TMI Tax Updates - e-Newsletter
January 3, 2023

Case Laws in this Newsletter:

GST Income Tax Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Section 154 and 155 of Income Tax Act

   By: APEKSHA GUPTA

2. RECENT CHANGES IN GST RULES – PART II

   By: DR.MARIAPPAN GOVINDARAJAN

3. Opportunity of hearing must be provided to the assessee before passing of an order

   By: Bimal jain

4. Order passed by Assessing Authority being ex-parte and in violation of principle of natural justice liable to be quashed

   By: Bimal jain

5. GST : Relief for Recipients incase of GSTR-2A Vs 3B mismatch

   By: Vivek Jalan

News

1. Rs 1,49,507 crore GST Revenue collected for December 2022, records increase of 15% Year-on-Year

2. Auction for Sale (re-issue) of (i)’7.38% GS 2027’, (ii) ‘7.26% GS 2032’, (iii) ‘7.36% GS 2052’

Notifications

GST - States

1. 15/2022– State Tax (Rate) - dated 30-12-2022 - Bihar SGST

Amendment in Notification No. 12/2017-State Tax (Rate), dated the 29th June, 2017

2. 14/2022– State Tax (Rate) - dated 30-12-2022 - Bihar SGST

Amendment in Notification No. 4/2017-State Tax (Rate), dated the 29th June, 2017

3. 13/2022– State Tax (Rate) - dated 30-12-2022 - Bihar SGST

Amendment in Notification No. 2/2017-State Tax (Rate), dated the 29th June, 2017

4. 12/2022– State Tax (Rate) - dated 30-12-2022 - Bihar SGST

Amendment in Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017

SEBI

5. SEBI/LAD-NRO/GN/2022/111 - dated 30-12-2022 - SEBI

Securities and Exchange Board of India (Employees' Service) (Third Amendment) Regulations, 2022

Circulars / Instructions / Orders

Customs

1. Instruction No. 34/2022 - dated 30-12-2022

Instruction regarding Consolidated list of animal feed additives/premix/ supplements for Import into India

Highlights / Catch Notes

Income Tax

• Tax Dispute: Faceless Assessment Order Violates Natural Justice, Ignores Sections 144B and 80P of Income Tax Act.

  Case-Laws - HC : Scheme of Faceless Assessment as provided u/s 144B - Deduction u/s 80P - It is not in dispute that in facts of the case no draft assessment along with show cause notice as required u/s 144B(1) and section 144B(7) is given to the petitioner so as to enable the petitioner to give explanation for proposed addition during the hearing before the National Faceless Assessment Centre. - the impugned order was passed by the respondent in violation of principles of natural justice without affording an opportunity of personal hearing by not following the prescribed procedure laid down as per the provisions of section 144B of the Act, 1961 for Faceless assessment. - HC
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• India-USA DTAA: "Make Available" Clause Requires Recipient to Retain Tech Skills Post-Contract for Independent Use.

  Case-Laws - AT : Income deemed to accrue or arise in India - FTS under the India-USA DTAA - provision of information technology and other administrative services - In order to invoke make available clauses, technical knowledge and skill must remain with the person receiving the services even after the particular contract comes to an end and the technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. - AT
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• CPC and NFAC uphold AO's decision: Rectification u/s 154 denied, tax computation must follow initial partnership firm return.

  Case-Laws - AT : Rectification of error u/s 154 - When the return was filed as if it is a firm, it follows that computation of tax liability should be made on the basis that it is a partnership firm. The CPC cannot go beyond the return of income. In the circumstances, we are of the considered opinion that the AO had rightly rejected the 154 petition as well as the NFAC justified in confirming the action of the Assessing Officer. - AT
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• Deduction Claim Denied: Assessee Fails to Provide Evidence for Commission Paid to Father, Taxable Income Increased.

  Case-Laws - AT : Disallowance of claim for deduction of commission - Assessee had despite specific directions of the A.O avoided producing him for necessary examination on the pretext that he was away to Gujarat and the date when he would be back was not to his knowledge. - assesee only in the garb of his bogus claim of having paid commission to his father, had tried to suppress his profits. - Additions confirmed - AT
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• Legal Ownership of Property Decides Capital Gains Tax Liability Despite Son's Financial Involvement and Loan Interest Claim.

  Case-Laws - AT : Capital gain - legal owner of property - entire funds at the time of purchase of property was paid by his son the entire sale consideration is also received by her son - merely because interest of housing loan is claimed by the son of the assessee in his computation it is not make him the owner of the property. In this case, the legal owner of the property is assessee who has transferred the property by registering sale deed. - AT
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• Tax Dispute Over Sections 115BBE and 115BBC Due to Non-Existent Entities and Lack of Documentation by Assessee.

  Case-Laws - AT : Addition u/s 68 - non-existence of the party - tax was levied u/s 115BBE and 115BBC of the Act on the ground that the said entities are being presently struck off record of registered companies - The assessee was unable to produce any documents in support of their action to restore the donor-company before the judicial authority. Accordingly, the question was unanswered related to the identity of the corporate bodies to prove the existence related the transaction of assessee. - AT
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• Correct Deduction Timing u/s 80G for Tea Manufacturers: Apply Before 40:60 Income Split.

  Case-Laws - AT : Deduction u/s 80G - when to claim deduction u/s 80G? - Income from business of manufacturing of tea - AO was of the view that first total income is to be computed and thereafter, it has to be divided in 40 : 60 ratio and then claim of deduction u/s 80G has to be made against 40% shares. - View of the AO is not correct - AT
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• High-Value Cotton Inventory Write-Off Scrutinized for Missing Reports to Stock Exchange and SEBI; Additions Confirmed.

  Case-Laws - AT : Addition of write off of inventory - assessee could not file any evidence to prove that whether any report has been submitted to stock exchange and SEBI on this issue - Assessee has written off 100% inventory of cotton held and the value of said inventory is very high. When the assessee is taking such a drastic decisions which impacts its financial decision, it needs to report to the concerned authorities and also required to take approval from the Board of Directors and audit committee. - Additions confirmed - AT
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• Dispute Over TDS Deduction on Software Payments u/s 40(a)(i); Verification Needed on Software Type by DRP.

  Case-Laws - AT : TDS u/s 195 - Disallowance u/s 40(a)(i) - assessee paid software charges and intranet and other IT cost - The issue whether the software supplied by Dart to the assessee is standard/off-the-shelf software or customized software needs verification in the light of observations made by the Hon’ble DRP.- AT
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• Section 147: Tax Authorities Can Reassess Income Based on New Evidence, Even After Initial Scrutiny Assessment.

  Case-Laws - AT : Reopening of assessment u/s 147 - looking to the scope of section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the assessee has escaped assessment, it is always open for the assessing authority to reopen the assessment. - AT
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• India-US DTAA: Benchmarking Studies Don't Qualify as Fees for Included Services under Article 12.

  Case-Laws - AT : Income deemed to accrue or arise in India - MOU to the India US DTAA elaborates on the concept of "make available" - Merely providing commercial information through a benchmarking study does not in any manner makes available any technical knowledge, experience, skill, know how or processes, nor consist of the development and transfer of a technical plan or technical design. Thus, the services of PTAI cannot be said to be FIS under covered Article 12. - AT
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Indian Laws

• High Court Strikes Down Sections 103(b)(vi) and 134, Declares Advertisement Tax Unconstitutional in Panchayath Raj Act.

  Case-Laws - HC : Levy of tax on advertisement - Constitutional Validity of Section 103(b)(vi), 134 containing the words "after levy of tax under Section 134 has been determined by the Corporation" - The amendment made by the State Government to the Panchayath Raj Act has, as contended by the petitioner has lead to anomaly wherein the tax on advertisement is being levied and collected within the limits of Municipal corporation and Municipalities while no such levy is being made within the limits of Panchayaths. - levy tax on advertisement is declared unconstitutional and void and the same are struck down. - HC
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VAT

• High Court rules interest on delayed tax refunds must be paid at 6%, considering the doctrine of merger.

  Case-Laws - HC : Interest on delayed refunds - when the doctrine of merger is borne in mind and when the statutory authority allows the appeal of an assessee, he gives legal shape to the contours of the matter which assessing authority should have adopted and therefore, the refund claim of the assessee would essentially arise from the order of assessment. - Interest to be paid @6% - HC
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Case Laws:

• GST

• 2023 (1) TMI 49
  Seeking release of seized goods alongwith conveyance - without waiting for the petitioner s response to the show cause notice, the impugned show cause notice under Section 130 of the Act had been issued - violation of principles of natural justice - HELD THAT:- It is agreed that till this Court decides the matter finally, the interim relief in terms of deposit of fine in lieu of confiscation of vehicle being Rs. 2,50,062/- with penalty of Rs. 5,00,124/- under Section 129(1a) which includes 200% of the tax amount and bond value against the release of the goods to the tune of Rs. 13,89,224/- as per GST MOV-10 shall be furnished by the petitioner. On this being complied with, no coercive steps or further order under Section 130 shall be passed. By way of interim relief, it is directed that the respondents shall release the goods and conveyance of the petitioner, confiscated and detained pursuant to the detention order passed in Form GST MOV-06 and Form GST MOV-10 dated 15.11.2022, subject to the conditions imposed - application allowed.

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• 2023 (1) TMI 48
  Taxability - Dried Distillers Grains Solubles (DDGS) - Distillers Wet Grains Solubles (DWGS) - Undenatured Extra Neutral Alcohol (ENA) - Challenge to CBI Circular No.163/19/2021-GST dated 06.10.2021 to the extent that it erroneously deals with and determines the issue of taxability of DDGS and DWGS - HELD THAT:- This Court on a query raised, is pointed out that the last meeting of the council was held on 18.05.2021 where the issue of taxability of ENA in GST has already been discussed. The next meeting of the council is scheduled on 17.12.2022. It is also argued that the impugned circular is ultra vires the statue and in derogation of the statutory scheme of classification and with a further argument that the issue with regard to the taxability of ENA which is pending for the consideration of GST council is likely to affect the entire country. Therefore, any adjudication on the part of the officer concerned of the show cause notice, which is challenged would have a bearing on all the pending issues. Issue Notice, returnable on 22.12.2022.

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• 2023 (1) TMI 47
  Seeking grant of regular bail - case of alleged offence under Section 132(1)(a) of the CGST Act is not made out - no intention to evade tax or to adopt any fraudulent practice - HELD THAT:- Considering the nature of allegations made in the FIR and without discussing the evidence in details as well as without going into details, prima-facie, this Court is of the opinion that this is a fit case to exercise the discretion to enlarge the applicant on bail. Hence, the application is allowed and the applicant is ordered to be released on bail, on executing a bond of Rs.10,000/- with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions imposed.

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• Income Tax

• 2023 (1) TMI 46
  Reopening of assessment u/s 147 - proceeding u/s 148A - violation of not only the statutory provisions, but has also basic principles of natural justice - as argued AO has virtually not considered the reply of the petitioner received in response to the show cause notice u/s 148A(b), also AO has not passed a speaking order under Section 148A(d) and has not dealt with each and every objection - HELD THAT:- As guidelines only explain what is required of an Assessing Officer while complying with the provisions of Section 148A along-with its sub clauses i.e. Clauses a to d. The guidelines otherwise also clearly state that these are only indicative and not exhaustive and the Assessing Officer may take suitable decision on a case to case basis qua the situations not specified in these guidelines. Accordingly, in view of the aforesaid discussion and reasons stated, the present petition is allowed and the impugned order issued under Clause 8 of the Income Tax Act, 1961 (Annexure P-5) is quashed. The respondents are directed to furnish additional material in support of the allegations made in the notice dated 19.03.2022 (Annexure P-3) within four weeks, including the reports, if any. Thereafter, the Assessing Officer shall decide the matter in accordance with law.

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• 2023 (1) TMI 45
  Prior period adjustments to be included or excluded for working out book profit for the purpose of Section 115J - HELD THAT:- The statute does not provide that prior period adjustments are to be excluded to work out the book profit as per sub-section (1A). In Apollo Tyres Limited [ 2002 (5) TMI 5 - SUPREME COURT] was considering amongst others the question as to whether an assessing officer while assessing a company under Section 115J of the Act can question the correctness of the profit and loss account prepared by the assessee in accordance with Parts II and III of Schedule VI to the Companies Act, 1956. Looking into the accounts of the company, an assessing officer under the Act has to accept the authenticity of the accounts with reference to the provisions of the Companies Act, 1956, which obligates the company to maintain its account in a manner provided by the Companies Act, 1956. Therefore, AO while computing the income under Section 115J has only the power to examine whether the books of accounts are certified by the authorities under the Companies Act, 1956, as having been properly maintained in accordance with the Companies Act, 1956. Assessing officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said Section. Putting it differently, Supreme Court held that an assessing officer does not have the jurisdiction to go beyond the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115J of the Act. If that be the position, assessing officer could not have taken another figure as the net profit instead of the net profit of Rs.33,222.00 shown as per the profit and loss account prepared in terms of Parts II and III of Schedule VI to the Companies Act, 1956. That being the position, the substantial questions of law as extracted above are answered in favour of the appellant and against the respondent.

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• 2023 (1) TMI 44
  Bogus LTCG - exemption u/s 10(38) denied - HELD THAT:- The genuineness of investment in the shares by the assessee was substantiated by him by producing copy of transaction statement for the period from 1.6.2001 to 1.10.2010. The investment was made in the year 2000-01. The shares were retained for more than ten years and were sold after such long time. These circumstances suggested that the investment was not bogus or investment made in penny stock. The shares were purchased in order to invest and not for the purpose of earning exempted income by frequent trading in short span. The finding recorded by the appellate authority and confirmed by the appellate tribunal is based on material before them. They are in the realm of findings of fact. No error could be noticed in the findings and conclusion that the investment was longstanding and genuine and was not penny stock on the basis of which the capital gain was wrongly claimed. No substantial question of law arises.

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• 2023 (1) TMI 43
  Scheme of Faceless Assessment as provided u/s 144B - Deduction u/s 80P - violation of principles of natural justice - HELD THAT:- Section 144B of the Act, 1961 provides detailed procedure for Faceless Assessment introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 with effect from 1st April, 2021. Section 144B(1) starts with a non-obstante clause i.e. notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub-section (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the procedure prescribed therein. The above-referred clause of section 144B(1) and 144B(7) deals with the procedure to be adopted by the National Faceless Assessment Centre on receipt of draft order from the assessment unit who has prepared the draft after providing opportunity to the assessee by serving a notice upon him to show cause as to why the assessment should not be completed as per such draft or final draft or revised draft assessment order. Therefore, such personal hearing in era of Faceless assessment is to be provided through video conferencing. It is not in dispute that in facts of the case no draft assessment along with show cause notice as required u/s 144B(1) and section 144B(7) is given to the petitioner so as to enable the petitioner to give explanation for proposed addition during the hearing before the National Faceless Assessment Centre. Section 144B(1)(xii) provides that on receipt of show cause notice, assessee may furnish his response to the National Faceless Assessment Centre and as per clause (xiv), Assessment unit shall make a revised draft assessment order after considering the response of the assessee and send it to the National Faceless Assessment Centre. As per the provisions of section 144B(7) in case of variation prejudicial to the assessee as proposed in the draft assessment order, the assessee is entitled to request for personal hearing and upon such request, the personal hearing may be provided by the authority, if the case of the assessee is covered by circumstances provided therein in exercise of powers under sub-clause (h) of clause (xii) of section 144B(7). It can be safely be said that the impugned order was passed by the respondent in violation of principles of natural justice without affording an opportunity of personal hearing by not following the prescribed procedure laid down as per the provisions of section 144B of the Act, 1961 for Faceless assessment. This petition succeeds and is accordingly allowed. The impugned order of assessment dated 18.08.2021 passed by the respondent as well as notice dated 26.08.2021 under section 270A of the Income Tax Act,1961 are hereby quashed and set aside.

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• 2023 (1) TMI 42
  Income deemed to accrue or arise in India - FTS under the India-USA DTAA - receipts on account of provision of information technology and other administrative services to its affiliate in India are in the nature of Fees for Included Services [FIS] under the India USA Double Taxation Avoidance Agreement [DTAA] - assessee is incorporated under the laws of USA and is engaged in the manufacture and supply of life science research, healthcare, analytical chemistry and other markets with broad range of products and systems - HELD THAT:- Facts on record show that the recipient of the services is not enabled to provide the same service without recourse to the service provider, i.e, the assessee. In our humble opinion, mere incidental advantage to the recipient of services is not enough. The real test is the transfer of technology and on the given facts of the case, there is no transfer of technology and what has been appreciated by the Assessing Officer/ld. CIT(A) is the incidental benefit to the assessee which has been considered to be of enduring advantage. In order to invoke make available clauses, technical knowledge and skill must remain with the person receiving the services even after the particular contract comes to an end and the technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. As relying on GUY CARPENTER CO. LTD. [ 2012 (5) TMI 31 - DELHI HIGH COURT] and DE BEERS INDIA MINERALS (P.) LTD. [ 2012 (5) TMI 191 - KARNATAKA HIGH COURT] we are of the considered view that the service recipient of the assessee is unable to make use of the said technology only by itself in its business or for its own benefit without recourse to the assessee year after year. We find that the Assessing Officer has referred to various decision which are based upon the decision of the Authority for Advance Rulings in the case of Perfetti Van Melle Holding B.V. [ 2011 (12) TMI 17 - AUTHORITY FOR ADVANCE RULINGS] which has subsequently been reversed by the Hon ble High Court of Delhi [ 2015 (1) TMI 239 - DELHI HIGH COURT] and hence is no longer a good law. We are of the considered view that the receipts of the assessee on account of provision of information technology and other administrative services to its affiliate in India are not in the nature of Fees for Technical Services under the India USA Double Taxation Avoidance Agreement and we, accordingly, direct the Assessing Officer to delete the same. Appeal of assessee allowed.

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• 2023 (1) TMI 41
  Rectification of error u/s 154 - Filing of ITR in wrong form and capacity - Exemption u/s 11 - Denial of exemption on failure to file of audit report in Form No.10B - HELD THAT:- We find that the appellant had filed the return of income in Form No.5. However, no documents were filed along with the return of income justifying the claim for exemption u/s 11 of the Act. It is only after receipt of intimation, the appellant took a plea that its income was exempt u/s 11 by virtue of registration u/s 12A of the Act. Even the audit report was admittedly not filed along with the petition u/s 154 or before the NFAC. The CPC while processing the return of income u/s 143(1) can take into consideration only the return of income an accompanied document, when the appellant had filed the return of income in Form No.5, the natural inference to be drawn is that the assessee is a partnership firm. When the return was filed as if it is a firm, it follows that computation of tax liability should be made on the basis that it is a partnership firm. The CPC cannot go beyond the return of income. In the circumstances, we are of the considered opinion that the AO had rightly rejected the 154 petition as well as the NFAC justified in confirming the action of the Assessing Officer. Therefore, the appeal filed by the assessee stands dismissed.

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• 2023 (1) TMI 40
  Penalty u/s 271(1)(c) - quantum disallowances/additions made by the AO regarding the assessee s section 80IA deduction raised for the first time in section 153A assessments completed in furtherance to the search - HELD THAT:- We see no reason to accept the Revenue s stand. We make it clear that the hon ble Apex court s landmark decision in CIT Vs. Reliance Petro Products [ 2010 (3) TMI 80 - SUPREME COURT] has settled the law long back that quantum and penalty proceedings are parallel in nature wherein each and every disallowance/addition made in the course of the former does not ipso facto attracts the latter provision. Hon ble jurisdictional high court s decision in PCIT Vs. JSW Steel Ltd. [ 2020 (2) TMI 307 - BOMBAY HIGH COURT] also holds that an assessee can very well raise its deduction claim for the first time in section 153A assessment proceedings. Mr. Jasnani could not pinpoint any exception to this proposition in section 153A itself qua raising of such a claim in abated or unabated assessments. Be that as it may, we make it clear that we are dealing with penalty proceedings only. We thus conclude that both the lower authorities have erred in law and on facts in imposing these penalties in the impugned four assessment years before us. The same are directed to be deleted. The assessee succeeds in its instant identical sole substantive grievance therefore.

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• 2023 (1) TMI 39
  TDS credit - CIT(A) directing the AO to verify the TDS credit instead of allowing the same - HELD THAT:- Since the AO has not given credit of the tax paid at Rs.3,20,21,101/- and given credit of Rs.3,19,78,883/- only without assigning any reason, the assessee preferred appeal before the ld.CIT(A) who directed the AO to verify the taxes paid and give credit accordingly. We do not find any infirmity in the order of the ld.CIT(A) on this issue. Since, the ld.CIT(A) has directed the AO to verify the taxes paid and give appropriate credit and since it is the apprehension of ld.AR that the ld.CIT(A) has no power to set aside an issue and therefore, the AO may not follow his direction, therefore, we direct the AO to verify the record and give due credit of the taxes paid by the assessee in shape of TDS, advance tax and self-assessment tax. The ground raised by the assessee on this issue is accordingly allowed for statistical purposes. Addition being the income underreported and treated the same as income of the assessee for AY 2014-15 - excess receipts over the income reported in P L account on interest received - HELD THAT:- As submitted assessee is following mercantile system of accounting and has duly filed the reconciliation statement. It is his submission that due to misunderstanding by the AO, he could not appreciate the system of accounting consistently followed by the assessee and made the addition. It is also his submission that given an opportunity, the assessee is in a position to substantiate with evidence to the satisfaction of the AO that such income has already been offered to tax in subsequent years and the method of accounting consistently followed by the assessee has been accepted by the revenue and therefore, no addition should be made in this year. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the AO with a direction to verify from the record the method of accounting consistently being followed by the assessee and pass appropriate order as per fact and law. The second additional ground raised by the assessee is accordingly allowed for statistical purposes. Nature of expenses - foreign exchange loss treated as capital expenditure and allow depreciation on the same instead of revenue expenditure as claimed by the assessee - HELD THAT:- Hon ble Supreme Court in the case of the CIT vs. Woodward Governor India (P.) Ltd. [ 2009 (4) TMI 4 - SUPREME COURT] has held that loss suffered by the assessee on account of the exchange difference as on the date of the balance sheet is an item of expenditure u/s. 37(1). We are of the considered opinion that the foreign exchange fluctuation loss on account of restatement of loan taken from Indusind bank for purchase of building at Chennai from M/s.Shriram Ventures Ltd. has to be allowed as revenue expenditure. We hold and direct accordingly.

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• 2023 (1) TMI 38
  Addition u/s 68 - share capital received from 8 companies - CIT-A deleted the addition - HELD THAT:- CIT (A) while deleting the addition did not examine the shareholders of the assessee company, nor examined the directors of the assessee company, even did not inquired the assessee questions about companies operated by Mr. Dilip C Mehta and several statements. Therefore ld. CIT (A) did not consider any of the reasons of the ld. AO for which addition is made. He merely swayed by the written submission of the assessee and deleted the addition. The ld. CIT (A) even did not find it proper to question the assessee about its activities and justification of share premium to show the genuineness of the share capital. As the assessee is a private limited company, how it came in to connect with those all 8 companies for subscribing to the shares of the assessee company which does not have income generation, was not at all inquired by the ld. CIT (A). Ld. CIT (A) further failed to visualize a situation with perspective of genuineness that 8 non-descript companies investing Rs 10 Cr, having common address, in share capital of a private limited company at huge premium of Rs 180 per share and the assessee company does not have any knowledge about the whereabouts of such a valued investor in that company. Thus, the order of the learned CIT A, is not sustainable in law in deleting the above addition. In view of this, we reverse the order of the learned and CIT A and confirm the order of the learned assessing officer. - Decided against assessee.

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• 2023 (1) TMI 37
  Rent receipts - Income from house property OR Income from Business and Profession - rule of consistency - AR contended that the Assessee since several years has let out the property involved in this case to various tenants who are paying rent to the Assessee, which the Assessee has been offering under the head income from house property - HELD THAT:- Fact of the instant year under consideration are exactly similar to the preceding 07 years and there is no change at all. Therefore, in view of the dictum laid down by the Hon ble Apex Court in the case of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT] qua rule of consistency, we are inclined to delete the addition under challenge. We may clarify that in case of change in facts and circumstances, this order shall not be taken as precedence - Assessee s appeal stands allowed.

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• 2023 (1) TMI 36
  Capital gain - AO made a reference under Section 55A - reference to DVO and not allowing indexed cost as per valuation of registered valuer - HELD THAT:- There is no dispute that the assessee has sold two non-agricultural land. The transaction of sale took place on 02/03/2012 and 15/03/2012. Admittedly, the transaction of transfer of land took place prior to 01/07/2012, thus it is now settled position under law by various decisions of superior courts, amended provisions of Section 55A(a) of the Act wherein the word is at variance was substituted, is not applicable for A.Y. 2012-13. We find that on similar issue, the combination of this Bench in Ranchod Bhai C Patel [ 2020 (12) TMI 171 - ITAT AHMEDABAD] by following the decision of Gauragiben S Shodhna [ 2020 (12) TMI 171 - ITAT AHMEDABAD] and the decision of Puja Prints [ 2014 (1) TMI 764 - BOMBAY HIGH COURT] held Amendment brought in section 55A(a) with effect from 1-7-2012 by Finance Act, 2012, according to which reference could be made by Assessing Officer to DVO if value of immovable property determined by assessee was lesser than FMV of property, is applicable prospectively. Thus, the reference made by the assessing officer under section 55A(a) is not competent and report received in such reference cannot be relied. Thus we direct the Assessing Officer to adopt the value of land as per registered valuer s report and computed the capital gain accordingly. In the result, grounds No. 1 to 4 of this appeal are allowed. Disallowance of deduction u/s 54B - no relevant information and documents were furnished to substantiate such claim - HELD THAT:- CIT(A) recorded contradictory finding on one hand, the ld. CIT(A) recorded that the claim of assessee is in order and on the other hand, confirmed the action of Assessing Officer by holding that the land sold by assessee was not agricultural land. We find that the order of ld. CIT(A) is self contradictory and not liable to be sustained. We find that on the similar issue, in CIT Vs Siddarth J Desai [ 1981 (9) TMI 48 - GUJARAT HIGH COURT] has determined 14 principals to ascertain the nature of land on the date of transfer and two determine whether the land was agricultural land or not, therefore, keeping in view the binding decision above we remit the issue back to the file of Assessing Officer to consider the decision and pass the order in accordance with law. In the result, this ground of appeal is allowed for statistical purposes. Treatment of agricultural income as income from unexplained sources - CIT(A) confirmed the action of Assessing Officer by holding that the land was not used for agricultural purpose in year 2010-11 and 2011-12, hence, there cannot be any agricultural income - HELD THAT:- We find that it is an undisputed fact that the assessee converted the nature of lands from agricultural to non-agricultural lands. The size of agricultural land was more than 11,000 square meters. It is not the case of revenue that the assessee has sold entire agricultural holdings. On perusal of Form 7/12 for A.Y. 2012-13, the assessee was growing sugarcane. However, we find that the assessee has not furnished any evidence for sale of sugarcane. The facts remained the same that the assessee is still holding some agricultural land, therefore, we deem it appropriate to restore this issue to the file of Assessing officer to consider various evidences and in the event the assessee is allowed deduction under Section 54B of the Act, this issue be adjudicated thereafter. In the result, this ground of appeal is allowed for statistical purposes.

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• 2023 (1) TMI 35
  Demand raised in the computation sheet - deduction claimed u/s 80P(2) has not been taken into account - HELD THAT:- We find that the submission made by the ld. Counsel are worth considering and the demand raised in the computation sheet is not in agreement with assessment order passed by the ld. AO. We refer to the provisions of section 156 of the Act relating to notice of demand according to which the assessee shall be served with a notice of demand in the prescribed form when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act. It is important to note that the sum payable has to be in consequence of an order passed under the Act. In the present case before us, the computation sheet and demand payable is not in consequence with the assessment order passed by the ld. A.O wherein the return has been accepted without any modification and assessed as such. Accordingly we direct to the ld. AO to vacate the demand so raised. Ground No.3 taken by the assessee is allowed.

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• 2023 (1) TMI 34
  GP estimation - rejection of books of account - no stock register, goods inward register, goods outward register is being maintained by the Assessee on regular basis - HELD THAT:- We fail to understand, once the Assessee having stock of raw-material then how the stock register of manufactured goods is not necessary. Further, the Assessee tried to shift the onus upon the Supervisor, whereas it is a fact that Supervisor is working for the benefit of the Assessee firm only and, therefore, the Assessee is not justified in not maintaining the stock register of the finished items/ gold jewellery. Assessee also failed to controvert the findings of both the authorities below with regard conclusion drawn and rejection of its books of account on the pretext that Assessee would have sale transactions over crores of rupees with parties in International market without a single record of orders placed, the terms and conditions of payment, date of delivery and rate of such sale/purchase. Books of account are neither complete nor reliable since no stock register, goods inward register, goods outward register is being maintained by the Assessee on regular basis. Hence, we are inclined not to interfere in the rejection of books of account. Coming to the application of GP rate @ 3% on sales by the Assessing Officer and affirmation thereof by the learned Commissioner, we observe that the AO has taken into consideration the prevailing GP rate amongst similar jewellery exporters who have declared GP rate @ 4-8% in the vicinity and, therefore, application of GP rate @ 3% on sales as reasonable and appropriate. AO has no where mentioned details of similar jewellery exporters and has remarked qua the prevailing GP rate in general and, therefore, the same is un-sustainable. Considering the peculiar facts and circumstances of the case and past history of the GP and NP declared by the Assessee, in our considered view, as agreed the parties too, justice would be met by directing the AO to apply the GP rate @ 2.5% as declared by the Assessee in immediately preceding assessment year, as justified and reasonable, hence order accordingly. Consequently, the appeal filed by the Assessee is liable to be allowed partly.

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• 2023 (1) TMI 33
  Inflated purchases - excess stock found during survey - addition solely on the basis of statement recorded of the partner of the assessee firm who had surrendered the same in his statement so recorded during survey - HELD THAT:- As pointed out by assessee, CIT(A) found the contention of the assessee in this regard to be correct. At para 4.2 of his order, page 11, while dealing with the issue of inflated purchases, the Ld.CIT(A) categorically states that the assessee had explained all purchases upto the date of survey with the above evidences . Again while dealing with the AO s contention of low profitability of the assessee CIT(A) reiterates his above findings vis- -vis correctness of Books of accounts, at page 27 of his order. Sustaining any addition thereafter either on account of inflated purchases or excess stock is contradictory to his specific findings relating to correctness of the Books of the assessee and the GP/NP being justified. CIT(A) it seems is blowing hot and cold at the same time. Even otherwise we find that the Ld.CIT(A) dismissing the assesses explanation for excess stock for the reason that the katta chitthi of purchases of raw material, allegedly remaining to be considered, appeared to be fabricated is not justified particularly when he categorically noted all purchases as stated by the assessee to be correctly recorded and explained and justified by GP / NP ratio also. Addition on account of inflated purchases is also not justified, as held by the Ld.CIT(A), since it is based merely on the statement of the partner of the assessee firm which was subsequently retracted and the retraction justified by the assessee also by his above explanation . Also the Ld.CIT(A) has rightly found the addition on account of inflated purchases to be overlapping with that on account of excess stock found. The addition, therefore, on account of the excess stock and inflated purchases we hold, not sustainable and is directed to be deleted. Appeal of the assessee on this issue is allowed Unexplained cash deposits - Addition deleted by the Ld.CIT(A) and as a consequence raised by the Revenue as Ground No.1 in its appeal, we have gone through the order of the ld.CIT(A) and we have noted that he has deleted the same noting that the assessee had offered the said amount as its income, credited it to its profit loss account, and had also shown the same as cash in hand. He therefore held that in the light of these facts that the assessee having already surrendered these cash deposits as its income, addition of the cash deposits again would only tantamount to double addition. DR unable to controvert this finding of fact by the ld.CIT(A) - no reason to interfere in the order of the ld.CIT(A) deleting the addition of Rs.1,01,19,284/- on account of unexplained cash deposits. Ground of appeal No. 1 raised by the Revenue is dismissed.

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• 2023 (1) TMI 32
  Disallowance of claim for deduction of commission - As observed by the A.O, the fact that the ledger account or details maintained by the assessee does not even contain the name and description of the goods sold or supplied through the aforementioned person further fortifies the fact that no services were in fact rendered by him - HELD THAT:- We find that not only the assessee had failed to adduce any documentary evidence which would support his claim of having paid genuine commission to the aforementioned person, viz. Shri. Maganlal Patel for the services rendered by him, but in fact he had despite specific directions of the A.O avoided producing him for necessary examination on the pretext that he was away to Gujarat and the date when he would be back was not to his knowledge. On the basis of the aforesaid facts, I am of a strong conviction that assesee only in the garb of his bogus claim of having paid commission to his father, viz. Shri Maganlal Patel had tried to suppress his profits. Accordingly, finding no infirmity in the view taken by the lower authorities uphold the disallowance made /sustained by them. Thus, the Ground of appeal No.1 raised by the assessee is dismissed in terms of the aforesaid observations. Disallowance of the assessee s claim for deduction of job work charges - Deduction claimed by the assessee to have been paid to his brother - HELD THAT:- As observed by the A.O, and, rightly so, as the aforesaid bill did not even mention the nature of job work, therefore, it did not inspire any confidence as regards the authenticity of the same. As the assessee had failed to place on record any documentary evidence which would support the authenticity of his claim of having paid genuine job work charges to his brother, viz. Shri Bharat Kumar Patel, therefore, the same had rightly been disallowed by the A.O. Also,concur with the view of the A.O that the aforesaid expenditure had been booked by the assessee only with an intent to suppress his profits. Accordingly, finding no reason to interfere with the view taken by the lower authorities, uphold the order of the CIT(Appeals) and sustain the disallowance - Thus, the Ground of appeal No.2 raised by the assessee is dismissed. Ad-hoc disallowance of 15% out of vehicles and telephone expenses - Addition made primarily for the reason that the expenses booked under the respective heads of expenditure were not supported by proper vouchers - HELD THAT:- We concur with the A.O that involvement of personal element as regards usage of car and telephone in absence of log book and call register could not be ruled out, but at the same time is unable to subscribe to the adverse inferences which had been drawn by him as regards the expenses in question on the ground that the same were not supported by proper vouchers. A.O had failed to point out a single voucher which as per him was either not found to be in order or the expenses therein claimed were liable to be disallowed for any other reason. On the basis of my aforesaid observations, uphold the disallowance of the aforesaid expenses only to the extent of 5%. Thus, the Ground of appeal No.3 raised by the assessee is partly allowed in terms of the aforesaid observations.

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• 2023 (1) TMI 31
  Addition u/s 68 - Bogus LTCG on shares - penny stock purchases - exemption u/s 10(38) denied - HELD THAT:- As relying on SUJATA AGARWAL [ 2022 (10) TMI 1142 - ITAT KOLKATA] and SWATI BAJAJ [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] the alleged long term capital gain has been earned by the assessees from dealing in penny stock companies and therefore, the transactions carried on are bogus in nature and thus, do not qualify for exemption u/s 10(38) of the Act. The finding of ld. CIT(A) in the instant two appeals needs no interference and the same is confirmed. - Decided against assessee.

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• 2023 (1) TMI 30
  Deduction u/s. 80IB - method adopted by the assessee for computing deduction - Argument against order of CIT(A) in not adopting the method of the A.O. and also for not invoking the proviso to section 80IA(8) - HELD THAT:- It is observed that this issue has been squarely covered by various decisions of the co-ordinate bench in assessee s own case for the previous years. By respectfully following the above [ 2014 (9) TMI 1269 - ITAT MUMBAI] we find no infirmity in the order of the ld. CIT(A). Hence, this ground of appeal raised by the Revenue is dismissed. Deduction u/s. 80IB on the profits derived from the work/manufacturing done through LLMs - HELD THAT:- It is observed that on identical issue raised by the assessee in earlier years, the Tribunal has held that the assessee was eligible for claiming deduction u/s. 80IB of the Act for profits derived from outsourcing the manufacturing activities carried out through LLMs - we find no infirmity in the order of the CIT(A). Accordingly, this ground of appeal raised by the Revenue is dismissed. Miscellaneous sales/processing charge, miscellaneous receipts eligible for computation of profits for claiming deduction u/s. 80IB - HELD THAT:- Tribunal has included miscellaneous sales, processing charges, and miscellaneous receipts for claiming deduction u/s. 80IB - A.O. has held that the assessee company has been set up for the purpose of manufacturing drugs and pharmaceuticals, section 80IB states that profits and gains derived by such industrial undertaking and the A.O. has interpreted attributable to and derived from and held that the miscellaneous receipts and processing charges are attributable to the business of the assessee company. This issue has arisen in the earlier years and that the Tribunal has decided the same in favour of the assessee. We are of the considered opinion that the identical issue has been dealt with by the Tribunal in earlier years in assessee s own case and has decided this issue in favour of the assessee. Allowable business expenditure - disallowance by relying on the CBDT Circular No. 5 of 2012 read with Explanation 1 to section 37(1) of the Act, towards expenses incurred by the assessee company for business expenditure on marketing and promotional activity - assessee contends that the assessee has incurred expenditures for the purpose of marketing and promotional activities such as gifts, travel facility, hospitalization, cash or monetary grant, etc. for the marketing and promotional activities - HELD THAT:- We are of the considered opinion that the said issue raised by the assessee is covered by the latest decision of M/s. Apex Laboratory Pvt. Ltd.[ 2022 (2) TMI 1114 - SUPREME COURT] the relevant portion of which is reproduced below for ease of ready reference: Thus, pharmaceutical companies gifting freebies to doctors, etc. is clearly prohibited by law , and not allowed to be claimed as a deduction under Section 37(1). Doing so would wholly undermine public policy. The well-established principle of interpretation of taxing statutes that they need to be interpreted strictly cannot sustain when it results in an absurdity contrary to the intentions of the Parliament - we are inclined to dismiss this ground of appeal raised by the assessee. Allowability of weighted deduction of clinical trial expenses for Research and Development (R D) expenditure claimed u/s. 35(2B) - A.O. restricted the amount of the weighted deduction to the amount quantified by the DSIR - HELD THAT:- We find no infirmity in the order of the ld. CIT(A) in setting aside the issue to the file of the A.O. for examining the expenses claimed by the assessee and to be considered in light of decision is Cadila Health Care Ltd [ 2013 (3) TMI 539 - GUJARAT HIGH COURT] pertaining to the claim of the expenses relating to clinical trials. The assessee has raised the ground that the ld. CIT(A) has failed to give any finding on the eligibility of expenses incurred on foreign consultancy expenses, building repairs, etc. for weighted deduction u/s. 35(2AB) - we direct the ld. CIT(A) to decide these issues raised by the assessee on merit of the case. Therefore, we remand this issue to the file of the ld. CIT(A) for the limited purpose of considering the eligibility of expenses incurred on foreign consultancy expenses, building repairs, etc. claimed by the assessee for weighted deduction u/s. 35(2AB) of the Act. Hence, this ground of appeal raised by the assessee is partly allowed. Disallowance u/s.14A read with Rule 8D - HELD THAT:- The assessee submits that the assessee has filed revised Rule 8D computation enclosed in Annexure 5, which may be taken into consideration for computing the disallowance u/s. 14A read with Rule 8D, instead of the computation offered by the assessee filed along with its return of income. We are of the considered opinion that the assessee may be given one more opportunity to furnish the details of revised computation of disallowance u/s. 14A - Therefore, this issue may be remanded back to the file of the A.O. for adjudication based on the details proposed to be filed by the assessee. Hence, this ground of appeal raised by the assessee is allowed for statistical purpose.

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• 2023 (1) TMI 29
  Capital gain - legal owner of property - entire funds at the time of purchase of property was paid by his son the entire sale consideration is also received by her son - HELD THAT:- As sale of property was mad in the name of the assessee which was also purchased in the name of the assessee. Therefore, assessee is the legal owner of the above property and in absence of any other evidence same is required to be taxed under the head capital gain in the hands of the assessee. There is no evidence that son of the assessee has declared any capital gain on the above transactions. Further, merely because interest of housing loan is claimed by the son of the assessee in his computation it is not make him the owner of the property. In this case, the legal owner of the property is assessee who has transferred the property by registering sale deed. Therefore, we do not find any infirmity in the orders of the lower authorities. Accordingly, the appeal of the assessee is dismissed.

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• 2023 (1) TMI 28
  Reopening of assessment u/s 147 - necessity of recording satisfaction as to the income escaping the assessment - independent application of mind by AO OR borrowed knowledge - reopening was made after receipt of information that the assessee is beneficiary of sum received from Surya Commotrade Pvt. Ltd. through its bank account which is a layered company and the assesse is beneficiary of loan provided by the said company - HELD THAT:- We note that the AO has discussed in reason the transaction in the bank account of third party and no where recorded a satisfaction that the amount which is received by the assessee of Rs. 10,00,000/- has escaped assessment. Thus, we find merit in the contentions of the Ld. A.R. that reason recorded are based upon presumption and surmises without recording a clear cut finding as to escapement of income. The case of the assessee finds support from the decision of MLB Commerical Pvt. Ltd [ 2021 (3) TMI 1396 - ITAT KOLKATA] . Also there is no application of mind by the AO to the information received and whatever has been supplied to the AO has been taken as it is without any independent application of mind by AO and thus AO has failed to demonstrate any live link between the material received and formation of reason to believe that income had escaped assessment. The case of the assessee find support from the decision in the case of Meenakshi Overseas Pvt. Ltd. [ 2017 (5) TMI 1428 - DELHI HIGH COURT] wherein it has been held that where there is no independent application of mind by the AO to tangible material and conclusion of AO was reproduction of the investigation report, reasons failing to demonstrate link between tangible material and formation of reason to believe that income has escaped assessment , the reassessment is unjustified. Appeal of assessee allowed.

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• 2023 (1) TMI 27
  Reopening of assessment u/s 147 - jurisdictional ground for reopening u/s 148 - unexplained investment - HELD THAT:- In factual position the assessee has already transacted the share/mutual funds in amounts for relevant financial year. In quantum assessment the assessee had not contradicted the transaction amount with ld. AO. AO has correctly calculated the investment part in share amount of Rs. 5 lacs. Further, during the year the assessee had liquidated the investment and had incurred the STGC amount of Rs.2 lacs. The source of investment amount of Rs. 5,00,000/- is remained unexplained before the bench. We find no infirmity in the order of the ld. AO. Assessee had not able to submit any contradictory fact or any calculation against the order of the ld. AO. CIT(A) has discussed both the legal and factual issue in the order. We are not intervening in the order of the revenue authorities in this stage. Accordingly, the addition made by the assessing authority is upheld. Appeal of assessee dismissed.

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• 2023 (1) TMI 26
  Addition u/s 68 - tax was levied u/s 115BBE and 115BBC of the Act on the ground that the said entities are being presently struck off record of registered companies - Registrar of companies have struck off their names and taken action for non compliance under the Companies Act, whereas the said entities are continued to be regularly assessed under the Income Tax and are recognized entities - HELD THAT:- Existence of the donors are in question. The counsel for the assessee had failed to file the effective date of striking off the companies and also placed reliance on the judgment of the Hon ble Apex Court and the ITAT, Delhi, supra . As in case of Patanjali Yogpeeth [ 2017 (2) TMI 781 - ITAT DELHI] to support the proposition that corpus donation is nature of capital receipt, which are not liable for tax as income. In the case of Hon able Apex Court [ 2019 (3) TMI 703 - SUPREME COURT] held that Appeal proceedings can continue even in case of company whose name has been struck off from Register of Company under section 560(5) of the Companies Act, 1956. But in factual matrix both the judgments are not similar with assessee s fact. Section 68 is governed by the four necessary ingredients and one of them is existence of the party. In any case the existence of the party in question. In the companies act there are different process to restore the companies removal of strike off. The assessee was unable to produce any documents in support of their action to restore the donor-company before the judicial authority. Accordingly, the question was unanswered related to the identity of the corporate bodies to prove the existence related the transaction of assessee. We find no infirmity in the order of the ld. CIT(A). So, the addition made by the ld. AO is upheld. Appeal of the assessee is dismissed.

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• 2023 (1) TMI 25
  Unexplained investment in purchase of property being Godown - addition of entire payment upto the date of sale deed - HELD THAT:- The assessee has produced the return of income of the preceding years as well as other record including the profit and loss account. Though the return of income were filed under section 44AD however, the availability of the cash was explained by the assessee in a chart showing the savings from the profits of the preceding years as well as the loan obtained by the assessee. These details were not considered and discussed either by the AO or by the CIT(A) in the impugned orders. Therefore, in the facts and circumstances of the case, when the AO has made the addition without even considering the fact that the payment of Rs. 1,00,000/- out of Rs. 8,00,000/- as considered by the AO was made in the preceding year and not during the year under consideration and further the explanation of the source of the payment was not discussed by the AO as well as the CIT(A), the impugned order of the CIT(A) is set aside and the matter is remanded to the record of the AO for fresh adjudication after proper verification and examination of the relevant facts as well as record explaining the source of investment made by the assessee. Accordingly, the appeal is allowed for statistical purpose. Reopening of assessment for unexplained investment in purchase of Godown - for AY 2011-12 - There is no allegation in the enquiry report regarding the another transaction of sale of plot for Rs. 3,75,000/- by Late Sh. Charanjit Singh Sehgal to the assessee. Further, the AO in the assessment order has not given any detail of property or title document through which the assessee has allegedly purchased the property. The AO took the second transaction of Late Sh. Charanjit Singh Sehgal as the transaction between the assessee and the vendor without considering the fact that the second transaction reported in the enquiry report does not pertain to the assessee. Accordingly, in the absence of any fact or document to show that the assessee has purchased the said plot of land from Late Sh. Charanjit Singh Sehgal, vide sale deed dated 11.3.2011, the addition made by the AO is baseless and liable to be deleted. Accordingly, the appeal of the assessee is allowed.

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• 2023 (1) TMI 24
  Deduction u/s 80G - when to claim deduction u/s 80G? - Income from business of manufacturing of tea - AO was of the view that first total income is to be computed and thereafter, it has to be divided in 40 : 60 ratio and then claim of deduction u/s 80G has to be made against 40% shares. - HELD THAT:- AO was of the view that first total income is to be computed and thereafter, it has to be divided in 40 : 60 ratio and then claim of deduction u/s 80G has to be made against 40% shares. The stance of the assessee was that, first business income has to be determined after allowing all necessary deduction and thereafter, apportionment of 40:60 has to be made. It can be explained by a simple example i.e., An assessee has gross income of Rs.100/-. Out of that necessary expenditure and deductions are to be allowed and the assessee has deduction admissible under Chapter VI at Rs.10/- and also under 80G, 80IA or 80HHC, then that Rs. 10/- has to be excluded from Rs.100/- and from the balance Rs. 90/-, apportionment of 40:60 has to be made. AO did not accept this contention. However, the ld. First Appellate Authority has accepted this contention on the strength of the decision of the Hon ble Madras High Court in the case of Periakaramalai Tea and Produce Co. Ltd. [ 1971 (8) TMI 46 - MADRAS HIGH COURT] After going through this well reasoned finding of the ld. CIT(A) based on the decision of the Hon ble Madras High Court, we do not find any error in it. Accordingly, this ground of appeal is dismissed. Allowable business expenses - foreign of travel expenses of the wife of the Managing Director - CIT-A deleted the addition - HELD THAT:- No error in the finding of the ld. CIT(A) because various Hon ble High Courts, namely, George Williamson (Assam) Ltd. [ 1998 (8) TMI 80 - GAUHATI HIGH COURT] , Glaxo Laboratories (India) Ltd. [ 1986 (5) TMI 46 - ITAT BOMBAY-A] and Appolo Tyres Ltd.[ 1998 (8) TMI 68 - KERALA HIGH COURT] are unanimous in their opinion that presence of wife with the top level executives is to assist him for discharging his social cum business obligation and such expenditure are deductible u/s 37(1) of the Act. Finally, the ld. First Appellate Authority held that similar expenditure was allowed in the earlier Assessment Years, and no disallowance is called for. Sale of gunny bags - business income - HELD THAT:- As during the course of its business activity i.e., manufacturing of tea, certain scrap value has been generated. The assessee has sold gunny bags and other items, which are byproduct of its business activity as well as manufacturing activity. The Assessing Officer has treated sale proceeds of such gunny bags etc. as income from other source which the ld. CIT(A) has held as income from business. We find that identical issue came up in earlier years and these were held as integral part of assessee s manufacturing process and gunny bags are necessary tools. Therefore, as the gunny bags go through wear and tear, they are bound to be sold out. This activity is interconnected with the business activity and hence such income deserves to be assessed as business income. CIT(A) has given right treatment to the above sale proceeds. We do not find any error in the order of the ld. CIT(A). Thus, this ground of appeal is rejected. Disallowance on account of Guest House expenses - basic reason for the Assessing Officer to make the disallowance is that such expenditure are to be disallowed towards maintenance of guest house - HELD THAT:- Stand of the assessee is that sum is not meant for guest house. Rather, it is with respect to transit flats given to the employees on transfers. The manufacturing activities of the assesse are such a place where it is difficult to find out any space to stay. The employees have to stay in the gardens where certain space is mandatory for the assessee to maintain. After considering the finding of the revenue, we do not find any error in this finding and accordingly, this ground of appeal is rejected. Deduction u/s 32 AB (1) (b) allowed in earlier years for direct utilization for purchase of plant and machinery - HELD THAT:- On due consideration of the above facts and circumstances, we are of the view that the ld. Assessing Officer has erred in construing the judgment of the Hon ble High Courts. On the other hand, the ld. CIT(A) has rightly appreciated it and has rightly held that once choice of the date is left open for making any scheme applicable, then it will be applicable from that date which is finalized by the parties. In the present case, that date is 31/05/1993. The amalgamated company DDIL ceased to exist on 01/06/1993. Whatever, it has deposited will be falling to its successor i.e. Brooke Bond India Limited (amalgamated company and it is entitle for deduction u/s 33AB of the Act. The ld. CIT(A) has not committed any error in this regard. Accordingly, this additional ground of appeal is dismissed. Deduction u/s 32AB(1)(b) and 32AB(7) r.w.s. 33AB(8) - whether merger of two companies under the scheme of amalgamation would be construed as transfer of assets for denying benefit of Section 33AB and 33AB(8) r.w.s. 32AB(7)? - HELD THAT:- AO under the scheme of Section 33AB of the Act, the amalgamated company has made certain deposits and also purchased certain machineries which was required to be used for eight continuous years as contemplated in the Act. But since before completion of those eight years, the amalgamated company which had made deposits has been amalgamated with Brooke Bond India Ltd. and, therefore, all those benefits are to be treated as of the assessee company i.e., Brooke Bond India Ltd. The assessee has explained about two factual positions about years of purchase and utilization of the machineries as well as about the creation of the funds with NABARD and its withdrawal for utilization for business purposes. The amalgamation of erstwhile DDIL into Brooke Bond India Limited cannot be construed as transfer. It is just an amalgamating company which ceased to exist in the eyes of law and it excludes itself for all practical purposes. In other words, it merged in the new company along with all its assets and liabilities and the same treatment has to be given to the new company i.e., the amalgamating company. The ld. First Appellate Authority has discussed this issue thoroughly and after going through all these details, we do not find any reason to interfere in the findings of the ld. CIT(A) extracted supra.

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• 2023 (1) TMI 23
  Disallowance of excess depreciation on motor vehicles - buses were put to use for less than 6 months only - HELD THAT:- AO ignored bills for purchase of diesel and Revenue generated from business, but has only considered payment made by the assessee for diesel bills and observed that the assessee has put to use the buses in the business from December, 2014 onwards. We find that the AO is grossly erred in holding the assets were put to use for less than 182 days and allowed only 50% depreciation on motor buses, because the buses were acquired and put to use before 30.09.2014 and also the assessee has generated income from the month of August, 2014 itself. Therefore, in so far as 8 buses are concerned, the assessee has put to use those buses for more than 182 days and eligible for 100% depreciation. Therefore, we direct the AO to allow 100% depreciation on 8 buses. In so far as remaining 2 buses, as admitted by the assessee, those buses were registered on 08.10.2014. The bill for building body to buses was also in the month of October, 2014. From the above, it is very clear that the remaining 2 buses were acquired and put to use in the business in the month of October, 2014, which is less than 182 days. Therefore, the assessee is entitled for 50% of actual depreciation on remaining 2 buses. Therefore, we do not find any errors in the reasons given by the AO to allow 50% depreciation on remaining 2 buses and thus, we reject the arguments of the assessee. To sum up, the assessee is entitled for 100% depreciation on 8 buses and thus, we direct the AO to consider the claim of the assessee and for remaining 2 buses, disallowance of excess depreciation is upheld. Disallowance of interest on borrowed capital u/s.36(1)(iii) - HELD THAT:- Since, we already held that the assessee has acquired and put to use the buses from the month of August, 2014 itself, in so far as interest paid on borrowed capital for 8 buses are concerned, the AO is directed to allow interest paid on borrowed capital to banks u/s.36(1)(iii) of the Act, as claimed by the assessee. As regards remaining 2 buses, since we held that the buses were put to use for business from the month of October, 2014 onwards, the disallowance of interest on borrowed capital up to the date of capitalization of 2 buses are upheld. To sum up, the assessee gets relief towards disallowance of interest u/s.36(1)(iii) of the Act, for 8 buses and for remaining 2 buses, the additions made by the AO is upheld. Disallowance of rates taxes - Nature of expenses - HELD THAT:- As we find that amount paid to Member Secretary, Pondicherry Planning Authority, is for taking permission to let out the premises to tenant for different purpose other than the purpose for which the planning permission has been taken from the local authority and said expenditure will definitely in the nature of Revenue in nature and therefore, we direct the AO to delete the additions made towards amount paid to Member Secretary. Pondicherry Planning Authority - As regards payment made to Mr.R.Viswanathan towards ROC fees, it is a professional fee paid for rendering professional services in connection with filing documents with ROC an thus, same cannot be considered as capital in nature and thus, we direct the AO to delete additions made on this accoun t- As regards payment for property tax to Pondicherry Panchayat, it is an annual property tax levied by local municipal authorities and the same will be in the nature of Revenue expenditure and therefore, we direct the AO to delete the additions made towards disallowance of property tax paid to Pondicherry Panchayat. Nature of expenses - Pondicherry Permit Expense - revenue or capital expenditure - HELD THAT:- The road taxes paid to state government for permitting vehicles to run in different states is recurring expenditures which needs to be incurred by a transporter for plying buses. In this case, the assessee being in the business of plying motor buses has paid Pondicherry permit charges to Government of Pondicherry to operate buses in the state of jurisdiction of Pondicherry and same would be in the nature of Revenue expenditure. The AO without appreciating the fact simply made disallowance towards Pondicherry Permit Expense and thus, we direct the AO to delete addition made towards Pondicherry Permit Expense . Disallowance of expenditure of Penal in nature u/s.37(1) - assessee has debited a sum under the head Vehicle Permit Tax - assessee claimed that said expenditure is paid towards taking permission to run vehicles for a particular period - AO disallowed Vehicle Permit Tax on the ground that it is in the nature of compounding fees for violation of law in force and hence panel in nature, cannot be allowed u/s.37(1) - HELD THAT:- AO on the basis of sample receipt issued by the Transport Department opined that it is panel in nature for violation of law in force. We find that the assessee has paid road taxes to Transport Department for taking permit to run buses and in the sample receipt considered by the AO nowhere it has specified that the assessee has violated any law and the Department has imposed penalty to consider said payment as panel in nature. The AO without understanding the concept of road tax being paid by transport operators simply disallowed amount paid to Transport Department as compounding fee which is panel in nature. In fact, it is a tax paid by the assessee to Transport Department to take permit to run the buses. Therefore, we are of the considered view that the AO is erred in disallowing expenditure u/s.37(1) of the Act, and thus, we direct the AO to delete the additions made u/s.37(1).

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• 2023 (1) TMI 22
  Revision u/s 263 by CIT - validity of Reopening of assessment - transaction in share/F O and taken benefit illegally by modifying the client code - As per CIT assessee is one of the beneficiaries who had taken profit through client code modification facility as provided by NSE, which is not a genuine transaction - HELD THAT:- In the present case, it is undisputed that reassessment proceedings were initiated under section 147 of the Act on the very same issue of alleged fictitious profits earned by the assessee through the process of client code modification. In the reasons recorded for reopening the assessment, it was alleged that the assessee is a beneficiary of transaction in shares/F O and has taken benefit illegally by modifying the client code of another person with its client code. During the reassessment proceedings, as is evident from the submission assessee merely provided the contract notes of the 2 brokers viz. J.L. Shah Securities Pvt. Ltd and Ashvin M Shah to substantiate its submission that the said transaction in shares/F O belongs to the assessee. It is evident from the record that the AO has made no enquiry to examine the source of investment or the genuineness of the profit earned by the assessee. AO also did not examine the original clients whose codes were alleged to have been modified to show the fictitious profit in the hands of the assessee. The AO merely proceeded to accept the contract notes of 2 brokers submitted by the assessee without appreciating the fact that in the alleged transaction of client code modification these brokers would have been actively involved and their statement cannot be treated as the gospel truth. Thus, in the present case, it cannot be said that the AO has carried out the enquiry/verification that would have been carried out by a prudent officer. The lack of investigation/enquiry by the AO, particularly when the assessment has been reopened on the very same issue and the information was received in this regard from the Investigation Department, would render the assessment order amenable to revision under section 263 of the Act, in the peculiar facts of the present case. This case is also covered under Explanation 2 to section 263 of the Act. Therefore, the assumption of jurisdiction under section 263 of the Act is upheld. We further find that the learned PCIT has straight away directed the AO to tax the amount of Rs. 35,47,821 as assessee s income from undisclosed sources under the head income from other sources . However, since the assessment order has been set aside, we are of the considered view that the AO should conduct a proper investigation/enquiry and pass a fresh order on this issue as per law. Further, as regards the direction to not allow the set off of income against the earlier years brought forward business losses, we are of the considered view that the allowability of claim of set-off of losses should be decided in terms of the law applicable during the year under consideration. To this extent, the directions in the impugned order are modified. Direction vide impugned order to examine the applicability of section 14A read with rule 8D - As we find that this issue was not examined by the AO, therefore, assumption of jurisdiction under section 263 of the Act on this issue and the direction in the impugned order is upheld. Appeal by the assessee is dismissed.

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• 2023 (1) TMI 21
  Capital gain computation - sale of agriculture land - Applicability of section 50C - CIT-A upheld the substitution of the sale consideration received by the assessee by stamp duty value as per section 50C but at the same time, rejected valuation of cost of acquisition of the property adopted by the AO on the basis of valuation done by the DVO, and directed the AO to adopt the value of cost of acquisition taken by the assessee - HELD THAT:- We find merit in the contentions of the ld.counsel for the assessee that actual consideration received by the assessee was to be considered for computing capital gain as opposed to its substitution by the stamp duty value as per section 50C of the Act, on account of the third proviso to section 50C whichthough brought on the statute w.e.f. 1.4.2019, has been held in series of decision by the ITAT as cited before us by the ld.counel for the assessee, to be retrospective in nature. Ground no.1 raised by the assessee is, therefore, allowed. Deduction u/s 54F - absence of any documents furnished by the assessee to substantiate its claim of having reconstructed his residential house - HELD THAT:- We have noted from the assessment order that there isno mention that the assessee had been put to notice before denial of this claim of deduction under section 54F - CIT(A) noted that the assessee had furnished evidence by way of certificate of Talati of the village and vouchers bills supporting the claim of reconstruction of house to the extent of Rs.6,75,000/- on which he claimed deduction under section 54F - CIT(A) refused to admit these evidences since they were not produced before the AO. In this backdrop of facts the denial of claim of deduction u/s 54F of the Act for want of evidence appears unjustified. We consider it fit to send the issue back to the file of the AO to verify the claim of the assessee, and thereafter adjudicate the issue in accordance with law. Ground no.2 is allowed for statistical purposes.

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• 2023 (1) TMI 20
  Assessment of trust - Disallowance of provision comprising of provision of gratuity and provision of leave encashment as application of income - DR submitted that there is no scientific basis for the estimate of the provisions made by the assessee for gratuity and leave encashment thus AO has rightly made the disallowance as the amounts in question represented unascertained liability - HELD THAT:- CIT(A) considered the above submission of the assessee and placing reliance on the decision of National Association of Software and services Companies[ 2012 (5) TMI 204 - DELHI HIGH COURT] , Birla Janhit Trust [ 1990 (8) TMI 5 - CALCUTTA HIGH COURT] , Trustees of H.E.H the Nizam s Charitable Trust [ 1981 (1) TMI 52 - ANDHRA PRADESH HIGH COURT] and the decision of the Tribunal in assessee s own case [ 2019 (3) TMI 2009 - ITAT DELHI] deleted the impugned disallowance. There is no substance in the contention of the Ld. DR that there is no scientific basis for the impugned provisions for gratuity and leave encashment which were made on the basis of actuarial valuation. No infirmity in the order of the Ld. CIT(A) who has applied the ratio decidendi of the decisions (supra) to the facts of the assessee s case. We, therefore, confirm his findings in the absence of anything brought on record by the Revenue to enable us to take a different view. Appeal of the Revenue is dismissed.

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• 2023 (1) TMI 19
  Addition u/s 69C - Bogus purchases - assessee submitted as relying on assessee own case disallowance can be restricted to 5% in the present case also - HELD THAT:- AO has treated the purchases from certain parties as non-genuine and added back the entire amount to the income of the assessee. However, it appears on record that before the Assessing Officer the assessee has furnished the details of sales quantitative tally of purchase and sales etc. Therefore, the fact that the assessee had purchased the goods from some source is established. In such a situation, the entire purchase cannot be disallowed but the disallowance can be restricted to the profit element embedded in such purchases. In fact, adopting this approach in some other assessment years the AO in assessee s own case has restricted the disallowance to 5% in respect of purchases made from very same parties. The same yard-stick can be applied in the impugned assessment year as well. Therefore, direct the AO to restrict the disallowance to 5% of the total purchases - These grounds are partly allowed.

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• 2023 (1) TMI 18
  TP Adjustment - Validity of TP order u/s. 92CA(3) - period of limitation - HELD THAT:- As we hold that the order date 01.11.2019 is passed beyond the period of limitation and therefore the adjustment proposed by way of transfer pricing order u/s. 92CA(3), therefore needs to be quashed. It is ordered accordingly. TDS u/s 195 - Disallowance u/s 40(a)(ia) - payments under the head management fees - make availble claause - nature of services rendered by the related parties to the AE is such that there is a knowledge that is transferred and imparted to the assessee and once the agreement is terminated, the assessee would be able to do the services based on the knowledge acquired - HELD THAT:- On perusal of the Service clause in the MSA, it is noticed that the service provider is providing regular management services relating to the business administration of the company and in our considered view there is no technical knowledge was imparted to the assessee. In view of the above and placing reliance on the decision of De Beers [ 2012 (5) TMI 191 - KARNATAKA HIGH COURT] we hold that the services rendered by the related parties to the assessee are not liable to tax deduction at source since there is no technology or technical knowledge is made available to the assessee. Appeal of the assessee is allowed.

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• 2023 (1) TMI 17
  TP Adjustment - corporate guarantee for a working capital term loan availed by its AE - TPO concluded that the corporate guarantee provided by the assessee to HSBC Bank, for the loan availed by DIPL, is an international transaction and commission from such corporate guarantee would be taxable in India in the hands of the assessee under Article 21 of the Double Taxation Avoidance Agreement ( DTAA ) between India and Germany - HELD THAT:- DRP having given categorical finding that as per the DTAA with Germany, guarantee commission which falls under other income is taxable only in Germany as per Article 21. We find that decision relied by the ld. TPO on Delhi Tribunal in the case of Johnson Matthey Public Limited is factually distinguishable as it pertains to India UK DTAA wherein under Article 23, it specifically provided for taxability of other income in source state i.e. India. Whereas under India- Germany DTAA, Article 21 provides for taxability of other income only in Germany and not in India. We find that the ld. AO in final assessment order had held that objections raised by the assessee before the ld. DRP were rejected and accordingly, added the transfer pricing adjustment made on account of guarantee commission - This action of the ld. AO is merely erroneous in view of the fact that against the categorical finding of ld. DRP on objections 6-7, which were allowed in favour of the assessee, the Revenue had not preferred any appeal before us. Hence, in view of the aforesaid observations we have no hesitation in directing the ld. AO to delete the transfer pricing adjustment made on account of guarantee commission income - Accordingly, the grounds raised by the assessee are allowed.

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• 2023 (1) TMI 16
  Addition of write off of inventory - AO sustained the additions made towards disallowance of loss on account of written off of inventory, on the ground that the appellant could not produce necessary evidences to prove its claim that written off of inventory is unusable and obsolete and further, there was no reporting to the authorities concerned, even though the assessee is a listed company which required to report major events to various authorities including SEBI etc - HELD THAT:- The assessee is required to take necessary approvals from the Board of Directors and also required to report major events to the stock exchange and SEBI, to inform the shareholders about any adverse events which cause huge financial burden or loss. Further, although the assessee claims that inventory write off pertains to purchase of cotton made in the financial years 2004-05 2005-06, but on perusal of statement of movement of stock filed by the assessee, the closing stock of cotton as on 31.03.2006 was only at Rs. 11.34 crores, whereas, the value of stock written off for the impugned assessment year is at Rs. 16.96 crores. Therefore, the argument of the assessee that the inventory of stock written off pertains to financial years 2004-05 2005-06 is devoid of merits. Assessee has written off 100% inventory of cotton held and the value of said inventory is very high. When the assessee is taking such a drastic decisions which impacts its financial decision, it needs to report to the concerned authorities and also required to take approval from the Board of Directors and audit committee. In this case, although assessee claims that it has reported inventory write off to the shareholders in published quarterly financial report, but the CIT(A) recorded categorical findings that similar statement is absent in the final accounts submitted to shareholders in the annual general body meeting. Further, there is no iota of observations by the auditors in their auditors report submitted to the Board of Directors for the financial year 2012-13, even though, there is a requirement of law to report any adverse movement in inventory valuation. CIT(A) made further observations that the assessee could not file any evidence to prove that whether any report has been submitted to stock exchange and SEBI on this issue. We further noted that the assessee has taken an insurance coverage for loss of stock and other asset. Even though, the assessee claims stock written off became obsolete and unusable, there is no proof of claim before the insurance company. Further, when such a huge chunk of inventory was written off, obviously there will be a revenue from sale of scrap. There is no iota of evidence with the assessee to prove its claim that whether any revenue is generated from sale of scrap. The assessee also could not able to furnish any evidence whether obsolete/unusable stock is still lying with the assessee or any further action is taken to sell or disburse the stock. Therefore, we are of the considered view that the assessee could not satisfactorily explain with necessary evidence the loss claimed on account of write off inventory, but is only to offset capital gain derived from sale of property as brought out by the AO and CIT(A). AO in their order observed that during the financial year relevant to assessment year 2013-14, the assessee shows two pieces of vacant land and computed LTCG and set off LTCG against current year business loss - AO further noted that substantial portion of the current year business loss is due to alleged write off of inventory - Therefore, from the above, it is very clear that the assessee has devised a tax planning to offset capital gains derived from sale of property by claiming set off current year business loss. There is no error in the reasons given by the AO as well as the CIT(A) to make additions towards disallowance of loss on account of write off inventory of cotton. Appeal filed by the assessee is dismissed.

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• 2023 (1) TMI 15
  Unexplained Credits u/s 68 - AO noticed inward Telegraphic transfer in the assessee s NRE account with DCB Bank Limited, Mumbai - assessee has filed certain additional evidences and prayed that these additional evidences be admitted under rule 29 of the Appellate Tribunal Rules 1962 - HELD THAT:- There is no explanation whatsoever as to the purpose for which this money was given by Topline International Inc to the assessee. What is filed as additional evidence before us included certain emails between Topline International Inc and it s bankers, as also certificates of incumbency of two customers of Topline International Inc. It is indeed true that just because the assessee has received the money from a company based in the BVI, it cannot be taxed as unexplained credit. Assessee has to give complete details of the BVI entity and establish bonafides of the said entity as also of the transaction. The burden of the assessee cannot stand discharged just by his giving some incomplete and incoherent details of this entity and copies of some documents in a foreign language. All such treasonable details, in respect of this entity, as the authorities may requisition will have to be furnished by the assessee. The fact that the assessee has access to these documents and that close relatives of the assessee are major shareholders of the company shows that the assessee has close relationship with Topline International Inc. I We deem it fit and proper to remit the matter to the file of the learned CIT(A) with a direction to adjudicate on the matter de novo after giving an assessee one more opportunity of producing documents, including all the bank statements, relating to Topline International Inc and establish the credit worthiness of the said company, explain the nature of transactions that the assessee had with Topline International Inc and respond to such questions as the CIT(A) may have with respect to this transaction. The assessee is further directed to file certified copies of all such documents as he may seek to rely upon translated in English-where necessary, within two weeks of receipt of notice of remanded hearing before the CIT(A), as also with the Assessing Officer. The CIT(A) will thus decide on the matter afresh after giving an opportunity of hearing to the assessee, by way of a speaking order and in accordance with the law. Ordered, accordingly. Levy of interest u/s 234B - HELD THAT:- No specific arguments were advanced before us beyond placing the reliance on the non-discrimination clause in the tax treaty, as set out in Article 24(1) of the Indo-Portugal Double Taxation Avoidance Agreement. In any case, it is only elementary that article 24(1) can come into play only when discrimination is based on nationality; that does not seem to be the case here. If interest is wrongly charged by the AO, then just because the assessee is a Portuguese citizen, it does not amount to non-discrimination under the Indo-Portuguese tax treaty. Be that as it may, as the matter is being remitted to the file of the CIT(A) for adjudication de novo, the assessee is also granted liberty to take up this issue regarding alleged wrong levy of interest u/s 234B, if so advised, before CIT(A). CIT(A) may examine the matter, if so raised before him, and adjudicate upon the same in accordance with the law and by way of a speaking order. On both the issues thus matter stands restored to the file of the learned CIT(A). Appeal is allowed for statistical purposes.

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• 2023 (1) TMI 14
  Income taxable in India - Existence or otherwise of a Permanent Establishment (PE) of the assessee in India and in case there is a PE, attribution of profit to the PE - assessee is a non-resident corporate entity incorporated in Ireland wholly owned subsidiary of Adobe System, USA and is engaged in licensing of software in India through distributors to the end users - HELD THAT:- There is no gainsaying that factually the issue stands on identical footing in relation to preceding assessment years, as, both AO and learned DRP have decided the issue following their earlier decisions. That being the case, respectfully following the decision of the coordinate Bench, as referred to above, we hold that the amount received by the assessee from supply of software and automated services, are not taxable in India. The Assessing Officer is directed to delete the additions.

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• 2023 (1) TMI 13
  Estimation of income - bogus purchases - HELD THAT:- As relying on case of Pankaj K. Choudhary others[ 2021 (10) TMI 653 - ITAT SURAT] we are of the view that disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. Reopening of assessment u/s 147 - reasons to believe - HELD THAT:- We note that Assessing Officer re-opened the assessment by issuing Notice u/s 148 of the Act. We note that function of the Assessing Authority at the stage of recording reasons is to administer the statute and what is required is a reason to believe and not to establish fact of escapement of income and therefore, looking to the scope of section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the assessee has escaped assessment, it is always open for the Assessing Authority to reopen the assessment. Therefore, based on these facts and circumstances, we do not find any infirmity in the reasons recorded by Assessing Officer, hence, we dismiss ground nos.1 and 3 raised by the assessee.

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• 2023 (1) TMI 12
  TP Adjustment - AMP expenditure incurred by the assessee - TPO proposed an adjustment by application of BLT - TPO concluded that the AMP expenses of the assessee are higher than that of comparable companies and applied BLT by charging a mark up of 15.43% for alleged brand building services provided to AE - HELD THAT:- TPO has only undertaken an adjustment by application of BLT. There is no agreement, understanding or arrangement between the assessee and its AE for the expenditure to be incurred on AMP which has been brought on record by the Revenue and hence it cannot be presumed that an international transaction exists. The application of BLT for the purpose of undertaking an adjustment under transfer pricing provisions is not permissible under chapter X of the Act. The Hon ble Delhi High Court has struck down the application of BLT for making adjustment on account of AMP expenses as an international transaction in Maruti Suzuki India Ltd. s case [ 2015 (12) TMI 634 - DELHI HIGH COURT ] BLT as an approach is not permissible for undertaking any addition on account of AMP expenses incurred by the assessee. We, therefore, set aside this issue to the file of the Ld. AO/ TPO to decide it afresh in light of the decisions of Maruti Suzuki India Ltd. [ 2015 (12) TMI 634 - DELHI HIGH COURT ] and Sony Ericsson Mobile Communications India Pvt. Ltd. [ 2015 (3) TMI 580 - DELHI HIGH COURT ] after giving reasonable opportunity of hearing to the assessee. Before us, the assessee has prayed that if the AMP adjustment is determined at Rs. NIL by application of jurisdictional High Court decisions (supra) the issue whether this is an international transaction would become academic and thus the assessee will not press this ground. However, leave may be granted to the assessee to argue this issue in the subsequent assessment years if so required. We have no objection and allow the assessee to argue on this issue in future. Disallowance on account of payment of royalty - Assessee in its transfer pricing study adopted CUP as the most appropriate method for the purpose of benchmarking the transaction - assessee had submitted a fresh corroborative analysis using Profit Split Method ( PSM ) before the Hon ble DRP - HELD THAT:- We find force in the contention of the assessee that royalty agreements operating in different geographical regions can be applied as a filter as the Ld. TPO himself has accepted royalty agreements operating in foreign jurisdictions. While the primary objection of the Hon ble DRP in respect of comparability analysis is that the comparable selected by the assessee are from a different geographical region (i.e. USA), we observe that the three comparables considered by the Ld. TPO in the remand report are from the same geographical location (i.e. USA) and hence in our view the objection relating to difference in geographical region does not hold good. Whether set of comparables selected by the assessee are appropriate for benchmarking the payment of royalty or not? - Five comparables selected by the assessee are from same geography i.e. USA and the same industry i.e. Kitchenware and home furnishing items as the comparables considered by the Ld. TPO. The Ld. TPO rejected two of his own comparables i.e. Mikasa Inc. and Oneida Ltd. by holding that these two comparables are providing know-how whereas the assessee is not obtaining know-how which in our considered view is incorrect as evident from the license agreement as well as other documentary evidence submitted by the assessee. The assessee has paid royalty for use of trademark and marketing information /marketing know-how. All the eight comparables listed in the chart are from the same geography and same industry and hence are valid comparables to that of the assessee. Accordingly, the Ld. AO/TPO is directed to include the aforesaid eight comparables in the final set of comparable agreements for the purpose of benchmarking the payment of royalty by the assessee. Ground No. 6 and 9 are thus allowed. Payment of management services fee - TPO held that the assessee could not submit any evidence that management support services had actually been received and also failed to demonstrate the need for such services - ALP was determined at NIL by using CUP and an adjustment - HELD THAT:- Respectfully following the decision of the coordinate bench in assessee s own case for AY 2012-13 [ 2021 (11) TMI 1122 - ITAT DELHI] we set aside this issue to the file of the Ld. AO with a direction to the assessee to furnish the required information / document / details of payment etc. in support of its claim that services were actually rendered and benefit was derived by the assessee and the Ld. TPO is directed to verify the same and decide the ALP afresh after giving reasonable opportunity to the assessee. Accordingly, ground Nos. 10, 11 and 12 are allowed subject to the above directions. TDS u/s 195 - Disallowance u/s 40(a)(i) - assessee paid software charges and intranet and other IT cost - reimbursement of expenses made by the assessee to Dart Industries Inc., USA ( Dart ) - TPO in its order has not drawn any adverse inference in relation to ALP of such reimbursement - HELD THAT:- The issue whether the amounts paid by resident Indian end users / distributors to non-resident computer software manufacturer / supplier as consideration for the resale/use of the computer software through end users license agreements (EULAs) /distribution agreements is the payment of royalty for the use of copyright in the computer software now stands settled by the decision of Engineering Analysis Centre of Excellence P. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT ] wherein the Hon ble Supreme Court has held that such payments are not royalty payment and the same does not give rise to any income taxable in India, as a result of which such payments are not liable to tax deduction at source under the provisions of section 195 of the Act. The decision (supra) of the Hon ble Supreme Court will apply to the case of the assessee provided the consideration paid by the assessee is towards purchase of standard/off-the-shelf software from Dart. The issue whether the software supplied by Dart to the assessee is standard/off-the-shelf software or customized software needs verification in the light of observations made by the Hon ble DRP. We, therefore, deem it fit to restore this issue to the file of the Ld. AO for verification. Needless to say, the assessee will be given adequate opportunity of hearing before the Ld. AO. If, on verification it is found that the software supplied by Dart is standard software without any customization being done by Dart, the Ld. AO shall reconsider this issue in light of the decision of the Hon ble Supreme Court in Engineering Analysis Centre of Excellence P. Ltd. (supra) and modify the assessment accordingly. As an alternate argument the assessee has also contended that being pure reimbursement in nature and no element of income embedded, the payment made by the assessee to Dart is not liable to tax in India. Since both the Ld. AO / Hon ble DRP have decided this issue against the assessee holding such payment in the nature of royalty which is yet to be determined based on the directions above, we refrain from adjudicating upon the alternate plea taken by the assessee.

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• 2023 (1) TMI 11
  Reopening of assessment u/s 147 - reasons were recorded by the AO, based on the information received from the investigation wing - HELD THAT:- As considering the aforesaid facts and circumstances of the case, we are of the considered view that it cannot be said that there is no reason to believe that the income chargeable to tax has escaped assessment because such exercise of reopening has been made only after due inquiries. From the above judgment of the Hon`ble Gujarat High Court in the case of Peass Industrial Engineers (P.) Ltd [ 2016 (8) TMI 280 - GUJARAT HIGH COURT] it is vivid that function of the assessing authority at the stage of recording reasons is to administer the statute and what is required is a reason to believe and not to establish fact of escapement of income and therefore, looking to the scope of section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the assessee has escaped assessment, it is always open for the assessing authority to reopen the assessment. Therefore, based on these facts and circumstances, we do not find any infirmity in the reasons recorded by Assessing Officer, hence the Cross Objection No.1 raised by the assessee is dismissed. Estimation of income - Bogus purchases - HELD THAT:- As the issue is squarely covered by the judgment of Co-ordinate Bench in the case of Pankaj K. Chaudhary ( 2021 (10) TMI 653 - ITAT SURAT] and there is no change in facts and law and the Ld. DR for the Revenue has failed to controvert the findings of the Co-ordinate Bench. We note that Co-ordinate Bench has sustained the addition @ 6% of bogus purchases, therefore, respectfully following the binding precedent, we partly allow the appeal of the Revenue.

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• 2023 (1) TMI 10
  Assessment u/s 153A - Necessity to have seized material to frame assessment u/s. 153A - contention of the Ld. A.R. is that assessment for these assessment years were already completed u/s. 143(3) before the date of search i.e. on 23.8.2016 and the assessment is not pending as on the date of search - as per CIT earlier assessment cannot be added again in the reassessment proceedings u/s. 153A, in as much it will amount to an addition being made twice as the assessment in which the addition was originally made had not abated - HELD THAT:- We do not find any infirmity and these findings of Ld. CIT(A) is in conformity with the judgement of Kabul Chawla cited [ 2015 (9) TMI 80 - DELHI HIGH COURT] . Before us, Ld. A.R. made one more plea that the department enforced the demand created in these assessment years consequent to assessment u/s. 143(3) of the Act and also demand created as a result of assessment framed u/s.153A of the Act and he also filed copies of demand notices for these assessment years stating that department is enforcing both the demands which amount to double taxation of same income. We make it clear that the department cannot enforce both the demands, which is created vide assessment u/s. 143(3) of the Act and assessment framed u/s. 153A of the Act. As held by Hon ble Delhi High Court in the case of Kabul Chawla cited (supra), department has to ensure the enforcement of only one demand created consequent to the search action and framing of assessment u/s. 153A of the Act and we direct accordingly. Addition under the terminology Unaccounted Fees Received in Cash - addition was made based on certain notings found impounded material labelled as GEF(M)/133A/5 which are loose sheets as, holding the same to be fees received in cash - HELD THAT:- Adverting to the facts of present case, AO relied upon the statement recorded and loose sheets impounded during the survey u/s. 133(1A) for making addition. The statement of D.V. Guruprasad cannot be relied in its entirety and this is not supported by any corroborated evidence. In such circumstances, we are not in a position to uphold the addition made on that basis. Accordingly, the Ld. CIT(A) is justified in deleting the addition. The order of the Ld. CIT(A) on this issue is confirmed. Addition based on loose sheets - CIT-A observed that the AO has relied upon the sworn statements of Mr. D.V. Guruprasad which are ambivalent in nature which certainly necessitates further inquiry and gathering of clinching/formidable evidence to justify the addition - HELD THAT:- CIT(A) observed that inquiry from persons, students who allegedly paid the money was essential to corroborate loose sheets as required by the decision in the case of CBI vs VC Shukla [ 1998 (3) TMI 675 - SUPREME COURT] and Common Cause (A Registered Society) and Others vs Union of India [ 2017 (1) TMI 1164 - SUPREME COURT] - And since such corroborative evidence is not found, one is constrained from sustaining an addition so made in view of the decisions of the Hon ble Supreme Court cited supra. Hence the addition is found to be unsustainable. There is no corroborated evidence other than the statement of Shri D.V. Guru Prasad to support the entries in the loose sheets. Accordingly, as discussed in earlier para, we delete the addition.

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• 2023 (1) TMI 9
  Income deemed to accrue or arise in India - nature and description of services rendered by PTAI - payments to be made by the assessee company would clarified as fees for included services (FIS) as per Article 12(4)(b) of Indo-US DTAA - Satisfaction of conditions of Article 12(4)(b) of Agreement for Avoidance of DTAA between India and US of make available of technical service - assessee submitted that the AO has wrongly inferred the website of PTAI to hold that the said company as make available any kind of skills to the assessee company - HELD THAT:- From the perusal of the agreement as well as nature of services rendered by the non-resident company PTAT, we find that the payment is purely towards benchmarking of the services of SPI and such benchmarking study merely enables the clients to undertake further course of action to improve its qualitative capacity of personnel. PTAI does not provide any know how or technical knowledge, albeit prompt its clients to take corrective action in the above areas. It merely provides implementing the benchmarking study in its organisation. PTAI is not a subject domain expert in the area in which the assessee operates. It only collects data from various entities engaged in similar business and makes benchmarking study report which indicates the percentile in which the assessee operates in terms of various facets of its operations. MOU to the India US DTAA elaborates on the concept of make available , which specifies that technology will be considered made available when the person acquiring the service is able to apply the technology. The fact that the provision of the service may require technical input by the person providing the service does not per se mean that technical knowledge, skills, etc. are made available to the person within the meaning of paragraph 4(b). Similarly, the use of a product, which embodies technology, shall not per se be considered to make the technology available. Thus, the services rendered by PTAI are neither ancillary nor subsidiary to the application or enjoyment of any right, property or information and therefore, same are not covered under Article 12(4)(a). Merely providing commercial information through a benchmarking study does not in any manner makes available any technical knowledge, experience, skill, know how or processes, nor consist of the development and transfer of a technical plan or technical design. Thus, the services of PTAI cannot be said to be FIS under covered Article 12. Accordingly, we hold that the payment made by the assessee to PTAI towards benchmarking services constitute business profit which are not liable to tax in India under the provision of Article 7 of the India USA DTAA and neither it has any business connection in India as defined in Explanation 2 of Section 9(1)(i) of the Act. Accordingly, the grounds of appeal raised by the revenue are dismissed.

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• 2023 (1) TMI 8
  Upward adjustment on account of sales made to the associated enterprises - CIT-A has deleted the upward adjustment made by the TPO/AO after making the reference to the order of the ITAT as discussed above in the earlier years - HELD THAT:- As no material has been placed on record by the ld. DR to demonstrate that the decisions of Tribunal that were followed by the Ld.CIT(A) while dismissing the appeals of Revenue have been set aside / stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of earlier years nor has placed any contrary binding decision in its support. In view of the above, we do not find any infirmity in the order of the learned CIT-A. Hence the ground of appeal of the revenue is hereby dismissed. Addition of marketing commission expenses which was taken as nil - CIT-A deleted the addition - HELD THAT:- DR to demonstrate that the decisions of Tribunal that were followed by the Ld.CIT(A) while dismissing the appeals of Revenue have been set aside / stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of earlier years nor has placed any contrary binding decision in its support. In view of the above, we do not find any infirmity in the order of the learned CIT-A. Hence the ground of appeal of the revenue is hereby dismissed. Addition of excess depreciation claimed by the assessee - AO during the assessment proceedings found that the assessee was given reimbursement of capital expenses in the earlier years but the assessee has not reduced the same from the cost of the plant and machineries - CIT-A deleted the addition - HELD THAT:- Before us, no material has been placed on record by the ld. DR to demonstrate that the decisions of Tribunal that were followed by the Ld.CIT(A) while dismissing the appeals of Revenue have been set aside / stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of earlier years nor has placed any contrary binding decision in its support. In view of the above, we do not find any infirmity in the order of the learned CIT-A. Hence the ground of appeal of the revenue is hereby dismissed.

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• Service Tax

• 2023 (1) TMI 7
  Denial of Cenvat Credit - Denial of interest on delayed refund - principles of ejusdem generis - HELD THAT:- It is settled principle that Justice need not only be done but it should be seem to be done. Although a specific plea has been raised by the Appellant but the learned Commissioner failed to give any findings on the said plea - In my view the plea raised by learned Consultant has a bearing on the merits and therefore the learned Commissioner ought to have gone into the submissions of the appellant and recorded a finding thereon. He jumped to the conclusion without recording any finding. Mere recording of conclusion without discussions on submission or case laws is no consideration and the absence of reasons has rendered the impugned order unsustainable. Matter remanded back to learned Commissioner (Appeal) with a direction to decide the appeal afresh and to give detailed findings on the pleas raised by the appellant. All the issues are left open. It goes without saying that the said authority must adhere to the principle of natural justice. Appeal allowed by way of remand.

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• Central Excise

• 2023 (1) TMI 6
  Maintainability of appeal - appropriate forum - Ethanol Blended Motor Spirit (EBMS) - exemption under N/N. 62/2002-CE, No. 63/2002-CE dated 31.12.2002 - blending of MS and Ethanol is a manufacturing process amounting to manufacture or not - HELD THAT:- In the decision rendered by Hon ble Supreme Court in the case of NAVIN CHEMICALS MFG. TRADING CO. LTD. VERSUS COLLECTOR OF CUSTOMS [ 1993 (9) TMI 107 - SUPREME COURT ] , the Hon ble Supreme Court while deciding the appeal in relation to classification of goods and as to whether or not they are covered by exemption notification directly and proximately to the rate of duty, held that A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and proximately to the value of goods for purposes of assessment. The statutory definition of the said expression indicates that it has to be read to limit its application to cases where, for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of the goods. The dispute in the present appeal, is in relation to whether the assessee was covered by the exemption notification, where the exemption notification was related directly and proximately to rate of duty applicable and, therefore as held by the Hon ble Supreme Court in case of Navin Chemicals MFG Trading Co. Ltd, appeal on the question of law before the High Court would not be maintainable and an appeal under section 35 L of the Central Excise Act, 1944, would be maintainable before the Hon ble Supreme Court. Appeal dismissed.

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• 2023 (1) TMI 5
  Valuation of gas - inclusion of retention charges of Cylinders wherein the final product viz gas supplied to the Customer beyond the stipulated period in the assessable value of the gas or not - HELD THAT:- The same issue has been decided in the appellant s own case for their different factory vide AIMS INDUSTRIES LTD. VERSUS C.C.E. S.T. -DAMAN. [ 2019 (4) TMI 2091 - CESTAT AHMEDABAD] . In the said decision various Judgments including the Supreme Court judgment in the case of COMMISSIONER OF CENTRAL EXCISE, INDORE VERSUS GRASIM INDUSTRIES LTD. [ 2009 (7) TMI 155 - SUPREME COURT] was considered. It was held that retention/detention charges is not a part of the sale price. It is only charged when the customers retain/detain the cylinders beyond the period stipulated by the appellant. Accordingly, the retention/detention charges are not includable in the transaction value of the excisable goods namely gas sold, duly packed, in the gas cylinders. In view of the above decision of this Tribunal which is based on the Hon ble Supreme Court judgment in case of Grasim Industries Ltd the issue is no longer Res-Integra, therefore, the impugned order is not sustainable - appeal allowed.

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• CST, VAT & Sales Tax

• 2023 (1) TMI 4
  Validity of assessment order - certain export sales was disallowed on the ground that the petitioner failed in producing the export proofs - HELD THAT:- The decision of KAVYA MARKETING VERSUS STATE OF GUJARAT [ 2022 (4) TMI 1202 - GUJARAT HIGH COURT] would squarely be applicable in facts of the present case. The Tribunal has committed serious error of law by not taking note of the prima facie case of the petitioner while examining the aspect of pre-deposit. Therefore, in the facts and circumstances of the present case, the order passed of the Tribunal deserves to be quashed and set aside and hereby quashed and set aside. The Commissioner Appeal-First Appellate Authority are directed to hear the appeal on merits. The First Appellate Authority may consider the payment of pre-deposit, a fresh keeping in mind the financial hardship expressed by the petitioner. It is made clear that we have not gone into the merits of the matter and kept all the issues open including the stay of demand to the file of the First Appellate Authority. Petition disposed off.

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• 2023 (1) TMI 3
  Interest on delayed refunds - Refund of only principal amount without interest for the period spanning 2005 till the date to the petitioner under Section 54 of the Gujarat Sales Tax Act, 1969 - whether the respondent is required to be directed to pay the interest from 01.04.2005 till the date of actual refund on the total amount? - HELD THAT:- Learned senior advocate, Mr.Soparkar appearing with learned advocate, Mr.Davavala has pressed into service the order of the First Court in case of ASIAN PAINTS LIMITED VERSUS JP GUPTA, STATE OF GUJARAT [ 2022 (3) TMI 1472 - GUJARAT HIGH COURT] where the Court has in contempt jurisdiction on dated 28.03.2022 has directed the amount to be refunded - It is thus clear that the First Court directed the amount to be deposited when the challenge before the Apex Court had already been made. The State has accepted this order without a murmur. It is also to note that the case which has been followed for the purpose of seeking the refund, no stay has been granted by the Apex Court and couple of matters are still at a diary stage. In that view of the matter, the request on the part of the petitioner for the interest on the amount of delayed refund deserves to be allowed, following the decision in case of M/s Syngenta Crop Protection Pvt. Ltd. v. State of Gujarat [ 2018 (4) TMI 1669 - GUJARAT HIGH COURT] . The petitioner thus would be entitled to the interest on the delayed refund at the rate of 6% per annum - It is thus made clear in all the decisions which have been referred to hereinabove that when the doctrine of merger is borne in mind and when the statutory authority allows the appeal of an assessee, he gives legal shape to the contours of the matter which assessing authority should have adopted and therefore, the refund claim of the assessee would essentially arise from the order of assessment. The respondent No.3 is directed to pay interest to the petitioner at the rate of 6% per annum from 13.07.2009 till the date of actual refund on the principal amount of Rs.2,15,80,739/-, and not later than twelve weeks from the date of receipt of a copy of this judgment - petition allowed.

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• Indian Laws

• 2023 (1) TMI 2
  Levy of tax on advertisement - Constitutional Validity of Section 103(b)(vi), 134 containing the words after levy of tax under Section 134 has been determined by the Corporation and in Sections 135(1), 135(2)(ii), 135(3), 139 and Schedule (viii) to the Municipal Corporations Act, 1976 along with bye laws framed by Municipal Corporation pursuant to the aforesaid provisions - Whether impugned provisions namely Section 94(1)(b)(xiii) including the explanation thereto, Section 94(1-B) containing the words after the levy of tax under Section 94 has been determined by Municipal council in Sections 133(1), 133(2)(ii), 133(3), proviso (iv) to Section 142, Section 324(1)(ff) and Schedule 7 to the Karnataka Municipalities Act, 1964 along with rules/bye laws framed by Municipalities in the State pursuant to the said provisions are unconstitutional and ultra vires the constitution and require to be quashed? HELD THAT:- As could be seen from the provisions under KMC Act, 1976 and KM Act, 1964 power has been entrusted to the Corporation to levy tax on advertisement and the power to determine the rate of tax has been vested with the Corporation and the Municipal Council respectively. Thus, hitherto power to levy and demand the tax on advertisement was traceable to the aforesaid provisions of the Acts. In turn the legislative competence of the State was traceable to entry No.55 of List II of Schedule VIII to the Constitution of India which conferred power on the State to make laws with respect to advertisement tax - the Parliament brought 101st amendment to the Constitution by way of constitution (one hundred and one first amendment) Act, 2016 by which entry No.55 of List II of Schedule VIII to the Constitution has been omitted. Consequently the State has no power to make any laws with respect to advertisement tax. The amendment to the Constitution omitting entry No.55 and consequent promulgation of the Goods and Services Tax (compensation to States) Act, 2017 the power of the State Legislature to levy tax on advertisement is withdrawn. It is appropriate to refer to the Judgment of the Constitutional Bench of the Apex Court in the case of KOLUTHARA EXPORTS LTD. VERSUS STATE OF KERALA ORS. [ 2002 (2) TMI 1314 - SUPREME COURT ] wherein the Apex Court dealing with Judgment of the Division Bench of High Court of Kerala (Ernakulam) upholding the Constitutional Validity of Section 4(2) read with Section 2(d) of Kerala Fishermen Welfare Fund Act, 1985(Act 30 of 1985) (As amended by Act 15 of 1987) held that When any statute of a State or any provision therein is questioned on the ground of lack of legislative competence, the State cannot claim legitimacy for enacting the impugned provisions with reference to the provisions in part IV of the Constitution; the Legislative competency must be demonstrated with reference to one or more of the entries in List II and III of the Seventh Schedule of the Constitution. Thus, it is clear that on and after implementation of Goods and Service Tax Act, 2017 consequent upon the 101st amendment to the Constitution certain taxes including the taxes and advertisement which were levied by the respective States and the Union are subsumed into goods and service tax. The authority to levy tax which was available under entry No.55 List II (State List) of the Seventh Schedule to the Constitution has been omitted. Consequently, the Municipal Corporations and the Municipalities which are the inferior corporate bodies of the State do not have power to levy and collect the tax on advertisement. As rightly contended by learned Senior counsel for the petitioner that amendment to the Karnataka Gram Panchayath and Panchayath Swaraj Act has already been made vide Karnataka Gram Swaraj at Panchayath Raj (Amendment) Act 2017 as seen in the notification dated 12.07.2017 as per Annexure-R whereby provisions similar to Section 94 of KM Act and 103 of KMC Act that existed in Section 199(3) of the Karnataka Gram Swaraj and Panchayath Raj act, providing for levy of tax and advertisement the Panchayath has been omitted in view of omission of entry No.55 in List II of Schedule VII of the Constitution - The amendment made by the State Government to the Panchayath Raj Act has, as contended by the petitioner has lead to anomaly wherein the tax on advertisement is being levied and collected within the limits of Municipal corporation and Municipalities while no such levy is being made within the limits of Panchayaths. This Court is of the considered view that the petitioner has made out a case for grant of relief as sought for - Petition allowed.

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• 2023 (1) TMI 1
  Appointment of full time Presiding Officer in Debt Recovery Tribunal-I, Ahmedabad - HELD THAT:- Right to speedy justice is enshrined under Article 21 of the Constitution of India as held by Hon ble Apex Court in Supreme Court Advocates-on-Record Association Vs. Union of India [ 1993 (10) TMI 352 - SUPREME COURT] . Non-adherence to the same would impinge upon the rights of citizens under Article 14 of the Constitution of India, inasmuch as the litigants are differently treated though placed on the same pedestal or being on par. To put it differently, litigants whose matters are before DRT-II would be able to get the relief at the hands of DRT-II, whereas litigants who are similarly placed and seeking reliefs by filing the petition, which is pending before DRT-I, are not able to get the relief namely, their applications or petitions are getting adjourned from time to time for want of Presiding Officer and thereby depriving them of their legitimate right to speedy justice. This Court adjourned this matter to enable the respondent to take such steps. Though this matter has seen two subsequent dates i.e. 17.6.2022 and 20.6.2022, till date, the assurance given to this Court has not crystallized by way of any such steps having been taken or order having been issued - Petition allowed.

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