TMI Tax Updates - e-Newsletter
October 14, 2023

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. ITR requirement for VISA purpose

   By: Sparsh wadhwa

2. MVAT Audit Report in Form e-704

   By: Ishita Ramani

3. Applicability of GST on Works Contracts entered before the GST Implementation

   By: Bimal jain

4. Condonation of delay is applicable for a period of one month only and not beyond

   By: Bimal jain

5. REDUCED TAXATION ON ENA AND MOLASSES TO BENEFIT ALCO BEVERAGE SECTOR

   By: Dr. Sanjiv Agarwal

6. Prime Location Charges/Floor Rise Charges would not be included in Taxable Service under VAT

   By: Bimal jain

News

1. Facility of enrolment for supply of goods through e-commerce operators by GST un-registered suppliers.

2. Facility for the e- commerce operators through whom unregistered suppliers of goods can supply goods

3. G20 Finance Ministers and Central Bank Governors (FMCBGs) adopt Communiqué at fourth and final G20 FMCBG meeting in Marrakech, Morocco

4. Dr. Vivek Joshi, Secretary, (DFS) chairs meeting with officials of Punjab, Haryana and UT of Chandigarh for speedy implementation of Pradhan Mantri Vishwakarma Scheme

5. Shri Piyush Goyal chairs a Chintan Shivir with industrialists on "Unleashing the power of India’s Manufacturing Industry"

6. IBBI invites suggestions to simplify, ease and reduce cost of compliance of Regulations notified under the Insolvency and Bankruptcy Code, 2016

Notifications

Customs

1. 10/2023 - dated 12-10-2023 - ADD

Anti-dumping duty on imports of flax yarn of below 70 lea count originating in or exported from China PR

GST - States

2. CT/LEG/GST-NT/12/17/676 - dated 31-7-2023 - Nagaland SGST

Seeks to exempt the registered person whose aggregate turnover in the financial year 2022-23 up to 2 crore from filing annual return

3. FIN/REV-3/GST/1/08(Pt-1)(Vol.II)/234 - dated 26-7-2023 - Nagaland SGST

Amendment in Notification No. FIN/REV-3/GST/1/08(P-1)(Vol.1)/04 dated the 31 December, 2018

4. FIN/REV-3/GST/1/08(Pt-1)(Vol. II)/233 - dated 26-7-2023 - Nagaland SGST

Amendment in Notification No. FIN/REV-3/GST/1/08(Pt-1)"D" dated the 30th June, 2017

5. FIN/REV-3/GST/1/08(Pt-1)(Vol. II)/232 - dated 26-7-2023 - Nagaland SGST

Amendment in Notification No. FIN/REV-3/GST/1/08(Pt-1) “P” dated the 30th June, 2017

6. FIN/REV-3/GST/1/08(Pt-1)(Vol. II)/231 - dated 26-7-2023 - Nagaland SGST

Amendment in Notification No. FIN/REV-3/GST/1/08(Pt-I) “O” dated the 30th June, 2017

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/SEC-FATF/P/CIR/2023/0170 - dated 13-10-2023

Amendment to the Guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under the Prevention of Money-laundering Act, 2002 and Rules framed there under

DGFT

2. 34/2023 - dated 13-10-2023

Amendments in Para 4.10 (i) of the Handbook of Procedures, 2023

Customs

3. PUBLIC NOTICE NO. 40 / 2023 - dated 25-9-2023

Change of Custodianship from M/s Chettinad International Coal Terminal Private Limited to M/s Ennore Coal Terminal Private Limited- reg.

4. Public Notice No. - 78/ 2023 - dated 8-9-2023

Additional Documents for Warehousing of liquor to safeguard revenue-reg.

Highlights / Catch Notes

GST

• Court Dismisses Petitioner's Writ Due to Absence and Lack of Evidence for Input Tax Credit Claim.

  Case-Laws - HC : Denial of Input Tax Credit - The petitioner assessee, despite show cause notice, chose not to provide any evidence in respect of his claim for the input tax credit, nor did he appear for a hearing on the date fixed. When the petitioner himself has given up his right to prove his claim for the input tax credit, this Court cannot help such an assessee by entertaining this writ petition. - HC
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• High Court Rules No Interest on Transitional Credit Under CGST Act Sections 138-140 Due to Revenue Neutrality.

  Case-Laws - HC : Seeking to levy interest on transitional credit which was allowed - revenue neutrality - If the petitioner had been allowed to successfully transition the credit under Sections 138 to 140 of the CGST Act, 2017, then and there, the amount would have available for being utilization. By availing the amount as regular credit and utilizing the same, the petitioner has not caused any loss to the revenue. - Demand set aside - HC
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• High Court Rules Bank Account Attachment Unjustified Due to Lack of Complete Tax Evasion or Prior Adjudication Order.

  Case-Laws - HC : Legality and validity of the provisional attachment of the bank account of the petitioner - It is not a case of complete evasion of tax by the petitioner - According to the Revenue, there is a short-payment of the tax due - It is mentioned that the quantum mentioned by the respondents is only a provisional figure even before issuance of show cause notice; not to speak of any adjudication order. In such a case, attaching bank account of the petitioner is not at all justified - HC
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Income Tax

• Supreme Court Clarifies Assessment Date Impact on Third Parties u/ss 153C and 153A of Income Tax Act.

  Case-Laws - SC : Assessment u/s 153C and 153A - date referred under proviso to Section 153(1) - In that event if the date would virtually “relate back” as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. - SC
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• Revenue Must Initiate Reassessment u/ss 147/148 if No Incriminating Material Found in Section 153A Search.

  Case-Laws - HC : Assessment u/s 153A - In case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. - HC
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• Court Upholds Special Audit u/s 142(2A) of Income Tax Act, Emphasizing Public Interest Over Subjective Satisfaction Claims.

  Case-Laws - HC : Special audit u/s. 142(2A) - Challenge on the ground that order is subjective satisfaction, is non-speaking and has been mechanically passed - The objection of petitioner that there is no material to show that interest of Revenue was adversely affected hence the special audit was not helpful, has no legs to stand in view of element of public interest being pre-dominant in the object behind special audit. - HC
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• High Court Clarifies Section 148A(d): Focus on Existence of Information, Not Merits, for Tax Reassessment Initiation.

  Case-Laws - HC : Reopening of assessment - Validity of order u/s 148A(d) - Merits of the information referable to Section 148A thus remains subject to the reassessment proceedings initiated vide notice under Section 148 of the Act. It is for this reason that issues which require determination at the stage of reassessment proceedings and in respect of which departmental remedy is otherwise available are not required to be determined at the stage of decision by the assessing authority under Section 149A(d). The scope of decision under Section 148A(d) is limited to the existence or otherwise of information which suggests that income chargeable to tax has escaped assessment. - HC
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• Draft Assessment Order u/s 144C Considered Final; High Court Upholds ITAT Decision Supporting Assessee's Appeal.

  Case-Laws - HC : Validity of assessment u/s 144C - Draft assessment or not - if the draft assessment order is accompanied by a notice of demand and penalty that itself would force one to reach to the conclusion that though it is termed as draft assessment order, in fact, it is the final assessment order and the notice of demand and penalty was accompanying the same. - The order of ITAT, allowing the appeal of the respondent/assessee was proper, legal and justified - HC
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• Assessee must submit Audit Report in Form 10B for exemption u/s 11; AO to verify compliance.

  Case-Laws - AT : Exemption u/s 11 and 12 - assessee failed to file the Audit Report in Form 10B along with the Return of Income - None of the authorities had any occasion to verify Audit Report in Form 10B belatedly filed by the assessee. Further there is no regular assessment order passed u/s. 143(3) - AO directed to verify the Audit Report in Form No. 10B and then allow the claim of exemption u/s. 11 of the Act, in accordance with law by giving adequate opportunity to the assessee. - AT
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• PCIT's Jurisdiction u/s 263 Challenged Over Debatable Application of Amended Section 115BBE Tax Rate.

  Case-Laws - AT : Revision u/s 263 by CIT - Applicability of Higher rate of tax u/s 115BBE on surrendered income - The applicability of the amended provision of section 115BBE of the Act, which prompted the PCIT to assume jurisdiction u/s 263 of the Act is highly debatable issue, and therefore wrongly assumed jurisdiction u/s 263. - AT
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• Unexplained Cash Deposit Leads to Addition u/s 68, Higher Tax Rate Applied Per Section 115BBE.

  Case-Laws - AT : Addition u/s 68 - Applicability of higher rate of tax u/s 115BBE - Sourcing unsecured loan against Cash Deposit - the assessee has failed to explain the source of cash deposit to her bank account - The amount remained unexplained and the AO was right in making the addition - Addition made u/s. 68 with higher rate u/s. 115BBE - AT
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• Claim Denied: Assessee Fails to Prove Heavy Vehicles Used for Hire; Depreciation Rate Revision Upheld u/s 263.

  Case-Laws - AT : Additions / Higher rate of depreciation @30% on heavy vehicle (Hyva and Tipper) - Main condition for availing of additional depreciation as carved out in the Act is that the motor buses/motor lorries and motor taxis are to be used in a business of running them on hire could not be satisfied by the assessee by way of any supporting documents like any hire charges - Denial of claim by invoking revision u/s 263 sustained - AT
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• TDS Credit Not Reflected in Form 26AS: Rule 37BA(3)(i) Requires TDS Benefit for Current Year's Assessable Income.

  Case-Laws - AT : TDS credit - there was no reflection of TDS amount in Form No. 26AS - It is, ergo, abundantly clear from the mandate of Rule 37BA (3) (i) that the benefit of TDS is to be given for the assessment year for which the corresponding income is assessable. Since the income, on which tax was deducted at source, is patently assessable in the year under consideration, we hold that the benefit of the TDS should also be allowed in the same year - AT
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• Appellant Fails to Submit Objections; Income Additions from Capital Gains Upheld by Assessing Officer's Valuation Report.

  Case-Laws - AT : Undisclosed income of capital gain - cost of acquisition - It is an admitted fact that on 28.03.2016, the Ld. AO received the valuation report submitted by the appellant, much after the valuation report dated 15/16-03-2016 as obtained by the Ld. AO from the DVO . In spite of the several opportunities, no objection was filed in regard to the same by the appellant neither any evidence has been relied upon even during the appellate proceeding. - Additions confirmed - AT
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• Section 154 Order on Cash Seizure Adjustments: Explanation 2 of Section 132B Applies Prospectively; No Appeals Before June 1, 2013.

  Case-Laws - AT : Validity of order passed u/s 154 - adjustment of cash seized against the advance tax denied - it has now been settled that insertion of Explanation 2 to Section 132B of the Act shall have a prospective application and so, appeals may not befiled by the Department on this issue for the cases prior to 01.06.2013 and those already filed may be withdrawn/ not pressed upon. - AT
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Customs

• Court Affirms Delhi's Jurisdiction Over Shawl Seizure Case, Emphasizes Forum Conveniens and Absence of Cause in Srinagar.

  Case-Laws - HC : Territorial jurisdiction of Courts - principle of Forum Conveniens - In absence of any specific pleadings in the writ petitions as well as memoranda of appeals, it cannot be said that any part of cause of action had accrued to the appellant-petitioner at Srinagar. The learned Writ Court has rightly held that the seizure of the shawls containing prohibited material had taken place in Delhi, therefore, Delhi Courts/Fora shall be having jurisdiction in the matter and not this High Court. - HC
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• Revenue's Revaluation of Imported Goods Fails Due to Lack of Identical Goods Comparison Using NIDB Data.

  Case-Laws - AT : Revaluation of imported goods - reliance placed on NIDB data - value of contemporaneous goods - The Revenue has to first establish that the goods imported and contemporaneous goods are identical in the first place before proceeding further, which exercise has not at all been done by the Revenue in the case on hand - AT
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• Invoice Value Matches Transaction Value for Imported Goods; No Misdeclaration Detected Under Letter of Credit System.

  Case-Laws - AT : Valuation of imported goods - The transaction value which have been declared on the bill of entry is the invoice value for which letter of credit through a recognized banking system has been opened. There is no evidence to suggest any extra payment to the supplier of the vessel except the invoice value - the invoice value is the true transaction value in this case and there is no element of misdeclaration of value. - AT
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IBC

• Court Rules Resolution Plan Extinguishes Debts Not Admitted; Section 11 Disputes Non-Arbitrable Under IBC Finality Principle.

  Case-Laws - HC : Extinguishment of claims - approval of the Resolution Plan - The Court is of the considered opinion that approval of the Resolution Plan in terms given clearly amounts to the extinguishment of all debts that were owed by the corporate debtor except to the extent as was admitted in the Resolution Plan. The IBC and the resolution process does not contemplate matters being left inchoate. In fact, and to the contrary it exhorts one to accept the seal of finality and quietitude which stands attached to the approval of a Resolution Plan. - On due application of the “eye of the needle” test, it is manifest that the disputes which are spoken of in the Section 11 petition are non-arbitrable and thus no reference to the AT is warranted - HC
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• Appeal Filing Delay Exceeds 15-Day Limit; Jurisdiction Cannot Condoned Further Delay.

  Case-Laws - AT : Condonation of Delay - the appeal has been filed with a delay of more than 15 days after expiry of limitation. Jurisdiction to condone the delay is limited to 15 days, the delay in filing the appeal cannot be condoned. - AT
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• NCLT Allows Amendment Filing After 2.5-Year Delay, Prioritizes Reducing Litigation and Avoiding Legal Technicalities Impact.

  Case-Laws - AT : Validity of permission granted by the NCLT to Respondent / Petitioner/Operational Creditor to file the necessary amended copy, with the Registry, of this Tribunal - Permission granted even after inordinate delay of 2 and 1/2 years - this Tribunal, comes to a consequent conclusion, that application is a ‘Bonafide’ one and to ‘minimise litigation’ between the parties and also that ‘No Party’, should suffer on account of ‘technicalities’ of Law. - AT
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PMLA

• Court Denies Default Bail: Charge Sheet Filed on Time, Section 167(2) Cr.P.C. Not Applicable to Petitioner.

  Case-Laws - HC : Rejection of prayer for default bail - There is no doubt that such right of bail although is a valuable right, but the same is a conditional one. The condition precedent being pendency of the investigation. Whether an investigation, in fact, has remained pending and the investigating officer has submitted the charge sheet only with a view to curtail the right of the accused, would essentially be a question of fact. - it cannot be said, in the aforesaid facts, that charge sheet was not submitted within the stipulated period, and in view of that, Sub-Section (2) of Section 167 Cr.P.C. is not available to the petitioner - No default bail - HC
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Case Laws:

• GST

• 2023 (10) TMI 583
  Detention of goods - Liability to pay tax on the value of the goods assessed - Court had entertained the writ petition in view of the fact that the tribunal contemplated under the GST Act was not constituted - HELD THAT:- As the detention is fully based upon the foundation that the TDS-01 form was not accompanied along with the goods which were in transit. The impugned orders solely founded on the allegation of not carrying of TDS-01 from may not be sustained, even otherwise, the reference to the powers under Section 68, only a power vests with the respondent authorities to inspect the goods in movement, however, the facts remain that the entire foundation for passing the order was not carrying the TDS-01 form, which issued was duly considered and decided by this Court in the case of M/S GODREJ AND BOYCE MANUFACTURING CO. LTD., L.G. ELECTRONICS INDIA PVT. LTD., BHARTI AIRTEL LIMITED, M/S GUALA CLOSURES (INDIA) PVT. LTD., M/S. RAS POLYTEX PVT. LIMITED, RIMJHIM ISPAT LIMITED, RIMJHIM ISPAT LIMITED, M/S. GAURANG PRODUCTS PVT. LTD., M/S. ADITYA BIRLA FASHION AND RETAIL LTD., M/S. NAVYUG AIRCONDITIONING AND M/S. PROACTIVE PLAST PVT. LTD. VERSUS STATE OF U.P. AND 02 OTHERS AND STATE OF U.P. AND 3 OTHERS [ 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT] as such, the orders impugned dated 27.12.2017 and 23.11.2008 cannot be sustained and are quashed. The respondents are directed to return the amount deposited by the petitioner within a period of two months from the date of production of certified copy of this order - the writ petition is allowed.

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• 2023 (10) TMI 582
  Cancellation of GST registration of petitioner - cancellation without assigning any reason - violation of principles of natural justice - HELD THAT:- Admittedly, the order of cancellation has been passed without assigning any reason and revocation application has also been rejected without assigning any cogent reason and thereafter appeal has also been dismissed by the impugned order. The GST registration can only be cancelled as per Section 29 of UP GST Act. From the perusal of the impugned order, it transpires that the same has been passed without recording any cogent reason for cancelling the GST registration of the petitioner and appellate authority has also dismissed the appeal filed by the petitioner summarily without assigning any reason. The record reveals that petitioner has neither submitted reply in pursuance of notice nor appeared before the respondent authority in spite of various dates fixed before the first appellate authority, therefore, some cost is liable to be imposed upon the petitioner. Petition allowed.

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• 2023 (10) TMI 581
  Violation of principles of natural justice - Non-speaking order - no grounds raised by the petitioner, discussed in the impugned order - one-line order - HELD THAT:- This Court is of the considered opinion, it is a non-speaking order. Therefore, the impugned order passed by the respondent is quashed. The matter is remitted back to the respondent to consider the petitioner s case in the light of M/S. REFEX INDUSTRIES LIMITED, M/S. SHERISHA TECHNOLOGIES PVT. LTD. VERSUS THE ASSISTANT COMMISSIONER OF CGST CENTRAL EXCISE, THE SUPERINTENDENT OF CENTRAL TAX, BANK MANAGAR, BANK MANAGAR, ICICI BANK [ 2020 (2) TMI 794 - MADRAS HIGH COURT] and pass an order after affording opportunity of personal hearing to the petitioner. The said exercise shall be completed within a period of four months (4) from the date of receipt of a copy of this order. This Writ Petition is disposed of.

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• 2023 (10) TMI 580
  Denial of Input Tax Credit - failure to discharge burden on the dealer for claiming input tax credit - Section 155 of the GST Act - HELD THAT:- Section 155 of the GST Act is in respect of the burden on the dealer for claiming input tax credit - If there is a difference between GSTR 2A and GSTR 3B, then it is for the assessee/dealer to prove his claim of input tax credit by leading cogent and credible evidence for his claim regarding input tax credit. In the present case, the petitioner, despite show cause notice, chose not to provide any evidence in respect of his claim for the input tax credit, nor did he appear for a hearing on the date fixed. When the petitioner himself has given up his right to prove his claim for the input tax credit, this Court cannot help such an assessee by entertaining this writ petition. There are no substance in the present writ petition, which is hereby rejected.

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• 2023 (10) TMI 579
  Maintainability of petition - availability of alternative remedy - Appropriation of amounts paid by the petitioner towards tax liability determination - demand of interest and penalty as well - HELD THAT:- A reading of the impugned order indicates that there is a variance between the amount declared towards outward supply in petitioner s GSTR 1 and the amount declared towards outward supply in GSTR 3B return. The petitioner has discharged the tax liability of Rs. 9,95,71,642/-, whereas, the respondents on the other hand have taken a stand that the petitioner is liable to pay sum of Rs. 10,10,60,012/-. Thus, there is a difference of Rs. 14,88,370/-. There are several disputed question of fact involved in this case. Therefore, the writ petition is not maintainable. The petitioner has an alternate remedy to challenge the same before the Appellate Authority under Section 107 of the CGST Act, 2017. Petition disposed off.

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• 2023 (10) TMI 578
  Seeking to levy interest on transitional credit which was allowed - revenue neutrality - HELD THAT:- In this case, the issue is revenue neutral. The petitioner was entitled to transition/transmit the Input Tax Credit lying unutilized in his CENVAT account as on 30.06.2017 i.e., one day before the implementation of GST under Section 140 of the CGST Act, 2017. Thus, the Input Tax Credit that was lying unutilized was to be transitioned under the new regime in terms of Sections 139 and 140 of the CGST Act, 2017. However, on account of technical glitches, credit could not be transitioned under Section 140 of the CGST Act, 2017. Since the issue is being revenue neutral, the imposition of penalty/interest either under Section 73(9) or Section 50(3) of the CGST Act, 2017, cannot be countenanced. If the petitioner had been allowed to successfully transition the credit under Sections 138 to 140 of the CGST Act, 2017, then and there, the amount would have available for being utilization. By availing the amount as regular credit and utilizing the same, the petitioner has not caused any loss to the revenue. There are no reasons to sustain the impugned order insofar as it seeks to impose interest at 10% and penalty on the petitioner as the issue is revenue neutral - petition allowed.

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• 2023 (10) TMI 577
  Cancellation of GST registration of petitioner - time limitation - closure of business way back in 2019 - case of the petitioner is that the petitioner was unaware of the notices that preceded the impugned Assessment Order - HELD THAT:- There is no scope for interfering with the impugned Assessment Order - the petitioner ought to have filed an appeal against the impugned Assessment Order dated 21.01.2023 within the period prescribed under Section 107 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017. Considering the fact that the issue may involve disputed questions of fact, Court is inclined to dispose this writ petition at the time of admission, by directing the petitioner to file a statutory appeal before the Appellate Authority against the impugned Assessment Order dated 21.01.2023 passed by the first respondent within a period of thirty days from the date of receipt of a copy of this order. Petition disposed off.

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• 2023 (10) TMI 576
  Attachment of Bank Accounts of petitioner - lapse of one year from the attachment order passed - HELD THAT:- Since the order dated 05.08.2022 which was the last provisional order passed by the Commissionerate at Belapur is no longer operative, the present petition has been rendered academic. It is considered apposite to dispose of the present petition by directing the concerned bank (respondent no.3) to not interdict the operation of the petitioner s bank account on account of any of the orders of the provisional attachment - petition disposed off.

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• 2023 (10) TMI 575
  Violation of principles of natural justice - vague SCN - Cancellation of GST registration of petitioner - HELD THAT:- The order dated 01.07.2023 read with the show cause notice dated 26.06.2023 are ex facie illegal. When an authority fixes a date of hearing, it would not be just and proper to hear and decide the matter on a date prior to the date which is notified - That apart, even the show cause notice appears to be quite vague inasmuch as petitioner was asked to show cause as to why its GST registration should not be cancelled for wrongful availment of input tax credit (ITC). The show cause notice is silent as to the quantum of ITC allegedly availed of wrongfully by the petitioner and for which period. In the absence of such material particulars, the show cause notice would be incomplete. Such a proceeding would be in violation of the principles of natural justice; and then to prepone the hearing and cancel the registration is wholly unjust. The SCN as well as the impugned order of cancellation set aside - petition allowed.

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• 2023 (10) TMI 574
  Legality and validity of the provisional attachment of the bank account of the petitioner - Document Identification Number (DIN) was not mentioned in the provisional attachment order due to technical difficulty - non-payment of the tax due - HELD THAT:- Attachment of bank account, even if it be a provisional measure, is a serious intrusion into the private affairs of a citizen. Being a drastic measure, there must be overwhelming reasons to justify such an action. It is not a case of complete evasion of tax by the petitioner. Petitioner has on its own paid Rs. 98,92,412.00 which has been acknowledged by the respondents. According to the respondents, there is a short-payment of the tax due. It is mentioned that the quantum mentioned by the respondents is only a provisional figure even before issuance of show cause notice; not to speak of any adjudication order. In such a case, attaching bank account of the petitioner is not at all justified and would be wholly without jurisdiction; continuation thereof would be highly oppressive and violative of Articles 14 and 21 of the Constitution of India. When an order is ex facie without jurisdiction as in the present case, it would not be just and proper to relegate a taxable person to the forum of alternative remedy - the provisional attachment order dated 22.05.2023 set aside - petition allowed.

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• 2023 (10) TMI 573
  Cancellation of registration of petitioner - submission of petitioner is that the petitioner proposes to submit supporting documents like invoices and other relevant material and as his registration was cancelled, he cannot upload digitally those documents - HELD THAT:- It is considered apposite to direct the 1st respondent to consider the appeal said to have been filed by the petitioner and register the same if it is otherwise in order and process the same for hearing within two weeks from the date of receipt of a copy of this order. Having regard to the fact that petitioner s registration was cancelled, we give liberty to the petitioner to submit all the relevant documents before the 1st respondent manually, in which case, the said authority shall admit them and after affording an opportunity of hearing to both parties, pass an appropriate order in accordance with the governing law and rules expeditiously. Petition disposed off.

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• Income Tax

• 2023 (10) TMI 572
  Assessment u/s 153C and 153A - The period for which the assessee requires to file the return - assessees contended that the period for which they were required to file returns, commenced only from the date the materials were forwarded to their A.Os - Revenue urged that the date (relatable to the period for which six years returns were to be filed by the assessee) was to be from the date when the search and seizure proceedings were conducted, in respect of the main assessee u/s 132 - HELD THAT:- As on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision u/s 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. This Court is of the opinion that the revenue s argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation [ 2012 (4) TMI 335 - DELHI HIGH COURT ] adopted, the A.O. seized of the materials of the search party, u/s 132 would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually relate back as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned u/s 153-C after a period of four years, the third party assessee s prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153-C supports the interpretation which this Court adopts. Appeal dismissed.

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• 2023 (10) TMI 571
  Bad debt claim - treating the hire purchases as stock in trade - theory of apportionment of expenses - Addition u/s 14A and depreciation - HC deleted addition - HELD THAT:- SLP disposed of owing to low tax effect.

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• 2023 (10) TMI 570
  Reopening of assessment u/s 147 - notice issued after the expiry of four years - disallowances reflected in the advertisement and sales promotion expenses - HELD THAT:- As the income tax returns were taken up for regular assessment and thereafter, order u/s 143(3) of the Act was passed. There is a categorical finding by the High Court that full material facts with regard to the expenditure in question were placed by the assessee Asian Paints Ltd. before the AO during the course of the regular assessment proceedings. No merit in the present special leave petitions and the same are dismissed.

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• 2023 (10) TMI 569
  Assessment u/s 153A - re-open the completed/unabated assessments - absence of any incriminating material found during the course of the search - ITAT deleted the additions - Availability of alternive remedy to the revenue for assessment u/s 147/148 - HELD THAT:- As on true interpretation of Section 153A in case of a search u/s 132 or requisition u/s 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, AO would have the jurisdiction to assess or reassess the total income taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. In case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. Thus, the view is based upon the decision of the Division Bench of this Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd.[ 2015 (5) TMI 656 - BOMBAY HIGH COURT] finds support in Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] - Considering this position, the only question which arises for determination would have to be answered against the Revenue.

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• 2023 (10) TMI 568
  Stay of demand - order of payment of 20 percent out of the total outstanding demand - Immediately after the demand was raised against the petitioner, an application requesting for rectification was sent to the AO by e-mail u/s 154 - petitioner has been availing the exemption of payment of Income Tax on account of the fact that the petitioner is a charitable institution and the works executed by it again is with a charitable purpose - HED THAT:- Since the petitioner availed the said benefits all along prior to the issuance of demand notice and even in the subsequent years as well, there does not seem to be any prejudice going to be caused if the stay application u/s 220(6) is decided in favour of the petitioner. Yet another fact which is more important to be appreciated is that though the appeal was filed as early as on 17.04.2021 and the rectification application also was filed on 20.03.2021, and both the rectification application and the appeal by now are still pending consideration or is undecided for more than 2 years. Under these circumstances, we are of the considered opinion that given the aforesaid factual matrix and also considering the status of the petitioner which is a charitable establishment with a charitable object and purpose, the Assessing Authority should have allowed the application under Section 220(6) of the Act.

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• 2023 (10) TMI 567
  Nature of expenses - renovation and repair expenses partly capitalized in the books of account of the Assessee and payment made to consultancy and supervision of interior d cor of the existing hotel of the Assessee under renovation and refurbishment - whether not the revenue expenditure admissible u/s 37? - treatment of expenses incurred on renovation and refurbishment of Hotel - HELD THAT:- As expenses initially capitalized and was claimed as revenue expenditure for the first time before the Tribunal and forms part of the additional grounds raised by the assessee in its appeal preferred before the Tribunal, it would stand remanded to the AO for examination of the character and nature of the expenses incurred, having regard to the principles adverted to [ 2023 (10) TMI 467 - DELHI HIGH COURT ] the instant appeal is disposed of with the following directions, as the view taken in the said appeal will apply mutatis mutandis to the instant case as well Appellant/assessee will be entitled to claim the deduction, as, in our opinion, it is in the nature of revenue expenditure.

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• 2023 (10) TMI 566
  Reopening of assessment - tax payable on the book profits in terms of Section 115JA of the Act would be higher than the income computed under the normal provisions of the Act - HELD THAT:- ITO/Respondent no. 1, in our view, failed to appreciate that he had no jurisdiction to reopen the assessment because no income had infact escaped assessment. As stated in petitioner s letter even if it is stated that ITO/Respondent no. 1 is right in his allegations that petitioner had offered said quantum of long term capital loss, that would still have no impact because petitioner continues to be liable to pay tax on the basis of profits computation as per Section 115 JA - We do not agree with respondent no. 1 that even if, no income had escaped assessment as on the date of the issue of the notice, one had to take into account the position that may arise as a result of further additions that may or may not be made in the final assessment order. He should have realised that he had no jurisdiction to proceed on the basis that some hypothetical income may be detected as a result of further investigations that may be conducted. In the recorded reasons, as alleged that petitioner has over stated the amount by taking cost of acquisition of the 2,00,000 shares of Gammon India Limited at Rs. 242.01 instead of Rs. 248.88 per share. The fact is, respondent no. 1 has not disputed that in the return and computation of income filed by petitioner, the complete facts relating to cost of acquisition of the shares has been disclosed by petitioner. The return makes it clear that the said 2,00,000 shares were purchased in FY 1995- 1996 for Rs. 4,97,75,438/- which works out to Rs. 248.88 per share. Therefore, there is no fresh tangible material to reopen the assessment. Since petitioner has paid tax on the basis of book profits in terms of Section 115 JA of the Act and the fact that even if revenue s case as set out in the reasons is accepted, there would be no change in the income offered to tax and the tax payable on the book profits in terms of Section 115 JA of the Act would be higher than the income of computation under the normal provision of the Act. The provisions of Section 152(2) of the Act states proceedings u/s 147 will be dropped if the assessee is able to establish that he had been assessed on an amount or the sum not lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into account. It is rather clear that the notice is issued without jurisdiction - Reopening notice set aside - Decided in favour of assessee.

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• 2023 (10) TMI 565
  Special audit u/s. 142 (2A) - objection of petitioner that there is no material to show that interest of Revenue was adversely affected hence the special audit was not helpful - Challenge on the ground that order is subjective satisfaction, is non-speaking and has been mechanically passed - HELD THAT:- The power vested in the Assessing Officer and the approving authority are wide enough to include within its ambit all such matters where complexity of accounts, volume of accounts, doubts about correctness of accounts, multiplicity of transactions and specialized nature of business are involved, besides the pre-dominant element of interest of the Revenue. From the very language of sub-section (2A) of Section 142, it is obvious that the same is worded in language which is very wide and inclusive. The paramount interest seems to be to avoid evasion of tax and to prevent the defaulter from slipping out of income tax nets. Thus, the provision u/s. 142(2A) is to be read liberally in favour of the Revenue with the only safeguard of prior opportunity of being heard to the assessee which in the present case has been complied with. The objection of petitioner that there is no material to show that interest of Revenue was adversely affected hence the special audit was not helpful, has no legs to stand in view of element of public interest being pre-dominant in the object behind special audit. Petition dismissed.

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• 2023 (10) TMI 564
  Reopening of assessment - Validity of order u/s 148A(d) - assessee has not offered his unaccounted unexplained income for taxation purpose in his return of income - HELD THAT:- Under the scheme of the Act a detailed procedure has been provided under Section 148 for issuance of notice whereafter the assessing authority has to determine, in the manner specified, whether income has escaped assessment and the defence of assessee, on all permissible grounds, remains open to be pressed at such stage. The ultimate determination made by the assessing authority under Section 147 for reassessment is otherwise subject to appeal under Section 246-A of the Act. Merits of the information referable to Section 148A thus remains subject to the reassessment proceedings initiated vide notice under Section 148 of the Act. It is for this reason that issues which require determination at the stage of reassessment proceedings and in respect of which departmental remedy is otherwise available are not required to be determined at the stage of decision by the assessing authority under Section 149A(d). The scope of decision under Section 148A(d) is limited to the existence or otherwise of information which suggests that income chargeable to tax has escaped assessment. Thus, in our opinion, the impugned order under Section 148A(d) of the Act and notice under Section 148 would not warrant any interference under Article 226 of the constitution of India as challenge to such order would be available to an assessee while challenging the order passed in reassessment proceedings consequent to the notice issued under Section 148 of the Act.

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• 2023 (10) TMI 563
  Validity of assessment u/s 144C - Draft assessment order got accompanied with the notice of demand and penalty - final assessment or draft assessment order - Tribunal has allowed the appeal of assessee - HELD THAT:- A plain reading of sub-Sections 1, 2, 6, 8 and 13 of Section 144-C would clearly spell out the requirement of law. Admittedly in the instant case, in addition to the draft assessment order, there was also a notice of demand and penalty which was enclosed. A plain reading of sub-Section 8 of Section 144-C would further make it amply clear that the demand has to be raised only after the final assessment order is passed, more particularly, for the reason that the dispute resolution panel has got the power to confirm, reduce or enhance the variations proposed in the draft. In the given context, if the draft assessment order is accompanied by a notice of demand and penalty that itself would force one to reach to the conclusion that though it is termed as draft assessment order, in fact, it is the final assessment order and the notice of demand and penalty was accompanying the same. As decided in M/s.Zuari Cement Ltd. as confirmed by SC [ 2013 (9) TMI 1167 - SC ORDER] AO is mandated to first pass a draft assessment order, communicate it to the assessee, hear his objections and then complete assessment. Admittedly this has not been done and the respondent has passed a final assessment order dt.23.12.2011 straight away. Therefore, the impugned order of assessment is clearly contrary to S.144C of the Act and is without jurisdiction, null and void As per legal position as is required under Section 144-C of the Act and also taking note of the contents of the operative part of the so called assessment order, in the considered opinion of this Bench leads to the only conclusion of the order being a final assessment order, more particularly, when the authority concerned has also ordered and directed for initiation of penalty proceedings simultaneously along with the draft assessment order. Hence, this Bench has no hesitation in reaching to the conclusion that the findings arrived at by the Tribunal while allowing the appeal of the respondent/assessee was proper, legal and justified. That the present appeal thus being devoid of merits, deserves to be and is accordingly, rejected.

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• 2023 (10) TMI 562
  Unexplained cash deposit - loss suffered by the appellant/assessee while trading in equities and commodities - assessee had not filed his Return of Income (ROI) - assessee s submission that both the CIT(A) as well as Tribunal have failed to notice that the AO had made no addition with regard to the presumptive income said to have been earned by him on account of trading in equity and commodities, the submission being that if the loss in trading and equity was considered then the addition made by the Tribunal would get set-off - HELD THAT:- A plain reading of paragraph 5 does indicate that after considering the reply of the appellant/assessee, the AO dropped the proposed addition with regard to the profit said to have been made by the appellant/assessee while trading in equity and commodities. This aspect somehow was not noticed both by the CIT(A) as well as the Tribunal. As noticed hereinabove by us, the Tribunal only dealt with the addition made on account of cash deposit which it chose to scale down to Rs. 2,50,000/- from Rs. 5,82,385/-. Question of law, as framed, must be answered in favour of the appellant/assessee for statistical purposes.

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• 2023 (10) TMI 561
  Scope and ambit of Tribunal s power u/s 254 - Tribunal excluding the comparable OTL while benchmarking the engineering, technical and inspection segment, in the course of exercising its powers u/s 254 - HELD THAT:- A perusal of the impugned order shows that the Tribunal has only recorded the contentions of both sides and perhaps, proceeded based on incorrect facts. The comparable OTL, according to the counsel for the parties, was indeed included in the Transfer Pricing Study Report. It is also not in dispute that the TPO had accepted OTL as a comparable. The Tribunal, in our view, without discussing the scope and ambit of its power u/s 254, has proceeded to issue operative directions, which, inter alia, excluded OTL as a comparable. Given this position, counsel for the parties say, and something that we tend to agree with, that the matter needs a relook by the Tribunal, with regard to the scope and ambit of its power u/s 254 - Issue answered in favour of the appellant/assessee for statistical purposes.

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• 2023 (10) TMI 560
  Expenditure incurred for the Indian business outside India - As per ITAT expenses in issue which were disallowed were attributable to the business in India - HELD THAT:- The statement of the auditor attached to the certificate shows that for the period ending on 31.12.2002, out of the gross receipts the cost directly attributable to India were advisory and business support costs and IT costs, amounting to USD 228,000/- and USD 1,469,000/- respectively. The total of these costs in USD would be 1697000. 4.2 Thus, the cost attributable to India, at the exchange rate of Rs. 48.50 per USD, would amount to Rs. 51,440,312/- for the relevant period. This amount has been certified by KPMG. As noted above, the expenses incurred by the respondent/assessee were solely for the Indian business. Clearly, these expenses do not fall within the ambit of Section 44C, which relates to the deduction of head office expenses in case of non- residents. No substantial question of law.

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• 2023 (10) TMI 559
  Exemption u/s 11 and 12 - assessee failed to file the Audit Report in Form 10B along with the Return of Income - HELD THAT:- It is no more res integra that filing of Form 10B as required u/s. 12A are directory in nature, as such the Assessing Officer are not powerless to allow an assessee to file Audit Report, if not filed along with return, any time before completion of assessment and also before Appellate Authorities. In the present case before us Audit Report in Form 10B though filed belatedly by the assessee, the same was not considered by the Ld. NFAC and Ld. A.O. Thus none of the authorities had any occasion to verify Audit Report in Form 10B belatedly filed by the assessee. Further there is no regular assessment order passed u/s. 143(3) of the Act in the case of the Assessee Trust. Therefore we hereby direct the Jurisdictional AO to verify the Audit Report in Form No. 10B and then allow the claim of exemption u/s. 11 of the Act, in accordance with law by giving adequate opportunity to the assessee. Thus the grounds raised by the assessee are hereby allowed.

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• 2023 (10) TMI 558
  Reopening of assessment u/s 147 - assessee has claimed exemption u/s 54B(2) on the ground that the said amount has been deposited in a capital gain scheme account, but no proof of same was furnished - HELD THAT:- As in the computation of income filed at the time of original assessment available assessee had given the detail of the capital gains calculation. As the reasons of reopening available on record and also examined from the assessment record made available by DR, are considered, it is apparent that the failure has been attributed to the assessee for not disclosing fully and truly all material facts. CIT(A) during the first appellate proceedings observed that the issue has arisen only out of audit objections and in regard to which even there was an office note from the ACIT wherein nothing adverse was noticed so requiring no action. It appears that merely on the basis of borrowed satisfaction the reopening was initiated. CIT(A) has also taken into consideration the fact that even there were rectification proceedings u/s 154 initiated by AO in which too the information provided by the assessee was duly taken into consideration and no mistake was found in the order dated 23.12.2010. The factual findings given by CIT(A) could not be disputed by Ld. DR. The fact of payment of Rs. 55 lakhs to Sh. Balwant Singh stand establish as the same was through a banking channels and the bank certificate of deposit of Rs. 2.22 crores in the capital bank account is duly established. Ld. AR has also canvassed before us as to how the amount deposited in the capital gains account was used for purchase of the land. The Bench is of considered opinion that the Annotated Report of DCIT, Hisar, was not a mere internal document but formed the basis for the reopening and which Ld. CIT(A) has rightly held to be a case of change of opinion. Decided in favour of assessee.

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• 2023 (10) TMI 557
  Addition u/s 68 - income from undisclosed sources - sale of shares as unexplained - HELD THAT:- Assessee has not received any share application money or premium from the investor but the impugned transaction in the present case pertains to sale of investment/shares by the assessee to the other entities and such transaction cannot be alleged as unexplained or bogus particularly when the Department has not disputed the investment in shares of RNB Infrastructure Pvt. Ltd. by the assessee during the earlier period of time i.e. in the A.Y. 2008-09 in the year of investment by the assessee. Decided in favour of assessee.

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• 2023 (10) TMI 556
  Penalty u/s 271(1)(c) - Additional depreciation on replacement of machinery - Claim denied as additional depreciation is eligible only for the new plant and machinery and not on the replacement of parts of the machinery - difference of opinion as to whether the additional depreciation is allowable on replacement of parts of machinery or not? - HELD THAT:- As decided in the case of Reliance Petro Product [ 2010 (3) TMI 80 - SUPREME COURT] held that mere making a claim which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee. Here is a case where the assessee made a conscious claim and has given a bonafide explanation before AO as well as CIT (Appeals). Simply because the claim of the assessee is not sustained by the authorities, it cannot be held that the assessee has furnished inaccurate particulars of income so as to attract the penalty u/s 271(1)(c) - In the circumstances the Assessing Officer is directed to delete the penalty levied u/s 271(1)(c) - Appeals of the assessee are allowed.

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• 2023 (10) TMI 555
  Revision u/s 263 - suppression of production of 467.32 MT - contention of the assessee that the issue pertains to addition on account of suppression of production was also raised by the assessee while making an application u/s. 154 for rectification of mistake. However, such contention of the assessee was not considered by the CIT(A), was found to be incorrect claim. HELD THAT:- Since on perusal of the application of the assessee for rectification of mistake, the assessee has referred to notice dated 22.07.2016 and not order dated 30.09.2016 or original assessment order dated 30.03.2014. Since such contention was not raised in the application for rectification u/s. 154 dated 21.10.2016, the assessee s claim that mistake pertains to yield of raw materials and suppression in the production was not dealt with in the order u/s. 154 of the Act was found to be incorrect. Consequently, we are unable to accept the contention of the assessee with the observation that, whether an issue which is not emerged from the impugned order which was challenged before the CIT(Appeals), can be taken up in an appeal by ITAT, our answer to this question is in negative. Accordingly, the grounds of appeal of the assessee, which are not emerging from order u/s 154 which is the foundation of the disputes raised under appeal before the Ld CIT(A), is liable to be treated as infructuous / non-maintainable. No infirmity in the view taken by the Ld. CIT(Appeals), thus, the same stands upheld.

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• 2023 (10) TMI 554
  Assessment u/s 153C - Addition made by the A.O. as devoid of any incriminating materials - HELD THAT:- On perusal of the impugned assessment order shows that the addition made by the A.O. are devoid of any incriminating materials. DR has not contradicted the said facts. Thus, the ratio laid down by Abhisar Buildwell Pvt. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] is squarely applicable to the case. CIT(A) has quashed the assessment order treating the assumption of jurisdiction u/s 153C bad in law correctly. Decided in favour of assessee.

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• 2023 (10) TMI 553
  Penalty u/s 271(1) - Addition was made towards difference between circle rate and the amount disclosed in sale deed - valuation of the capital asset, the issue was referred to DVO who reduced the valuation adopted by the AO - HELD THAT:- As valuation made by DVO is an estimate which can be the basis for making addition to the income of the assessee for the purpose of assessment but the same alone cannot be the basis to construe concealment for the purpose of imposing penalty u/s 271(1)(c) - See JMD Advisors Pvt.Ltd. [ 2008 (2) TMI 450 - ITAT DELHI] and Prakash Industries Ltd.[ 2016 (3) TMI 1060 - ITAT DELHI] Also see case of CIT vs Lahsa Construction Pvt.Ltd .[ 2013 (9) TMI 969 - DELHI HIGH COURT] as held that addition cannot be justified solely relying upon the valuation report . Decided in favour of assessee.

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• 2023 (10) TMI 552
  Revision u/s 263 by CIT - income surrendered by the appellant during the survey proceedings - As per CIT AO has not made any addition either u/s 68 or u/s 69 and failed to apply the provision of Section 115BBE - HELD THAT:- AO has not made any addition either u/s 68 of the Act or Section 69 of the Act as the surrendered amount was already included by the assessee in his return of income. From the findings of learned PCIT in the impugned order, it is clear that the learned PCIT has also not specified any specific charging section under which charging section the AO should have treated the surrendered amount. nothing has been stated either in the pre-amended or in the post-amended provisions of section 115BBE of the Act that where the assessee surrendered undisclosed income during search action for the relevant year, the tax rate has to be charged as per provisions of Section 115BBE of the Act. Therefore, the applicability of the amended provision of section 115BBE of the Act, which prompted the PCIT to assume jurisdiction u/s 263 of the Act is highly debatable issue, and therefore wrongly assumed jurisdiction u/s 263. Assessment order cannot be alleged as erroneous and prejudicial to the interest of the Revenue by way of picking up the debatable issue. Assessee appeal allowed.

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• 2023 (10) TMI 551
  Reopening of assessment u/s 147 - Reason to believe - valid approval obtained u/s 151 or not? - Addition u/s 68 - Applicability of higher rate of tax u/s 115BBE - Sourcing unsecured loan against Cash Deposit - HELD THAT:- AO had recorded the detailed reasons for reopening of assessment wherein the relevant documentary evidences including the documentary evidence found during the course of survey operation and statements recorded during and post survey operations were in possession of AO which was sufficient material indicating the escapement of assessment by the assessee. AO also carried out the necessary analysis and examination of the said material, correlating the same with the income tax returns filed by the assessee as well as the statement recorded during the course of investigations. Therefore, the AO had sufficient reasons to believe that income had escaped assessment and therefore, he rightly invoked the action u/s. 147 of the Act for initiation of reassessment proceedings and for issuance of notice u/s. 148 of the Act and thus, he assumed valid jurisdiction to frame the reassessment order u/s. 147/143(3) of the Act, after proper analysis and evaluation of facts based on available evidences. We decline to accept the contentions of Ld. Counsel for the assessee that the AO had proceeded to initiate the reassessment proceedings without having tangible material and the reasons recorded do not constitute valid reason to believe for initiation of reassessment proceedings. We are unable to see any factual mistakes by the AO which could establish non- application of mind by the AO while recording the reasons, when the AO has evaluated the bank statements of the assessee as well as the creditors and the assessee failed to substantiate the source of cash deposits and the genuineness of the transactions of unsecured loan then the AO was validly entitled to have reason to believe that income had escaped assessment. Thus we hold that the AO assumed valid jurisdiction to initiate reassessment proceedings u/s 147. Approval granted u/s. 151 - We are unable to see any ground by the assessee before the Ld. CIT(A) challenging the approval granted u/s. 151 - From the relevant para for approval order, we note that CIT(A) has categorically stated and observed that after perusing the relevant material and reasons recorded by the AO, he is satisfied that it was a fit case of reopening assessment u/s. 147 and issuance of notice u/s. 148 of the Act and accordingly, ground of the assessee being devoid of merits is also dismissed. Addition of cash credit - We hold that the other hand, the AO and Ld. CIT(A) recorded categorical finding that the assessee failed to explain and prove the creditworthiness of loan creditor and genuineness of transaction of unsecured loan received by her for purchase of immovable property. We reach to a logical conclusion that AO was quite correct and justified in treating the unsecured loan as unexplained cash credit in the hands of the assessee while invoking the provisions of section 68 and the Ld. CIT(A) was also correct in upholding the same after detailed logical analysis of documentary evidence, allegations of the AO and explanation of the assessee. Accordingly, we are unable to see any valid reason to interfere the findings affirmed by the Ld. CIT(A) while confirming the addition u/s. 68 of the Act in the hands of the assessee, hence, we uphold the same. Assessee failed to reconcile the opening cash in hand with the income tax returns of previous year AY 2012-13 - CIT(A) thus rightly observed that since there was no income or receipt in cash during the last several years, there was no justification of having any cash in hands otherwise, what has been withdrawal over the years from the bank accounts of the assessee. We also observe that the AO as well as Ld. CIT(A) provided due opportunity to the assessee to explain the source of cash deposit but the assessee did not submit any specific reason explaining the source of cash deposit during the year. We decline to accept the explanation of the assessee as the assessee has failed to explain the source of cash deposit to her bank account upto the month of July, 2012 and hence, the impugned amount remained unexplained and the AO was right in making the addition in the hands of the assessee u/s. 68 of the Act and hence, we are unable to see any perversity or any other valid reason to interfere with the findings of AO and conclusion recorded by the Ld. CIT(A), hence, we uphold the same. We uphold the conclusion of the AO for AY 2019-20 wherein he made addition to the income of the assessee u/s. 68 and ordered to change higher rate u/s. 115BBE.

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• 2023 (10) TMI 550
  Unexplained investment in purchase of land on protective basis - substantive addition relating to present assessee has been deleted in the case of Shri Ku.Pa. Krishnan. [ 2023 (10) TMI 448 - ITAT CHENNAI] - AO has made impugned addition by rejecting the claim of agricultural income - HELD THAT:- Upon perusal of certificate of Village Administrative Officer as placed on record, it could be seen that the assessee is having sufficient cultivable land. The same is also backed up by Adangal, lease copies which support the claim of the assessee that it had land holding giving rise to agricultural income. Therefore, the claim of the assessee qua earning of agricultural income was to be accepted in all the years. AO is directed to treat the income as agricultural income only. Addition of undisclosed investment in land in at Vadagaunchi , investment in House Property situated at Trichy, investment in flat situated at Adyar - As the undisputed position that emerges is that the assessee has disclosed the above investment in her return of income which has been filed much before the date of search in the case of Shri Ku.Pa. Krishnan. These investments are duly disclosed in the Balance Sheet. Therefore, the impugned additions, in that respect, is not sustainable. We order so. Investment in property situated at Trichy AR, in the written submissions, has submitted that the cost of improvement on assessee s land was only to the extent of Rs. 10.16 Lacs and therefore, the impugned addition was to be restricted to that extent. Accepting the same, we direct Ld. AO to reduce the impugned addition to the extent of Rs. 10.16 Lacs as against Rs. 11.59 Lacs. Income from house property - AR submitted that the house property situated at Nehru Nagar was self-occupied property and therefore, no income need to be computed against the same. With respect to other properties situated at Fernhill (Kodaikanal) and Banker s Colony is concerned, Ld. AR has submitted that the estimation of rental income is on the higher side. We concur with the submissions that no income on property situated at Nehru Nagar need to be computed this being self-occupied property. However, the estimation of rental income against other two properties is quite reasonable. Therefore, the addition to that extent, in all the years, is sustained. The corresponding grounds, in all the years, stand disposed off accordingly. Gifts as been received by the assessee. However, the assessee is unable to file any details of the same. Therefore, this addition, in both the years, stand confirmed. Addition of FDR and interest thereon from AYs 1994-95 to 1997-98 stand confirmed since this addition has been deleted by us in the case of Shri Ku.Pa. Krishnan.

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• 2023 (10) TMI 549
  Revision u/s 263 - Additional / Higher rate of depreciation @30% on heavy vehicle (Hyva and Tipper) - PCIT observed that the assessee is engaged in mining contract, these vehicles are primarily used on assessee own business and furthermore, no hire income was shown from the heavy vehicle, therefore, depreciation @15% only should have been allowed - HELD THAT:- Main condition for availing of additional depreciation as carved out in the Act is that the motor buses/motor lorries and motor taxis are to be used in a business of running them on hire could not be satisfied by the assessee by way of any supporting documents like any hire charges which were separately paid to the assessee by the contractee company or any condition which may support the contention of the assessee that the heavy vehicles were used in hire by the assessee. Since, the MDO contract was a composite contract for Excavation loading, Sorting Sizing Stacking, Hauling, Drilling Blasting, Loosening, Feeding to fixed screen plant etc. The hiring of vehicles in terms of Section 32 could not be specified and therefore, the Learned PCIT has rightly observed to disallow such additional depreciation when the vehicles are used in the own business of the assessee and not on hire. No merit in the contention of the assessee and infirmity in the order of PCIT, therefore PCIT was correct in invoking the provision of Section 263, since the order of Learned AO was satisfactorily held to be erroneous so far as prejudicial to the interest of Revenue.

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• 2023 (10) TMI 548
  Revision u/s 263 - as per CIT AO failed to apply the provisions of Section 115BBE - business income surrendered at the time of survey was liable to be added back under section 68/69/69A/69B/69C - HELD THAT:- To buy peace of mind and to avoid litigation the assessee surrendered an amount of Rs. 30,00,000/- over and above his regular income in the year under appeal. The voluntary surrender was not subject to any penal action under any direct tax laws. Thus, it is not clear as to what was the nature of this surrendered amount, whether it was out of business income or out of undisclosed sources. The learned Pr. CIT has not given a clear finding about which provision of law the AO ought to have charged the tax which he failed to do so. CIT has stated that the AO should have considered the surrendered income as income u/s 68/69/69A/69B/69C of the Act. Therefore, in the absence of clear finding by the learned Pr. CIT as to under which provision of law the amount was required to be taxed so as to attract the provisions of section 115BBE by mentioning the multiple provisions does not serve the purpose of law. There has to be clear cut finding by the learned Pr. CIT. As no clear finding has been given by learned Pr. CIT as to under which provision of law the amount surrendered during the course of survey was required to be taxed, the impugned action cannot be sustained. Hence, the impugned order is set aside and the finding of AO is hereby restored. Decided in favour of assessee.

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• 2023 (10) TMI 547
  Exemption u/s 11 - rejecting application u/s 12AB - mismatch in the name of assessee in PAN/Form-10AB and in translated copy of registration deed - HELD THAT:- We find that such mistake may be inadvertent otherwise the registration number and PAN and the object of assessee are not in dispute. The assessee is in existence from 1934 and registered under the provisions of Bombay Public Charitable Trust vide registration No. Surat/A-736. The assessee was not given opportunity either to explain the mismatch or to get such mismatch to correct, thus, in our view, the assessee deserve one more opportunity to correct their name, wherever required, therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(E) reconsider the registration of assessee u/s 12A afresh and pass order in accordance with law. Needless to direct that before deciding the application afresh, CIT(E) shall grant opportunity of correcting the mismatch in the name and also to allow to make further submission to prove the object of assessee-trust and its activities. Assessee is also directed to file/furnish any other necessary information if so desired. Appeal of assessee is allowed for statistical purposes.

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• 2023 (10) TMI 546
  TDS credit - year in which income was declared there was no reflection of TDS amount in Form No. 26AS and vice versa in succeeding year - assessee is following mercantile system of accounting and declared the income during the assessment year 2018-19, whereas the deductor deducted and deposited the amount of TDS on payment basis i.e. in AY 2019-20, accordingly TDS credit in Form No. 26AS also reflected in assessment year 2019-20 - HELD THAT:- AO has relied on sub-rule (1) of section 37BA for denying the benefit of TDS which provides that the credit for TDS shall be given to the person to whom payment has been made or credit has been given on the basis of information relating to TDS furnished by the deductor. What is material for sub-rule (1) is the beneficiary of credit for the TDS, being the person to whom payment has been made, which in the instant case is the assessee. CIT (A) has, in addition, relied on sub-rule (4) of Rule 37BA, which again provides that the credit for TDS shall be granted on the basis of information relating to deduction of tax at source furnished by the deductor. How, this rule prejudices the claim of the assessee is anybody s guess. Obviously, the information about the TDS by KMAMC is not denied. Both the sub-rules simply provide for granting of the benefit of TDS. The point of time at which the benefit of TDS is to be given, is governed by sub-rule (3) of Rule 37BA, which unequivocally provides through clause (i) that the credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable . It is, ergo, abundantly clear from the mandate of Rule 37BA (3) (i) that the benefit of TDS is to be given for the assessment year for which the corresponding income is assessable. Since the income, on which tax was deducted at source, is patently assessable in the year under consideration, we hold that the benefit of the TDS should also be allowed in the same year, namely, the year under consideration. We, therefore, overturn the impugned order and direct accordingly.

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• 2023 (10) TMI 545
  Undisclosed income of capital gain - determination of cost of acquisition - AO found that the value adopted by the appellant was without any basis and which seems to be on higher side, a reference was made to the Valuation Officer u/s 55A of the Act for determining the fair market value of this property as on 01.04.1981 - HELD THAT:- Appellant never submitted this valuation report earlier during the course of assessment proceeding, neither raised any objection before the Valuation Officer in regard to the valuation of the land on the rate adopted by the Valuation Report as reflecting from the valuation report dated 15/16-3-2016, the copy whereof has already been reproduced by the Ld. AO in the assessment order. Taking into consideration this particular aspect of the matter, the working of capital gain furnished by the appellant was not found to be acceptable and the value determined by the Valuation Report Dated 15/16-3- 2016, the cost of acquisition of land as on 01.04.1981 at Rs. 19,024/- and taxable LTCG has been computed As valuation certificate has been obtained by the appellant from the Registered Valuer only upon re-assessment proceeding initiated and not submitted to the Ld. AO till 28.03.2016 by which period the Valuation Report from the DVO dated 15/16-3-2016 has already been obtained by the Ld. AO., and no objection was raised by the appellant against the DVO s report, neither any evidences were sought to be relied upon by the appellant in respect of value of the land in question, the Ld. CIT(A) confirmed the addition. It is an admitted fact that on 28.03.2016, the Ld. AO received the valuation report submitted by the appellant, much after the valuation report dated 15/16-03-2016 as obtained by the Ld. AO from the DVO . In spite of the several opportunities, no objection was filed in regard to the same by the appellant neither any evidence has been relied upon even during the appellate proceeding. Thus, we do not find any reason to interfere with the order of confirmation of addition made by the Ld. CIT(A) which according to us is just and proper. The same is, therefore, upheld. The appellant s ground of appeal is found to devoid of any merit and, thus, dismissed. Decided against assessee.

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• 2023 (10) TMI 544
  Addition u/s 68 - unexplained share premium and share capital - assessee submitted that the assessee had furnished all documentary evidence for establishing identity, creditworthiness of the investors and the genuineness of the transaction but the Revenue Authorities have failed to appreciate the material available on record - Share premium has been calculated on the basis of Section 56(2)(viib) r.w.r.11UA (2)(b) - HELD THAT:- Assessee effectively discharged the burden cast upon them u/s 68 of proving identity of the investors, the genuineness of the transactions and the creditworthiness of the parties with respect to the transactions that took place between the Assessee and the investors. Since the Assessees filed the bank statements of the parties conclusively proving that the impugned sums were received through normal banking channels from the bank accounts of the parties, the burden of proving the genuineness of the transactions between the Assessee and the parties and the creditworthiness of the parties to invest in the share capital of the Assessee Companies stood discharged. Once the Assessee established the identity of the parties, the genuineness of the transactions and the creditworthiness of the parties to invest in the share capital of or advance loans to the Assessee Companies, the burden shifted to the Revenue to prove the contrary. A.O has failed to discharge the secondary onus of demolishing/disproving the genuineness of the documentary evidences filed by the Assessee. Thus before fastening any liability upon the Assessee, A.O is required to show by bringing on record tangible material that the amounts received as share capital/loans from the investors/lenders actually emanated from the coffers of the Assessee or represented the undisclosed income of the Assessee - Decided in favour of assessee. Enhancement of income u/s 251(1) - Addition under the head from other sources by applying Section 56(2)(viib) on protective basis by rejecting the valuation report furnished u/R 11UA (2) (b) i.e. Discounted Cash Flow Method (DCF Method) - HELD THAT:- For the purpose of section 56(2)(viib) of the Act, the valuation of shares has to be done in accordance with the Rule 11UA of the Income Tax Rules. As decided in the case of Cinestan Entertainment (P). Ltd. [ 2019 (6) TMI 1367 - ITAT DELHI] wherein it is held that the AO cannot examined or substituted its own value in place of valuation arrived by the assessee either DCF Method or NAV Method, the commercial expediency has to be seen from the point view of businessman. Further held that if law provides the assessee to get the valuation done from a prescribed expert as per the prescribed method, then the same cannot be rejected because neither the AO nor the assessee have been recognized as expert under the law. There is no dispute that legally the assessee had option to choose the valuation of the shares as per Rule 11UA of the IT Rules. When the statute provides for particular procedure, authorities have to follow the same and cannot interpret or permitted to act in contravention of the statute. The said legal principal is based on the legal maxim Expression Unis Est Exclusion Alterius . CIT(A) have committed an error in rejected the valuation done by the assessee from prescribed expert as per the prescribed method, which ultimately resulted in enhancement of income of the Assessee u/s 251(1)

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• 2023 (10) TMI 543
  Validity of order passed u/s 154 - adjustment of cash seized against the advance tax denied - Scope of Expl Explanation 2 to Section 132B of the Act was inserted by the Finance Act, 2013 w. e. f. 01-06-2013 - HELD THAT:- This provision restricts the scope of adjustment of seized cash, and, therefore, is to be treated as advance to the assessee - HELD THAT:- The issue of adjustment of cash seized against the advance tax stands covered by the judgment of Hon ble Punjab Haryana High Court in the case of PCIT Vs. Surinder Kumar Khindri [ 2017 (4) TMI 1104 - PUNJAB HARYANA HIGH COURT] held Explanation 2 to Section 132B of the Act was inserted by the Finance Act, 2013 w. e. f. 01-06-2013, clarifying that existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII of the Act. However, the dispute continued on the issue as to whether the amendment was clarificatory in nature having retrospective applicability or it has only prospective applicability. Several Courts have held that the insertion of Explanation 2 to section 132 B of the Act, is prospective in nature and not applicable to cases prior to 01.06.2013. Accordingly, it has now been settled that insertion of Explanation 2 to Section 132 B of the Act shall have a prospective application and so, appeals may not befiled by the Department on this issue for the cases prior to 01.06.2013 and those already filed may be withdrawn/ not pressed upon. We hereby hold that the order u/s 154 passed by the AO is against the Circular of the CBDT and the order of the Hon ble High Court. Suffice to say that we are unable to appreciate the hyper technicalities embarked upon by the AO as well as the ld. CIT(A) while dealing with the issue.

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• Customs

• 2023 (10) TMI 542
  Territorial jurisdiction of courts - principle of Forum Conveniens - Seizure of goods - Supply of Pashmina Embroidered Ladies Shawls - prohibited goods or not - Contention that, cause of action had started at Srinagar only and the Notices/Communications have been made/received by the appellant-petitioner at Srinagar - HELD THAT:- Merely receiving of shawls from its suppliers by the appellant-petitioner, without any descriptive details in its petitions, cannot be said that the part of the cause of action had accrued within the territorial jurisdiction of this Court. It was for the appellant-petitioner, to at least plead and also urge at the time of arguments before the learned Writ Court or even before this Bench substantially, as to wherefrom it had received supplies of the consignment of shawls manufactured from the prohibited yarn, so that the learned Writ Court or this Court in appeal could have said that in view of commission of offences in J K, the appellant s cause of action had arisen within the territorial jurisdiction of this Court, so as to entertain the writ petitions for their disposal on merits. Merely pleading that the consignment was booked from Srinagar by the appellant-petitioner and the Notice/Communications from the respondents were received by the appellant-petitioner at Srinagar, does not disclose any cause of action having arisen at Srinagar so as to confer territorial jurisdiction on the basis of part of cause of action, exercising writ jurisdiction of this Court. In absence of any specific pleadings in the writ petitions as well as memoranda of appeals, it cannot be said that any part of cause of action had accrued to the appellant-petitioner at Srinagar. The learned Writ Court has rightly held that the seizure of the shawls containing prohibited material had taken place in Delhi, therefore, Delhi Courts/Fora shall be having jurisdiction in the matter and not this High Court. The impugned common judgment passed by the Writ Court is maintained and upheld.

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• 2023 (10) TMI 541
  Revaluation of imported goods - Vitrified and Porcelain Tiles - rejection of declared value - reliance placed on NIDB data - HELD THAT:- There is no discussion as to the quantity of import, commercial level and other data insofar as the NIDB data referred to is concerned, nor anywhere is found to any discussion by the original authority as to how the same were comparable with the impugned goods on hand, imported by the appellant. There is no discussion also as to the quality, thickness, etc., in the goods referred to in the NIDB data. The Tribunal Benches across India have held that the NIDB data alone cannot be the basis for rejection of the transaction value. There is a reference to under-valuation way back in 2000, no specific reference to the appellant s case, no reference ever made to the price being at arm s length, nor is there any allegation that the transaction was between related parties. In the case on hand, the Revenue has not alleged anything other than relying on NIDB data. The Revenue has to first establish that the goods imported and contemporaneous goods are identical in the first place before proceeding further, which exercise has not at all been done by the Revenue in the case on hand - The Hon ble Apex Court in its latest judgement in the case of COMMISSIONER OF CUSTOMS (IMPORTS) , MUMBAI VERSUS M/S GANPATI OVERSEAS THROUGH ITS PROPRIETOR SHRI YASHPAL SHARMA ANR. [ 2023 (10) TMI 364 - SUPREME COURT ] has held that the legal position is that transaction value can be rejected if the invoice price is not found to be correct but it is for the Department to prove that the invoice price is not correct. The under-valuation attempted by the Revenue does not persuade to approve the same in any manner - the re-valuation cannot be accepted that came to be upheld in the impugned Order-in-Appeal as well, for which reason the impugned order is set aside. Appeal allowed.

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• 2023 (10) TMI 540
  Claim for nil rate of CVD in terms of the N/N. 12/2012-C.Ex Sl. No. 105, List 1 Sl. No. 11 - requirement to pay CVD, which came to be debited in the FMS scrip furnished by the appellants - HELD THAT:- Serial number 105 describes the bulk drugs specified in List 1 which would attract nil rate of duty, and there is no dispute that List 1 includes Hydrocortisone (Sl. No. 11) as well. But the description of excisable goods at Column No. (3) has something more, by way of explanation. That means the description has to be read along with the explanation and the same are not mutually exclusive. The explanation provides the purposes of that particular entry - bulk drug to mean any pharmaceutical, chemical, biological or plant product, including its salts, esters, stereo-isomers and derivatives, conforming to pharmacopoeial or other standards specified in the Second Schedule to the Drugs and Cosmetics Act, 1940, and which is used as such or as an ingredient in any formulation. It is therefore incumbent upon the importer who imports any of the goods or bulk drugs as in the case on hand specified in List 1 to demonstrate that the same are conforming to the pharmacopoeial or other standards specified in the Second Schedule to the Drugs and Cosmetics Act, 1940. Admittedly, the appellant/assessee has nowhere demonstrated that the goods imported by it did conform to the standards specified under the explanation nor are the goods available for testing as they were cleared from Customs control before making the claim for exemption. There are no hesitation in holding the authorities below were absolutely correct in rejecting the claim of the appellant - the appeal filed by the assessee is dismissed.

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• 2023 (10) TMI 539
  Valuation of imported goods - mis-declaration on the part of the importer of the vessel with regard to transaction value of the vessel declared at the time of importation - Levy of penalty u/s 112 (a) (b) and Section 114AA of the Customs Act, 1962 - HELD THAT:- The MOA dated 10.10.2010 wherein the price indicated as USD 63,68,295/- some sort of a performa invoice rather than actual sale agreement. The basic evidence on which the department has relied upon is this agreement wherein the price has been indicated as 63,68,295/- whereas it is found that on the same date and by the same party another agreement has been signed wherein the price agreed between the owner and the cash buyer is USD 61,31,400 (CIF). It can be seen that as per Section 14 of the Customs Act, 1962 that value of the imported goods for the purpose of levy of Customs duty shall be the transaction value of the imported goods which is paid at the time of importation. It is found that transaction value is decided between the supplier of the goods and the buyer, which is importer in this case declared on the bills of entry for the purpose of assessment of the customs duty. The importer has opened a Letter of Credit in favour of the supplier of vessel which is for the amount indicated in MOA. The transaction value which have been declared on the bill of entry is the invoice value for which letter of credit through a recognized banking system has been opened. There is no evidence to suggest any extra payment to the supplier of the vessel except the invoice value - the invoice value is the true transaction value in this case and there is no element of misdeclaration of value. Levy of penalty u/s 112 (a) (b) and Section 114AA of the Customs Act, 1962 - HELD THAT:- These penalties have primarily been imposed by the learned Adjudicating Authority holding that transaction value has been misdeclared. Since it is already held in the preceding paras that charges of misdeclaration are not established, therefore, the penalties imposed on the other appellants are not sustainable and the same are set-aside. Appeal allowed.

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• 2023 (10) TMI 538
  Option to choose benefit of exemption - Allegation of wrongful availment of benefit under Sl. No. 91 of the Notification No. 04/2006-CE dt. 01.03.2006 - concessional rate of duty - allegation of the department that the CENVAT Credit availed on inputs and utilized the same in discharging duty for clearance of the goods availing concessional rate of duty inadmissible cannot be sustained - HELD THAT:- This issue has been considered by this Tribunal in the case of BALKRISHNA PAPER MILLS LTD, LAXMI BOARD AND PAPER MILLS LTD, COMMISSIONER OF CENTRAL EXCISE, THANE-I VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE I AND LAXMI BOARD AND PAPER MILLS LTD [ 2015 (11) TMI 210 - CESTAT MUMBAI ] where it was held that appellant-assessees cannot be forced to pay duty as per serial No. 90 of Notification 4/2006 and they have option to pay the duty under other numbers, viz. 91 and 93. There are no merit in the impugned order. Consequently, the impugned order is set aside. Appeals are allowed .

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• Insolvency & Bankruptcy

• 2023 (10) TMI 537
  Extinguishment of claims - approval of the Resolution Plan results in an extinguishment of all claims that the Petitioner could enforce against Arcelor Mittal or not - arbitration of disputes which are sought to be referred for the consideration of an AT. - eye of the needle test. HELD THAT:- The legislative intent and command of Sections 30 and 31 of the IBC is an issue which is no longer res integra - In Ghanashyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT] as well as the host of judgments rendered in that context and which were duly noticed by the Supreme Court in that decision, the underlying theme has been the recognition of the right of the successful Resolution Applicant to take over the corporate debtor on a clean or fresh slate. Those decisions lay primordial importance of the successful Resolution Applicant being enabled to take over the corporate debtor without being burdened by any uncertainties or a specter of irresolution. The approval of the Resolution Plan is statutorily recognised as conferring a closure upon all claims that persons or entities may have had against the corporate debtor. The claims or liabilities which could have been enforced against the corporate debtor are duly considered in the course of the CIRP with the Adjudicating Authority undertaking a detailed exercise with respect to identification of the various creditors of the corporate debtor, including the classes thereof, the scrutiny of claims received and the ultimate apportionment of the amounts deposited by the successful Resolution Applicant amongst the creditors inter se. However, once the aforesaid process has been completed and the Resolution Plan comes to be approved, no fresh claims can be laid or enforced against the successful Resolution Applicant. The successful Resolution Applicant is only bound to meet the claims as may have been accepted and ultimately form part of the approved Resolution Plan. This issue assumes seminal importance since the successful Resolution Applicant cannot be left open to defend or oppose claims which are either not factored in the Resolution Plan nor can it be left to fend off actions that may be brought with respect to alleged or asserted dues of the corporate debtor which were not admitted. The Court is of the considered opinion that approval of the Resolution Plan in terms given clearly amounts to the extinguishment of all debts that were owed by the corporate debtor except to the extent as was admitted in the Resolution Plan. The IBC and the resolution process does not contemplate matters being left inchoate. In fact, and to the contrary it exhorts one to accept the seal of finality and quietitude which stands attached to the approval of a Resolution Plan. While the Court is conscious of the Section 11 power contemplating a prima facie view being formed and a first review alone being undertaken, the decisions handed down on the scope of that jurisdiction also bids High Courts to ensure that dead disputes are not revived and parties forced to undertake arbitration. Thus, where issues which are canvassed on a Section 11 petition are found to be contested or even arguable, the High Court would desist from delving into the merits of the rival claims. Once it is accepted that the approval of the Resolution Plan results in the extinguishment of all claims that the petitioner may have had, the dispute which is now sought to be canvassed cannot be permitted to be urged again before the AT. That would clearly amount to rewriting upon the clean slate based upon which the respondent took over the corporate debtor. A reference of the disputes as sought by the petitioner would clearly amount to a reopening of the Resolution Plan and which is clearly impermissible - Empowering the AT to adjudicate or rule upon these disputes would also be contrary to the principles which were enunciated by the Supreme Court in Ghanashyam Mishra. The Court thus comes to conclude that on due application of the eye of the needle test, it is manifest that the disputes which are spoken of in the Section 11 petition are non-arbitrable and thus no reference to the AT is warranted - petition dismissed.

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• 2023 (10) TMI 536
  Condonation of Delay - period of limitation is to be computed from the date of knowledge of the order or otherwise - sufficient cause for delay present or not. Whether limitation for filing an Appeal under Section 61 of the IBC shall commence from the date of the order or from the date when contents of the order are known to the aggrieved party i.e. the date when copy of the order is received by an aggrieved party? - HELD THAT:- In the present case, orders passed by the Adjudicating Authority were pronounced in the open Court in the presence of the Counsel for the Appellant. In any view of the matter, they cannot contend that they do not have even constructive knowledge of the order on the said date. Knowledge of the order has to be actual or constructive knowledge and when the orders are pronounced, it can very well be said that the constructive knowledge has to be imputed to the contents of the order to an aggrieved party. In the present case, when orders were pronounced by the Adjudicating Authority, they cannot be allowed to contend that they are not aware of the order of the Adjudicating Authority. Further, Section 12 of the Limitation Act provides for exclusion of the time taken in obtaining certified copy of an order. After an order is pronounced which pronouncement is well known to the Appellant in the present case, it was open for them to apply for the certified copy of order, even if they are not aware of the contents of the order as per their submissions on that date - Law, thus, clearly provides opportunity to any aggrieved party to obtain certified copy of the order and file an appeal after exclusion of the period obtaining in certified copy of the order. Legislative scheme takes care of all situations where order was pronounced by a Court, it is expected for the parties to diligently apply for certified copy of the order in event there may be any chance to file an appeal. The limitation for filing an Appeal under Section 61 shall commence from the date when the order is pronounced and not from the date when aggrieved party or Appellant claims to have knowledge of the contents of the order. Whether in the Delay Condonation Application being IA No.3694 of 2023 sufficient grounds have been made out to condone the delay in filing the Appeal? - HELD THAT:- It is undisputed that the order was pronounced on 08.05.2023. The order clearly notices the presence of the Counsel who appeared on the date physically/ video conferencing. It is not denied by the Appellant that the order was pronounced on 08.05.2023. The submission of the Appellant that he came to know about the contents of the order only when order was received by an e-mail dated 02.06.2023 - The Appeal having been filed on 04.07.2023 i.e. after 15 days from expiry of limitation, there is a delay of 27 days in filing the Appeal. The jurisdiction to condone the delay is limited to only 15 days under Section 61(2), the Delay Condonation Application cannot be allowed - no sufficient ground has been made out in I.A. No.3694 of 2023 to condone the delay in filing the Appeal being Company Appeal (AT) (Insolvency) No. 1071 of 2023. Whether in Delay Condonation Application being IA No.1956 of 2023 sufficient grounds have been made out to condone the delay in filing the Appeal? - HELD THAT:- The order was pronounced by the Adjudicating Authority on 12.01.2023. Counsel for the Successful Resolution Applicant i.e. Appellant was present when the order was pronounced - Appellant s case is that he has applied for certified copy on 06.02.2023 and he has received free of cost copy on 08.02.2023. Even if exclusion of the aforesaid period is given, it shall be only 3 days against the order dated 12.01.2023. Appeal has been filed on 11.03.2023 even after giving exclusion of 3 days, period of 45 days shall come to an end by 02.03.2023, hence, the appeal has been filed with a delay of more than 15 days after expiry of limitation. Jurisdiction to condone the delay is limited to 15 days, the delay in filing the appeal cannot be condoned. There are no sufficient grounds made out in I.A. No.1956 of 2023 to condone the delay in filing the Appeal being Company Appeal (AT) (Insolvency) No.588 of 2023 - both the Delay Condonation Applications dismissed.

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• 2023 (10) TMI 535
  Approval of Resolution Plan - validity of assessment order - Claim of workmen dues in full - section 7A and 7Q of Employees Provident Fund Miscellaneous Provisions Act, 1952 as well as section 14B - exercise of jurisdiction under 1952 Act - HELD THAT:- The submission of Respondent No. 2 with regard to damages as imposed on the Corporate Debtor needs consideration. From the claim forms which was submitted by the Appellant on 18.10.2019 annexed as Annexure C to the Appeal indicates that one of the assessment pertaining under Section 14B for amount of Rs. 68,54,869 was imposed by Order dated 14.10.2019 which is clear from Form-F which was submitted by the Appellant itself. The Copy of Order dated 14.10.2019 by which amount of Rs. 68,54,869/- has been imposed is clearly after initiation of CIRP against the Corporate Debtor vide Order dated 30.09.2019 - it is not necessary in this proceeding to issue any direction for payment of the damages as imposed by the Order dated 18.10.2019 which was subsequent to CIRP imposition of moratorium. No direction need to be issued for payment of damages under Section 14B of Rs. 68,54,869/-. Another part of damages amounting to Rs. 31,16,446 which was imposed by order dated 25th July, 2017 - waive of damages under Section 14B of the Act - HELD THAT:- When Insolvency Resolution Process has been initiated against a Corporate Debtor and Resolution plan has been approved under IBC, power of Central Board to reduce or waive the damages can be exercised with regard to the damages imposed under Section 14B. Paragraph 32 of the 1952 Scheme as extracted above also contemplate recommendation by Board for Industrial and Financial Reconstruction, 1985 Act being not in force and substituted by Insolvency Regime there can be now no recommendation for waiver of the damages under Section 14B of Board for Industrial and Financial Reconstruction. The power of recommendation as contemplated in paragraph 32B scheme can very well be exercised by the NCLT. Another part of the admitted claim i.e. claim for Rs. 1,32,44,314 along with Form F - HELD THAT:- In the amount which is claimed by the Appellant towards 7A and 7Q, the amount which has already been paid to the workmen need to be deducted. Resolution Professional needs to compute the amount paid to the workmen under Resolution Plan towards PF dues. Resolution Professional being ex- Resolution Professional i.e. Respondent No. 1 we direct the Respondent No. 1 to compute the amount of PF dues paid to the workmen under Resolution Plan and thereafter arrive at the amount which is required to be paid to the Appellant as against the admitted claim towards Section 7A and 7Q. Let the aforesaid exercise be completed by the Respondent No. 1 within two months from today and communicate the amount payable to Appellant under 7A and 7Q. The amount to be determined for payment to Appellant has to be the amount after deducting from total claim of Rs. 1,32,44,314 by deducting the amount paid towards PF to the workmen and amount already paid to the Appellant under Resolution Plan. The Order passed by the Adjudicating Authority approving the Resolution Plan is upheld subject to following; (a) SRA shall make the payment of dues of Appellant under Section 7A and 7Q on the basis of computation communicated by the Respondent No. 1 after deducting the amount paid to the workmen under Resolution Plan towards PF and the amount paid to the Appellant under Resolution Plan. SRA shall make the said payment within 30 days from computation as communicated by Respondent No. 1. (b) No direction is issued to the SRA to make payment of amount of damages under Section 14B for amount of Rs. 68,54,869/- which was imposed by Order dated 14.10.2019 after enforcement of the moratorium. (c) With regard to amount of Rs. 31,16,446/- under Section 14B we permit the SRA to make an application to Central Board for waiver of 100 per cent damages along with copy of this order within 30 days from today. Appeal disposed off.

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• 2023 (10) TMI 534
  Validity of permission granted by the NCLT to Respondent / Petitioner/Operational Creditor to file the necessary amended copy, with the Registry, of this Tribunal - Permission granted even after inordinate delay of 2 and 1/2 years- HELD THAT:- It must be borne in mind that Amendments are allowed in pleadings to avoid, uncalled for multiplying of litigations . All amendment, ought to be allowed, if the twin conditions are satisfied (i) of not working injustice to other side; (ii) of being necessary, for the purpose of determining the real questions in controversy between the parties - There is no rule limiting amendment to accidental errors. An amendment , which is necessary for the just decision of a case can be allowed. Also that, an amendment , in general , is not to be refused, in a mechanical and casual manner. In fact, the pleadings can be amended, to substantiate, to elucidate and expand the pre-existing facts , already existing . Where an amendment, does not constitute and addition of a new case, but amounts to no more than adding to the facts already on record, the amendment , would be allowed, even after the statutory, period of limitation - An amendment , which is necessary for the just decision of a case, can be allowed. In the present case, even though, the Appellant / Respondent, had come out with the plea that the amendment in pleadings was sought for by the Respondent / Petitioner in application with the inordinate delay of 2 years, keeping in mind, of a prime fact, that the Amendment , in pleadings is in imperative one , for a proper, effective and efficacious adjudication of the controversies, involved in the main application on the file of the Adjudicating Authority / Tribunal - this Tribunal, comes to a consequent conclusion, that application is a Bonafide one and to minimise litigation between the parties and also that No Party , should suffer on account of technicalities of Law. Appeal dismissed.

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• PMLA

• 2023 (10) TMI 533
  Money Laundering - Refusal to discharge the petitioner / A.1 - Conspiracy with other accused - receiving the keys of bank locker wherein the bribe amount was secreted by A.2 through his son - contention of the petitioner is that by the date of the alleged incident the Prevention of Money Laundering Act, 2002 viz., Act 2 of 2013 was not even promulgated and did not come into force. HELD THAT:- Section 3 of the Act does not attract to the case of the petitioner is concerned, the Hon ble Supreme Court in Vijay Madanlal Choudhary Vs. Union of India [ 2022 (7) TMI 1316 - SUPREME COURT ], the amendment to the Act is only in the nature of clarificatory and that the said amendment shall have the effect from the date of enactment of the PML Act, 2002 - Though the said amendment has come into force on 15.02.2013, nowhere in the Act it was stated that it is only prospective in nature. But it is only in the nature of clarificatory. It is an admitted fact that the investigation reveals that huge sum of untainted money was recovered from the locker of A.2 and the petitioner is having custody of the keys of the said locker which stands in the name of A.2. Therefore, the explanation given in the above section does attract to the case of the petitioner herein though it the amendment came into force from 15.02.2013 onwards since he is indirectly involved in the alleged crime. As seen from the record, there was an agreement between A.2 and A.1 and A.3 with regard to grant of bail, which itself shows the complicity of the case. The respondents have filed voluminous evidence in the form of documents, which have to be gone through during the course of trial only. The criminal revision case is dismissed.

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• 2023 (10) TMI 532
  Seeking grant of anticipatory bail - bail sought on medical grounds - Money Laundering - Scheduled offences - applicability of Section 45 of Prevention of Money Laundering Act, 2002 - HELD THAT:- It is relevant to note that in the case of Gayatri Prasad Prajapati [ 2020 (10) TMI 1281 - SUPREME COURT ] the High Court had passed the impugned order without considering the report of SGPGI. The Hon ble Supreme Court observed that SGPGI is a super specialty hospital and it had reported that the accused s glycaemia was better controlled, hypertension was well controlled, pulmonary consultation had been completed and only urology workup was going on and, therefore, the Hon ble Supreme Court set aside the order passed by the High Court. Moreover, even Section 45 PMLA has a Proviso appended to it which provides that a person who is sick, may be released on bail even by the special court. The applicant was granted interim anticipatory bail keeping in view his medical conditions only, which claim stands fortified by the subsequent reports submitted by the medical board constituted by five expert doctors of SGPGIMS in furtherance of an order passed by this Court. As has already been noted above, this court lacks the requisite expertise to doubt the reports submitted by SGPGI. The subsequent documents relating to medical condition of the applicant annexed with the supplementary affidavit indicate that the applicant continues to be seriously ill. The allegations of a witness being influenced have been emphatically denied on behalf of the applicant. The applicant has been granted anticipatory bail in Case Crime No. 119/2023, under sections 409, 420, 467, 468, 471, 120-B I.P.C., P.S. Hazratganj, District Lucknow, which is the scheduled offence - this court finds no reason to vacate the interim anticipatory bail granted to the applicant by means of order dated 30.05.2023. The application for anticipatory bail is allowed.

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• 2023 (10) TMI 531
  Rejection of prayer for default bail - right accrued in favour of the petitioner in terms of Subsection (2) of Section 167 Cr.P.C. - HELD THAT:- The Court has gone through the materials on record and finds that admittedly the petitioner was arrested on 04.05.2023 and was remanded on 05.05.2023. The prosecution complaint being ECIR/RNZO/18/2022 was filed on 12.6.2023. The learned court has taken cognizance on 19.06.2023. If the contention of the learned counsel for the petitioner is accepted, the 60 days period came to an end on 03.07.2023 and the petitioner filed a petition for default bail on 04.07.2023 which has been rejected by the learned court by the impugned order dated 10.07.2023. It appears that FIR bearing No. 141/ 2022 dated 04.06.2021 was registered by Bariyatu police station, Ranchi under section 420, 467, 471 of the I.P.C against one Pradip Bagchi. The petitioner being the then Deputy Commissioner of Ranchi utilized his official position and helped them in transferring of the land. The property with regard to ECIR/ RNZO/18/2022 was the subject matter of the lands which has been noted in the submission of the learned A.S.G.I. appearing on behalf of the respondent Enforcement Directorate (E.D)(supra). It further appears that FIR bearing No. 399 of 2022 was registered by Ranchi police and on the basis of which a separate ECIR/RNZO/10/2023 dated 07.03.2023 was also recorded by the Enforcement Directorate (E.D). As the charge sheet is not filed within the meaning of section 173(2) of the Cr.P.C., the investigation remains pending. Filing of final report or charge sheet, however, does not preclude the investigating officer to carry on further investigation in terms of Section 173(8) Cr.P.C. Indisputably, the power of the investigating officer to make a prayer for making further investigation in terms of section 173(8) of the Cr.P.C., is not taken away only because a charge sheet has been filed under section 173(2) Cr.P.C. - There is no doubt that such right of bail although is a valuable right, but the same is a conditional one. The condition precedent being pendency of the investigation. Whether an investigation, in fact, has remained pending and the investigating officer has submitted the charge sheet only with a view to curtail the right of the accused, would essentially be a question of fact. The materials which has come in the first ECIR, the investigation in the first case is complete and the learned court has taken the cognizance on 19.06.2023. Thus, it cannot be said that the investigation is still pending so far as ECIR/18/2022 is concerned. The another ECIR, being ECIR/10/2023 is the subject matter of other properties in which the final form has been submitted on 01.09.2023. The Court finds that it cannot be said, in the aforesaid facts, that charge sheet was not submitted within the stipulated period, and in view of that, Sub-Section (2) of Section 167 Cr.P.C. is not available to the petitioner - the Court come to the conclusion that this is not a case to grant default bail to the petitioner under section 167(2) of the Cr.P.C. Application dismissed.

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• Service Tax

• 2023 (10) TMI 530
  Validity of adjudication order - recovery of service tax alongwith penalty - quantum of penalty - HELD THAT:- Though the adjudication order was passed in the year 2017, till date the respondent/department has not been able to effect any recovery from the appellants and the orders of adjudication have remained only on paper. Thus, balancing the interest of both parties, more particularly bearing in mind the interest of revenue, we find the case on hand to be a peculiar case, where certain directions can be issued so that the part of the amount payable by the appellants can be recovered by the department. Simultaneously, the appellants can also be granted an opportunity to question the correctness of the order of adjudication as well as also make their submissions as to whether the penalty enhanced by the Commissioner was warranted. The appeal stands disposed of by directing the appellants to pay 50% of the Service Tax, which was determined and demanded in the order of adjudication dated 21st June, 2017. Such payment shall be effected by the appellants within six weeks from the date of receipt of server copy of this order.

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• 2023 (10) TMI 529
  Levy of Service Tax - Commercial Training and Coaching Service provided by non-profit and charitable institutions - contrary decisions regarding the issue - extended period of limitation - HELD THAT:- The documents produced by the appellant on record that the appellant is registered under Society Registration Act, 1860 w.e.f. 26.08.1963 as well as under Section 12A(a) of the Income Tax Act, 1961. It is also a fact that the Appellant was operating as an institution recognised under Section 80 G of the Income Tax Act. 1961 during the relevant period. During the relevant period 2003-2004 to 2005-2006 there were contrary decisions regarding whether the service tax is leviable on the Commercial Training and Coaching Service provided by non-profit and charitable institutions - Thereafter, the Tribunal by majority decision in the case of SRI CHAITANYA EDUCATIONAL COMMITTEE VERSUS COMMISSIONER CUSTOMS, CENTRAL EXCISE, GUNTUR [ 2019 (11) TMI 17 - CESTAT HYDERABAD (LB)] has held that the service tax is leviable in respect of coaching provided by the appellant through junior colleges under its management or under the management of others also. The majority view held that the extended period is not invokable and the demand is limited to the normal period of limitation. On merit the issue is against the appellant but in the present case, the entire demand is barred by limitation - Appeal disposed off.

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• 2023 (10) TMI 528
  CENVAT Credit - banking and financial service used by the appellant in providing Renting of Immovable Property service - Short paid interest on delayed payment of service tax - Interest rate be 15% or 25% for belated payment of service tax? CENVAT Credit - Banking and financial service used by the appellant in providing Renting of Immovable Property service - HELD THAT:- Reliance placed in OBERON EDIFICES ESTATES PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, COCHIN [ 2023 (9) TMI 769 - CESTAT BANGALORE] , it was held that various input services used in providing Rental of Immovable Property service are admissible to CENVAT credit. Following the aforesaid decision of this Tribunal, it is opined that CENVAT Credit availed on banking and financial services used in providing Renting of Immovable Property service is admissible. Demand of differential interest for the respective periods - HELD THAT:- The department has specifically alleged in the notice that the appellant had collected rent on monthly basis along with service tax from the tenants; however, they have not deposited service tax so collected as on due date - On being inquired during the course of hearing to place the invoices under which rent was collected from the tennants, the ld. Advocate for the appellant expressed inability to produce a single copy of the invoices. Thus, the appellant could not establish that service tax was not collected earlier, hence could not be deposited before the due date - there are no merit in the contention of the ld. Advocate that their case falls under Sl. No. 2 of Notification No. 13/2016-ST dated 01.03.2016 - the applicable interest would be @24% on the service tax amount paid belatedly even though collected from service receivers. Appeal allowed in part.

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• 2023 (10) TMI 527
  CENVAT Credit - Wrong utilization of cenvat credit - input services - credit on the basis of debit notes - common inputs services used for both taxable and exempted services - non-maintenance of separate books of accounts - violation of Rule 6 (1) of CCR, 2004 - non-payment of interest - penalty. Wrong utilization of cenvat credit over and above the 20% of the output tax liability in contravention of Rule 6 (3) (c) of CCR 2004 - HELD THAT:- Prior to 01.04.2008, there was restriction that when an assessee is providing both exempted services and taxable services, the credit can be utilized only upto 20%. In the present case, it is not disputed that the appellant has utilized credit for payment of the service tax beyond the prescribed 20%. This provision imposing restriction was omitted w.e.f. 01.04.2008. After 01.04.2008, there was confusion as to whether an assessee has to repay the amounts so utilized over and above the 20% cap. The Tribunal in the case of M/S. GE MONEY FINANCIAL SERVICES P. LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2019 (5) TMI 1569 - CESTAT CHANDIGARH] had occasion to analyse the very same issue. It was held that the demand to recover the amount utilized over and above 20% cannot sustain and that the assessee would be liable to pay interest for the intervening period from the date of excess utilization of credit till 01.04.2008. It was also held that penalty cannot be imposed. Thus, the demand of service tax to the tune of Rs.24,10,286/- cannot sustain and requires to be set aside. The penalties imposed also cannot sustain and are set aside. However, the appellant is liable to pay the interest on this amount from the date of utilisation of credit till 01.04.2008. Credit availed on various input services - HELD THAT:- The appellant has availed credit on input services in the nature of premium paid on motor vehicle insurance, group insurance for employees, personal accident insurance for employees, life insurance etc. The other services are tour and travel and event management service (entertainment service) - prior to 01.04.2011 the credit would be eligible. It is also to be pointed out that the invoices are issued in the name of the company and the cost of such services has been borne by the company - the appellant is eligible to avail credit of Rs.7,36,922/-. Demand on this ground cannot sustain and requires to be set aside. Credit availed on the basis of debit notes - HELD THAT:- As per Rule 4A of the Service Tax Rules, among other details, the service tax registration number of the service provider has to be mentioned in the invoices. The proviso to Rule 9 (2) of CCR gives discretionary power to the jurisdictional officer to condone lapses of such details in the invoices if it is clear after verification that the tax amount has been paid by the assessee. It is for the jurisdictional officer to verify as to the particulars of tax paid by the appellant to the service provider. Merely because some details are not mentioned in the invoice/document, the substantive right of credit cannot be denied. As there is no allegation in SCN as to the veracity of the document, the credit of Rs.10,67,514/- denied and confirmed by the impugned order requires to be set aside. Non-payment of Interest - levy of penalty - HELD THAT:- There is no positive act of wilful suppression of facts alleged against the appellant. So also, there is no evidence established by the department to show that the appellant has suppressed facts with an intention to evade payment of tax. The only allegation is that non-payment of tax would not have come to light, if the audit party had not verified the accounts. The appellants having disclosed the availment of credit of Rs.8,69,567/- in their ST-3 returns. The penalty imposed alleging wilful suppression of facts is not justified. The same is set aside. Appeal allowed in part.

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• 2023 (10) TMI 526
  Levy of penalty u/r 26 of the Central Excise Rules, 2002 - wrongly claimed the exemption provided under Notification 20/2007-CE dated 20.04.2007, on the basis of the certificate issued by the Appellant - HELD THAT:- The Appellant has not specified the purpose for which the certificate was issued by him. He stated that the M/s. Kitply Industries have asked them to verify their books of Accounts and value the plant and machinery of the company as on 31.03.2005. After examining the relevant records, the Appellant issued a certificate dated 31.03.2005. It is found that this certificate was not relied upon in the impugned order. The impugned order refers a Chartered Accountant Certificate dated 30.06.2007 certifying the additions in plant and machinery, which was not issued by the Appellant. Thus, the Appellant has not abetted the offence, if any, committed by the company in claiming the benefit of exemption provided under Notification 20/2007-CE dated 20.04.2007. Accordingly, the penalty imposed on the Appellant is not sustainable and hence set aside the same. The penalty imposed on the Appellant under Rule 26 of the Central Excise Rules, 2002 set aside - appeal allowed.

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• Central Excise

• 2023 (10) TMI 525
  CENVAT Credit - capital goods - printers and cartridge - packing materials - exclusion clause under Rule 2(a)(A)(i) of CCR - HELD THAT:- The items namely printers and the printer cartridges though covered by the definition of capital goods as argued by the appellant have not been used in the manufacturing premises but in the office of the appellant located within the premises of the appellant. Commissioner (Appeals) has referred to the exclusion clause. Exclusion Clause specifically excludes equipment or appliances used in the offices, definitely printer and its cartridges nothing but the equipment of appliance and not the furniture in respect of which board has issued the clarification since these equipments or appliances are used in office, they fall within the exclusion clause of the definition and hence credit in respect of these would not be permissible. Similar view has been expressed by Mumbai Bench in case of M/S BHARTI AIRTEL LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2012 (4) TMI 362 - CESTAT, MUMBAI] observing there is no direct nexus between this item and the output service provided by the appellant. The appellant has not established sufficient nexus between printers and their output service. Cenvat credit on the packing material which was delivered at the warehouses located at Lawrence Road, Delhi - HELD THAT:- There are no much justification in the order, it is settled principle in law till the time it can establish that the inputs were used in or in relation to manufacture and clearance of the finished products. The Cenvat credit in respect of the same cannot be denied. It is also the depot has been considered as the place of the clearance for the excisable goods, warehouse where these boxes were delivered is a depot of the appellant from where sugar was cleared after being repacked in these corrugated boxes, these facts are not in dispute. Cenvat credit of Rs.41,078/- taken in respect of these packing materials is held to be admissible and remaining credit of Rs.29,341/- + Rs.23,610/- =Rs.52,951/- is held to be not admissible to the appellant. In the respect of credit disallowed the demand of interest also needs to be upheld. Penalty under Rule 15 (2) read with Section 11AC of the Central Excise Act, 1944 is upheld to the extent of Cenvat credit disallowed. Appeal allowed in part.

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• 2023 (10) TMI 524
  CENVAT Credit - Allegation of non-receipt of material - reliance placed upon the statements of directors - cross examination of witnesses - contravention of Section 9D of Central Excise Act - HELD THAT:- In the first instance the impugned order is bad in law because the whole case was built only on the statement of Mr. K.P. Khemka and Mr. Rupesh Bansal and Mr. Yashpal Sharma and no opportunity of cross examination was provided to the appellant despite specific request. The Ld. Commissioner (Appeals) has not considered the evidence namely RG-23C part I and the bank statements showing payment to transporter and the supplier. Further, department has not been able to bring any independent evidence to prove the allegations of non-receipt of goods against the appellant. Besides this, statement of Shri Sushil Jain dated 09.02.2009 and Shri Suresh Sharma, the authorized representative of the transporter has been rejected without any basis. In the case of M/S NIDHI METAL AUTO COMPONENTS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-IV [ 2015 (4) TMI 649 - CESTAT NEW DELHI ] and S.K. Foils Ltd. v. Commissioner of Central Excise, Rohtak [ 2014 (3) TMI 412 - CESTAT NEW DELHI ] where the manufacturer and first stage dealer were same, relief was granted to the assessee on the observation that allegation had been made on basis of statement of manufacturer, dealer/ supplier of invoice and there is no discrepancy in the invoice and payment has been made through cheque. The appellant has regularly filed the statutory returns on monthly basis and the fact of clearance of goods and availment of credit was duly reflected in the returns but the same has not been examined by the authorities below. The impugned order is not sustainable in law - Appeal allowed.

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• 2023 (10) TMI 523
  Payment of duty on facility charges recovered from other customers claiming that the agreements are different - HELD THAT:- The issue is no more res integra and the issue is covered by the judgment of this Tribunal in the case BOC India Ltd. [ 2018 (3) TMI 854 - CESTAT NEW DELHI ]. This Tribunal after taking note of the Board Circular dated 10.11.2014 and 24.4.2014 held that The appellants are engaged in manufacture supply of gases liable to Central Excise duty. They have put up storage facilities inside the clients premises to store such gases for subsequent consumption. For such activity, they are collecting fixed facility charges apart from the sale consideration for the gas. Admittedly, the clarification dated 10-11-2014 issued by the Board on similar set of facts, as well as, the clarification dated 24-4-2014 issued in respect of appellant s unit in Orissa are applicable to the present dispute. There are no reason not to follow the aforesaid judgment of this Tribunal. Hence, the facility charges, escalation charges, etc., collected from all customers are includable in the value of gases sold/supplied to their customers. However, in the facts and circumstances of the case, there are no reason to confirm the penalty imposed on the appellant - the impugned order is modified to the extent of setting aside the penalty of Rs. 5,00,000/- under Rule 25 of the Central Excise Rules, 2002 and duty amount confirmed along with interest is upheld. Appeal disposed off.

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• 2023 (10) TMI 522
  Levy of penalty u/r 26 of Central Excise Rules, 2002 - Revenue filed the present appeals on the ground that the Commissioner ought to have confirmed the charges against the present appellants made in the show cause notice in the impugned de-novo adjudication order - HELD THAT:- It is clear that the observation is in respect of the appellants which were before the CESTAT. Therefore, even though the operating portion of the order sets aside the impugned order but it is only in respect of appellants which were before the CESTAT. It is obvious that the parties, the appellants in the present case which were not before the CESTAT, the order of the CESTAT cannot be said to have been given in respect of the present appellant which were not the parties as appellants before the CESTAT. In view of facts and specific observation made by the Learned Commissioner in the impugned order about the present appellants is absolutely legal and correct - there are no infirmity in the impugned order - appeal of Revenue dismissed.

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• CST, VAT & Sales Tax

• 2023 (10) TMI 521
  Condonation of delay of 1651 days in filing SLP - Sufficient reasons for delay or not - HELD THAT:- It is not convincing that there is any sufficient cause to condone the delay. Hence, the special leave petition is dismissed on the ground of delay alone keeping open the question of law, if any. SLP dismissed.

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• 2023 (10) TMI 520
  Charge against the Commercial Tax Officer - Lapse regarding allowing Input Tax Credit - non- production of original purchase bills - careless handling of the surprise inspection and suppression of the material facts - huge revenue loss to the exchequer and improperly functioning as Inspecting Officer - HELD THAT:- In the case on hand, it is not the claim of the respondents that the team head G.Balasubramanian was discharged in view of certain illegality / inadvertence / mistake committed on the part of the Department. The Commercial Tax Officer has been discharged consciously by admitting the fact that there was a lapse on his part as well. He has been discharged, since the revenue impact has been eliminated subsequently. In such case, the same logic for granting the advantage ought to have been extended to the petitioner who is also similarly placed. No point of time the respondents have alleged any malafide intention on the part of the petitioner. In fact, even in the order of punishment, it has been explicitly mentioned that there is no element of any ulterior motive on the part of the petitioner. So there cannot be any difficulty to grant the same benevolence shown to the then Commerial Tax Officer, who was the leader of the inspection team, to the members of the team as well. The order passed by the first respondent is set aside - Petition allowed.

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• 2023 (10) TMI 519
  Entitlement of rebate on the entire amount of tax paid on purchase of cotton seed at first stage and used in manufacturing of oil, oil-cake and residue - Section 15A of the Haryana General Sales Tax Act, 1973 read with rule 24A of the Haryana General Sales Tax Rules, 1975 - refund of tax paid in excess at first stage, over and above tax payable on finished goods at the stage of sale at his hands. HELD THAT:- As per the judgment in Sharda Cotton Ginning Pressing Factory vs. State of Haryana and others [ 2001 (3) TMI 991 - PUNJAB AND HARYANA HIGH COURT] , once the entire cotton seeds after purchase had been used in the manufacturing and if one of the items is tax free, rebate cannot be reduced proportionately and it has to be allowed in full. Since both the questions i.e. (1) whether on the facts and in the circumstances of the case, the dealer is entitled to rebate on the entire amount of tax paid on purchase of cotton seed at first stage and used in manufacturing of oil, oil-cake and residue in terms of the provisions of Section 15A of the Haryana General Sales Tax Act, 1973 read with rule 24A of the Haryana General Sales Tax Rules, 1975 and (2) if answer to the above question is in affirmative, whether the dealer is entitled to refund of tax paid in excess at first stage, over and above tax payable on finished goods at the stage of sale at his hands, have been answered in favour of the assessee. General Sales Tax Reference is allowed.

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