TMI Tax Updates - e-Newsletter
November 9, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
-
GST:
Collection of GST by the respondent (service provider) wrongly - Amount collected by the National Board of Examinations (NBE) - Amount to be returned / refunded by the NBE or GST authorities as the case may be - HC
-
GST:
Rejection of refund claim - it is clear that the State is only dilly-delaying on the issue and merely on account of the fact that the State is in the process of filing an appeal, we do not feel that the State is justified in divesting the petitioner of his fruits of litigation which have accrued to him despite a period of 1 year 3 months having gone by. - Refund to be made - HC
-
GST:
Attachment of Bank account of petitioner - After the expiry of one year period, the authority has issued the fresh order of provisional attachment, such action of the authority, therefore, when challenged though shall need to be looked at cautiously for this being draconian powers, while directing the authority to complete and wind up its Proceedings of investigation in three months as the charge-sheet also has been filed against the petitioner within a specific time period, extension since has come by a specific order, the very action of attachment cannot be interfered with. - HC
-
Income Tax:
Validity of reassessment u/s 147 - If the AO had only verified in the portal of assessee before initiating proceedings, particularly when he had the PAN number with him, AO would have realized that not only Petitioner has filed the Return of Income, but also the return has been processed and an order dated 26th February 2020 u/s 143(1) of the Act had been passed. Therefore, the notice that was issued under Section 148A(b) of the Act also has to be quashed and set aside. - HC
-
Income Tax:
Validity of reopening of assessment - if only the AO who applied for approval under Section 151 of the Act had only read the approval form, he would have made the required corrections. If only the Additional/Joint Commissioner of Income Tax had read the approval form and the order under Section 148A(d) of the Act and the file relating to the matter, he would not have recommended granting of approval. So also the Principal Commissioner of Income Tax. If he had only read the file, he would have realised that if the time limit for current proceedings is covered under Section 149(1)(b) of the Act, i.e., for more than 3 years but not more than 10 years, he has no power to grant approval and the approval should have been granted by the Principal Commissioner of Income Tax. Reassessment proceedings quashed - HC
-
Income Tax:
Validity of assessment order passed u/s 153A r.w.s. 143(3) - Extension of period of limitation - reference made by the revenue to Swiss authorities - Since the reference is not a valid reference, the claim of the revenue that period of limitation is extended by one year under section 153B based on the reference is not tenable - AT
-
Income Tax:
Characterization of receipts - transfer of shares - Business income or capital gains - CIT(A) did not go deep into the part of the consideration relatable to transfer of shares. He simply applied the magic wand and held that 10% of the consideration was towards non-compete and termination of role of the assessee in management. - the exercise of attributing sale consideration to the shares and the negative covenants is required to be done afresh by the AO. - AT
-
Income Tax:
Applicability of special tax rate u/s 115BBE - income surrendered in search and seizure operation u/s 132 and offered in the return of income - Admittedly, assessee has not offered the income u/s 69A - Even, AO has not made any separate addition under Section 69A - He has merely re-characterized the nature of income offered by the assessee. - Higher Rate of Tax u/s 115BBE would not be applicable - AT
-
Income Tax:
Nature of expenditure - amount paid on retirement of partner - Allowable revenue expenditure or capital expenditure - CIT(A) without appreciating proper facts of the case went on to hold that the payment of money to the retiring partner is revenue expenditure. - Such findings cannot be accepted in the eyes of law. - AT
-
Income Tax:
Determination of correct income - Scope of rectification u/s 154 - reduction in the income - If the contention of the revenue has to be accepted then the provisions of section 154(5) of the Act would become otiose. In any case, it is well settled that the revenue cannot be unjustly enriched and in genuine cases, the assessed income could very well go below the returned income. - AT
-
Income Tax:
Addition u/s 69 - unpaid purchase consideration and the future commitment made to the builder by the assessee - Builder has shown the amount as due in its books of account - once the assessee has not made any payment the same cannot be added as unexplained investment. - AT
-
Income Tax:
Assessment u/s 153C - the assessee cannot be held to be having control over what the third person records in his regular books of accounts or in the parallel books of account. Here the seized documents are merely loose sheets not forming part of the books of account of the assessee and that they do not constitute admissible evidence and are to be merely discarded as dumb documents as there are no other corroborative material or evidence to link those documents. - AT
-
Income Tax:
Revision u/s 263 - Belated filing of return for claiming deduction u/s 80-IA - the requirement of separate balance sheet of the power generation unit for admissibility of deduction u/s 80IA as prescribed in Rule 18BBB - The specific requirement of the Section for allowing the deduction was not touched by the Ld. AO, this makes the order of Ld. AO erroneous, which was without proper enquiries and examination of the records. - AT
-
Income Tax:
Timeframe for Disposal of Appeals [pending] before Commissioner (Appeals) in Income Tax - Working/Sanctioned Strength of the Commissioner (Appeals) - So far as increasing the sanctioned strength or the filing up of vacant posts of the Commissioner (Appeals) is concerned, the CBDT may not have any role to play. - Union of India may take appropriate measures and decision in that regard, inasmuch as filling up of all the present posts lying vacant would greatly assist in disposals of the pending appeals - HC
-
Customs:
Classification of imported goods - Steel Balls - The appellants cannot be forced to continue the classification they adopted in the past even though it was incorrect. The appellants are free to correct the classification of the imported products. If the classification, so claimed, was wrong, it was incumbent upon the Department to rectify the same by taking legal recourse. - AT
-
Customs:
Valid sanction of refund or not - conversion of foreign going vessel to coastal run - subsequent on finalization, whatever un-utilised consumables were there, the excess amount of duty paid was refundable or otherwise - The order allowing the refund is correct - AT
-
FEMA:
Recovery of penalty imposed on the respondent - Validity of insolvency notice issued to the respondent - interpretation of statute - words creditor, debt and debtor as defined u/s 2A and 2B of the Presidency Town Insolvency Act - an order of the Adjudicating Authority imposing penalty would not create a debt within the meaning of Section 2(b) and the person in whose favour the order is passed could not be creditor within the meaning of Section 2(a), in order to enable them to invoke Section 9(2) of the Presidency Towns Insolvency Act, 1909. - HC
-
IBC:
Rejection of section 9 application - pre-existing dispute - The Adjudicating Authority did not commit any error in holding that there is a pre-existing dispute. When the Corporate Debtor even prior to issuance of demand notice has denied liability to pay, pre-existing dispute was there - there are no ground to interfere with the impugned order rejecting Section 9 application. - AT
-
Service Tax:
Levy of Service tax - ‘commercial’ institute or not - The words ‘recognized by law for the time being in force’ cannot be construed so as to restrict its’ coverage only to Universities and Educational Boards. There can be other statutes which recognize certain degree, diploma, certificate or qualification. The DGCA is a statutory authority exercising powers conferred on it under the Aircraft Act, 1934 and the Rules made thereunder. Consequently, if a course completion certificate is recognized by DGCA for any specific purpose, in pursuance to the provisions contained in Aircraft Act / Rules, then the said certificate will satisfy the condition of having been recognized by law for the time being in force - AT
-
Service Tax:
Extended period of limitation - there are several layers of suppression and mis-representation of facts with a motive to avoid service tax. These layers of suppression cannot be detected by mere mundane audit of financial records. We therefore hold that extended time period for demanding service tax has rightly been invoked in this case. - AT
-
Service Tax:
Rejection of refund claim - scope of SCN - since the learned Commissioner (Appeals) has traveled beyond the scope of the show-cause notice and applied entirely the different rule for rejection of refund benefit in favour of the appellant, the impugned order cannot sustain for judicial scrutiny. - AT
-
VAT:
Interpretation of statute - Section 13(1)(f) of the UP VAT Act - Claim of full ITC on inputs - amount of tax paid towards the purchase of raw Rice Bran - scope of the word “goods” as defined under Section 2(m) of the UP VAT Act as outlined in Section 13(1)(f) of the UP VAT Act should be limited to only “taxable goods” or not - The order of Tribunal allowed the credit restored - SC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
-
GST
-
2023 (11) TMI 359
Detention of goods - documents produced before passing of the detention / seizure order - HELD THAT:- The authorities below has not accepted the documents on the ground that same were produced after the movement of goods. But lost the site of the fact that the discrepancies were cured before the detention or seizure order could be passed. Once the documents were produced before passing of the detention / seizure order, the authorities ought not to have proceeded further as held by the the Division Bench judgement of this Court in the case of M/S Axpress Logistics India Pvt. Ltd [ 2018 (12) TMI 68 - ALLAHABAD HIGH COURT] and M/s Bhumika Enterprises [ 2018 (4) TMI 530 - ALLAHABAD HIGH COURT] . Since the Division Bench has specifically decided the said issue in an identical matter way-back in the year 2018, the impugned order is not justified as the documents have already been produced before passing of the detention as well as seizure order. The matter is remanded to the first appellate authority, who shall pass a fresh order in accordance with law, expeditiously, preferably within a period of two months from the date of producing a certified copy of this order - petition allowed.
-
2023 (11) TMI 358
Cancellation of GST registration of petitioner - petitioner submits that the petitioner is ready to pay all the dues - HELD THAT:- The present Writ Petition (No. 3082 of 2023) is being decided with a direction that in case, petitioner moves his representation for revocation of the cancellation order, under Section 30 of the Central Goods and Services Tax Act, 2017 along with all the GST returns, outstanding tax and dues, if any, within two weeks from today, the Competent Authority shall consider the petitioner s representation and pass appropriate order in accordance with law, within four weeks thereafter.
-
2023 (11) TMI 357
Actionable claim or not - betting and gambling - petitioners platform used for gaming - HELD THAT:- Perusal of the show cause notice would indicate that the authorities while purporting to seek an explanation from the petitioner prima facie observed that the nature of services rendered was actionable claims and therefore Mr. Joshi, learned Senior Advocate has contended that no useful purpose will be served in responding to the show cause notice. The question whether online gaming as so done by the petitioner would tantamount to betting/gambling requires to be considered in extenso - Hence, notice returnable on 17.01.2024.
-
2023 (11) TMI 356
100% EOU - Interpretation of the notifications - Classification of mango pulp - to be classified under HSM 08.04 or not - HELD THAT:- RULE returnable on 01.12.2023. Ms. Hetvi Sancheti learned Senior Standing Counsel waives service of notice of Rule on behalf of all respondents in Special Civil Application No. 21706 of 2023 and for respondent no. 3 in Special Civil Application No. 21700 of 2023.
-
2023 (11) TMI 355
Collection of GST by the respondent (service provider) wrongly - Amount collected by the National Board of Examinations (NBE) - Course fees - applicability of notifications dated 15.01.2021, 15.02.2021 and 19.08.2021 - HELD THAT:- A part of GST collected by the NBE is still available with the NBE, however, bulk of GST collected has been remitted to the hospitals along with the course fee - In view of the above, the petitioners contention that the impugned notifications are liable to set aside, is merited. The affidavit filed by NBE indicates that there are two three transactions which have not been traced to the candidates. The NBE shall make all efforts to trace the said transactions to the concerned candidates and upon identifying the candidates, take steps to ensure that the GST collected is refunded to them. In the event, the GST is available with the NBE, it will be refunded to them immediately. In cases where the GST has been transferred to hospitals, the same would abide by the directions as issued. The petition is disposed of.
-
2023 (11) TMI 354
Seeking enlargement of bail - Government has been duped of revenue worth Rs.7/- Crores and more - creation of fictitious firm to avail fake input tax credit - forged documents - HELD THAT:- The investigation is over and the charge-sheet is also filed. Having regard to the same as well as the punishment prescribed for the offence and also the fact that offence alleged against the applicant is triable by learned Magistrate and the trial is not likely to commence in near future, the present application deserves consideration and accordingly stands allowed. The Applicant Accused is ordered to be released on bail in connection with the aforesaid FIR on executing a personal bond of Rs.10,000/- with one surety of the like amount to the satisfaction of the trial Court, subject to the conditions imposed. Application allowed.
-
2023 (11) TMI 353
Rejection of refund claim - refund denied on the ground that the Department is in the process of filing an appeal against the order of the Appellate Authority - HELD THAT:- Inspite of the fact that the order was never appealed against and a period of more than 1 year 4 months have almost gone by, the State has chosen not to refund the amount while passing the impugned order. The writ petition first came up for hearing on 03.07.2023 and an opportunity was given to the State to submit whether an appeal had been filed or not. More time was taken on 21.07.2023 and 29.09.2023 and proceedings had been deferred. However, the appeal has still not been filed. In such circumstances, it is clear that the State is only dilly-delaying on the issue and merely on account of the fact that the State is in the process of filing an appeal, we do not feel that the State is justified in divesting the petitioner of his fruits of litigation which have accrued to him despite a period of 1 year 3 months having gone by. The State is directed to refund the amount due within 2 weeks from the receipt of certified copy of this order - petition allowed.
-
2023 (11) TMI 352
Cancellation of GST registration of petitioner - principal place of business was not found / available at the time of the field visit - validity of SCN - HELD THAT:- The petitioner s contention regarding the impugned SCN being in violation of Rule 25 of the CGST Rules has not been addressed. The petitioner also asserts that it is carrying on the business from its principal place of business and if a proper investigation is carried out, the same would be confirmed. The impugned order dated 17.10.2023 is set aside and matter remanded to the Proper Officer to consider the petitioner s application for revocation of order cancelling its GST registration, afresh - petition disposed off by way of remand,
-
2023 (11) TMI 351
Rejection of Refund claim - rejection on the ground that, one of the suppliers, was non-existent at its registered place of business - rejection also on the ground that the documents submitted by the petitioner failed to establish that the petitioner had paid for the goods and services within a period of 180 days from the date of the invoices. HELD THAT:- It is material to note that the show cause notices issued to the petitioner by the Adjudicating Authority did not propose to reject the refund applications on the ground that it had made payments for the supplies beyond the period of one hundred and eighty days from the date of issuance of invoices. Thus, the orders passed by the Adjudicating Authority proceed on a ground, which was not put to the petitioner at the material time. The show cause notice also did not mention the specific registered dealer (M/s Yamuna Overseas) which is alleged to be non-existent. It is considered apposite to set aside the impugned order as well as the orders dated 28.09.2020 rejecting the applications filed by the petitioner for refund pertaining to the period January, 2020 to March, 2020 and remand the matter to the Adjudicating Authority to consider afresh. Since the allegation that M/s Yamuna Overseas is non-existent and that the petitioner had not paid the amount due as per the invoices within the period of one hundred and eighty days is articulated in the impugned order, it would not be necessary for the Adjudicating Authority to issue a fresh show cause notice. Petition disposed off by way of remand.
-
2023 (11) TMI 350
Attachment of Bank account of petitioner - attachment during the pendency of investigation - fresh order of extension beyond the period of one year - HELD THAT:- Section 83 provides that for the purpose of protecting the interest of government revenue, the provisional attachment of any property including bank account belonging to the taxable person as prescribed in this provision, is permissible. It is clear from the very provision of the act that during the pendency of any proceedings under Section 62, 63, 64, 67, 73, 74, the commissioner on a subjective satisfaction if finds it necessary for the purpose of protecting the interest of government revenue may, by an order, in writing attach provisionally any property which may include the bank account which should belong to the taxable person and this provisional attachment shall cease to have effect after expiry of period of one year from the date of order made under sub-section (1). Here, according to the respondent, the petitioner has admitted his tax liability and promised to pay, but, he has not paid the government dues and therefore, the respondent according to its affidavit-in-reply by way of abundant precaution for protecting the revenue s interest has proceeded to attach and freeze the bank accounts on 27.02.2020 and 02.03.2020. According to the Respondent, more than Rs. 1,00,00,000 is available in the State Bank Accounts and the respondent department exercising the powers vested under Section 83(2) of the CGST Act after obtaining the approval of the competent authority has again sent the letter on 09.02.2021 to the banks directing them to freeze the facility of withdrawal of amount from these accounts for one more year in order to protect the government revenue. Entertainment of the challenge to the merit is not desirable at this juncture at all as appropriate Authority would determine that aspect and statutory remedies would also demand address to such core issue at the relevant point of time. Therefore, this Court has chosen not to enter into the details of business model as explained in the statement of the petitioner and whether the transaction in money amounts to service attracting taxability under the Statute, except for the limited purpose of examining the apt exercise of powers under Section 83 of the Act prior to the finalization of assessment and raising of demand. What has also been pressed into service before this Courtis the decision of the Apex Court in case of M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH ORS. [ 2021 (4) TMI 837 - SUPREME COURT ] where the Apex court has held that the nature of provisional attachment being a draconian power, exercised before finalization of assessment or raising of the demand, the same has to be exercised with due caution. It is provisional as an aid of something else and its purpose is to protect revenue. Its validity depends on strict observance of statutory preconditions. Formation of commissioner s opinion must approximate and live nexus to protection of revenue interest and it is not left to unguided subjective discretion of the commissioner s opinion which must be based on tangible material regarding statutory requirement. As per the decision of the Apex court that the Court shall need to examine whether the commissioner exercised the powers under Section 83 read with Rule 159 in accordance with law and the material fact for making determination needs to be kept in mind where this Court also needs to bear in mind the necessity of provisional attachment which implicates the doctrine of proportionality which mandates the existence of approximate or live link between the need for attachment and the purpose which it is intends to secure - The mandatory requirement of furnishing the opportunity to the person whose property is attached is in consonance with the principle of natural justice which ensures a fair procedure. Provisional attachment of bank account without passing any fresh order after expiry of statutory period that too without compliance of necessary formalities would not be endorseable. The attachment of the bank account after expiry of prescribed period without passing fresh orders would surely be illegal in violation of rights of Assessee for carrying on business under article 19 of the Constitution of India as was held by the Calcutta High Court in case of Amazonite Steel Private Limited vs. union of India [ 2020 (3) TMI 1179 - CALCUTTA HIGH COURT] . However, even after expiry of one-year period as prescribed under the law, it is incumbent upon the authorities to release the provisional attachment by informing the bank on issuance of a fresh order of provisional attachment since the very purpose for which this exercise of provisional attachment was done is not completed. Petition disposed off.
-
Income Tax
-
2023 (11) TMI 349
Inordinate delay of 1110, 1117 and 991 days respectively in refiling the said appeals - Appellant(s) has handed over the Demand Draft to learned counsel for the respondent(s), who has acknowledged receipt the same. Delay in paying the amount is condoned. The Miscellaneous applications stand disposed of along with pending applications.
-
2023 (11) TMI 348
Validity of assessment u/s 144B - request for adjournment and VC ignored - without giving reasonable opportunity - violative of principles of natural justice - HELD THAT:- The screen shots pellucidly depict that the request for adjournment and VC are made through the official web portal of the respondent. Therefore, it shall be deemed that the respondents have received the request for adjournment and VC sought for by the petitioner through her e-mail. Except denying the submission of the response by the petitioner by 07.03.2023, the respondent did not produce any cogent material to show that no such e-mail requests were made by the petitioner. Therefore, we believe the e-mail communication made by the petitioner seeking adjournment on medical grounds. The respondent neither granted time as sought for by the petitioner nor sent any refusal communication in time to the petitioner so as to enable her to submit her case on the date fixed by the respondents. Respondent passed the impugned order on 21.03.2023. The conspicuous silence of the respondents and passing of the impugned assessment order resulted in violation of principles of natural justice to the petitioner, inasmuch as, the respondents passed the impugned assessment order without giving fair opportunity to the petitioner to submit her case on the points raised by the respondents. Therefore, impugned order deserves to be set aside. It is trite law that availability of efficacious alternative remedy is not a bar for a constitutional Court to exercise its plenary jurisdiction under Article 226 of the Constitution of India when the concerned public authority passes an order in utter disdain to the principles of natural justice. WP allowed setting aside the impugned assessment order with a direction to the respondents to grant sufficient time to the petitioner to submit her detailed explanation along with relevant documents relied upon by her and thereupon the respondents shall afford an opportunity of hearing to petitioner through VC and pass an appropriate order in accordance with governing law and rules expeditiously.
-
2023 (11) TMI 347
Rectification u/s 254 - Assessment u/s 153C - incriminating material found during the course of search in the concerned assessment or not? - Scope of expression pertains to or relates to - case of the Revenue before the Appellate Tribunal was that the assessment proceedings of the searched person was pending when the amendment to Section 153C came into force and since the assessment proceedings were not concluded post 1.6.2015 and therefore the scope of the Section was widened and therefore the satisfaction note rightly recorded that the documents related to/pertained to the person other than the searched person - whether the material found at the premises of the searched person, would indicate that these documents falls in the category of documents, which could be termed as document belong to or belongs to the assessee? - as per revenue Tribunal committed an error apparent in deleting the additions and ought to have verified the seized material and though the search HELD THAT:- The perusal of the Misc. Applications in this category indicates that the same was filed on the ground that the Tribunal erred in not holding that various documents clearly proved that the documents seized belong to the assessee. The other ground was that the Tribunal erred in not considering the decision in the case of Kamleshbhai Dharamshibhai Patel [ 2015 (8) TMI 966 - GUJARAT HIGH COURT] which stated that the language used in the satisfaction note will have to be seen with reference to the seized material. Reading of the satisfaction note which has been reproduced in the relevant paras of the Appellate Order indicates that the note has brought in the wider concept of correlating the documents seized pertain to/or related to the assessees. When the revenue s case itself as per the satisfaction note wanted the scope to be considering the seized documents in relation to/pertain to now it is not open for them to apply for rectification on the ground that the Appellate Tribunal committed an error in not considering the fact that the seized material belongs to the assessees, when it was never the case of of the Revenue. Tribunal did not consider the decision of the jurisdictional high court - Reading the decision of the Tribunal wherein the decision of the case of Anil Kumar Gopi Krishna Agrawal [ 2019 (6) TMI 746 - GUJARAT HIGH COURT] has been reproduced would indicate that the essential requirement for assumption of jurisdiction under Section 153C as it stood prior to the amendment qua the other person is that the seized documents forming the basis of the satisfaction note must not merely pertain to the other person but belong to the other person. What is therefore evident on reading the decision reproduced herein above is that the Court had considered the decision of the Gujarat High Court in the case Kamleshbhai Dharamshibhai Patel (supra) and therefore the submission of the Revenue that the Tribunal did not consider the decision of the jurisdictional high court is baseless. What the decision in the case of Kamleshbhai Dharamshibhai Patel (supra) indicates is that the essential requirement to invoke Section 153C is that the documents seized must belong to the assessee concerned. Tribunal in Appeal in context of the satisfaction note which brought in the concept of pertains to/related to in the case on hand found that when the search was prior to 1.6.2015, the post amendment criteria could not apply. In doing so, it considered various decisions especially that of the jurisdictional high court that covered the issue in the case of Anil Kumar Gopi Krishna Agrawal (supra) and therefore the Order refusing to entertain the Rectification Application on this count cannot be faulted. As per Revenue that the decision of Vikram Bhatia [ 2023 (4) TMI 296 - SUPREME COURT] of the Supreme Court would squarely apply and when read in light to the decision in the case of Saurashtra Kutch Stock Exchange Ltd.(supra) which said that failure to consider subsequent decision would be a good ground to rectify an order, some dates need to be mentioned - The order of the Tribunal in Appeal is dated 12.11.2020. The date of the Tribunal order in MA was of 24.08.2022 whereas the judgement of the Supreme Court in the case of Vikram Bhatia (supra) was dated 6.4.2023 which was not available when the Tribunal decided the main appeals. The law on that date was governed by the decision in the case of Anil Kumar Gopi Krishna Agrawal (supra) which held the field. Alternatively, even the submission of the learned Senior Counsel Shri Hemani for the assessee with regard to the provisions of Section 254(2) post 2016 merit consideration. Section 254(2) prior to its amendment permitted rectification of a mistake within a period of four years from the date of the order. This period with effect from 1.06.2016 was reduced to six months. The order of the Tribunal in Appeal is dated 12.11.2020. The Misc. Application order is dated 24.08.2022. The Supreme Court decided the case of Vikram Bhatia (supra) on 6.4.2023 which was beyond the cap of 6 months from the date of the Misc. Application order which would be 23.03.2023 and therefore even otherwise the decision of the Supreme Court could be no ground in rectifying of the Order. Whether the assessment proceedings u/s 153A is to be framed strictly on the basis of the incriminating material found during the course of search in the concerned assessment? - Reading the findings of the Appellate Tribunal would indicate that the Tribunal had extensively considered the decision of the Delhi High Court in the case of CIT vs Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] In the appeals under consideration before the Tribunal, simultaneous search was carried out at the premises of the Venus Infrastructure and Ashok Sunderdas Vaswani and the material found during the search could be used while framing assessment of Rajesh Vaswani and Deepak Vaswani. Material recovered from the premises of the other persons cannot be used in the hands of the searched persons. Tribunal in detail analyzed the decisions of various High Courts and held that looking to the scheme of the Income Tax Act in case a search is carried out on an assessee then the search would give rise to proceedings under Section 153A qua the person searched. The income has to be assessed on the basis of the material found during the course of the search. Tribunal as is evident from the findings discussed had extensively considered various decisions including that of Kabul Chawla (supra). It had reproduced para 37 of the said decision and discussed it in the context of facts. The Tribunal discussed the issues and found that the revenue had framed assessments based on material seized from the premises of other persons. The only ground on which the rectification was sought was that the Tribunal had misinterpreted the judgement in the case of PCIT vs Saumya Construction P. Ltd [ 2016 (7) TMI 911 - GUJARAT HIGH COURT] and that of CIT vs Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] - ITAT after elaborate discussion on the issue of assessment in case of search proceeding has taken a view that in the proceeding under section 153A of the Act, the addition to total income can only be made on the basis of material found from the premises of the assessee. In holding so, the ITAT analyses the facts available on record, gives various reasoning and also refers several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2). Whether the assessments completed u/s 153A are within limitation or not? - Appreciating the provisions of Section 153B of the Act, the Tribunal observed that the assessment orders have to be passed within two years from the end of the financial year in which the last authorisation was executed. The Tribunal, considering and reproducing the decision of the Karnataka High Court, observed that once an order under Section 132(3) has been passed then the limitation period commences and such an order cannot be continued unless and until the provisions of Section 132(8A) are satisfied. The Tribunal held that the prohibitory orders were invalid as the search team had seized only 277 pages which was very much possible to seize during search proceedings which concluded on 13/3/2015. The Tribunal also relied on a decision in the case of CIT v Sandhya P. Naik reported [ 2000 (12) TMI 21 - BOMBAY HIGH COURT] Obviously, therefore, the Tribunal found that there could have been no justification to pass a prohibitory order as the same was not practicable. Whether reopening of the assessments in the year 2008-09 in the case of Ashok Sundardas Vaswani is justifiable? - As material found during the course of search proceedings can be used for invoking the provisions of Section 147 of the Act. However, it is important to note that the provisions of Section 147 of the Act can be invoked only after complying the provisions/conditions as provided under Section 147/148/149/150 and 151 of the Act. We are not inclined to disturb the finding of the authorities below. Hence the contention raised i.e. the provisions of Section 147 of the Act cannot be invoked in view of the fact that there was special proceedings under Section 153A of the Act in case of search, by the assessee is dismissed. Thus the contention of the assessee is hereby dismissed. Conclusion - A bare reading of Section 254(2) indicates that the Appellate Tribunal may at any time within six months from the month in which the order was passed with a view to rectifying the mistake apparent from the record amend any order passed. Therefore, the mistake has to be apparent from the face of the record and not one where an extensive delving into arguments and a re-look can be sought on questions decided on merits. In the case of Commissioner of Income Tax (IT4), Mumbai vs Reliance Telecom Ltd [ 2021 (12) TMI 211 - SUPREME COURT] has held that when a detailed order has been passed by the ITAT, no rectification can be made on the ground that the order passed by the ITAT was erroneous either on facts or in law as in that case the only remedy was to prefer an appeal. What is therefore evident on considering the decision of the ITAT in the Appellate proceedings where the issues have been examined threadbare on merits considering the case laws, merely because the Appellate Tribunal, which according to the Revenue has been decided by misinterpretation of facts and law, the same cannot be a subject matter of rectification. In some of the cases before us in the each of the 4 Categories set out herein above, the Revenue has also filed Tax Appeals challenging the order of the Tribunal in various Tax Appeals under Section 260A of the Income Tax Act, 1960. We have set out against each Special Civil Application numbers category wise in which Tax Appeals have been filed. In light of the decisions in the case of R.C.Sabharwal [ 2009 (7) TMI 1391 - DELHI HIGH COURT] and Muni Seva Ashram [ 2013 (10) TMI 113 - GUJARAT HIGH COURT] in such petitions where Tax Appeals are filed by the Revenue in the respective categories, the petitions so filed are not entertained while reserving the right of the Revenue to urge the grounds raised in these petitions while arguing the Appeals.
-
2023 (11) TMI 346
Disallowance u/s 14A r.w.r.8D - in the period in issue assessee had not earned any exempt income - HELD THAT:- Issue concerning whether Section 14A r.w.r. 8D could not be triggered where no exempt income has been earned as decided in Bhilwara Energy Ltd. case [ 2023 (7) TMI 1316 - DELHI HIGH COURT] as relying on Cheminvest Limited [ 2015 (9) TMI 238 - DELHI HIGH COURT] , Chettinad Logistics (P.) Ltd.. [ 2017 (4) TMI 298 - MADRAS HIGH COURT] and IL And FS Energy Development Co Ltd [ 2023 (5) TMI 1266 - DELHI HIGH COURT] . Also Special Leave Petition (SLP) was preferred against Cheminvest Limited, which was dismissed [ 2018 (7) TMI 567 - SC ORDER] . Also whether the Finance Act, 2022 could have retrospective effect, the said aspect also stands covered by the judgment rendered in Principal Commissioner of Income Tax (Central)-2 v. M/s Era Infrastructure (India) Ltd . [ 2022 (7) TMI 1093 - DELHI HIGH COURT] - Decided against revenue.
-
2023 (11) TMI 345
Validity of reassessment u/s 147 - allegation of not filing of return of income - HELD THAT:- The order passed u/s 148A(d) is unsustainable. This is because the notice u/s 148A(b) of the Act does not call upon Petitioner to provide any justification on any transaction in question. The entire basis for issuing the notice u/s 148A(b) was that Petitioner was a non-filer as he has failed to file the Return of Income and therefore, the income from salary and purchase of securities have not been declared/offered for taxation. But the fact is Petitioner has filed his Return of Income and has also paid total tax and had also claimed refund - Therefore, the order under Section 148A(d) of the Act, passed on 26th April 2023, has to be quashed and set aside. We would go a step further and say that even the notice under Section 148A(b) of the Act was unjustified. This is because the Assessing Officer ( AO ) before issuing the notice, was bound to atleast verify or enquire following the information that was received in accordance with the Risk Management Strategy. If the AO had only verified in the portal of assessee before initiating proceedings, particularly when he had the PAN number with him, AO would have realized that not only Petitioner has filed the Return of Income, but also the return has been processed and an order dated 26th February 2020 u/s 143(1) of the Act had been passed. Therefore, the notice that was issued under Section 148A(b) of the Act also has to be quashed and set aside. Decided in favour of assessee.
-
2023 (11) TMI 344
Validity of reopening of assessment - as argued notice u/s 148A(b) has been issued to a deceased person and even the order u/s 148A(d) is not a valid as sanction u/s 151 has been granted without application of mind - HELD THAT:- No notice u/s 148 of the Act can be issued without undertaking enquiry before assessment u/s 148A - We find this statement having been made twice in the affidavit in reply - It is rather obvious that no such enquiry has been made because if the AO had only made such an enquiry or even bothered to verify the Income Tax Portal relating to the deceased assessee, he would have certainly come to know that the assessee is deceased and had died on 23rd July 2020. The notice under Section 148A(b) of the Act has been issued without making the enquiry as mandated u/s 148A, thus is bad in law and has to be quashed and set aside. Invalid sanction u/s 151 - We agree that the approval applied for and granted u/s151 of the Act exposes the total non application of mind by the AO who applied for the approval, the Additional/Joint Commissioner of Income Tax who recommended granting of approval and the Principal Commissioner of Income Tax who granted the approval. We say this because Row 9 of the approval form, copy whereof can be found in the affidavit in reply, states time limit for current proceedings covered under Section 149(1)(b) for more than 3 years but not more than 10 years . The assessment pertains to Assessment year 2019-2020, whereas the notice issued under Section 148A(b) of the Act is dated 29th March 2023 and, therefore, within the three years period. If we take Row 9 to be correct, then Row 7 indicates the quantum of income which has escaped assessment Rs.3 lakhs . Therefore, the notice issued under Section 148A(b) of the Act itself could not have been issued. Therefore, if only the AO who applied for approval under Section 151 of the Act had only read the approval form, he would have made the required corrections. If only the Additional/Joint Commissioner of Income Tax had read the approval form and the order under Section 148A(d) of the Act and the file relating to the matter, he would not have recommended granting of approval. So also the Principal Commissioner of Income Tax. If he had only read the file, he would have realised that if the time limit for current proceedings is covered under Section 149(1)(b) of the Act, i.e., for more than 3 years but not more than 10 years, he has no power to grant approval and the approval should have been granted by the Principal Commissioner of Income Tax. Reassessment proceedings quashed - Decided in favour of assessee.
-
2023 (11) TMI 343
Validity of reopening of assessment u/s 147 - assessee argued non application of mind in granting approval u/s 151 and that is evident from the approval itself - HELD THAT:- The application for approval, recommendation and the grant of approval have all been made by the officers mechanically and without application of mind. There is not even an attempt to explain in the affidavit in reply as to how this glaring error has been committed. Perhaps they had not explanation. We are of the opinion that if only the PCIT had read the form for approval carefully with the order that was prepared by the AO under Section 148A(d) of the Act, the PCIT would not have come to the conclusion that there is any material to treat it as a fit case to issue notice under Section 148 or pass order under Section 148A(d). So also the Additional/Joint Commissioner of Income-tax, who recommended that it was a fit case. It is obvious that they have not bothered to read anything. It is rather unfortunate that someone of the rank of PCIT, in the affidavit in reply, is trying to justify the glaring error. Personal hearing not being granted - As in every case, before passing an order under Section 148A(d) of the Act, Respondents shall give a personal hearing if requested for by Petitioner. That would also be beneficial to Respondent because if a Petitioner or an assessee is able to satisfy as to why it was not a fit case to pass order under Section 148A(d) of the Act and issue notice under Section 148 of the Act, the department can close the file. We should also note that we have come across many matters where personal hearing has been given and we find it rather strange that the PCIT in the affidavit in reply has taken such an unacceptable stand. We, therefore, quash and set aside the order passed under Section 148A(d) of the Act and the notice also issued under Section 148 of the Act.
-
2023 (11) TMI 342
Validity of assessment order - only three working days were given to respond to the draft assessment order - short adjournment and personal hearing through video conferencing, which was not given - HELD THAT:- As three working days were given to respond to the draft assessment order, petitioner should be given liberty to file a supplementary response to the draft assessment order. Petitioner is justified in making this request. Petitioner may, therefore, file a supplementary response to the draft assessment order on or before 16th October 2023. The time to file supplementary response will start upon the Assessing Officer providing copies of the notices issued under Section 133(6) of the Act to various parties and responses received from those parties. AO shall also make a statement in the forwarding letter that apart from those responses made available to petitioner, no other party has responded. The assessment order to be passed shall be a reasoned order dealing with every submission of petitioner. The assessment order to be passed by 31st December 2023.
-
2023 (11) TMI 341
Refund due to the petitioner along with interest u/s 244A(1) and 244A(1A) - During the pendency of this writ petition, the learned counsel for the petitioner submits that the respondents have credited a partial sum [Rs. 54,13,466/-] and a further sum of Rs. 7,00,000/- has to be paid - HELD THAT:- The petitioner has got substantial relief during the pendency of the present writ petition. Whether the petitioner is entitled for further amount or not cannot be decided straight away in this writ petition. Under these circumstances, Court is inclined to dispose this writ petition by directing the petitioner to give a fresh representation to the first respondent giving all the particulars of the amounts that are yet to be paid by them. The representation shall be made by the petitioner within a period of thirty days from the date of receipt of a copy of this order.
-
2023 (11) TMI 340
Revision u/s 263 - abnormal increase in cash deposits into the bank account of the assessee during the year especially during the demonetization period - CIT observed that there was no cash sales from April to July, 2016 however in August the cash sales were only 5.00 lacs which rose to Rs. 11.00 lacs in September and fell back to Rs. 1.60 lakhs in October. However in November, sales were more than Rs. 7.00 crores and in December the cash sales have been shown at Rs. 3.00 crores which fell back to Rs. 5.00 lakhs in January, 2017 - HELD THAT:- We note that the AO has recorded a finding in the assessment order that during the demonetization period assessee has deposited huge cash as compared to pre-demonetization period and this was the reason that the case of the assessee was selected for scrutiny under CASS. We also note that comparative details of cash sales and cash deposited for during two years i.e. FY 2015-16 and 2016-17 were furnished after AO asked for the same. Assessee, is a proprietor of two proprietary concern which are authorized traders of Pan Masala Zarda and accordingly filed return of income - A.R submitted that during demonetization period from 09.11.2016 to 31.12.2016 assessee deposited demonetized currencies in the case of two concerns - The Ld. A.R stated that the assessee is a CSA (Consignee Sales Agent) of the DS group Delhi who is in the business of pan masala, jarda, supari for the state of Bihar. We note that the money received by the assessee in the proprietary concern was immediately transferred to D.S. group on which the assessee received commission. The AO, after analyzing all these facts in details, accepted the explanation of the assessee and made no addition while framing the assessment. A.R therefore submitted that the AO has taken a plausible and possible view on the basis of evidences/explanation furnished by the assessee after doing necessary verification and examination of the same. According to the Pr. CIT AO has not verified the details furnished by the assessee qua the spike in the sales of the assessee during various months particularly during demonetization - cash deposited by the assessee in the bank account was abnormally high and should have raised suspicion in the mind of the AO and AO should have done the necessary enquiry which he has failed to do so. In our opinion, the said observations of the Pr. CIT is factually wrong and contrary to the facts on records. AO has examined the issue in detail and after analyzing the details filed by the assessee with the documents, bank book and cash book, a conclusion has been recorded in the assessment order and only thereafter accepted the plea of the assessee and framed the assessment accordingly. Considering these fact, we are of the view the conditions as envisaged u/s 263 of the Act have not been fulfilled i.e. for invoking jurisdiction u/s 263, the assessment order has to be erroneous insofar as prejudicial to the interest of the revenue. The case of the assessee squarely covered by the decision of Hon ble Supreme Court in the case of Malabar Industrial Co. Ltd. ( 2000 (2) TMI 10 - SUPREME COURT ), wherein it has been held that the jurisdiction is not available to the Pr. CIT where the twin conditions as envisaged by section 263 of the Act were not satisfied. CIT has revised the assessment on the ground that the AO has not conducted proper enquiry on the cash deposits in the bank account but Ld. PCIT has not conducted any enquiry himself to record a finding as to how the order is erroneous and prejudicial which is not correct , thus we quash the revisionary order passed u/s 263 of the Act. Decided in favour of assessee.
-
2023 (11) TMI 339
Unexplained cash deposits into the bank accounts - assessee has not filed any return of income u/s 139(1) and even not responded to the various opportunities provided under receipt of notice - CIT(A) deleted additions - HELD THAT:- We have also taken note of the AO observation that assessee has not shown the cash sales in the TAR whereas there is no such column meant for disclosing cash deposit into bank or cash sales in the Tax Audit Report. We also observe from the records before us that the assessee has collected VAT /sales tax on the total sales including cash sales which was duly in the the VAT Returns filed before the competent authority and all these evidences were ignored in the by the AO during the remand proceedings and so much so that the AO has not allowed any opportunity to the assessee during remand proceedings and reiterated same observations in the remand report as were recorded during the assessment proceedings. We note that TCS has been deducted u/s 206 CJ and 206 CH from the purchase of iron ore lumps totaling to Rs. 2,29,54,031/- made by the assessee from the various suppliers which was duly recorded in the books maintained by the assessee. We note that the assessee has paid for fee for professional and technical services which is liable for TDS u/s 194J which was also added and is included in the addition made - We have also examined the evidences in the form of bank possession notice which proved that the premises of the assessee were attached after the assessee was evicted from the said premises. We observe that the CIT(A) has rightly appreciated all these evidences filed by the assessee and taken a correct and reasoned view in the matter. In view of this, we are inclined to uphold the order of Ld. CIT(A) by dismissing the grounds raised by the revenue.
-
2023 (11) TMI 338
Bogus purchases of tobacco - since the purchase details / invoices could not be produced by the assessee they should be considered as bogus purchases - Assessee submitted that the assessee did not claim any expenditure in the impugned assessment year for the purchase of tobacco - HELD THAT:- It is an admitted fact that the assessee in his own deposition has stated that purchases of tobacco was made out of the withdrawals from the bank account of the assessee company to the extent of Rs. 14.47 Crs. We also find that the assessee has admitted the sale proceeds of Rs. 30 Crs towards the sale of property and has offered the capital gains tax while filing the return of income. AO has not disputed the source for the withdrawals however, has considered the purchases as bogus. From the submissions of the Ld. AR and from the materials placed before us, we find that the assessee has not claimed any expenditure with respect to purchases during the FY 2014-15 and has shown the entire purchases as stock-in-trade from AY 2015-16 to 2019-20. Further, during the AY 2019-20, the assessee has written off the stock worth Rs. 17,71,40,617/- as it was damaged due to wetness. AR also demonstrated that these written off of stock-in-trade has not been included in the expenditure claimed during the AY 2019-20. Further, we also find that the Search Team also could not find any stock of Tobacco worth Rs. 17,71,40,617/- during the course of search AO has not brought on record any material to corroborate the seized material warranting addition of bogus purchases to the extent of Rs. 14.47 Crs. In these circumstances, we find that the Ld. CIT(A) has rightly considered these facts and has deleted the addition made by the Ld. AO to the extent of Rs. 17.71 Crs. We therefore find no infirmity in the order of the Ld. CIT(A) and thereby dismiss the grounds raised by the Revenue.
-
2023 (11) TMI 337
Undisclosed investment in partnership firm towards capital credit - Introduction of capital and loans advanced to Niyaz Sea Foods Exports[a firm in which the assessee and his family members are the partners - search proceedings was carried out in the residential premises of the assessee and survey was conducted in the partnership firm - HELD THAT:- We note that no addition has been made by the AO on the basis of searched material unearthed during the course of search. The addition is made only on the basis of documents found during the course of survey in the partnership firm in which debit and credit transactions were found in the capital account which is clear from the statement recorded u/s. 131. The document marked as capital and loan respectively. AO has observed that the cheque amount has been noted in the capital account and the cash transactions are not reflected in the books of account or the firm. Since the documents were found during the course of survey in the case of partnership firm, therefore, the addition should have been made in the partnership firm, not in the hands of the assessee. The partnership firm is a separate entity. The documents found can be utilized for the purpose of assessment under the other section of the I.T. Act. but not for the purpose of section 153A - assessee offered as income when the AO sought for explanation vide letter dated 21.11.2019. We further note that the AO has accepted the declaration made by the assessee without verification of revised computation and without giving reason by the AO. During the course of hearing the ld. AR has submitted that it was a running capital account and the cash is contributed and withdrawn as per the need of the assessee/partnership firm. We find substance in the submissions of the ld. AR. AR has also relied on the judgment of the Hon ble Supreme Court in the case of Geotze India Ltd.[ 2006 (3) TMI 75 - SUPREME COURT] which supports to the case of the assessee. Undisclosed Commission received from Partnership firm - cash seized during search - Addition made made on loose sheets impounded - HELD THAT:- We note that during the course of search, document relating to commission earned under the head UKB Commission was impounded and not offered to tax in the return. The assessee has taken dual stand one before the AO that it is included in the turnover of the assessee and the other that he has requested before us that the net profit margin @ 1.51% may be adopted to arrive at the income from commission. If the amount is included in the turnover, taxing the same on net profit margin would amount to double taxation. Before the CIT(Appeals), the assessee did not comply with the notices and present his case. Thus we think it fit to send the matter to the AO for further verification. Cash seized during the course of search , the assessee has taken different stand that cash was withdrawn from the bank through employees by cheque and in the post-search enquiry, it is stated that Rs. 66 lakhs was part of cash in hand of M/s. Niyaz Sea Foods and that they had taken the said amount to their flat to secure the same at night time. The assessee has also raised a ground that the entire cash seized shall not be taxed and only the net profit margin element as prevailing in the fishing business may be taxed. AR submitted that the books of account were not updated at the time of search. Therefore, in the interest of justice, we think it fit to send the matter back to the AO for further verification as to who is the actual owner of the cash, M/s. Nayaz Sea Foods or the assessee. Thus, the above issues are remitted to the AO for fresh decision as per law after reasonable opportunity to the assessee.
-
2023 (11) TMI 336
Nature of expenses - project expenses - revenue or capital expenditure - HELD THAT:- Identical issue was dealt with by the ITAT in the said year 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] wherein the ITAT had allowed the claim of the assessee treating the project expenses as incurred for the continuation of the existing business of the assessee only, and therefore, revenue in nature. Disallowance of interest paid to Sales Tax Authorities treating it as penalty - Interest on Completion of Assessment U/s.47(4) of the G.S.T. Act - HELD THAT:- We have noted that the Hon ble Apex Court in the case of Lachmandas Mathuradas [ 1997 (12) TMI 16 - SUPREME COURT] has categorically held that interest on outstanding balance of sales tax was compensatory in nature and hence allowable under Section 37(1) of the Act. In view of the proposition of law as above, we find merit in the contention of the ld. Counsel for the assessee that the amount paid to the Sales Tax Authorities for late payment of sales tax is to be allowed under Section 37(1) of the Act. The ground of appeal so raised by the assessee is, therefore, allowed. Disallowance of prior period expenses as reported in the Tax Audit Report - Since the assessee was unable to substantiate its claim to the said expenses in the said year on the reasoning that the expenses crystallized in the impugned year, the AO disallowed these expenses - HELD THAT:- ITAT in the Assessment Year 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] wherein the order of the Ld.CIT(A) restoring the issue back to the file of the AO for verifying which prior period expenses crystalized during the year and directing him to allow all such prior period expenses, was upheld by the ITAT.In view of the same, we restore this issue back to the Assessing Officer to adjudicate the same afresh. Disallowance made of expenses relating to the earning of exempt income, as per the provisions of Section 14A - HELD THAT:- The issue, therefore, admittedly stands covered in favour of the assessee by the order of the ITAT in the immediately preceding year i.e. AY 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] following which we direct the Assessing Officer to delete the disallowance made under Section 14A as held that it is a settled law that where sufficient interest free funds are available the presumption is that the investments have been made out of such funds calling for no disallowance of interest under section 14A of the Act. Hon ble Supreme Court in the case of Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT] has laid down the above law. In the present case, therefore, invocation of Rule 8D by the ld.CIT(A), we hold is not in accordance with law. Further, noting that the assessee had sufficient owned interest free funds for the purpose of making the impugned investment, as demonstrated both to the Ld.CIT(A) and also before us and which fact has remained uncontroverted by the Revenue, we hold no disallowance of interest under section 14A of the Act is warranted. Disallowance of contribution made to Index-B Govt. of Gujarat for celebrating Gaurav Day Shardotsav - HELD THAT:- We are in complete agreement with the Ld.CIT(A) that these expenses are nothing but donations made by the assessee. These expenses have not been incurred for the purpose of business of the assessee. They are merely contributions made to these entities. That some benefit would accrue to the assessee is only incidental. The purpose of incurring the expenditure is definitely not for the business of the assessee. The same have therefore, we hold, rightly been disallowed by the Ld.CIT(A). the facts being found to be different from A.Y 2005-06, the contention of the assessee that the issue is covered by the order of the ITAT in A.Y 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] is rejected. Disallowance of expenses for non deduction of tax at source u/s 40(a)(ia) - assessee had paid an amount to ATIRA, an approved Scientific Research Association - HELD THAT:- The fact that ATIRA to whom payment was made by the assessee without deduction of tax at source is exempt from tax by virtue of CBDT Notification No.1325/DG/IT/E/CAL/G-33-35(1)(ii) dated 25.01.1995 has not been controverted by the Revenue. We have also noted that in the case of Essar Steel Ltd. [ 2013 (6) TMI 186 - ITAT MUMBAI] has held that where the recipient is exempt from tax, there is no TDS liability on the payer and, therefore, no disallowance is warranted in such circumstances for non-deduction of tax at source. In view of the same, we find merit in the contention of the ld. Counsel for the assessee that there being no TDS liability on the assessee vis- -vis ATIRA, non-deduction to tax at source on the payment made to the assessee would not attract the provisions of Section 40(a)(ia) - disallowance made by the AO under the said section is, therefore, directed to be deleted. This ground of appeal of the assessee is accordingly allowed. Income from other sources - treating the income earned by the assessee from projects which was still under construction - HELD THAT:- e issue, therefore, admittedly stands covered in favour of the assessee by the order of the ITAT in the immediately preceding year i.e. AY 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] following which we direct the Assessing Officer to treat the income from projects as Business income. Gross expenditure incurred on projects is to be allowed to the assessee and the income earned from these projects is to be treated as income from business and profession. Claim of depreciation in respect of leased buses to GSRTC - transaction was held to be ingenuine and colorable device intended to avoid taxation by claiming depreciation - HELD THAT:- The issue, therefore, admittedly stands covered in favour of the assessee by the order of the ITAT in assessee s own case in the immediately preceding year i.e. AY 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] following which we direct the Assessing Officer to delete the disallowance made on account of depreciation of leased assets as in the present case the assessees lease and buy back arrangement has been held to be a colorable device on the basis of the special bench decision of the ITAT in IndusInd Bank [ 2012 (3) TMI 212 - ITAT MUMBAI] which blanket proposition vis a vis lease and buy back arrangements has since been reversed by the Hon ble apex court [ 2013 (1) TMI 344 - SUPREME COURT] and the Ld.DR has not distinguished the said case before us - Decided in favour of assessee. Nature of expenses - expenditure incurred for excavation of river diversion - treating it to be capital in nature, which in turn was upheld to the extent of 80% by the ld.CIT(A) - HELD THAT:- Admittedly stands covered in favour of the assessee by the order of the ITAT in assessee s own case in the immediately preceding year i.e. AY 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] to hold, the assessee s claim of expenses incurred for excavation of river diversion as allowable revenue expense. Disallowance of depreciation and additional depreciation of Akrimota project - Claim denied denied on the ground that the project commenced operations in October 2005, though assessee claimed commencement in March 2005 when trial runs were done which contention was rejected by the authorities below HELD THAT:- Admittedly stands covered in favour of the assessee by the order of the ITAT in assessee s own case in the immediately preceding year i.e. AY 2005-06 [ 2022 (12) TMI 333 - ITAT AHMEDABAD] held assessee had substantiated carrying on trial run, by pointing out that the power generated during the trial run had been sold to GEB which was evidenced by copy of invoices issued by the GEB, meter reading confirmed by the GEB and fact that power generation from the plant being reported in the newspaper. Considering the fact that the assessee had demonstrated carrying on trial runs with valid evidences, which have not been controverted by the Revenue despite being placed before both the authorities below, we cannot agree with the finding of the Revenue authorities that no trial run was conducted by the assessee. In view of the same, we hold that the assessee had rightly claimed deprecation - direct the Assessing Officer to delete the disallowance of depreciation - Decided in favour of assessee. Addition pertaining to accrued interest on doubtful advance made to GIIC - HELD THAT:- As in the immediately preceding year [ 2022 (12) TMI 333 - ITAT AHMEDABAD] , held no addition on account of interest on advances made to GIIC is tenable in the present year on mercantile basis. The addition therefore made is directed to be deleted. Addition made of lease rental charges and accrued interest on lease rental charges to be recovered from GSRTC - HELD THAT:- We uphold the grievance of the assessee and direct the Assessing Officer to delete the addition made of lease rent and accrued interest on lease rent as what derives from the same is that GSRTC was not paying up the amounts due from it to the assessee. And for this reason the assessee had resorted to accounting for lease rental income from GSRTC on cash basis which aspect we have dealt with above. Besides, the assessee had filed resolution of Board of directors approving the write off of debts. The facts on record themselves establish the fact of debts from GSRTC becoming bad. The assessee therefore, we hold, is entitled to claim bad debts. MAT - addition to the book profits of the assessee for the purposes of paying tax thereon in terms of Section 115JB relating to disallowance of expenses made under Section 14A of the Act and FBT paid by the assessee - HELD THAT:- We hold that the disallowance made under Section 14A is not required to be added back to the Book Profits of the assessee, nor the FBT paid to be added back to the Book Profits of the assessee under Section 115JB of the Act. The additions so made by the Assessing Officer is, therefore, directed to be deleted. This ground of appeal raised by the assessee is thus allowed. Payment made to commissioner, geology and Mining allowed and disallow that made to Index B Fund - As for payments made to advertisement agencies, we see no justification in the orders of the authorities below denying it for the reason that assessee not dealing it branded products it was not required to advertise its products. As long as the incurrence of the expenditure is not in dispute and there is also no dispute that it is for the purpose of business of the assessee, the claim cannot be denied by the Revenue gauging its necessity. The claim to expenses for advertisement in dailies is therefore allowed.
-
2023 (11) TMI 335
Validity of assessment order passed u/s 153A r.w.s. 143(3) - Extension of period of limitation u/s 153B(1) - reference made by the revenue to Swiss authorities - whether the reference made by the revenue to Swiss authorities requesting for information under Article 26 of Indo swiss treaty for provision of exchange of information pertaining to the assessee for AY 2008-09 is valid thereby providing the extension of one year to assessing officer for completing the assessment under Explanation (ix) to section 153B? - HELD THAT:- As relying on Praveen Sawhney vs ACIT [ 2023 (7) TMI 1139 - ITAT DELHI ] the information sought for pertaining to the assessee for A.Y. 2008-09 could not have been received by the revenue since Article 26 of the Indo Swiss Treaty regarding exchange of information is applicable for information that relates to the period on or after 1st April, 2011 and therefore is not a valid reference. In the light of these discussions, we hold that the claim of the revenue that period of limitation is extended by one year under section 153B based on the reference is not tenable and in assessee s case, the assessment should have been completed on or before 31/12/2015. Accordingly the order passed by the A.O. 153A read with section 143(3) dated 29/12/2016 is clearly barred by limitation and is liable to be quashed.
-
2023 (11) TMI 334
Characterization of receipts - treating the extent of sale consideration received on transfer of shares as Business income chargeable u/s 28 - terms and conditions of Share Sale and Purchase Agreement (SSPA) between the assessee and the foreign company - As per AO receipt for handing over the management and control of the Indian company and hence charged to tax as Business income as against capital gains shown - agreement talks of some specified negative covenants - Is entire consideration only for transfer of shares? - HELD THAT:- Liability of the assessee to indemnify the Purchaser for violation of the negative covenants contained in Article 7 of the SSPA can extend up to a maximum of Rs. 40.00 crore (Rs. 150 million + Rs. 150 million + Rs. 100 million). No person will undertake the liability to indemnify the foreign company for a sum up to Rs. 40.00 crore for violation of the negative covenants without receiving any consideration there against in the first instance. Had the consideration of Rs. 85.79 crore been exclusively towards sale of shares, there was no question of the assessee accepting the obligation of indemnifying the buyer up to a sum of Rs. 40.00 crore for the violation of the negative covenants. It is thus graphically glaring that even though there is no separate mention of the consideration for the negative covenants, but they, forming an essential and integral part of the SSPA, do carry value, which is embedded in total consideration. It is the substance rather than the form of the SSPA, which should be looked into. It is ergo held that the consideration of Rs. 85.79 crore was not only for transfer of shares but also for accepting the negative covenants. We, therefore, jettison the contention advanced on behalf of the assessee that the entire consideration was towards transfer of shares. How it is taxable? - We find that para 14.5 of the JVA deals with the situation in which a shareholder agrees to purchase the shares of the company from another shareholder. This para states that: In the event the Shareholders agree to purchase the shares but do not agree to the price at which the same are offered for sale, then the sale shall take place at the net sale value of the shares to be determined by'. Obviously, this para is referring to the situation of transfer of shares between the shareholders post the JV agreement, as is instantly prevailing. The Valuer did not value the shares under the Net asset value method, leave aside the determination of the value under this method. AO treated full sale consideration of Rs. 85.79 crore as attributable to the transfer of business, leaving no scope for finding out separate consideration towards the transfer of shares for the computation of capital gains. CIT(A) also did not go deep into the part of the consideration relatable to transfer of shares. He simply applied the magic wand and held that 10% of the consideration was towards non-compete and termination of role of the assessee in management. No reason or rationale has been given for the ad hoc figure of 10%. Under these circumstances, we are satisfied that the exercise of attributing sale consideration to the shares and the negative covenants is required to be done afresh by the AO. We order accordingly and direct him to segregate the consideration relatable to sale of shares and then accordingly compute the capital gains on transfer of such shares; and the remaining amount towards negative covenants should be taxed as business income u/s 28(va). Disallowance u/s 14A - HELD THAT:- As seen that the AO made the disallowance only towards rule 8D(2)(iii), which is 0.5% of the average value of investments. It is further borne out from para 30 of the assessment order that the average value of investments was computed by the AO considering only those securities which yielded exempt income and not all the investments. Considering the fact that the assessee had own capital more than the amount invested in securities yielding exempt income, the AO did not make any disallowance towards interest. In our opinion, no exception can be taken to the disallowance made and sustained u/s 14A. We, therefore, dismiss this ground of appeal. Addition towards deemed rent on vacant property - HELD THAT:- It is found as an admitted position that the vacant property, in respect of which deemed rent was calculated by the AO, was stock in trade of the assessee. The Pune Bench of Tribunal in M/s Cosmopolis Construction [ 2018 (9) TMI 1621 - ITAT PUNE] has held that no income from house property can result in respect of unsold flats held by the builder as stock in trade at the year-end. Insertion of sub-clause (5) to section 23 by the Finance Act, 2017 w.e.f. 01.04.2018, requiring determination of the ALV in respect of building and land appurtenant thereto which is held as stock in trade, is prospective and cannot apply to the assessment year 2015-16 under consideration. We, therefore, uphold the impugned order on this score.
-
2023 (11) TMI 333
Applicability of special tax rate u/s 115BBE - income surrendered in search and seizure operation u/s 132 and offered in the return of income - loose paper/document was found from the wallet of the assessee, wherein, the amount was mentioned against the noting com trade and when confronted assessee stated that the figures mentioned in the seized document represent profit from offline commodity trading - as per AO Assessee has calculated his tax liability on the surrendered income applying the normal rate but as income surrendered by the assessee is in the nature of unexplained money in terms of section 69A applicable rate of tax as prescribed u/s 115BBE should be applied HELD THAT:- Section 69A uses word may , which implies that if explanation offered by the assessee regarding source of money, bullion, jewellery or other valuable articles is satisfactory, it cannot be treated as unexplained money u/s 69A of the Act. In the facts of the present appeal, there is nothing on record to suggest that assessee s explanation regarding the source of the income offered has either been doubted or disputed at the time of search and seizure operation or even during the assessment proceedings. Therefore, in our view, the income offered by the assessee cannot be treated as unexplained money under Section 69A of the Act. Therefore, as a natural corollary, section 115BBE of the Act would not be applicable. Section 115BBE of the Act is applicable where the total income includes any income referred to in sections 68, 69A, 69B, 69C or 69D and reflected in the return of income under Section 139 of the Act. Secondly, if the income determined by the Assessing Officer includes any income referred to, in sections 68, 69, 69A, 69B, 69C or 69D, if such income is not covered under the first condition. In the facts of the present appeal, admittedly, assessee has not offered the income u/s 69A - Even, AO has not made any separate addition under Section 69A - He has merely re-characterized the nature of income offered by the assessee. Thus, in our considered opinion, the provisions of sections 115BBE would not be applicable to the facts of the present appeal. Decided in favour of assessee.
-
2023 (11) TMI 332
Deduction u/s 80P(2) - claim denied as the activities of the appellant also include micro insurance premium, NPS contribution, loan insurance premium etc. - Assessee argued that AO has disallowed the receipt instead of the income earned by the assessee on the said amount - HELD THAT:- From the reading of provisions of section 80P of the Act, it is abundantly clear that if the assessee has carried out any of the activities mentioned in sub-section (2) of section 80P, then the gross total income earned from the said activity shall be an allowable deduction. In the present case, the assessee has not filed any document showing that the assessee has not claimed the deduction as indicated by the AO - AR submitted that the AO has included the total receipts from insurance business as against the income from said activity. It was contended that even perusing that that the activities of assessee are not eligible u/s 80P of the Act, then also the AO has required to disallow only the income even for the reason that the activities of the assessee does not fall within the purview of section 80P(2) of the Act. In our view, admittedly, the assessee can only claim the deduction in respect of the gross total income earned by the assessee from the activities mentioned in sub-section (2) of Section 80P of the Act. Undoubtedly, the activities of the insurance do not form a part and parcel of carrying on the business of banking and providing credit facilities to its members. In our considered opinion, the activities of the insurance do not fall within the realm of the banking activities as banking activities are separate and distinct from the insurance activities. The banking activities are regulated by the Banking Regulations Act, 1949 and the insurance activities are governed by the Insurance Regulation of Development Authority Act, 1999. The banking and insurance activities are two separate and distinct activities, governed by two different Acts and hence, it cannot be presumed that insurance activities were subsumed in banking activities. The banking activities are quite different than the insurance activities and therefore, the contention of the assessee that the activities carried out by the assessee, being the insurance activities, would fall within the banking activities is devoid of merit and we do not agree with the said contention. Activities of the assessee are primarily in the nature of insurance activities as mentioned by the Assessing Officer and confirmed by the ld.CIT(A). In view of the above, we do not find any reason to state that the assessee is entitled to any deduction under section 80P(1) of the Act. Having held that in our opinion, the AO is only entitled to disallow the deduction claimed by the assessee in the return of income with respect to insurance business. For the above said purposes, we deem it proper to remand back the matter to the file of Assessing Officer for the limited purpose with a direction to disallow the deduction claimed by the assessee in return of income which is directly relatable to the insurance activities, as it do not fall under section 80P(2) of the Act i.e., Insurance activities. We remand back the matter to the file of AO for the limited purposes of verifying the deduction claimed in return of income and to pass a fresh order - Appeal of the assessee is allowed for statistical purpose
-
2023 (11) TMI 331
Condonation of delay filing appeal before ITAT - There is a delay of 117 days in filing the present appeal for which the assessee has given the reasons by filing condonation of delay application. It appears that the delay is genuine and hence, the same is condoned. Penalty u/s 271(1)(c) - assessee did not file the return of income and not paid the capital gain tax on the sale of immovable property - assessee has not paid any taxes earlier as she was under bonafide belief that no tax is payable on sale of agriculture land since the assessee being uneducated and is not aware of the provisions of income tax which resulted into not paying the taxes - HELD THAT:- It is pertinent to note that the assessee has not filed return of income and it appears that the assessee being not aware about the tax on sale consideration of the land is genuine. At no point of time assessee concealed the particulars of income or furnished inaccurate particulars of income as the assessee after the order of the CIT(A) has paid the taxes on capital gain. This fact is not disputed by the Ld. DR. The decision of Sun on Peak Hotel (P.) Ltd. 2018 (6) TMI 1055 - GUJARAT HIGH COURT] is applicable in the present case as the assessee herein has a genuine case of not aware of tax payment. Thus, the penalty imposed u/s 271(1)(c) of the Act is not justifiable. Decided in favour of assessee.
-
2023 (11) TMI 330
Nature of expenditure - amount paid on retirement of partner - Allowable revenue expenditure or capital expenditure - as per AO cannot be allowed as deduction and, accordingly, added to the closing work-in-progress by disallowing the same as deduction u/s 37(1) - CIT(A) held that the provisions of section 45(4) has no application and, therefore, disallowance of payment by holding to be capital expenditure is not justified, it should be allowed as revenue expenditure - AR submits that the amount was paid to the retiring partner on account of settlement arrived at between two partners towards the expenditure incurred at that time and, therefore, it is not the amount paid to the retiring partner. HELD THAT:- As carefully gone through the registered settlement deed, wherein, it clearly shows that the amount was paid to the retiring partner in terms of settlement arrived at between two partners for giving up his interest in the partnership firm, there cannot be any dispute that the amount paid to a retiring partner for giving up his interest in the partnership firm is a capital expenditure. See Sangam Enterprises [ 1999 (6) TMI 16 - ANDHRA PRADESH HIGH COURT] and Standard Makings Allied Products Corpn [ 1997 (1) TMI 49 - GUJARAT HIGH COURT] CIT(A) without appreciating proper facts of the case went on to hold that the payment of money to the retiring partner is revenue expenditure. In the circumstances, the findings of the ld. CIT(A) cannot be accepted in the eyes of law. Therefore, the decision of the ld. CIT(A) is reversed. Thus, the grounds of appeal filed by the Revenue stand allowed.
-
2023 (11) TMI 329
Determination of correct income - Scope of rectification u/s 154 - AO not reducing the income of the assessee in consonance with reduction of TDS credit thereon as per revised Form No. 26AS - Form 26AS had undergone change because of filing of revised TDS for the second time - income of the assessee is only FTS assessed on gross basis and assessee being a foreign company had not maintained books of account in India - request of the assessee was rejected by the CIT(A) on the ground that as per section 143(1) prima facie adjustment could be carried out by the CPC only for addition to income on the basis of Form 26AS and there is no scope for the revenue to reduce the income offered by the assessee. HELD THAT:- In this first revised 26AS, the income of the assessee reflected thereon is only Rs. 2,71,80,917/- but this income figure has not been considered by the ld CPC. Again, Form 26AS had undergone change because of filing of revised TDS for the second time by the aforesaid two deductors having great impact on the income and TDS of the assessee. Hence, the assessee had rightly brought out this fact before the ld CIT(A). We are unable to comprehend ourselves to accept the argument advanced by the ld DR as the provisions of section 154 of the Act are meant only to rectify any mistake apparent on record. The assessee in the instant case had duly brought to the knowledge of the ld CIT(A) that income of the assessee had been wrongly determined by the ld CPC and that the correct income figure of the assessee would be Rs. 2,90,10,368/- and TDS thereon of Rs. 29,78,210/-. Infact the provisions of section 154(5) of the Act also provides for reduction in the income of the assessee for which rectification u/s 154 could be done. If the contention of the revenue has to be accepted then the provisions of section 154(5) of the Act would become otiose. In any case, it is well settled that the revenue cannot be unjustly enriched and in genuine cases, the assessed income could very well go below the returned income. Reliance in this regard is placed on the decision of the Hon ble Gujarat High Court in the case of Gujarat Gas Company [ 2000 (4) TMI 19 - GUJARAT HIGH COURT] . Similarly in the case of CIT Vs. Milton Laminates Ltd [ 2013 (3) TMI 192 - GUJARAT HIGH COURT] had held that assessed income could go below the returned income if the circumstances of the case so warrant. Thus we direct the ld AO to determine the income of the assessee and grant TDS credit - Decided in favour of assessee.
-
2023 (11) TMI 328
Rectification application u/s 254 - Deduction of interest income u/s 80P(2) - reliance on Full bench decision to pass orders - Tribunal had regarded the interest income on deposits with other co-operative banks or treasuries as part of the assessee s business of provision of credit to its members and, therefore, deductible u/s.80P(1) r/w s. 80P(2)(a)(i) - HELD THAT:- Revenue s MA is not maintainable. No mistake of fact/s or of law, has been pointed out and, in fact, both the stated grounds are incorrect. Tribunal has decided the appeal under reference not by, as claimed, following it s earlier order in Kizhathadiyoor Service Co-operative Bank Ltd. [ 2016 (7) TMI 1405 - ITAT COCHIN] but by the Full Bench of the Hon ble jurisdictional High Court in CIT v. Mavilayi Service Co-operative Bank Ltd. [ 2019 (3) TMI 1580 - KERALA HIGH COURT] In fact, having found the same as laying the law in the matter, it has directed the AO to examine the applicability of the said decision inasmuch as the impugned appellate order was based on decision/s by the Hon ble Court contrary thereto. The larger bench decision being in favour of the Revenue, a challenge to the impugned order in rectification proceedings could arise at the instance of the assessee. And which again has to be within the time provided therefor by the statute. As regards the claim of interest on investment in cooperative banks as eligible for deduction u/s. 80P(1) r/w s. 80P(2)(d), we find no such direction per the impugned order, even as the Tribunal has no power of review. We cannot though help adding that the said direction, assuming so, is in agreement with the later binding decision in Pr. CIT v. Peroorkadda SCB Ltd. [ 2021 (12) TMI 1084 - KERALA HIGH COURT] No case for interference qua the impugned order is accordingly made out. It is nevertheless open for the assessee to, if so advised, contest the AO s order in the set aside proceedings where and to the extent it is found by it inconsistent with the latest decision by the Hon ble Apex Court in Mavilayi Service Co-operative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] MA dismissed.
-
2023 (11) TMI 327
Addition u/s 69 - unpaid purchase consideration and the future commitment made to the builder by the assessee - HELD THAT:- Merely at the time of registration and TDS process the total amount of investment considered but the same cannot be taken as a basis for which the actual payment neither due nor paid by the assessee. Thus, the same cannot be considered as unexplained investment by the assessee. We have gone through the proposals,letters and relevant deed of purchase of property placed on record before us and before ld. CIT(A). The said information contended by the ld. AR of the assessee is based on evidence which has not been controverted that the assessee has not paid the said amount. Hence, in the absence of clear evidence placed before us we are of the considered view that once the assessee has not made any payment the same cannot be added as unexplained investment. The revenue did not bring on record contraryfact that the assessee has paid this amount. But in fact it is based on the record that the same is considered as due by the builder. Thus, the due payment cannot be added as unexplained investment by the assessee. Therefore, we are of the considered view that the addition does not have leg to stands and the same is thus vacated. Addition of stamp duty - assessee has already placed record the evidence to prove that the assessee has paid a sum partly. Balance amount has been paid out of the loan taken by his father. The proof of payment in the form of bank account maintained by his father is available on record. Therefore, since the source of this payment of stamp duty duly discharged by the assessee, the same cannot be added in the hands of the assessee merely stating that the assessee might have given this money to his father but in fact his father has taken housing loan and from that ICICI bank housing loan, this payment has been made. Therefore, same cannot be added in the hands of the assessee as unexplained investments. Addition next assessee based on the deed of seller proved that the assessee has out of total deal paid a sum which is not disputed, and a stamp duty and other related payment is yet not paid by the assessee but the builder has in the schedule just debited the amount. Therefore, when the said amount is not paid the same cannot be considered as an unexplained investment of the assessee. Based on these facts already on record the addition is vacated. Addition next assessee has along with his father purchased a property at Banipark, Jaipur for an amount of Rs. 91,64,348/- and 50% of that amount which comes to Rs. 45,82,174/- has been added as unexplained investments of the assessee on the pretext that the whole of the payment is made by the assessee and therefore, he has not considered the fact that the father of the assessee taken a loan to meet investment of his part for which the ld. AR of the assessee relied upon the evidence of loan taken and payment of cheque made by his father from his bank account. This factual aspect of the matter has not been challenged. Thus, based on this discussion, the addition is vacated. Based on the detailed findings recorded here in above, we are of the considered view that the addition above is factually incorrect and thus vacated. Thus, Ground raised by the assessee is allowed.
-
2023 (11) TMI 326
TP Adjustment - interest imputation on share application money paid to the associated enterprises - as per DRP assessee has issued loan to its associated concerns in the garb of share application money and therefore, it is a capital financing transaction that should have been benchmarked for the interest imputation - HELD THAT:- As the issue is squarely covered in favour of the assessee, in earlier years 2015-16 [ 2022 (4) TMI 543 - ITAT MUMBAI] on identical facts and circumstances, respectfully following the decision of the coordinate bench we direct the learned AO to delete the adjustment on account of interest imputed on share application money. Accordingly, ground of the appeal of the assessee is allowed. TP Adjustment on advance recoverable from associated enterprises - HELD THAT:- We find that coordinate bench has dealt with this issue in ITA number 2015-16 [ 2022 (4) TMI 543 - ITAT MUMBAI] following the decision of the coordinate bench in assessee s own case for assessment year 2014-15 as held we direct the AO/TPO to consider LIBOR +300 basis point to benchmark interest on receivables from Associated Enterprises. Further, while computing credit period, the credit period allowed by AE's to be considered and only on net credit period interest needs to be charges.' D.R. could not show us any reason to deviate from the aforesaid order and no change in facts and law were alleged in the relevant assessment year. Thus, respectfully following the order passed by the Co- ordinate Bench of the Tribunal in assessee's own case cited supra, we direct the Assessing Officer/TPO to consider LIBOR plus 300 basis point to compute the interest on advances recoverable from the A.Es. We further direct that while computing the interest, the credit period allowed by the A.Es to be considered and only on net credit period interest needs to be charged. Disallowance u/s 14A - HELD THAT:- As only those investments which yield exempt income needs to be considered for computation of average value of investments. In this case, we notice that the Assessee has himself disallowed an amount which has not been found to be accepted by the AO or the DRP. Facts with regard to total investments and investments which yield exempt income is not readily available before us. We, therefore, are of the considered view that ends of justice would be met if the disallowance is made after re-computing average value of investment by considering only those investments which yield exempt income. Hence, the matter is restored to the AO to re-work the disallowance. Disallowance u/s 36 (1) (iii) - disallowance of interest and other expenditure holding that same has not been incurred by the assessee for the purposes of the business - HELD THAT:- We find that when the assessee is having higher non-interest-bearing funds available with the assessee in the form of share capital and interest free reserves, then the amount of investment made in the non-interest-bearing investments, no disallowance u/s 14A under section 36 (1) (iii) can be made. As the issue of disallowance under section 14 A of the act has been restored back to the file of the learned assessing officer with certain directions, the learned AO should also consider the above directions relevant for deciding this ground also. As this ground is a joint with the ground number 4 of the appeal of the assessee which has been set-aside to the file of the learned assessing officer in the interest of justice we have set-aside ground number 5 of the appeal back to the file of the learned assessing officer to decide it a fresh in accordance with the above observations. Increase of the book profit under section 115JB of the act by the disallowance under section 14 A is to be deleted. See JSW energy Limited. [ 2015 (5) TMI 823 - BOMBAY HIGH COURT] Disallowance of deduction u/s 35 (2AB) - assessee has made the higher claim as compared to expenses approved by the DSIR in form number 3CL - whether assessee is entitled to weighted deduction at the rate of 200% expenditure incurred for the research and development facilities? - HELD THAT:- As identical issue arose in the case of the assessee in [ 2023 (5) TMI 1101 - ITAT MUMBAI] which was decided by the coordinate bench wherein the disallowance of weighted deduction under section 35 (2AB) of the act has been considered and as categorically held that the requirement of form number 3CL has been introduced with effect from 1/7/2016 and prior to that there was no such requirement. Thus direct the learned assessing officer to grant the deduction under section 35 (2AB). Short credit of TDS not been granted by AO despite making a rectification application - HELD THAT:- We direct the learned assessing officer to dispose of the application of rectification in accordance with the law. This is also the request of the assessee. Accordingly, ground number eight of the appeal is allowed with above direction.
-
2023 (11) TMI 325
Scrutiny assessment - Net Profit rate @ 5.59% - reasons for decline in the N.P. ignored - HELD THAT:- CIT(A) has compared the ratio with the immediately preceding A.Y and after completely ignoring the decline in the profit and closure of business in the subsequent A.Y. N.P. ratio for A.Y 2013-14 is 0.32% which became loss of 0.73% in A.Y 2014-15, 19.57% in A.Y 2015-16, 86.70% in A.Y 2016-17 and finally the business was closed in A.Y 2018-19. Assessment orders for A.Ys 2013-14 and 2014-15 are placed on record which assessments were made u/s 143(3) of the Act and loss was accepted as such. Thus we are of the considered view that the first appellate authority has grossly erred in not considering the reasons for decline in the N.P. in true perspective. Trading account is quantified, books of account are audited. No error infirmity or defect has been pointed out. Therefore, the addition solely based on comparison with profit of immediately preceding A.Y, ignoring the profit of earlier years and subsequent A.Ys is uncalled for . We, therefore, set aside the findings of the ld. CIT(A) and direct the AO to delete the impugned addition. Appeal of assesseeallowed.
-
2023 (11) TMI 324
Assessment u/s 153C - any seized documents belonging to the assessee found or not? - addition of cash receipts by invoking the provisions of section 68 - AO has recorded his satisfaction note that incriminating documents seized possession of Sh. Rakesh Yadav and Sh. Rajbir Goyat reveals that Sh. Jethmal Mehta had entered into various cash transactions with them - HELD THAT:- It is not in dispute that the document containing certain cash entries (both receipts and payments) which are tabulated were seized from the premises of Sh. Rakesh Yadav and Sh. Rajbir Goyat belonging to Antriksh Group, during the course of their search on 05/02/2014. It is not in dispute that the said tabular form contained a surname called Mehta , which was suspected by the Department to be representing Sh. Jethmal Mehta, the assessee herein. The assessee had categorically denied in his reply that these transactions were not at all related to him and he has nothing to do with the same. This goes clearly to prove that assessee had categorically disowned seized document as not belonging to him or pertaining to him or relating to him. Admittedly these seized documents were seized from the premises of Sh. Rakesh Yadav and Sh. Rajbir Kumar Goyat during the course of their search and hence the presumption in terms of section 292C of the Act would be that the said document belongs/pertains/relates to the searched person. It is not in dispute that the seized documents were in the handwriting of searched person. However, the aforesaid presumption could be rebutted by the AO of the searched person with cogent material by recording a satisfaction note that the said material does not belong/pertain/relate to the searched person but instead belongs/pertains/relates to some other person (a 3rd party). The only material available with the Revenue is the surname Mehta used in the said seized document which is assumed by the Revenue to be Jethmal Mehta i.e., the assessee herein. He had categorically denied right from the inception that his name is not at all mentioned in the seized document. No cogent evidence has been brought on the record by the Revenue to prove that the surname mentioned in the seized document in fact refers to Jethmal Mehta i.e., the assessee herein. The entire seized documents that is the subject matter of the addition were placed on record by the Ld. AR before us. On perusal of the same, we find that nowhere the name of Jethmal Mehta is mentioned and only the surname Mehta is mentioned. We find that the Revenue was not able to collaborate the seized document with any other transactions belonging/pertaining/ relating to the assessee to give weightage to these seized documents. Hence, the said seized document becomes merely dumb documents in the hands of the assessee. In our considered opinion, the assessee cannot be held to be having control over what the third person records in his regular books of accounts or in the parallel books of account. Here the seized documents are merely loose sheets not forming part of the books of account of the assessee and that they do not constitute admissible evidence and are to be merely discarded as dumb documents as there are no other corroborative material or evidence to link those documents. The Revenue right from the inception has been assuming that the surname Mehta mentioned in the seized documents refers to Jethmal Mehta i.e., the assessee herein. We have already given our observations in this regard (supra) that assessee had categorically denied the contents of the seized materials when they were confronted to him. The assessee cannot be expected to prove the negative. Decided in favour of assessee.
-
2023 (11) TMI 323
Addition u/s 69A - large volumes of cash deposits in her bank account during the demonetization period compared to the declared income in her returns - assessee, being an old lady, had deposited a sum of Rs. 25 lakhs in her bank account after demonetization and after depositing the said amount in the bank account, she transferred the same to her daughter s account by way of cheque - HELD THAT:- There is no cavil that the assessee was assessed to income tax for the last many years and the above side is not disputed by the Assessing Officer or by the ld.CIT(A). In fact, the ld.CIT(A) had reproduced the summary of ITRs from A.Ys. 2013-14 to 2017-18 - The grand total of all the net income for the 5 years roughly comes to Rs. 34 lakhs, which is more than the amount deposited by the assessee on 21/11/2016 i.e., 25 lacs. In our opinion, it is not expected for a person who is earning the income from rents to save and preserve the whole amount. In fact, some of the amounts must have been spent by the assessee either for herself or for the welfare of the family or on the education of the grandchildren etc. A balance is required to be drawn between the interests of the assessee as well as the interests of the revenue. Further during the period from 01.04.2016 to 21.11.2016, there was no debit entry in the bank account of the assessee, which clearly shows that the assessee did not have the active bank account even prior to the period of demonetization. Thus explanation given by the assessee merit consideration, and the amount deposited by the assessee in her account was required to be considered from her previous holdings. However, as pointed by the ld. DR, the whole amount deposited in the bank cannot be accepted to be explained. Considering the totally of the facts, social status of the assessee and the fact that the assessee had passed away, ends of the justice would met if the addition of Rs. 5,00,000/- is confirmed out of the addition of Rs. 25,00,000/- u/s 69 of the Act on estimation basis, and the remaining amount of Rs. 20 lakhs is deleted. Decided partly in favour of assessee.
-
2023 (11) TMI 322
Disallowance u/s. 14A - HELD THAT:- Assessing Officer is directed to re-work disallowance u/s.14A under rule 8D(2)(iii) on investment which has yielded exempt income and consider only those investments which yielded the exempt income. The assessee gets the relief accordingly. This ground of appeal is partly allowed. Unutilized CENVAT Credit - As per revenue though section 45 of the Act makes it mandatory to make adjustment in computing total income as has been rightly done by the Assessing Officer - HELD THAT:- irrespective of the method of accounting followed by the assessee, i.e. 'Inclusive method', wherein the taxes are included in the opening stock, purchases, etc. or the 'Exclusive method', the MODVAT credit does not have any impact on the profit of the assessee. Thus, following the ratio laid down by the Hon'ble Supreme Court in the case of Indo Nippon Chemicals Co. Ltd. [ 2003 (1) TMI 8 - SUPREME COURT] and followed by Diamond Dye Chem Ltd. [ 2017 (7) TMI 616 - BOMBAY HIGH COURT] we set-aside the order of the CIT (A) and direct the Assessing Officer to delete the addition made on account of unutilised MODVAT credit. Nature of receipt - sales tax incentives received by assessee are rightly considered as Capital Receipts by Ld.CIT(A). Addition made on account of unutilised MODVAT credit - HELD THAT:- As irespective of the method of accounting followed by the assessee, i.e. 'Inclusive method', wherein the taxes are included in the opening stock, purchases, etc. or the 'Exclusive method', the MODVAT credit does not have any impact on the profit of the assessee. Thus, following the ratio laid down by the Hon'ble Supreme Court in the case of Indo Nippon Chemicals Co. Ltd. [ 2003 (1) TMI 8 - SUPREME COURT] and followed by the Hon'ble Bombay High Court in the case of Diamond Dye Chem Ltd. [ 2017 (7) TMI 616 - BOMBAY HIGH COURT] we set-aside the order of the CIT (A) and direct the Assessing Officer to delete the addition made on account of unutilised MODVAT credit. TDS u/s 195 - disallowance of interest paid to State Bank of India- Bahrain branch even though the assessee did not deduct tax at source - HELD THAT:- As observed that Ld.CIT(A) in his order has given finding that Bahrain Branch of State Bank of India (SBI) is part of SBI which is governed by the Banking Regulation Act and this fact is not disputed by LD DR. Further it is also a settled position that a branch office is part of the entire SBI and not a separate legal entity. Payment to foreign branch of Indian entity tantamount to payment made to Indian company only. Accordingly, provisions of Section 195 are not applicable in respect of payments made to foreign branch of Indian Bank - we are inclined to accept the findings of Ld.CIT(A) for deleting the addition made by Assessing Officer. Additional depreciation u/s 32(1)(iia) - whether additional depreciation is allowable only on new machinery be. the first year in which it is put to use? - HELD THAT:- It is observed that coordinate bench in its later decision in the case of Ambuja Cement Limited [ 2022 (11) TMI 1419 - ITAT MUMBAI] holding company of assessee has allowed similar claim of depreciation. When coordinate bench of ITAT in its latest decision has decided issue in favour of assessee by holding that assessee is entitled for additional depreciation u/s 32(1)(iia), such later decision would prevail over the decision of Everst Industries Limited [ 2018 (4) TMI 426 - ITAT MUMBAI] relied upon by Ld DR. As a result, since this aspect of the matter is no longer res integra, we see no reasons to take any other view of the matter than the view so taken by the coordinate bench in the group concern s case of the assessee. We uphold the plea of the assessee and direct the Assessing Officer to allow depreciation u/s.32(1)(iia) of the Act. Deduction u/s. 80IA of the I.T. Act, in respect of power-generating unit-TG3 located at Wadiif - HELD THAT:- As deduction u/s. 80-IB was granted for an initial assessment year, same could not be rejected for subsequent assessment years unless relief for initial year was withdrawn. Thus, assessee is entitled to deduction u/s 80IA on TG-2 and TG-3, Wadi unit. Apportionment of indirect Head Office Expenses while computing deduction u/s. 80IA for TG2 unit - HELD THAT:- AO is directed to allocate Head office expenses (other than auditor fees and CMA expenses) on the basis of expenditure incurred by the units vis- -vis overall expenditure. Thus, related ground of appeal in departmental appeal is dismissed and ground of appeal in assessee s appeal is partly allowed. Capital gain computation - AO power to refer the valuation of Land to the DVO - HELD THAT:- AO was not justified in considering fair market value of land based upon DVO s report obtained u/s 55A of the Act. This ground of appeal is accordingly allowed. Addition of provision for gratuity, provision for wealth tax, provision for VRS made while computing book profit u/s 115JB is deleted. Disallowance u/s 14A cannot be made while computing book profit u/s.115JB as relying on Vireet Investments Pvt Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] Deduction u/s.80IA on Rail Infrastructure allowed as quantified in form 10CCB subject to allocation of indirect expenditure as confirmed. Disallowance of claim of leave encashment - HELD THAT:- On perusal of relevant facts on record, it is observed that Hon'ble supreme court in the case of UOIv. Exide Industries Ltd. [ 2020 (4) TMI 792 - SUPREME COURT] has upheld constitutional validity of provision of section 43B(f) for provision for leave encashment liability and considering binding decision of Hon'ble Supreme Court claim cannot be allowed. However, if payment of such provision towards leave encashment is made in subsequent year, deduction may be allowed to assessee in such years if not allowed till date. Therefore, Assessing Officer is directed to verify and the same and allow the same as per our above directions. Addition of provision for leave encashment made while computing book profit u/s 115JB is deleted. Non-exclusion of profit on sale fixed assets while computing book profits u/s. 115JB - Recompute taxable long term capital gains arising on transfer of fixed assets as well as investments after giving the benefit of indexed cost of acquisition (if applicable) while computing taxable profits u/s 115JB.
-
2023 (11) TMI 297
PIL for expeditious disposal of appeals or within the time limit envisaged by Section 250(6A) - Timeframe for Disposal of Appeals [pending] before Commissioner (Appeals) in Income Tax - Working/Sanctioned Strength of the Commissioner (Appeals) - additional affidavit filed on behalf of the CBDT wherein CBDT has provided the manner in which, in the past as also in the future, pending appeals are to be dealt with and disposed of expeditiously - HELD THAT:- We are satisfied that the prayers as sought by the petitioner have been suitably addressed by the CBDT. Also, upon a perusal and consideration of the aforesaid road map including the Central Action Plan for the Financial Year 2022-23, it appears that the CBDT has formulated a real time and a practical approach to dispose of the large number of appeals pending before various Commissioner (Appeals). So far as the prayers in clause (a) and clause (c) of the petition are concerned the same appear to be satisfied in terms of the Litigation Management Policy framed under the yearly Central Action Plan. In fact, the said policy also addresses the specific grievances raised by the petitioner. So far as the prayer in clause (b) is concerned, the CBDT has submitted that more than 570 Commissioners (Appeals) would be needed to deal with the pending appeals as in the year 2014. It appears that as against the sanctioned strength 349 Commissioner (Appeals), only 229 Commissioners form the working strength as on July 2023. It also appears that the CBDT has made a request to the concerned authorities to increase the working strength by way of promotions or direct in-take, as the case may be. That apart, it also becomes clear that the Finance Act, 2023, has introduced a concept where joint Commissioner/Additional Commissioners (Appeals) will decide the First Appeals below the threshold of Rs. 10 lakhs. The department claims to have sanctioned 100 such posts which according to it, will substantially reduce the pendency of appeals. In that, the greater percentage of the pending appeals belongs to this bracket/category. Concept of Faceless Appeals introduced since September 2020 by the department also appear to have mitigated the issue of disposal of pending appeals. We are satisfied that so far as increasing the sanctioned strength or the filing up of vacant posts of the Commissioner (Appeals) is concerned, the CBDT may not have any role to play. Union of India, which is respondent no. 1 in the present petition, may take appropriate measures and decision in that regard, inasmuch as filling up of all the present posts lying vacant would greatly assist in disposals of the pending appeals. The Union of India may also consider increasing the sanctioned strength of Commissioner (Appeals) substantially at least to the extent of 570 of such posts, to achieve the aims and objects of the Central Action Plan which is formulated every year.
-
2023 (11) TMI 296
Revision u/s 263 - Belated filing of return for claiming deduction u/s 80-IA - deduction claimed u/s 80-IA as alleged violation of provisions of section 80AC wherein it is mandated that the return of income was supposed to be filed on or before the due date specified u/s 139(1), whereas as observed by the PCIT, assessee has filed the return after the date specified u/s 139(1) - HELD THAT:- The return of income filed by the assessee for the relevant AY was within the specified date for submission of return u/s 139(1) i.e., 7th November, 2017 (extended by CBDT from 31st October, 2017 to 7th November, 2017), assessee s response dated 29-12-2021 towards the notice issued u/s 263 on 20-12- 2021 also have such explanation before the Ld. PCIT and, therefore, violation of section 80AC as observed by the Ld. PCIT is incomprehensible. Observation of the Ld. PCIT that separate balance sheets for the power unit was not furnished by the assessee, the same is tantamount to violation of Rule 18BBB of the Act, such fact needs verification, which the AO has overlooked. Assessee s contention that proceedings u/s 263 cannot be used for substituting opinion of the AO by date the principal CIT, though a specific query regarding deduction u/s 80IA was asked by the Ld. AO, but the requirement of separate balance sheet of the power generation unit for admissibility of deduction u/s 80IA as prescribed in Rule 18BBB, wherein clause 2 of the said Rule specifies that A separate report is to be furnished by each undertaking or enterprise of the assessee claiming deduction u/s 80-I or 80-IA or 80-IB [or 80-IC] and shall be accompanied by the Profit and Loss Account and Balance Sheet of the undertaking or enterprise as if the undertaking or the enterprise were a distinct entity. Since, such a specific requirement of the Section for allowing the deduction was not touched by the Ld. AO, this makes the order of Ld. AO erroneous, which was without proper enquiries and examination of the records. Assessee also argued about the eligibility of the business for deduction u/s 80IA, have explained the process of business, power generation and related aspects, however, we are not dealing with such contentions as the same is also subject of verification for which the Ld. PCIT has rightly set aside the order to the files of Ld. AO, without reaching to any logical conclusion, providing the assessee proper opportunity of being heard and to be represented in the set aside proceedings. PCIT has rightly assumed the jurisdiction u/s 263 of IT Act, in terms of explanation 2 of section 263, consequently, the order passed u/s 263 is held as sustained. Decided against assessee.
-
Customs
-
2023 (11) TMI 321
Seeking provisional release of 22 KT Plain Gold Jewellery (Pendent) - country of origin of the goods - benefit of Notification dated 1st June 2011 (Notification No. 46/2011-Cus) - HELD THAT:- It is observed that the goods dealt by the very same exporter with the other importers in the country have been cleared by the Respondent-Revenue. Hence according to the Petitioner, it cannot be a case that in the face of the documents as provided the foreign exporter would indulge into any irregularity in relation to the agreement in question in regard to supply on the origin of the goods imported by the Petitioner. Thus, the contention of the Revenue is only in the context of duty i.e.; whether the Petitioner qua the goods in question would at all be entitled to claim an exemption from payment of duty. The goods ought not to suffer any further detention and they are required to be provisionally released, on the Petitioner furnishing an appropriate bond for the differential duty, more particularly considering the letter dated 30th October 2023 as issued by Mr. Mulyadisimatupang as addressed to the Ambassador of Indian Embassy in Indonesia. Ordered accordingly. Petition disposed off.
-
2023 (11) TMI 320
Classification of imported goods - Steel Balls - to be classified under Chapter Heading 84829900 or under CTH 8714 9990? - recovery of differential duty and imposition of penalty on the company and two Directors - HELD THAT:- As per Chapter Note 6 to Chapter 84 in HSN Heading 8482 applies, inter alia, to polished steel balls, the maximum and minimum diameters of which do not differ from the nominal diameter by more than 1 per cent, or by more than 0.05mm, whichever is less. Other steel balls are to be classified in heading 7326. Section Note 2(a) to Section XVII says that parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective heading. A cumulative reading gives an understanding that Steel Balls if polished fall under CTH 8482 and if not polished under CTH 7326 and no way under Chapter 87 - the report given by the said Chartered Engineer mentions that 5/16 and 7/32 size is rarely used in some special hub applications in bicycles as per the information collected in the survey; sizes 5/8 , 9/16 and 18.6mm are not generally used in bicycles; if they are to be used in bicycles, they should be polished. On going through the certificate issued by the Chartered Engineer, it is found that the certificate does not specify whether the impugned Steel Balls are polished and gives an impression that the same is issued on the basis of a survey rather than on technical testing and examination. Hon ble Supreme Court in the case of KRISHNA STEEL INDUSTRIES VERSUS COLLECTOR OF CENTRAL EXCISE, PATNA [ 2004 (9) TMI 107 - SUPREME COURT] held that with the incorporation of Chapter 6, the item now has to be classified either under Chapter 84 or under Chapter 73 and that an item has to be classified in accordance with Chapter notes. Tribunal in the case of Pratap Engineering Works (supra) held that in view of Note 6 to Chapter 84, Steel Balls of sizes 3/16 , 5/32 and 1/8 with the variation, of both maximum and minimum diameter from the nominal diameter in accordance with the permissible limits, merits classification under heading CTH 8482. Thus, the impugned goods can only be classified under CTH 8482 which is a specific heading; moreover, other Notes of Section XVI or Chapter 84 do not exclude the classification of Steel Balls under CTH 8482 - the classification of any goods should be per se as per the descriptions in the individual headings, related Section/ Chapter notes and under no circumstances on the end use of the product. The impugned order has completely ignored the submission of the appellants that the steel balls are also usable in other industries. Moreover, the Chartered Engineer, on whose certificate Revenue places reliance only makes and averment that the impugned goods are generally used by bicycle manufacturers. It is not the case of the Department that they are solely used by the bicycle manufacturers. Thus, the classification cannot be based on end use. The appellants cannot be forced to continue the classification they adopted in the past even though it was incorrect. The appellants are free to correct the classification of the imported products. If the classification, so claimed, was wrong, it was incumbent upon the Department to rectify the same by taking legal recourse. For that reason, it cannot be held that the classification adopted by them previously is only correct. Penalty on Directors - HELD THAT:- When the classification and duty demanded in the show-cause notice are set aside, there is no way that the penalty on the appellant s company and their directors can survive. The classification adopted by the appellants under CTH 8482.9900 upheld - the impugned order is not sustainable - appeal allowed.
-
2023 (11) TMI 319
Revocation of appellant s customs broker license - forfeiture of security deposit - imposition of penalty - weight of pan masala mentioned on invoice cum packing list was much higher than the actual weight thereof found during examination - an opportunity of cross-examination not provided - no finding has been given with respect to the submissions made by the appellant - violation of principles of natural justice - violation of Regulations 10(a), 10(b), 10(d) 10(e), 10(j), 10(k) and 10(q) of CBLR, 2018. Violation of 10(a) of CBLR, 2018 - HELD THAT:- It was obligatory for the appellant to obtain an authorization even from the individuals by whom he is for the time being is employed as customs broker. Appellant has failed to produce any such authorization from exporter M/s. Batra Enterprises mentioning Shri Pran Shanker Jha, an employee of their freight forwarder (M/s. Toshnek International) to be the authorized representative not only for the exporter but also for the customs house agent. Absence of such authorization is more than sufficient to prove the violation of 10(a) of CBLR, 2018. Violation of 10(b) of CBLR, 2018 - HELD THAT:- The transactions of business in relation to customs house is the idea behind Regulation 10(b). Transaction of business in customs station in case of exports is filing of shipping bills along with the invoice, packing list, checklist and all other requisite documents. In today s era of virtual transactions/online processings, physical presence in customs house for transacting the business is not required. However, the intent of the provision remains the same that business has not to be transacted by an unauthorized person i.e. Shri Pran Shanker Jha that too to the notice and knowledge of the appellant. Apparently and admittedly the customs house related transaction of business has been done by an unauthorized person. The same is sufficient to confirm violation of 10(b) of CBLR, 2018. Violation of Regulation 10(d) of CBLR, 2018 - HELD THAT:- The appellant had no means to verify item wise quantity or weight of the goods and in fact as, customs broker, he is not required to do so. With these findings, the penalty as was imposed upon the appellant under Section 114 (iii) was also set aside. Once there was no knowledge with the appellant about the alleged mis- declaration, once it was a case of clerical mistake and over sightedness while preparing invoice/packing list no question arises for informing anything to the department. Violation of 10(d) therefore is not sustainable. Violation of Regulation 10(e) of CBLR, 2018 - HELD THAT:- The mistake has already been acknowledged by the exporter to be a clerical mistake at the end of his Accountant namely, Ms. Aakansha Mishra. The same cannot be attributed to the appellant - these submissions are insufficient to justify the two packing lists for the same shipment. Irrespective the appellant had no mens rea to support the exporter for availing inadmissible export incentive but the fact remains is that once there cannot be two different documents as that of packing list with different description of the goods, it was the incumbent duty of the customs house agent to diligently check the veracity about the same. There is nothing on record about any such exercise of due diligence by the appellant. Hence, there are no infirmity with the violation of 10(e) has been confirmed against the appellant. Violation of Regulation 10(j), 10(k) and 10(q) of CBLR, 2018 - HELD THAT:- There is no allegation in the show cause notice that up to date records were not being maintained by the appellant - With respect to his cooperation with the customs authority, it is coming apparent that he only ensured the presence of Shri Saurabh Batra, the partner of the exporter, their employee including Ms. Aakansha Mishra and the freight forwarder i.e. Shri Pran Shanker Jha. He got his authorized representatives Shri Prasanta Kumar Samanta, the F-Card holder and Shri Om Prakash Kashyap, the G Card holder examined not once but on several occasions, Hence, violation of regulation 10(j), 10(k) and 10(q) has wrongly been confirmed. Though the appellant is held guilty of the violations under Regulation 10(a), 10(b) and 10(e) but these are not so grave as to justify the revocation of the customs license. These violations are observed to be the consequence of negligence on part of the appellant custom broker. Depriving him of his livelihood is held to be disproportionate in the light of given findings - the violations as far as Regulation 10(d), 10(j), 10(k) and 10(q) of CBLR, 2018 are concerned are not confirmed - the ends of justice would be met if the order of forfeiting security deposit and imposing penalty is upheld and as far as the order of revocation of license is concerned, the same be set aside. Appeal allowed in part.
-
2023 (11) TMI 318
Invocation of principles of unjust enrichment - Valid sanction of refund or not - conversion of foreign going vessel to coastal run - subsequent on finalization, whatever un-utilised consumables were there, the excess amount of duty paid was refundable or otherwise - HELD THAT:- The admitted facts are that the Appellants were agents for liners, who filed refund claim under authorization given to them in respect of excess customs duty paid on bunkers and other stores in connection with conversion and reversion of vessel, as per the procedure provided in Circular No. 58/97 dated 06.11.1997 - The CBEC has prescribed a procedure for collection of duty on ship s stores and bunker consumed during coastal run vide Circular No. 58/97 dated 06.11.1997. This special procedure, inter alia, provides that the duty on the bunkers like diesel, furnace oil, etc., may be recovered at 110% of duty leviable on the quantity estimated to be consumed during the coastal run at the time of conversion from foreign run to coastal run on provisional assessment basis. Admittedly, the respondent agent is following the procedure prescribed for the steamer agents in terms of Board Circular dated 06.11.1997 and Board s letter dated 24.11.2005. It is essentially meant for recovery of applicable customs duty on the quantity actually consumed during the coastal run and based on the actual consumption, the duty could turn out to be either short or excess than quantity on which duty was paid, based on estimated quantity. The matter is no longer res integra. In the case of COMMISSIONER OF CUSTOMS, PUNE VERSUS M/S ATLANTIC SHIPPING PVT LTD [ 2014 (12) TMI 109 - CESTAT MUMBAI] dismissed the Appeal of Revenue. There is no error in the impugned Order-in- Appeal, upholding the original order - appeal of Revenue dismissed.
-
Corporate Laws
-
2023 (11) TMI 317
Transfer of pending proceeding to NCLT - substitution of ICICI Ltd to Edelweiss - HELD THAT:- A conjoint reading of Rule 5 of the notification dated 7th December, 2016 along with the decision in Citicorp International Limited v. Shiv-Vani Oil Gas Exploration Services Limited [ 2023 (7) TMI 1188 - DELHI HIGH COURT ] would show that in cases where the petition is not at an advanced stage, the matter is to be transferred to the NCLT. In the present petitions, apart from issuance of notice, no steps have been taken. None appear for the parties as well. Accordingly, the present petitions are directed to be transferred to the NCLT. List before the NCLT on 1st November 2023 - petition allowed.
-
Insolvency & Bankruptcy
-
2023 (11) TMI 316
Jurisdiction of this Court under Article 226 of the Constitution of the India for recovery of outstanding dues - proceedings in respect of the same are already pending consideration before the NCLT - HELD THAT:- The learned Single Judge dismissed the petition holding that it was not open for the Petitioner to invoke the jurisdiction of this Court under Article 226 of the Constitution of the India for recovery of outstanding dues, as the proceedings in respect of the same are already pending consideration before the NCLT. It has not been disputed, that the issue of remittance of outstanding dues from the Department of Post is currently pending before the NCLT. Further, notice already stands issued to Department of Posts in respect of the application moved qua the dues. As such, we fail to understand the reasons holding back the Appellant from campaigning its cause before the NCLT - no fault can be found in the view taken by the learned Single Judge. There are no reason for this Court to exercise its extraordinary writ jurisdiction at this stage to parallelly consider the question of realisation of the NRRA in-question. That apart, the issue of remittance of outstanding dues by the Department of Posts is interconnected to the allegations of violation of Section 37(3) of the Act. Given the former is yet to be decided by NCLT, the allegations of violation of the Act not delved upon. There is no merit in the present appeal - Appeal dismissed.
-
2023 (11) TMI 314
Rejection of section 9 application - rejection on the ground of pre-existing dispute - appellant submits that Respondent never disputed the amount claimed by the Appellant, which is clear from emails between the parties. HELD THAT:- The Adjudicating Authority has noted the termination of Work Order on 02.01.2019 whereas the Demand notice under Section 8 was issued on 20.05.2019. It is already noticed the demand notice issued even prior to Section 8 notice to the Corporate Debtor, one of such notice is dated 28.02.2019, which was filed along with the Section 9 application which was promptly replied and refuted by the Corporate Debtor and in the detailed reply which has been submitted by the Corporate Debtor all claims were disputed. It was clearly stated that no amount was due and payable to the Operational Creditor. The Adjudicating Authority did not commit any error in holding that there is a pre-existing dispute. When the Corporate Debtor even prior to issuance of demand notice has denied liability to pay, pre-existing dispute was there - there are no ground to interfere with the impugned order rejecting Section 9 application. Appeal dismissed.
-
2023 (11) TMI 313
Dismissal of application for initiation of CIRP - time limitation under Section 61(2) of the IBC, 2016 - default occurred in the period excluded as per the provisions of Section 10A of the IBC, 2016 - invocation of Corporate Guarantee - HELD THAT:- In the Judgement of this Tribunal in the case of VIKRAM KUMAR, PROPRIETOR VERSUS ARANCA (MUMBAI) PRIVATE LIMITED [ 2023 (11) TMI 51 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] , it was held that the date of default in the case of the Guarantor is the date on which the Guarantee was invoked. By its action of depositing the security cheques and issue of Notice dated 31.01.2022, the Financial Creditor, the Appellant herein, is deemed to have invoked the Corporate Guarantee in the month of January, 2022, which is to be considered as the date of default, and which lies beyond the period prohibited under Section 10A of the IBC, 2016. In the light of the detailed discussion, it is concluded that the date of default lies beyond the prohibited period prescribed under Section 10A of the IBC, 2016. The Adjudicating Authority is directed to hear and decide the Application of the Financial Creditor under Section 7 by treating it as a case not covered by the provisions of Section 10A of the IBC, 2016. Considering the loss of time, it is expected that the said Application will be decided by the Adjudicating Authority expeditiously - appeal allowed.
-
FEMA
-
2023 (11) TMI 315
Recovery of penalty imposed on the respondent - Validity of insolvency notice issued to the respondent - interpretation of statute - words creditor, debt and debtor as defined under Section 2A and 2B of the Presidency Town Insolvency Act should be given a restricted conventional meaning - term decree or order appearing in Section 9(2) of the Presidency Towns Insolvency Act 1909 would mean only a decree or order of a civil Court or would it include any order for payment of money passed after an adjudicatory process? - maintainability of application under Section 9(5) - Enforcement Directorate is competent to initiate proceedings in insolvency for failure in payment of penalty imposed or not - invocation of Section 9(2) before the decree or order becoming final. Definition of the terms creditor, debt and debtor - Section 2(a) of the Presidency Towns Insolvency Act 1909 - HELD THAT:- As could be seen from the definitions, both the definitions are inclusive definitions. In REGIONAL DIRECTOR EMPLOYEES' STATE INSURANCE CORPN. VERSUS HIGH LAND COFFEE WORKS OF PFX. SALDANHA SONS [ 1991 (7) TMI 367 - SUPREME COURT] , the Hon'ble Supreme Court had considered the import of the term 'includes' used in a definition clause, the Hon'ble Supreme Court had held The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occur- ring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include. The word includes as pointed out by the Hon'ble Supreme Court has been used with a intent to impart wider meaning to the terms defined. We should also be alive to the various developments in law since the enactment of the Presidency Towns Insolvency Act, 1909, more than a century ago. Various other Forums, Tribunals and alternative Dispute resolution mechanism have been put in place and those Forums and Tribunals have been empowered to decide legal disputes and have been empowered to pass orders for payment of money. Therefore, at this distant point of time, the meaning of the words appearing in Sections 2(a) and 2(b) of the Presidency Towns Insolvency Act, 1909 should not be restricted and the other creditors not to be deprived from invoking the provisions of the Act - thus, in view of the inclusive definition adopted in Section 2(a) and 2(b) of the Presidency Towns Insolvency Act, 1909, the terms creditor, debt and debtor defined thereunder should be given a wider meaning and it cannot be restricted to a decreed debt or a debt payable under order of a Court. Whether the term decree or order appearing in Section 9(2) of the Presidency Towns Insolvency Act 1909 would mean only a decree or order of a civil Court or would it include any order for payment of money passed after an adjudicatory process? - HELD THAT:- While considering this definition the Hon'ble Supreme Court after referring to the inclusive definition, held that the judgment in PARAMJIT SINGH PATHEJA VERSUS ICDS LTD. [ 2006 (10) TMI 419 - SUPREME COURT] being one with regard to legal fiction provided under Section 36 of the Arbitration and Conciliation Act cannot be taken as a precedent for having decided on the effect of various orders that may be passed by various Tribunals or Authorities who are empowered to pass orders imposing financial liability. Sections 50 and 51 of the Foreign Exchange Regulation Act, 1973 provides for a mechanism for determination of the penalty payable by a person who violates the provisions of the said Act. Section 56 of the said Act enables prosecution and that is without prejudice to the power to levy penalty - Though the word penalty is used in Section 50 it is not a fine levied on the basis of conviction or a penalty as used under Article 20(1) of the Constitution of India. The provisions of Sections 50 and 51 of the Foreign Exchange Regulation Act, 1973 are more in the nature of recovery of loss that is caused to the exchequer because of the violation of the provisions of the Foreign Exchange Regulation Act and the Act also provides for criminal prosecution without prejudice to the power to levy penalty. The conclusion of the learned Single Judge cannot be agreed upon where he held that an order of the Adjudicating Authority imposing penalty would not create a debt within the meaning of Section 2(b) and the person in whose favour the order is passed could not be creditor within the meaning of Section 2(a), in order to enable them to invoke Section 9(2) of the Presidency Towns Insolvency Act, 1909. Whether the application under Section 9(5) on the grounds mentioned in it is maintainable? - Whether Section 9(2) can be invoked before the decree or order becoming final? - HELD THAT:- The failure to pay, on being served with the notice under Section 9(2) of the Presidency Towns Insolvency Act, 1909, would amount to an act of insolvency to enable the creditor to initiate insolvency proceeding. This is a reason why the grounds set out in Section 9(5) of the Presidency Towns Insolvency Act, 1909 are very relevant. Section 9(5) of the Presidency Towns Insolvency Act, 1909 extracted above would show that the specific grounds have been set out. The question as to whether a debt existed or not is not a ground that is postulated in the said provision - No doubt, the words being a decree or order which has become final and the execution thereof has not been stayed would definitely provide a ground under Section 9(5) of the Presidency Towns Insolvency Act, 1909. The very jurisdiction to issue an insolvency notice would be in doubt, since the appeal in CMA.No.914 of 2001 was pending on the date when the insolvency notice was sought to be issued. The reference to the provisions of Section 138 of the Negotiable Instruments Act and the judgment of the Hon'ble Supreme Court concluding that a complaint filed under Section 138 of the Negotiable Instruments Act before the expiry of 15 days time could still be sustained, if the drawer had not paid the money due under the cheque within 15 days from the date of receipt of summons cannot be applied to the instant case, inasmuch as it is the non-payment of money ordered to be paid within a particular time that constitutes the act of insolvency - the very act of insolvency would occur only if the debtor fails to pay within 31 days from the date of issuance of a notice, the money payable under an order which has already become final. The question Whether Section 9(2) can be invoked before the decree or order becoming final is not answered. Application is dismissed upholding the order of the Hon'ble Single Judge only on the ground that the insolvency notice issued on 28.02.2001 is unsustainable, in view of the fact that it has been issued when the Civil Miscellaneous Appeal was pending and the order has not become final.
-
Service Tax
-
2023 (11) TMI 312
Levy of Service tax - commercial institute or not - Commercial Coaching or Training Services - whether the courses imparted by the appellant leads to the grant of a educational qualification recognized by law and is therefore outside the purview of levy of service tax? - period prior to 01.07.2012 and after - service tax on Management, Maintenance and Repair Services for the period 2005-2007 - invocation of extended period of limitation for the period 2005-2010. Whether the course imparted by appellant institute would fall within the meaning of recognized by law ? - HELD THAT:- The Hon ble High Court of Delhi in the case of Indian Institute of Aircraft Engineering [ 2013 (5) TMI 592 - DELHI HIGH COURT ] has considered precisely the very same issue, so as to reach the conclusion that the clarification issued by the board vide circular dt. 11.5.2011 is invalid. The very same issue as to whether Flight Training Institute and Aircraft Engineering Institutes are liable to service tax under Commercial Training or Coaching Service was considered by the Hon ble Allahabad High Court in the case of CCE, Cus., ST Vs Garg Aviations Ltd. COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX VERSUS M/S. GARG AVIATIONS LTD. [ 2014 (5) TMI 955 - ALLAHABAD HIGH COURT ] - The Hon ble High Court followed the decision of the Hon ble High Court in the case of Indian Institute of Aircraft Engineering [ 2013 (5) TMI 592 - DELHI HIGH COURT ] and held that the activity is not taxable. This case was appealed to Hon ble Supreme Court, and the appeal was dismissed on 6.2.2018. Thus, the issue stands covered by the above judgments which have categorially held that these institutes are not liable to pay service tax under Commercial Coaching or Training Services . The words recognized by law for the time being in force cannot be construed so as to restrict its coverage only to Universities and Educational Boards. There can be other statutes which recognize certain degree, diploma, certificate or qualification. The DGCA is a statutory authority exercising powers conferred on it under the Aircraft Act, 1934 and the Rules made thereunder. Consequently, if a course completion certificate is recognized by DGCA for any specific purpose, in pursuance to the provisions contained in Aircraft Act / Rules, then the said certificate will satisfy the condition of having been recognized by law for the time being in force - the demand of service tax for the period after 1.7.2012 also alleging that appellant is imparting Commercial Coaching or Training services cannot sustain and requires to be set aside. Management, Maintenance and Repair Services - HELD THAT:- It is found that the argument put forward by appellant on this services to be too flimsy to be acceptable. The appellant can render services on the basis of oral contract also - For these reasons, on merits the appellant is liable to pay service tax on Maintenance or Repair Services for the period 2005-06 (Rs.90,848/-) and 2006-07 (Rs.26,243/- Total Rs.1,17,091/-). Time Limitation - HELD THAT:- There is no specific allegation of suppression of facts brought out against the appellant alleging intent to evade payment of tax. Further though SCN was issued in 2010, the same has been adjudicated with much delay only on 31.12.2021. For these reasons the SCN issued invoking the extended period cannot sustain and requires to be set aside. The impugned orders are set aside. The appeals are allowed.
-
2023 (11) TMI 311
Short payment of service tax - import of services - value of foreign currency expenditure - reverse charge mechanism - levy of service tax on the differential value of foreign currency expenditure reported in the annual accounts of the company vis-a-vis the value of services on which service tax was actually paid as import of services - Professional Fees/ engineering services - Corporate cost allocation - Bank Guarantee Commission Charges - Bank Charges - Subscription / License fees - Repairs and Maintenance (Material purchase) - Payment of tax to government authorities - Purchase of Protective Clothing - Purchase of books magazines - Reimbursement of Insurance charges -Reimbursement of relocation charges of employees - Reimbursement of salary plus other reimbursement - Demurrage charges - Purchase of Dispenser - Conference and meeting - Sundry expenses- Unreconcilable expenses - Time limitation u/s 73 of the Finance Act, 1994 - Suppression of facts or not. Requirement of classification of service under proper category of service - HELD THAT:- Even before the issue of show cause notice, during correspondence with the appellant, the department had pointed out the various differences in payments made in foreign currency in the books of account of the appellant vis-a-vis the ST-3 returns and alleged that that the Appellant was procuring various services from foreign vendors and was making payments in foreign currencies towards professional fee/engineering services, license fee/ subscriptions, corporate cost allocations, repairs and maintenance, consultancy fees, bank charges etc. for use in business and had short paid / not paid service tax on the same under reverse charge. Therefore, the appellant was put to a sufficient notice of the alleged irregularities in filing the ST-3 returns and if the appellant did not agree to the allegations, it was incumbent upon him to specifically contradict those allegations by reconciling the figures in books of account and the ST-3 returns - there was no lack of clarity on the part of the department in determining the nature and impugned services in the show cause notice. There are no force in the argument of the appellant that the show cause notice did not determine nature of service and that the appellant was asked to defend the indefensible. In the light of these observations, the case law produced by the appellant which is solely on the basis where there was a lack of clarity in the show cause notice in not relevant to the facts of the case. Professional Fees/ engineering services - HELD THAT:- The amount of Rs. Rs. 9,17,72,871.00 was already booked in their accounts during the year 2011-12 and as per the definition of associated enterprises , the amount has to be considered to have been received in 2011-12 even though the invoice was issued at a later stage. Further as per the provisions of Rule 3(iii) of Taxation of Services (Provided from Outside India and received in India) Rules, 2006, the service tax liability in respect of Consulting Engineering Service falling under Section 65(105)(g) of the Finance Act, 1994 lies on the recipient located in India irrespective of the fact that the service has been performed in India or consumed in India when the services have been received by a recipient located in India for use in relation to business or commerce - It is not convincing that the service can be related to in relation to the immovable property or the performance based services which are specifically covered under Rule 3(i) and 3(ii) of the Rules 2006 ibid and which do not cover the services under Section 65(105)(g) of the Finance Act, 1994. Similar issue has already been decided by the Tribunal in the case of M/S. EMI TRANSMISSION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NASHIK [ 2018 (4) TMI 776 - CESTAT MUMBAI ] where it was held that the technical testing and analysis service on the reverse charge basis is not taxable in terms of Rule 3(iii) of Rules, 2006. The said provision was prevailing upto 1-4-2011 as w.e.f. 1-4-2011 vide Notification No. 23/2011-S.T., dated 31-3-2011 Clause (zzh) was omitted under Rule 3(iii) of Rules, 2006. Thus, the professional fees/ Engineering charges which are considered under the expression Consulting Engineering Services were chargeable to service tax during the relevant period. Corporate cost allocation - HELD THAT:- On going through the various terms of the representative assignment agreement of the seconded employees as detailed above, there is no doubt that the effective control over the employees deputed in India always remains with Linde AG, Germany and the appellant has no role in their appointment. Terms of service in India, remuneration of the employees, social security benefits, duration of service in India are all decided by Linde AG, Germany and as per agreement German Law is proper law for the agreement . The invoices detailed in the adjudication order clearly state that the services provided by the seconded employees to the appellant are of consulting engineer - the service agreements of the seconded employees do not show that those are the employees of the appellant and for all effective purpose, they remain employee of their Home Company and merely providing services to the Company at the behest of the Home Company i.e Linde AG, Germany. The ratio of the Apex Court judgement in the case of C.C.,C.E. S.T. BANGALORE (ADJUDICATION) ETC. VERSUS M/S NORTHERN OPERATING SYSTEMS PVT LTD. [ 2022 (5) TMI 967 - SUPREME COURT ] is squarely applicable to the facts of the case. The Company is effectively providing taxable service of Consulting Engineer services defined under Section 65(105)(g) of the Finance Act, 1994 before 01.07.2012 and taxable service under Section 66B after 10.07.2012. Bank Guarantee Commission Charges - HELD THAT:- The matter is finally settled by the Apex Court judgement in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S EDELWEISS FINANCIAL SERVICES LTD. [ 2023 (4) TMI 170 - SC ORDER ] where the Hon ble court has held that issuance of corporate guarantee without consideration would not be a taxable service. There is no allegation in SCN or findings in the impugned order that LAG had received any consideration other than the re-imbursement of bank guarantee charges from the appellant. Accordingly, we hold that no service tax is chargeable on this count and accordingly, the findings of the impugned order-in-original not agreed upon. Bank Charges - HELD THAT:- The appellant has claimed that the impugned charges are bank commissions providing various services with respect to foreign remittances. Service tax is already charged by the banks and only dispute is that the appellant failed to substantiate that these amounts are against bank charges - the case is remanded back to the adjudicating authority with the directions to the appellants to provide all supporting documents with respect to their contention. Thus, this issue is remanded back to the Adjudicating Authority to re-adjudicate the matter after giving opportunity to the appellant to submit necessary documents and after hearing them. Subscription / License fees - HELD THAT:- The adjudicating authority has confirmed the taxability as impugned services hypothetically without actually examining the nature of software from the invoices which the appellant has submitted in respect of such goods (softwares) - the matter is remanded back on this issue to pass a fresh order after examining the invoices and ascertain whether the purchased software are goods or services. Repairs and Maintenance (Material purchase) - HELD THAT:- Under the service tax law all payments received or paid to the foreign parties by the assessees against any service provided/ received from abroad (i.e other than goods, immovable property or money/actionable claims) are subject to tax unless those are brought under specific exception. Once a discrepancy has been brought to the notice of the assessee for a particular amount, onus lies upon him to prove that the amount was not taxable. Having failed to prove that the amount received in foreign currency was not subject to tax liability, the demand of service tax in this regard is upheld. Payment of tax to government authorities - HELD THAT:- The adjudicating authority his merely proceeded on assumption and presumption to the taxability and nature of taxes paid by the appellant to the governments abroad without ascertaining the actual contents of the assessment orders. Merely for the reason that the assessments orders were in German, the adjudicating authority should not have proceeded on presumptions. He should have asked the appellant to provide English Translation of the assessment orders or should have taken assistance of the private translators to arrive at the true nature of the taxes paid by them - matter is remanded back on this issue also to decide the matter afresh. Purchase of Protective Clothing - HELD THAT:- Since the services provided by the seconded employees have already been held to be taxable under the service tax provisions as 'Consulting engineer services', the protective clothing will form part of the gross amount to be taxed in terms of Section 67(c) of the Finance Act. Therefore, the demand has been correctly confirmed. Purchase of books magazines - HELD THAT:- The adjudication order has failed to specify for the period before 1.7.2012, that the impugned service was covered under any of the specified services. Therefore, they cannot be considered to be taxable before 01.07.2012. Further, the impugned service was duly covered under Section 65(72) under ODIAR services which were taxable at the end of service provider. As the service providers were outside India, the service cannot be taxed in India - the demand for the service under the head Purchase of books and magazines is set aside. Reimbursement of Insurance charges - Reimbursement of relocation charges of employees - School fees - Reimbursement of salary plus other reimbursement - HELD THAT:- The relationship between the seconded employees and the appellant was not covered under the exclusion clause contained in the definition of 'Service' under Section 65B(44)(b) of the Finance Act, 1994 as the employee-employer relationship - the said services were chargeable to service tax. Demurrage charges - HELD THAT:- Under the service tax after law all payments received or paid to the foreign parties by the assessees against any service provided/ received from abroad (i.e other than goods , immovable property or money/actionable claims) are subject to tax unless those are brought under specific exemption. Once a discrepancy has been brought to the notice of the appellant for a particular amount, onus lies upon him to prove that the amount was not taxable. Having failed to prove that the amount paid in foreign currency was not subject to tax liability, the service tax is leviable after 01.07.2012 on such payments. Purchase of Dispenser - HELD THAT:- The matter needs to be remanded to the adjudicating authority to pass a fresh order after examining the invoices. Conference and meeting - Sundry expenses- Unreconcilable expenses - HELD THAT:- Under the service tax law after 01.07.2012 all payments received or paid to the foreign parties by the assessees against any service provided/ received from abroad (i.e other than goods, sale of immovable property or money/actionable claims etc.) are subject to tax unless those are brought under specific exception. Once a discrepancy has been brought to the notice of the assessee for a particular amount, onus lies upon him to prove that the amount was not taxable. Having failed to prove that the amount paid in foreign currency was not subject to tax liability, the demand of service tax upheld in this regard. Time limitation u/s 73 of the Finance Act, 1994 - Suppression of facts or not - HELD THAT:- There are several layers of suppression and mis-representation of facts with a motive to avoid service tax. These layers of suppression cannot be detected by mere mundane audit of financial records. Thus, the extended time period for demanding service tax has rightly been invoked in this case. Appeal disposed off.
-
2023 (11) TMI 310
Levy of Service Tax - water front royalty/ wharfage charges - statutory levy charged by the Government of Gujarat in respect of sovereign/staturory function or not - invocation of extended period of limitation - HELD THAT:- The water front royalty is being charged from 1 April 2008 as per the provisions of the Maritime Board Act, 1981 per Section 22A, and therefore the maritime board is collecting the water front royalty as a statutory levy provided by Maritime Board Act, 1981, on behalf of State of Gujarat. A similar matter has already been decided by this Tribunal in the appellant s own case of PORT OFFICER, GUJARAT MARITIME BOARD, JAFRABAD VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, BHAVNAGAR [ 014 (7) TMI 972 - CESTAT AHMEDABAD ] where it was held that any amount collected after April 1, 2008 by Gujarat Maritime Board, can be considered as statutory levy only and service tax liability thereon may not arise. Invocation of Extended period of limitation - period of demand in this case pertains to 2006-07 to Feb 2009 and the show cause notice in this case has been issued on 21/10/2011 - Section 73 of the Finance Act, 1994 - HELD THAT:- The fact is noted that a final audit order report No. 10/ST/2008-09, for covering the audit period October 2005 to March 2008, wherein all the financial records have been there report the auditing officers. Similarly another audit final order report No. 75/ST-2009-10 dated 03.05.2010, covering period from 2008 to September 2009 has also been placed on record. The above audited report indicate that all the financial statements of the appellants were before the auditing officers much before the issuing of the SCN. In these circumstances, we feel that element of the suppression of facts or mis- representation etc., within intent to evade Service Tax are not present in this case. As the SCN has been issued on 21 October 2011 much beyond the normal period of demand, the SCN is barred by period of limitation. The impugned order-in-original is without any merit and therefore set aside - appeal allowed.
-
2023 (11) TMI 309
Recovery of service tax - non-production of Chartered Accountant s certificate to satisfy the department that the duty is being demanded for the second time or that they have paid duty on the value of reimbursements received by them - HELD THAT:- Since, the appellant through its Advocate submits that the desired documents are available for verification, it is opined that the matter should go back to the original authority for verification of the records/ documents and for passing of the adjudication order accordingly. The matter is remanded back to the original authority for the limited purpose of examination of the records/documents with regard to the confirmation of service tax demand of Rs.84,12,507/- confirmed in the impugned order as referred above and for passing of the adjudication order on the basis of the available records - Appeal allowed by way of remand.
-
2023 (11) TMI 308
Levy of service tax - charges recovered by the appellant from the allottee in addition to the land premium - Administrative Charges Realized - Processing Fees - Transfer Fees - Supervision Charges - Works Income - Income from Ekamra Hat - Rent received from Industrial Estates - Interest received on plots - Interest received on sheds - Occupation Charges realized from Industrial Estates - Water Charges realized from Industrial Estate, Buildings and Tenants - Ground Rent Collection - Cess Collection - Maintenance Charges Realized - Infrastructure Maintenance Charges Realized - Interest receipts on Land (Duburi Steel Complex) - Contract Receipts (Construction) - penalties - HELD THAT:- The appellant is a statutory Corporation established under IDCO Act, 1980 and discharging functions of acquisition of land and allotted the same as per the guidelines of the Act to the various Industrial Units on lease basis and charged certain amounts in lieu of this. Administrative Charges Realized - HELD THAT:- The said charges have been collected by the appellants with reference to the acquisition of land as prescribed under IDCO Act, 1980. Therefore, the said Administrative Charges Realized by the appellants are statutory charges for allotment of plot, which does not cover under Real Estate Agency s Service . Accordingly, no service tax is payable on the said amount. Processing Fees - HELD THAT:- The processing fee is collected from the land allotees for post-acquisition Allotment and consequential Transfer of property in their favour in Industrial Estate and Industrial area as per IDCO Act, 1980. Therefore, no service tax is payable one the said amount. Transfer Fees - HELD THAT:- The said charges have collected in terms of Circular issued by IDCO on mutual transfer of lease hold interest in IDCO allotted properties in Industrial Estate and Industrial Area on payment of processing fee and transfer fee and the same has been fixed by IDCO. The said services are in the statutory levy in nature, therefore, no service tax is payable by the appellants on the said charges. Supervision Charges - HELD THAT:- The said Supervision Charges are required for Development of the Industrial Estate, which is statutory functions, which is to be discharged by the appellant. Accordingly, the same cannot be termed as Consulting Engineering Service , therefore, no service tax is payable by the appellants on the said Supervision Charges. Works Income - HELD THAT:- The said activity has been hired by the appellants for testing of the soil of the industrial area, which were beneficiaries to the land allottees, which do not qualify as Technical Testing and Analysis Service . Therefore, on the said amount received by the appellant, the appellant is not liable to pay service tax. Income from Ekamra Hat - HELD THAT:- The said activity does not qualify as Renting of Immovable Property Service. In that circumstances, no service tax can be demanded from the appellants under Renting Immovable Property Service, but service tax paid under Mandap Keeper Service by the appellant is correct and the same is payable by the appellants under Mandap Keeper Services. Rent received from Industrial Estates - HELD THAT:- It is the contention of the appellant that this rent collected are to cover up the cost of repair, maintenance of Sheds, Plots in Industrial Estates, Capital Expenditure on Roads, Water and Engineering System as well as Electrical Installation under Section 17 of IDCO Act, 1980 - It is found that the same is statutory levy in terms of IDCO Act, 1980, therefore, no service tax is payable by the appellant on the said rent received by the appellant. Interest received on plots - Interest received on sheds - HELD THAT:- The appellant has received the interest on delayed payment of dues of HP dues, Ground rent, cess, water charges and other payments from plot holders/share-holders. The said interest received is not related any service provided by the appellant. In that circumstances, the appellant is not liable to pay service tax. Occupation Charges realized from Industrial Estates - HELD THAT:- These charges are the levy as occupied the land unauthorizedly, which cannot be terms as Renting Immovable Property, therefore, no service tax is payable by the appellant from the said services. Water Charges realized from Industrial Estate, Buildings and Tenants - HELD THAT:- The appellant is collecting water charges in terms of Orissa Irrigation Act, 1959 and required for water supply to the Industrial Estate, Buildings and Tenants. These are the water charges. Therefore, it cannot be termed as Renting Immovable Property. Therefore, the said activity is not liable to service tax under Renting Immovable Property. Therefore, no service tax is payable on the appellant on the said services. Ground Rent Collection - Cess Collection - HELD THAT:- The said collections are statutory levy, which the appellants collected from the allottees and transferred the same to the concerned officers, Revenue Department, Government of Orissa. Therefore, the said service cannot be said as Renting of Immovable Property and accordingly, no service tax is payable by the appellant on the said activity. Maintenance Charges Realized - HELD THAT:- On payment by the appellant to the outsource agency and paid the service tax thereon, is also entitled for cenvat credit of service tax paid on hiring charges by the appellant. In that circumstances, the appellant is liable to pay service tax under the category of Maintenance and Repair Service on the maintenance charges recovered by the appellant. Infrastructure Maintenance Charges Realized - HELD THAT:- The appellant is maintaining roads, electricity supply facilities and provided water supply system and repair maintenance of those assurances and also suffer from huge loss on the said account due to non-recovery of IMD from sick units and the said charges have been recovered by the appellant in terms of Section 17 of IDCO Act, 1980 as these are the statutory levy and the maintenance and repair etc. are not chargeable to service tax, which are the statutory functions provided by the appellant. Therefore, the said services do not qualify as maintenance and repair service. Accordingly, no service tax is payable by the appellant on the said charges. Interest receipts on Land (Duburi Steel Complex) - HELD THAT:- The appellant allotted lands to Industries on payment land cost to be paid on instalments and in case default in payment of installments, interest is collected by the appellant from Duburi Steel Complex. The said interest collected for lease of land to the industries is not chargable to service tax under the category of Renting and Immovable Property and the same cannot be terms as Renting and Immovable Property. In that circumstances, no service tax is payable by the appellant on the said services. Contract Receipts (Construction) - HELD THAT:- The appellant gets Work orders from Government/ Corporations for construction of Government/Corporation Buildings as per the direction of the Government and out of estimated amount, the appellant gets supervision charges @ 8% of the actual expenditure with additional incentive of 2% for timely compliance of the awarded work in accordance with the plan, design prepared by IDCO and accepted by Government Building including Government College Buildings as per Work procedure issued by Government of Odisha in OPWD, Works Department - The said activity of the appellant of works order, the appellant is paying service tax under Commercial and Industrial Construction Services and the same is liable as Commercial and Industrial Construction Service , therefore, the same amount is confirmed against the appellant. Thus, the appellant is liable to pay the service tax on income from Ekama Hat under heading Mandap Keeper Service , the charges under the category of Maintenance and Repair Service and contract receipts under the category of Commercial and Industrial Construction Service . Penalties - HELD THAT:- No penalty is imposed on the appellants. Accordingly, the same is dropped. Appeal disposed off.
-
2023 (11) TMI 307
Levy of Service Tax - Business Auxiliary Service or not - amount received by it as incentive in respect of sale of goods - HELD THAT:- It is noticed that Learned Commissioner had distinguished the ratio of M/s Sai Service Station Ltd., [ 2013 (10) TMI 1155 - CESTAT MUMBAI ] in stating that in that case incentives were paid in connection with sale of excisable goods by the manufacturer to the dealer which were held as trade discount but the same is not the situation in case of the present Appellant. Such an observation appears to be erroneous for the reason that in the summary of the incentive received, which is annexed to the notice under Sec 73 (1A), clearly indicates that against purchase of 4 items namely vehicles and it s components, incentives were given to the Appellant and the same can t be considered as paid against any service since paid against sale of goods. The order passed by the Commissioner in Order-in-Original is hereby set aside with consequential relief, if any - Appeal allowed.
-
2023 (11) TMI 306
Rejection of refund claim - scope of SCN - SCN proposed for rejection of the refund claim in terms of Rule 9(c) of the Place of Provision of Services Rules, 2012, whereas the learned Pr. ADG has rejected the refund benefit by applying Rule 4 of the said Rules - HELD THAT:- The show-cause notice dated 20.07.2015 had proposed for denial of the refund benefit, holding that the appellants are an intermediary and as such, their case falls under Rule 9(c) ibid and as such, the services provided by them do not fall under the category of Export of Service for the purpose of grant of the refund benefit. The original authority while adjudicating the show-cause notice dated 20.07.2015 had dropped the proposals made therein and had considered that the services provided by the appellant qualify as Export of Service for the purpose of grant of benefit of the refund provided under Rule 5 ibid read with Notification issued thereunder. However, on appeal filed against the said original order by the Revenue, the learned Pr. ADG has taken entirely a different view and accepted the appeal filed by the Revenue holding that the appellant should not be entitled for refund in terms of Rule 4 ibid. Hence, it is evident that the learned Pr. ADG has gone beyond the scope of show-cause notice. It is settled law that show-cause notice is the foundation on which the Department must build up its case and the Department cannot urge new grounds/points which were never raised in the show-cause notice. It is also settled by the Hon'ble Supreme Court that Review proceedings cannot go beyond the grounds taken in the show-cause notice, as held in the cases of COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S BALLARPUR INDUSTRIES LTD [ 2007 (8) TMI 10 - SUPREME COURT ], CCE VERSUS SHITAL INTERNATIONAL [ 2010 (10) TMI 19 - SUPREME COURT ] and THE COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-I VERSUS M/S. CHAMPDANY INDUSTRIES LIMITED [ 2009 (9) TMI 7 - SUPREME COURT ] that the show-cause notice is the foundation in the matter of levy and recovery of duty, penalty and interest. Thus, Revenue cannot take a new ground at the appellate stage which was not canvassed in the show-cause notice issued by the Department. In the circumstances of the present case, since the learned Commissioner (Appeals) has traveled beyond the scope of the show-cause notice and applied entirely the different rule for rejection of refund benefit in favour of the appellant, the impugned order cannot sustain for judicial scrutiny. Appeal allowed.
-
Central Excise
-
2023 (11) TMI 305
Exemption from payment of National Calamity Contingent Duty (NCCD) as per notification 67/95-CE dt. 16.03.1995 - Manufacture of Dumper trucks and Dumper trucks without body (Chassis with Cabin) - Captive consumption/intermediate product - Classification of the impugned chassis. The Dumper Truck was manufactured by fixing the load body on the chassis with cabin - exemption from NCCD denied on the ground that the chassis is thus captively consumed in the production of final product, viz., Dumper Truck. Whether the appellant is liable to pay NCCD on Dumper chassis as an intermediate product? HELD THAT:- The Dumper without the body cannot be treated as a chassis of a dumper, for the reason that it appears to have all the essential features of a dumper, except for that it is not fitted with the body. As per Note (2) of the Interpretative Rules to the Central Excise Tariff Act, 1985 which has been already noticed in para 6.1 of this order, when the incomplete or unfinished article has the essential character of the complete or finished article, such unfinished article merits classification under the heading of the complete or finished article. The Ld. Counsel for the appellant has emphasized that there is no practice in the market to sell a chassis of a Dumper. The reason in the impugned order to hold that an intermediate marketable product emerges is not based on the process/ stages of manufacture. The reason is that the appellant while making some exports had described the product as chassis with cabin assembly in the export documents. The exigibility to duty of a product cannot merely be based on how the assessee described the product in a document. In case of dispute, the department has to clearly state in the SHOW CAUSE NOTICE the nature, classification and dutiability of the product - The Tribunal in the case of COMMISSIONER OF C. EX., MYSORE VERSUS BHARAT EARTH MOVERS LTD. [ 2009 (10) TMI 748 - CESTAT BANGALORE] has categorically held that the demand of NCCD cannot sustain as there is no intermediate, identifiable and marketable product viz. Dumper chassis emerging in the process of manufacture of dumpers. The issue as to whether NCCD is payable on dumper chassis was also held in favour of assessee by the Tribunal. In the case of BAJAJ AUTO LIMITED VERSUS UNION OF INDIA OTHERS [ 2019 (3) TMI 1427 - SUPREME COURT ] the Hon ble Apex Court was considering the issue as to whether the area-based exemption notification no.50/2003-CE dated 10.06.2003 issued under Section 5A of CE Act, 1944, would be applicable to NCCD also. The Hon ble Apex Court held the issue in favour of assessee and that the appellant would not be liable to pay the NCCD. Thus, the issue as to whether the exemption under notification 67/95 is available to NCCD is to be answered in the affirmative and in favour of the assessee. The demand of NCCD therefore cannot sustain and requires to be set aside. Classification of the impugned chassis, the alleged intermediate product - HELD THAT:- As the issue is decided on merits as to whether the exemption under notification 67/95 is available to NCCD in favour of assessee, it is not necessary to delve into these arguments on classification. It is clarified that no decision rendered on the classification of the impugned goods the findings are confined as to whether the demand of NCCD is sustainable or not. The impugned order is set aside - The appeal is allowed.
-
2023 (11) TMI 304
CENVAT Credit - input services - Renting of immovable property - Business support services and Business Auxiliary service - Election Commissioning Service - Sponsorship services - Warehouse services - General insurance services - Courier services - Telephone services - Air Travel Agency - Pandal and Shamiyana Services - Credit denied mainly on the ground that since all the subject services are not mentioned in the inclusive part of the definition, the same do not qualify as input service - period August 2012 to November 2012 - HELD THAT:- Since a manufacturing unit when manufacture goods there are various activities of the services which are used directly or indirectly exclusively in relation to the manufacture of the goods. it is not a case of the department that the appellant is carrying out any other activity other than the manufacture - only on the ground that the input services are not mentioned in the inclusive part of the definition cannot be a reason for denial of Cenvat Credit. Since the appellant are exclusively involved in manufacturing operational in both their unit. The corporate office is operated only for the operation of the manufacturing of the final product. Therefore, it cannot be said that the corporate office is not used in or in relation to manufacture of final product. All the services are admissible input service qualify under the definition of input service provided under Rule 2(l) of the Cenvat Credit Rules, 2004. Therefore, the appellant are clearly entitled for the Cenvat Credit on such services. The impugned order is set aside, appeal is allowed.
-
2023 (11) TMI 303
Maintainability of appeal - Rebate of duty on the finished goods exported - whether appeal is not maintainable in this Tribunal in terms of Section 35 B of Central Excise Act, 1944, in respect of goods exported out of country? - HELD THAT:- From the section 35 B as per the proviso therein clause (b) any order referred in clause (b) if such order relates to rebate of duty of excise on goods exported to any country, no appeal against such order shall lie to this Appellate Tribunal. Accordingly, as per the clear statute of Section 35 B the present appeal is not maintainable before this Tribunal. Therefore, the revenue appeal is dismissed as non-maintainable.
-
2023 (11) TMI 302
Excisability - books used for internal administration and record keeping in the zonal railway that were printed at zonal railway press - HELD THAT:- The issue in dispute is squarely covered by the decision of the Tribunal in re Dy Chief Manager (P S), Central Railway [ 2015 (6) TMI 374 - CESTAT MUMBAI ] in relation to the same activity undertaken by the Central Railway which held that product in question are not dutiable on both the counts of classification as well as marketability. The impugned orders lack merit - Appeal allowed.
-
2023 (11) TMI 301
Method of Valuation - physician sample to be in accordance with Rule 8 or Rule 4 of the Central Excise (Valuation) Rules, 2000? - HELD THAT:- The Hon ble Supreme Court in MEDLEY PHARMACEUTICALS LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [ 2011 (1) TMI 13 - SUPREME COURT] has held that physician samples have to be valued on pro-rata basis for the relevant period. The impugned order is upheld and the appeal being devoid of merit, accordingly is dismissed.
-
2023 (11) TMI 300
Method of Valuation - related parties - allegation is that the appellant has been clearing the finished products at lesser value to the buyer M/s Gera Enterprises, Faridabad - time limitation - Suppression of facts or not - HELD THAT:- In the present case, the demand has been confirmed by relying upon Rule 8 and 9 of Central Excise Valuation Rules, 2000 whereas it is an admitted fact in the show cause notice that the entire production has not been cleared to a related person M/s Gera Enterprises in this case. In the show cause notice itself it has been stated that the noticee has been clearing the finished goods at lesser (assessable) value to M/s Gera Enterprises as compared to other customers. Once this fact is admitted then applying Rule 9 is not legally sustainable in view of the larger bench decision of the Tribunal in the case ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [ 2007 (2) TMI 5 - CESTAT, MUMBAI] . Besides, this Tribunal in the case of SUDERSHAN CASTINGS PVT. LTD., SUDERSHAN STEELS PVT. LTD., TRIKUTA STEEL ROLLING MILLS, ROMESH CHANDER GUPTA, SHRI. NARINDER KUMAR GUPTA, MG. DIRECTOR OF SHRI SUDERSHAN KUMAR SHARMA VERSUS CCE, JAMMU. [ 2017 (5) TMI 1816 - CESTAT CHANDIGARH] held that when the goods are sold to related persons as well as to independent buyers, in that case, Rule 9 will not be applicable. Time Limitation - HELD THAT:- The appellant has been filing the monthly returns regularly and has not concealed any material fact from the department. Therefore, alleging suppression or fraud to invoke the extended period of limitation is not legally sustainable. The impugned order is not sustainable in law and the same is set-aside by allowing the appeal of the appellant.
-
2023 (11) TMI 299
CENVAT Credit - input services - outward freight paid in respect of transportation of final products up to delivery - Revenue contended that the place of removal for clearance of the finished goods of the assessee is factory gate/depot and not the customers' premises - HELD THAT:- The finding recorded by the Commissioner in the impugned order is that the goods were cleared by the appellant on FOR basis then in view of the circular No 1065/4/2018-CX dated 08.06.2018 the place of removal will be the place of delivery of goods and the CENVAT Credit on services of GTA till that point will be admissible. The issue is no longer res-integra and Mumbai bench has in case of M/S. CEAT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III [ 2022 (10) TMI 1213 - CESTAT MUMBAI] decided the issue following the said circular - there are no merits in the impugned order - appeal allowed.
-
CST, VAT & Sales Tax
-
2023 (11) TMI 298
Interpretation of statute - Section 13(1)(f) of the UP VAT Act - Claim of full ITC on inputs - amount of tax paid towards the purchase of raw Rice Bran - scope of the word goods as defined under Section 2(m) of the UP VAT Act as outlined in Section 13(1)(f) of the UP VAT Act should be limited to only taxable goods or not - applicability of decision of this Court in the case of M.K. Agro Tech [ 2017 (9) TMI 1308 - SUPREME COURT ]. HELD THAT:- A bare perusal of the scheme under Section 13 of the UP VAT Act [and specifically under Section 13(1)(a)] makes it abundantly clear that in cases where the purchased goods (in the present case Rice Bran) are used in the manufacture of taxable goods (in the present case RBO and physically refined RBO) except the non-VAT goods, and where such manufactured goods are sold within the State or in the course of inter-state trade and commerce, the registered dealers (like the assessee herein) are entitled to claim input tax credit of the full amount. The charging section of the UP VAT Act, therefore, entitles the assessee to claim full amount of tax paid on the purchases as ITC - Furthermore, Section 13(3)(b) of the UP VAT Act, introduces the concept of proportionality in the scheme of the enactment and by means of a deeming fiction provides that where during the manufacture of VAT goods, exempt and non-VAT goods (except as by-product or waste product) are produced, the amount of ITC credit may be claimed and may be allowed in proportion to the extent they are used or consumed in manufacture of taxable goods other than the non-VAT goods and exempt goods. Explanation (iii) to Section 13, therefore, forbids the Assessing Authority as well as the assessee from raising any dispute in regard to the allowability of the ITC in cases where exempted goods are being produced as a by-product or waste product during the process of manufacture. Whether the High Court was right in placing on the decision of this court in the case of M.K. Agro Tech? - HELD THAT:- In the case of M.K. Agro Tech, the assessee was engaged in the manufacture of sunflower oil (taxable goods), which is extracted from sunflower cake, by employing solvent extraction process. Sunflower oil cake is the input/raw material on which VAT was payable. During the extraction process, a by-product in the form of de-oiled sunflower oil is produced. The said by-product was also exempted under the Karnataka VAT Act - This Court while examining Section 17 of the KVAT Act, read with Rule 131 of the KVAT Rules, held that ITC was admissible to the extent of inputs used in the sale of taxable goods. In the case of M.K. Agro Tech, this Court held that only partial ITC was permitted to the assessee as they were making taxable and exempted sales from the dutiable raw materials procured by them. In Para 28, this Court has elaborated on the scheme under the Karnataka VAT Act, to emphasise that the provision which allows partial rebate is made applicable on the sales of taxable goods and goods exempt under Section 5. It refers to sale of goods , taxable as well as exempt, and is not relatable to the manufacture of the goods. Further elaboration has been made to hold that upon the sale of goods exempted under Section 5 of the Karnataka VAT Act, partial rebate shall only be admissible - The High Court committed an error in passing the impugned judgment relying on the decision of this Court rendered in M.K. Agro Tech. The impugned common judgment and order passed by the High Court of Allahabad is hereby set aside and the orders passed by the Commercial Tax Tribunal dated 04.05.2016 and 05.07.2017 are hereby restored - appeal allowed.
|
