TMI Tax Updates - e-Newsletter
February 12, 2024

Case Laws in this Newsletter:

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

Articles

1. GST Authorities can’t raise new grounds or arguments that are not part of the SCN

   By: Bimal jain

2. Excess stock found during survey – business income or undisclosed investments

   By: Vivek Jalan

3. NEW PENAL PROVISION IN GST

   By: Dr. Sanjiv Agarwal

4. Assessee not liable to pay interest when GST amount deposited within prescribed time period but returns Form GSTR-3B were filed belatedly post due-date

   By: Bimal jain

News

1. DPIIT holds consultation with representatives of Indian Cement Industry on CIS portal for collection of cement production data

2. Existing IPR regime well-equipped to protect AI generated works, no need to create separate category of rights

3. DPIIT coordinates initiatives for Ease of Doing Business creating a conducive business environment

4. Startup India Seed Fund Scheme provides financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization

5. GeM to enhance reach of Odisha-based businesses affiliated with ORMAS

6. Government of India and ADB sign $200 million loan to tackle flood and erosion risk along Brahmaputra river

7. Sovereign Gold Bond Scheme 2023-24 (Series IV) will open for subscription from 12th-16th February, 2024

8. DFS Secretary chairs follow-up meeting with stakeholders from 12 organisations on Cyber Security in Financial Services Sector and Online Financial Frauds

Notifications

GST - States

1. S.O. 50 - dated 12-1-2024 - Jammu & Kashmir SGST

Amendment in Notification No. S.O. GST No.105/2023-Tax, dated the 3rd March, 2023

2. S.O. 46 - dated 12-1-2024 - Jammu & Kashmir SGST

Jammu and Kashmir Goods and Services Tax (Fourth Amendment) Rules, 2023

3. S.O. 44 - dated 12-1-2024 - Jammu & Kashmir SGST

Amendment in Notification No. SRO-GST 4/2017, dated the 08th July, 2017

4. S.O. 43 - dated 12-1-2024 - Jammu & Kashmir SGST

Amendment in Notification No. SRO-GST 5/2017, dated the 08th July, 2017

5. S.O. 42 - dated 12-1-2024 - Jammu & Kashmir SGST

Seeks to notify a special procedure for condonation of delay in filing of appeals against demand orders passed until 31st March, 2023.

6. S.O. 41 - dated 12-1-2024 - Jammu & Kashmir SGST

Seeks to amend Notification SRO-GST 1/2017, dated the 08th July, 2017

Highlights / Catch Notes

GST

• ITC Restriction Upheld: No Input Tax Credit for Construction Expenses Regardless of Capitalization Status.

  Case-Laws - AAAR : Ineligibility for claiming ITC on inward supplies of goods or services used for construction on account of own use - The appellant contested the restriction on ITC for immovable property construction, arguing it should apply only to capitalized expenses. The respondent countered that the restriction applies regardless of capitalization. The Appellate Authority (AAAR) affirmed that the restriction applies to all construction expenses, regardless of capitalization, concluding that ITC for such construction is not available.
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• GST Exemption Denied: Imported Goods Lose Agricultural Produce Status After Value Addition and Sales.

  Case-Laws - AAAR : Exemption from GST - items imported and the services rendered by the applicant is in relation to loading, unloading, packing, storage and warehousing of ‘agricultural produce’ or not - AAR has given a ruling against the applicant. - After enduring multiple value additions and sales, the goods when imported into India, forfeits the quality to be considered as ‘marketable for primary market’. - The AAAR (appellate authority) upheld the ruling of the WBAAR, stating that the imported products did not meet the criteria to be considered as agricultural produce under GST laws.
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Income Tax

• Court Upholds Validity of Proceedings Despite Identical Satisfaction Notes in Section 153C Inquiry.

  Case-Laws - HC : Validity of Initiation of proceedings u/s 153C - as argued satisfaction note of the searched person and satisfaction note of the petitioner (other than the searched person) are verbatim, proceedings are invalid - The High Court observed that, having noted the fact that the satisfaction note of the AO of the petitioner assessee has not been brought on record and moreover, the assessment note of the AO of the searched person indicates a prima facie case of inquiry against the petitioner, we do not find any substance in the argument of the learned Senior Counsel that the satisfaction note of the AO of the petitioner is to be discarded being a copy in verbatim of the satisfaction note of the AO of the searched person.
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• Court Confirms Tax Additions for Unexplained Bank Balances; Passbooks Not Books of Account, Creditworthiness Unproven.

  Case-Laws - HC : Addition u/s 68 - unexplained balance in corporation bank - as argued pass book cannot be treated as books of account - The High Court has observed that, even assuming the contention of the petitioner that passbook cannot be treated as part of Books of Accounts to be true; admittedly, the source of income in the case of both the assesses has not been proved; inasmuch as, both the assesses have failed to prove the identity/creditworthiness/genuineness of the creditors, who have given cash loan as claimed by them. Further, the HC has held that, only for not mentioning the correct provision in the assessment order an amount which may be an income under any of the provisions of the Act; cannot be allowed to go untaxed. - Additions confirmed.
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• Court Quashes Tax Reopening Due to Procedural Lapses, Jurisdictional Overreach, and Monetary Limit Misapplication.

  Case-Laws - HC : Validity of reopening proceedings - assessing authority not considering the reply-cum-objection filed by the petitioner - Period of limitation where monetary limit is below threshold of Rs. 50 lakhs - Joint Ownership of the property - The High Court quashed the entire enquiry proceeding, including the order under section 148A(d) of the Act and the notice issued under Section 148, deeming them beyond jurisdiction and barred by limitation. The court allowed the petitioner's application, emphasizing the procedural lapses and the incorrect application of the law by the tax department in this case.
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• Criminal Charges Against Dissolved Company Quashed; Proceedings May Target Responsible Individuals Instead.

  Case-Laws - HC : Continuation of criminal proceedings as against company no longer in existence/ dissolved/ amalgamated - Protection u/s 32 of IBC - The High Court held that, A2 has already died and therefore, the charge abates insofar as A2 is concerned. Company has been taken over by a new management and the criminal liability cannot be passed on to the new management. Accordingly, the proceedings as against A1 company in all these complaints stands quashed. - It is left open to the respondent to identify the persons who were in-charge of running the company and were involved in the day today affairs of the company during the relevant point of time and it will be left open to the respondent to continue the criminal prosecution as against those officers.
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• Tribunal Rules Share Premiums to Existing Shareholders May Not Trigger Unlawful Gain Provisions.

  Case-Laws - AT : Addition on account of share premium received on the contours of Section 56(2)(viib) - Premium has been charged to existing shareholder - Related parties / subscriber having pre-existing right in the company. - The Tribunal observed that where the shares are allotted to existing shareholders, the deeming provisions may not be applicable. The courts emphasized that the purpose behind Section 56(2)(viib) is to prevent unlawful gains, which may not arise in transactions between related companies. - CIT(A) rightly deleted the additions.
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• Cash Loan Penalty Overturned: ITAT Accepts Loans from Relatives as Gifts, Orders Penalty Removal Under Sec 271D.

  Case-Laws - AT : Penalty levied u/s 271D - assessee has availed cash loan in contravention of provision of section 269SS - Assessee has submitted that though the assessee has initially availed loans from close relatives, which were subsequently the loans, were treated as gift and credited to his capital account, therefore, levy of penalty under section 271D of the Act is unwarranted - The Tribunal found the explanations offered by the appellant reasonable, especially considering the confirmation letters from the lenders, and the circumstances surrounding the transactions. Accordingly, ITAT directed the AO to delete the penalty.
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• Tribunal Grants Tax Exemption After Late Submission of Form 10B; Overrules CPC's Initial Adjustment Decision.

  Case-Laws - AT : Adjustment made to the income returned in the intimation made by the CPC u/s 143(1) - exemption u/s 11/12 denied as assessee had failed to furnish the necessary Form 10B one month prior to the due date of filing of return of income u/s 139(1) - procedural v/s mandatory requirement - the assessee had demonstrated to the ld. CIT(A) that the necessary Form 10B had been prepared much in advance before the due date of filing of return of income and had been filed before the ld. CIT(A) also. - the Tribunal held that the assessee's claim of exemption to its entire income under Sections 11 and 12 of the Act should be allowed.
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• Interest on Tax Refund in India Taxed at 10% Under India-France DTAA; Not Linked to Permanent Establishment.

  Case-Laws - AT : Taxability of interest on income tax refund received - PE in India or not? - whether shall be taxable as business income under Article 7 of India-France DTAA as against offered to tax as interest income under Article 12 of India-France DTAA ? - The Tribunal held that the interest on income tax refund is to be taxed at the rate of 10% under Article 12 of the India-France DTAA, as it was not effectively connected with the Permanent Establishment in India.
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• Tribunal Overturns Arbitrary Disallowance of 50% Back Office Charges, Citing Acknowledged Benefits to Assessee.

  Case-Laws - AT : Disallowance u/s. 40A(2) - addition being 50% of the total back office charges paid to group consultant - The Tribunal held that, AO has observed that the assessee may have benefitted from the bulk or centralized purchasing done though to group consultant but it does not justify the entire payment. Once it is accepted by the AO that the assessee is benefited through to group consultant , no adhoc disallowance is called for - we delete the disallowance u/s. 40A(2) of the Act.
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• ITAT Rules Assessee Must Prove Stock Availability Amidst Allegations of Bogus Sales and Discrepancies in Cash Deposits.

  Case-Laws - AT : Deposits of demonetized currencies - substantial increase in cash sales - The Assessing Officer highlighted instances of negative closing stock figures in the gold jewels register, indicating possible bogus sales. - The ITAT held that, it is the duty of the assessee to establish that there is sufficient stock available with the assessee and subsequently, sale was made. Thus, the preponderance of probability in favour of the assessee cannot be applied in this case.
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• ITAT Rules Suspicion Insufficient for Reopening Assessment; Dismisses Claims of Bogus Transactions in Penny Stock Case.

  Case-Laws - AT : Validity of reopening of assessment u/s 147 - addition made on account of unexplained money u/s 69A - as alleged consideration was obtained by the assessee from the secondary market out of artificial price rigging of shares of KAFL in connivance with the entry operators - off market purchase of shares - The ITAT held that, merely because a particular scrip is identified as a penny stock by the income tax department, it does not mean all the transactions carried out in that scrip would be bogus. - The transactions of sale of shares were done in online platform of BSE through the registered share broker from whom the received the sale consideration. - Finally ITAT held that, the findings of AO are based on suspicion, surmises and hearsay. It is trite law that the suspicion howsoever strong cannot partake the character of legal evidence.
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• ITAT Upholds 5% Tolerance in Transfer Pricing, Confirms ALP for IT and ITES Segments Needs No Adjustments.

  Case-Laws - AT : TP Adjustment - comparable selection - ALP which is worked out after applying the 5% range - Application of Tolerance Range - The ITAT found that the CIT(A) correctly applied the tolerance range, showing that the assessee's prices for ITES and IT segments were within the permissible limits, negating the need for any transfer pricing adjustments.
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• Income Tax Tribunal Upholds Decision to Delete Additions Due to Assessee's Evidence Proving Transaction Genuineness.

  Case-Laws - AT : Undisclosed cash credit u/s 68 - non-appearance of directors - As per DR assessee has failed to prove the genuineness of transaction and creditworthiness of the share applicants - The Ld. CIT(A) found that the AO did not properly consider the documentary evidence provided by the assessee, including the identities and creditworthiness of the share applicants and the genuineness of the transactions. - Accordingly, the ITAT confirmed the order of CIT(A) deleting the additions.
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• Excess Stock Income Classified as Business Earnings, Not Subject to Higher Tax Rate for Undisclosed Sources.

  Case-Laws - AT : Additional income offered on account of excess stock during the course of survey - business income of the assessee OR income from other sources liable to be taxed at a higher rate prescribed u/s 115BBE - The Tribunal held that, The ITAT dismissed the Revenue's appeal, confirming that the additional income from excess stock declared during the survey constitutes business income, not subject to the provisions of section 115BBE. This decision underscores the principle that income from regular business operations, even if not previously disclosed, should be taxed as business income rather than at the higher rates applicable to undisclosed sources.
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• Tribunal Allows Depreciation on Goodwill from Slump Sale; Finance Act 2021 Amendment Not Retroactive.

  Case-Laws - AT : Depreciation claimed by the appellant - goodwill acquired under slump sale - The tribunal noted that, The amendment brought in by the Finance Act 2021 and the Memorandum explaining the provisions of the Bill makes it explicitly clear that, the amendment was prospective. - Regarding valuation, ITAT observed that, we come to the reasonablness of the valuation exercise of the goodwill at Rs. 160 crores, it is indeed true that since the transaction was with a related party, the fair market valuation ought to be examined; but at the same time, on the specific facts of this case, it is necessary to also take cognizance of the material information that the excess consideration (towards goodwill) paid by the appellant to VEGL was offerred by the latter as taxable capital gains in its hands. - AO directed to allow the claim of depreciation.
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• Income from Star World Channel Transfer Not Taxable in India Due to Offshore Ownership, Tribunal Rules.

  Case-Laws - AT : Taxability of income from transfer of channel as short term capital gains - taxability in India or not? - The tribunal observed that, it is established that the ownership of the Star World channel is outside India - ccordingly in our considered view, the income arising out of the transfer of Star World channel, being an asset outside India by the assessee to SIML will not fall within the provisions of section 9(1)(i) and accordingly not taxable in India.
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• Foreign Exchange Gain from Vessel Contract Cancellation Ruled as Non-Taxable Capital Receipt by ITAT.

  Case-Laws - AT : Revenue receipt or capital receipt - Foreign exchange gain written back on cancellation of vessel construction contract taxed u/s. 28(iv) - The ITAT agreed with the assessee, holding that the gain was a capital receipt not taxable under Section 28(iv) of the Act. This decision underscores the differentiation between capital and revenue receipts, particularly in the context of foreign exchange gains related to capital assets.
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Customs

• Exporters Cleared of Penalty in Red Sanders Smuggling Case Due to Lack of Evidence and Incomplete Investigation.

  Case-Laws - AT : Levy of penalty u/s 114AA of Customs Act, 1962 - Smuggling - Red Sanders - prohibited goods or not - There is total lack of investigation on the aspects of who broke the seals on the plot enroute and how they got substituted and where have the substituted goods gone. Main culprits are still at large. - CESTAT held that, Exporters earning precious foreign exchange cannot be allowed to be victimised and still further penalised. The lack of knowledge brought on record by the Commissioner (Appeals) in his findings is supported in evidence not only by various statements but also circumstantial evidence. The incomplete investigation coupled with all above narrative does not justify imputation of malafide and penalties under Section 114 (i) and Section 114AA. - No penalty.
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• Customs Broker's License Revoked for Misrepresenting Psychotropic Substances as Green Tea; Penalty Upheld.

  Case-Laws - AT : Revocation of Customs Brokers licence - forfeiture of security deposit - Levy of penalty - The appellant consistently misrepresented the imported goods as Green Tea, contrary to their actual nature. - The Tribunal held that, a Customs Broker is expected to behave and operate responsibly and he cannot simply file benami Bills of Entry which, in this case, resulted in import of a psychotropic substance. Filing of Benami Bills of Entry, if condoned, can have severe consequences. Customs procedures are based on trust and selective controls based on risk assessment. If Customs Brokers start filing Benami Bills of Entry, in the name of any importer, it can open the floodgates for free import of any contraband including, drugs, arms and explosives. - CESTAT upheld the impugned order, rejecting the appellant's appeal.
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• Tribunal Denies Apple Import Exemption Due to Invalid COO, Finds No Evidence Against Importer for Forgery.

  Case-Laws - AT : Import of Apples - authenticity of the Country of Origin Certificate (COO) - Imports from South Asian countries under South Asian Free trade agreement (SAFTA) - CESTAT upheld the exemption denial, agreeing the COOs were not validly issued. However, it found no evidence implicating Asra Enterprises in document fabrication or forgery, noting the importer's reliance on supplier-provided documents and lack of intent to evade duty.
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• Tribunal Rules Against Retroactive Application of New DFIA Condition, Invalidating Duty Demands on Past Imports.

  Case-Laws - AT : DFIA scheme - exemption from basic customs duty and additional customs duty - introduction of new condition by way of amendment - The tribunal held that, the amendment couldn't be applied retrospectively to imports cleared before its introduction. Since some of the appellant's imports fell into this period, the demand for duty and penalties based on the new condition was invalid. - The CESTAT found no evidence of fraud, misrepresentation, or deliberate evasion of duty by the appellant. The failure to fulfill the new condition was considered a procedural violation, not a misdeclaration.
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Corporate Law

• Tribunal Confirms Dismissal of Appeal for Revival Due to Late Filing of Returns Under Companies Act 2013.

  Case-Laws - AT : Revival of the Appellant / Company - Removal the company for non-filing of Annual Return - Going Concern or not - NCLAT found no error in the NCLT's decision, emphasizing that the appellant failed to file the application within two years as required for rectification under Section 420 of the Companies Act, 2013. The NCLAT concluded that the appeal lacked merit, upholding the NCLT's decision not to reconsider the revival based on additional documents submitted beyond the prescribed period.
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Indian Laws

• Court Affirms Rule Allowing Disciplinary Action Against Accountants Despite Initial Findings of No Misconduct.

  Case-Laws - SC : Jurisdiction - Constitutional Validity of Rule 9(3)(b) of the Chartered Accountants’ (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 - While dismissing the appeal, The Apex Court concluded that the rule, which allows the Board of Discipline to proceed further or refer the matter to the Disciplinary Committee even when the Director (Discipline) finds no prima facie case of misconduct, is consistent with the general power to make rules under Section 29A(1) of the Chartered Accountants Act, 1949. - This ensures that complaints of professional misconduct are thoroughly examined, aligning with the Act's objective to maintain ethical standards within the profession.
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• Company's Role in Cheque Dishonor Cases: Employee or Representative Acts as De Facto Complainant u/s 138.

  Case-Laws - HC : Dishonour of Cheque - The High Court hedl that, where the company is a complainant, who will represent the company, and how the company will be represented in 138 proceedings is not covered by the Code. Section 200 of the Code mandatory requires an examination of the complaint, and whether the complainant is an incorporeal body, it is only one of its employee or authorized representative can be examined on behalf of the company. With the result, the company becomes a dejure complainant and the person, who is representing the company whether it is employee or the authorized representative becomes de facto complainant, thus, in every complaint lodged by a company, which is a separate juristic personality, there is a complainant dejure and a complainant de facto.
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• Cross-examining a witness thoroughly negates further questioning; misuse of legal process delays justice in NI Act cases.

  Case-Laws - HC : Dishonour of cheque - Cross-examination of complainant - The Court held that, it is clear that the petitioner had extensively questioned the complainant in his cross-examination, and there is no ground to further examine the complainant. In these circumstances, this Court is of the opinion that the provisions of Section 391 of Cr.P.C. cannot be used to delay the proceedings or to cause inconvenience to the other party as that also amounts to miscarriage of justice by delaying the proceedings under Section 138 NI Act, and abuse of process of law, especially in cases where complainant has already been cross-examined in detail and no grounds are shown to recall the witness.
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IBC

• Supreme Court Affirms NCLAT Decision: Section 9 Insolvency Application Barred by Time, Dismisses Creditor's Appeal.

  Case-Laws - SC : Maintainability of section 9 application - initiation of CIRP - It was held by NCLAT that The present was a case filed by the Operational Creditor only for recovery of its contractual dues with regard to default committed as per the case of the Appellant on 30.04.2015 for stage 1 and 23.10.2018 for stage 2. The Adjudicating Authority did not commit any error in rejecting Section 9 application as barred by time. - Now the Supreme Court, 3 member bench, has dismissed the appeal against the decision of NCLAT.
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• Tribunal Upholds Liquidation Order, Finds No Irregularity in Creditors' Decision; Commercial Wisdom Prevails.

  Case-Laws - AT : Liquidation of Corporate Debtor - CoC’s decision to liquidate was tainted with material irregularity and arbitrariness or not - the NCLAT found no material irregularity in the CoC's decision. It was emphasized that the commercial wisdom of the CoC is paramount and not subject to judicial review unless specific grounds under the IBC are met, which were not in this case. The appellants' willingness to submit a resolution plan and their classification as a willful defaulter were also discussed, but these did not influence the tribunal's decision to uphold the liquidation order.
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PMLA

• Court Affirms Authority's Right to Determine Crime Proceeds, Separates PMLA and IPC Offences for Individual Prosecution.

  Case-Laws - HC : Provisional Attachment Order - Money Laundering - proceeds of crime - Petitioner being Housewife - The High Court held that, The present case is not a case of patent lack of jurisdiction. The Adjudicating Authority has the power to look into the facts of the case of the Petitioner before coming to a conclusion as to whether the properties in question are proceeds of crime or not. - The HC further held that, Merely because proceedings have been dropped against some individuals does not mean that the proceedings against the Petitioner should or will be dropped. The offences under the PMLA Act are distinct from offences under the IPC. The companies can still be convicted for the predicate offence and the Petitioner can be prosecuted under the PMLA Act.
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Service Tax

• Exclusive Right to Use Goods Deemed Sale, Exempt from Service Tax; Sales Tax/VAT Correctly Applied.

  Case-Laws - AT : Demand of service tax - Supply of tangible goods for use - transfer of right to use goods - deemed sale - The Tribunal observed that, evidently, the Appellant had granted exclusive right to use without disturbance or encumbrance to their clients – FKOL and accordingly, it is held that they have rightly paid the Sales Tax/VAT on transfer of right to use the goods, to their customers, which is a transaction of deemed sale. Accordingly, it is held that service tax is not attracted.
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• Court Confirms Notification Scope Unaffected by Circular; Upholds Exemption for Goods Transport Agency Declaration.

  Case-Laws - HC : GTA Service - Declaration by the Goods Transport Agency in the consignment note has not been made so as to comply with the two conditions of Notification No. 32/2004- ST dated 03.12.2004 - The High Court held that, The Circular relied upon by the appellant does not narrow down the scope of Notification No. 32/2004-ST or prohibit a separate declaration. - The order of commissioner (appeals) and CESTAT allowed the benefit of exemption sustained.
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• Court Dismisses Petition on Service Tax Dispute, Cites Violation of Natural Justice Principles and Missed Hearings.

  Case-Laws - HC : Violation of principles of natural justice - recovery of nonpayment/ short payment of service tax - The High Court observed that, the petitioner himself has not availed the three earlier opportunities of hearing and with respect to the fourth opportunity, the petitioner has filed adjournment. Consequently, the HC held that, the impugned order is well reasoned order. Petition dismissed.
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• Tribunal Upholds CENVAT Credit Eligibility for Insurance Services Covering Customer-Owned Gold Purchased from Appellant.

  Case-Laws - AT : Eligibility of CENVAT credit - Input services or not - insurance service - premium for the master insurance policy issued to the appellant - The Cenvat credit was denied on the ground that, Insurance Company was providing service in relation to insurance of the gold belonging to the customers of the appellant and which was purchased from the appellant. - The Tribunal, following the larger bench and the Hon’ble High Court decisions, rejected the adjudicating authority's reasoning regarding the documentation provided for availing CENVAT credit, citing relevant provisions of the Reserve Bank of India Act, 1934, and Service Tax Rules, 1994. - Credit allowed.
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• Tribunal Rules Services Not GTA Without Consignment Notes, Service Tax Demand Overturned.

  Case-Laws - AT : Classification of services - Goods Transport Agency Services or not - The appellant was not issuing any consignment note which is an essential requirement for classification of their services under the category of GTA - The Tribunal held that, this fact about not issuance of consignment note is not disputed by the revenue that being so the services provided by the appellant cannot be classifiable under the category of GTA services for making the demand of service tax. - Demand set aside.
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Case Laws:

• GST

• 2024 (2) TMI 556
  Time Limitation - Cancellation of GST registration of petitioner - non-application of mind - no adequate reason for such cancellation - violation of principles of natural justice - HELD THAT:- In the present case, the facts are similar to one in Surendra Bahadur Singh s case [ 2023 (8) TMI 1262 - ALLAHABAD HIGH COURT] , wherein the appeal was barred by time under Section 107 of the Act. However, the Division Bench in Surendra Bahadur Singh s case took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice. The orders impugned herein are liable to be set aside. Accordingly, the order in original dated February 1, 2021 and the appellate order dated January 19, 2024 are quashed and set aside - Petition allowed.

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• 2024 (2) TMI 555
  Validity of assessment order - no personal hearing was offered to the petitioner as per sub-section (4) of Section 75 of GST Act - breach of principles of natural justice - HELD THAT:- On examining the impugned assessment order, it is evident that such order was issued in view of the fact that the petitioner did not reply to the show cause notice. From the documents on record, it also appears that the petitioner was not provided a personal hearing, including by reminder dated 14.07.2023. Solely for the purposes of providing a personal hearing to the petitioner, impugned order calls for interference. The matter is remanded for re-consideration. The petitioner is permitted to file a reply to the show cause notice within a maximum period of ten days from the date of receipt of a copy of this order. Upon receipt thereof, the assessing officer is directed to issue a fresh assessment order after providing a personal hearing to the petitioner - Petition allowed.

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• 2024 (2) TMI 554
  Violation of principles of natural justice - reasonable opportunity of hearing was not provided - multiple hearings were scheduled by the appellate authority or not - HELD THAT:- The documents on record disclose that hearings were rescheduled either at the instance of the petitioner or the appellate authority. Although Additional Government Pleader produced the hearing notice dated 22.06.2023 for the hearing on 27.06.2023, there is no proof of service thereof on the petitioner. Since the petitioner was not heard before the appellate order was issued, the impugned order warrants interference. It should also be noticed that the petitioner made the pre-deposit while presenting the appeal. The impugned order dated 27.06.2023 is quashed and the matter is remanded to the appellate authority for reconsideration - Petition disposed off by way of remand.

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• 2024 (2) TMI 553
  Ineligibility for claiming ITC on inward supplies of goods or services used for construction on account of own use - applicability of restriction under clause (d) of sub-section (5) of section 17 of the GST Act in respect of input tax credit on goods or services received by the applicant for construction of warehouse - HELD THAT:- The provisions of clauses (c) and (d) to sub-section (5) of section 17 of the GST Act thus clearly states that Input Tax Credit is not available in respect of works contract services or goods or services or both received for construction of an immovable property. Therefore, for the purpose of construction, the law is unambiguous in the main clauses (c) and (d) to sub-section (5) of section 17 of the GST Act that Input Tax Credit will not be available and thus it will be a blocked credit. It is only the Explanation part, where the law extends the ineligibility criteria for Input Tax Credit to the arena of re-construction, renovation, additions, alterations or repairs and that too conditionally, i.e. Input Tax Credit for such portion of the expenses pertaining to re-construction, renovation, additions, alterations or repairs which are capitalized stands ineligible. The issue of capitalization is applicable only in the Explanation part to the clauses (c) and (d) to sub-section (5) of section 17 of the GST Act i.e. only when the question of reconstruction, renovation, additions, alterations or repairs arises. If such expenses are not capitalised in the books, only under such circumstances the related Input Tax Credit may be available subject to fulfilment of other eligibility criteria. But for the purpose of construction , it is clear from the law that Input Tax Credit is blocked in all occasions and there is no scope of any other interpretation. The WBAAR has erred in interpreting the afore-stated provisions by applying the conditions of capitalisation both for construction as well as for reconstruction, renovation, additions or alterations or repairs. The concerned respondent has constructed one warehouse and let it out. This being a construction , will attract the provisions of the clauses (c) and (d) to sub-section (5) of section 17 of the GST Act and not the Explanation part for determining the eligibility criteria for Input Tax Credit. Thus, the input tax credit for such construction shall not be available to the respondent.

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• 2024 (2) TMI 552
  Exemption from GST - items imported and the services rendered by the applicant is in relation to loading, unloading, packing, storage and warehousing of agricultural produce or not - Sl No. 54 (e) of the Notification No. 12/2017-Central Tax (Rate), Sl. No. 24 of notification No. 11/2017-Central Tax (Rate) both dated 28.06.2017 - applicability of circular No. 16/16/2017 GST dated 15.11.2017 - HELD THAT:- It is evident from a conjoint reading of the definition and explanation provided in the notifications and circular referred above, that in order to determine whether a product qualifies as agricultural produce, a correlation must be established between the stipulations outlined in the aforementioned circular and notifications. Rather than examining each of these stipulations separately, a holistic approach is required for such ascertainment. It can therefore be concluded that agricultural produce denotes any produce out of cultivation (emphasis added) of plants for food, fibre, raw material on which either no further processing is done or such processing is done as is usually done by a cultivator or producer (emphasis added) which does not alter its essential characteristics but makes it marketable for primary market. Additionally, Circular No. 16/16/2017-GST dated 15.11.2017 clarifies that dehusked or spilt pulses are not agricultural produce. The activities of loading/unloading/storage by the cultivator/producer of such agricultural produce have been granted exemption from the levy of tax in the cited notifications. Further, it is observed that there is an absence of substantiating evidence suggesting that the products had not been altered or had not undergone any changes in the overseas, by any entity other than the producers or cultivators, prior to their importation into India. It, therefore, is evident that when products are imported, their primary market is situated on foreign shores. However, after enduring multiple value additions and sales, the goods when imported into India, forfeits the quality to be considered as marketable for primary market . Consequently, these goods become no longer eligible to be treated as Agricultural Produce in terms of the afore-mentioned notifications and circular.

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• Income Tax

• 2024 (2) TMI 551
  Validity of Initiation of proceedings u/s 153C - as argued satisfaction note of the searched person and satisfaction note of the petitioner (other than the searched person) are verbatim, proceedings are invalid as the satisfaction note does not contain DIN (Document Identification Number), mandatorily to be generated as per the CBDT Circular No. 19/2019 dated 14.08.2019, no incriminating material was found against the petitioners during the search carried out on 15.10.2019 and there is undue delay in recording the satisfaction note in the case of the petitioners, Baseless allegations have been made against the petitioners without there being any material before the AO to even record a prima facie proof that the seized material has a bearing on the petitioners case. HELD THAT:- As in view of the change in the legal regime with effect from 01.06.2015, the requirement is that even an information contained in the documents seized, if pertains to or relates to a person other than the searched person, the requirement of Section 153C(1) can be held to be fulfilled. In view of the categorical statement in the satisfaction note of the searched person forwarded by the AO of the searched person to the Assessing Officer of the petitioner assessee, it cannot be assumed that no prima facie satisfaction of the seized material being pertain to the petitioner assessee could be recorded. Having gone through the decision of the Apex Court in the case of Super Malls (P) Limited [ 2020 (3) TMI 361 - SUPREME COURT ] we find that the observations made therein with regard to the mandatory requirement of Section 153C to record a satisfaction note by the AO of the petitioner assessee herein, before issuing notice u/s 153C of the Act has been fulfilled in the facts of the instant case. Having noted the fact that the satisfaction note of the AO of the petitioner assessee has not been brought on record and moreover, the assessment note of the AO of the searched person indicates a prima facie case of inquiry against the petitioner, we do not find any substance in the argument of the learned Senior Counsel that the satisfaction note of the AO of the petitioner is to be discarded being a copy in verbatim of the satisfaction note of the AO of the searched person. It is not a case where it can be argued that the satisfaction recorded by the AO of the petitioner in his satisfaction note supplied to the petitioner is without any basis. The first ground of challenge is, therefore, liable to be turned down. Mandation of quoting DIN - The said ground is misconceived, inasmuch as, the copy of the letter of communication to the petitioner of satisfaction note to initiate assessment proceedings u/s 153C has not been brought on record. Revenue has brought the attention of the Court to the communication addressed to the petitioner, which contains the DIN number, to assert that the requirement of CBDT Circular No. 19 of 2019 dated 14.08.2018 has been fulfilled. We may also note from the order of disposal of the objection of the petitioner wherein it is noted that the DIN number is mandatory for communication by the Income Tax authority/officer to the assessee or another person and it is not to be generated for the covering letter forwarded by the AO of the searched person to the AO of the assessee, i.e. the petitioner herein. Having gone through the language of CBDT No. 19 of 2019 dated 14.08.2019, we do not find any error in the conclusion drawn by the respondent No. 2 in rejection of the objection of the petitioner in this regard. For the remaining grounds that the allegations against the petitioner are baseless or there was no incriminating material against the petitioner, we may note the decision of the Apex Court relied on by Revenue in the case of Commissioner of Income- Tax, Gujarat vs. Vijaybhai N. Chandrani [ 2013 (7) TMI 740 - SUPREME COURT] wherein as held that at the stage of issuance of notice under Section 153C, the High Court ought not to have entertained the writ petition and relegated the assessee to file reply to the said notices and upon receipt of a decision from the Assessing Officer, if for any reason, it was aggrieved by the said decision, to question the same before the forum provided under the Act. Delay agitated in the writ petition, no submission has been made by the learned Senior Counsel and as such the same is not being dealt with. Thus no jurisdictional error could be found in the decision of the Assessing Officer in the proceedings under Section 153C. WP dismissed.

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• 2024 (2) TMI 550
  Addition u/s 68 - unexplained balance in corporation bank - as argued pass book cannot be treated as books of account - HELD THAT:- It is true that pass book itself cannot be treated as books of accounts, but in the instant case as appears from the order that the assesssee has submitted balance-sheet, profit and loss account, computation of income etc. and certainly the assessee also maintained his own books of account in his ledger; as such the findings given by Tribunal that in the peculiar facts and circumstances the claim of the assessee is not sustainable, prima facie, is acceptable to this Court. It is not a case where the assessee has proved the source of income or identity/creditworthiness/genuineness of transaction and before us they have taken only one ground that since the pass book cannot be treated as books of account; as such the addition made by the Assessing Officer under section 68 of the Act is not sustainable is not sustainable. Effect of Mere mentioning of wrong section/provision - Only for not mentioning the correct provision in the assessment order, an amount which may be an income under the provisions of the Act cannot be allowed to go untaxed. Admittedly, in the Income Tax Act under Section 69 of the Act there is a provision of undisclosed investment and certainly an amount deposited in the Bank will come under the purview of investment. Otherwise also no prejudice has been caused to the petitioner as petitioner failed to show any prejudice even when a wrong provision has been mentioned in the assessment order. It is a settled legal principle that if a source of power can be traced, the mere mentioning of wrong section/provision will not invalidate the order. Even assuming the contention of the petitioner that passbook cannot be treated as part of Books of Accounts to be true; admittedly, the source of income in the case of both the assesses has not been proved; inasmuch as, both the assesses have failed to prove the identity/creditworthiness/genuineness of the creditors, who have given cash loan as claimed by them . Assessee has submitted the balance-sheet, profit and loss account, Bank account and computation of income and other details before the AO. Thus, definitely those amounts have escaped the taxation and as stated hereinabove only for not mentioning the correct provision in the assessment order an amount which may be an income under any of the provisions of the Act; cannot be allowed to go untaxed. No error has been committed by the Tax Authorities and/or the Tribunal in adding the amount not disclosed to the total income of the respective Assessee. Decided in favour of revenue.

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• 2024 (2) TMI 549
  Stay of demand - order directed the petitioner to pay 20% of the disputed demand entirely on the basis of the CBDT Instruction No.1914 dated 31.07.2017 (Instruction No.1914) - petitioner submitted that the appellate authority is required to take into consideration the principles relating to consideration of a stay application and cannot impose conditions merely by referring to Instruction No.1914 - HELD THAT:- Instruction 1914 sets out guidelines to be taken into account while deciding stay applications. As is evident on examining such guidelines, the discretion of the appellate authority remains and it is not mandated that in all cases 20% of the disputed tax demand should be pre-deposited. This aspect was noticed by this Court in the Order in Kannammal [ 2019 (3) TMI 1 - MADRAS HIGH COURT ] wherein, the appellate authority was directed to take into account the classical principles relating to the consideration of stay petitions. We find that the appellate authority has not recorded any reasons for the conclusion that the assessee should pay 20% of the disputed tax demand. Therefore, the order impugned herein calls for interference. Hence, the impugned order is quashed and the matter is remitted to the appellate authority for re-consideration of the stay application after providing a reasonable opportunity to the petitioner. While re-considering such stay application, the appellate authority shall take into account the existence of a prima facie case, the financial condition of the assessee and the balance of convenience and thereafter dispose of the stay application within a maximum period of two months from the date of receipt of a copy of this order.

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• 2024 (2) TMI 548
  Validity of reopening of assessment - information relating to the assessed for the A.Y. under consideration is available on record - Validity of two orders u/s 148A(d) contradicting each others, taking reverse stand - non application of mind by sanctioning authority, i.e., PCCIT. HELD THAT:- The fact that an earlier order dated 26th July 2022 recommending that it is not a fit case to issue notice under Section 148 of the Act, has been issued, is not denied. There is not even a reference to that earlier order in the order dated 31st July 2022. - In the circumstances, respondents having once held it was not a fit case for issuing notice under Section 148 of the Act, in our view, cannot change that opinion without any basis. This also reflects non application of mind by sanctioning authority, i.e., PCCIT, because if a sanctioning authority has given sanction for issuance of order dated 26th July 2022, we wonder how the sanction for issuing the order dated 31st July 2022 taking a totally contrary stand has been given by the sanctioning authority. This also expresses the total non application of mind by the PCCIT. We should also note that these points had been raised and recorded in this court s order dated 5th September 2022 but still respondents have not bothered to explain in the affidavit in reply. Therefore, petition is allowed. Further, PCIT directed to conduct an inquiry against the said Amit Kumar as to how he has passed two such orders, which contradict each other, in a span of five days and take necessary action. Petition disposed of.

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• 2024 (2) TMI 547
  Validity of reassessment order u/s 148 - petitioner submits that the respondents have no jurisdiction to issue the notice u/s 148 as the same has been issued without following the notification dated 29.03.2022 issued by the CBDT - as argued by respondent writ petition has been filed by the petitioner at the premature stage against the show-cause notice only as the proceedings are still pending before the authority before whom the petitioner can submit reply and raise all his objections available under the law. HELD THAT:- Apparently, the notice issued to the petitioner u/s 148 is only a show cause notice for which undoubtedly the petitioner is having remedy to file reply raise all objections before the Assessing Authority where the proceedings are going on. Thus, considering the judgments passed by the Hon ble Supreme Court Vicco Laboratories [ 2007 (11) TMI 21 - SUPREME COURT] , State of Assam Vs. Barak Upatyaka D.U. Karmachari Sanstha [ 2009 (3) TMI 992 - SUPREME COURT] and State of Madhya Pradesh Ors. Vs. Commercial Engineers and Body Building Company Limited. [ 2022 (10) TMI 576 - SUPREME COURT] as referred above, we see no reason to interfere in this matter as the proceedings are still pending before the concerned Assessing Authority where the petitioner is certainly having liberty to file the available under the law. raise all his objections as So far as the interim passed by the Coordinate Bench at Principal Seat, Jodhpur in the matter of Krishna Kumar [ 2023 (7) TMI 1360 - RAJASTHAN HIGH COURT] relied upon by counsel for the petitioner is concerned, the said order was passed as an interim measure, which has not decided the issue finally. In our considered view, since we are deciding the matter finally at the request of counsel for the petitioner himself, the said interim order passed by the Coordinate Bench does not help to the petitioner in view of the judgment passed by the Hon ble Supreme Court in the matter of State of Assam [ 2009 (3) TMI 992 - SUPREME COURT] . We are also of the view that in number of petitions filed under Article 226 of the Constitution of India challenge is made to mere issuance of the show cause notice and for seeking interim orders therein, which prolong the proceedings pending before the concerned authority and therefore in our considered view interference with regard to mere issuance of show cause notice should be rare and not in a routine manner. This writ petition is dismissed.

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• 2024 (2) TMI 546
  Validity of reopening proceedings - assessing authority not considering the reply-cum-objection filed by the petitioner - Period of limitation where monetary limit is below threshold of Rs. 50 lakhs - HELD THAT:- As in terms of Section 148A(c) AO is mandatorily required to consider the reply/objections furnished by the Assessee. Non consideration of reply or objection furnished by the Assessee not only amounts to violation of principles of natural justice but is also contravention of mandatory modalities which are to be followed during the course of enquiry proceedings u/s 148A of the Act. In the instant case, the Respondents have not disputed the fact that the Petitioner has not filed any reply, but have categorically accepted the fact that the reply-cum-objection furnished by the Petitioner has not been considered by the concerned Respondent. It is rather immaterial for whatever reason the reply-cum-objection furnished by the Petitioner has not been considered. AO ought to have considered the objections raised by the Petitioner and should have disposed the same in terms of judgment rendered by the Hon ble Apex Court in the matter of GKN Driveshafts (India) Limited v. ITO [ 2002 (11) TMI 7 - SUPREME COURT ] wherein as laid down an elaborate procedure as to the manner of dealing with objections raised against a notice u/s 148 and clarified that when a notice under section-148 of the Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. Section 148A which was inserted by the Finance Act, 2021 reiterates the procedure to be followed by the Assessment Officer upon receiving such information, including conducting any inquiry regarding the information received, providing an opportunity of being heard to the Assessee through serving of notice to show cause within the prescribed time in the notice (which must not be less than 7 days and not more than 30 days on the date of serving the notice or the time period till which time extension was received by the Assessee), considering the reply given by the assessee and deciding on the basis of the material that is present, including the reply, about whether the case is fit for passing a notice under Section 148 through passing an order within 1 month from the reply. Period of limitation - Apart from the codification of Sections 148 and 148A, Section 149 was further modified by the Finance Act, 2021 to the effect that any case can be reopened within three years from the time of end of relevant assessment year as under clause (a) of Section 149(1), if there is information with the Assessing Officer that suggests that there is escapement of income as provided under Explanation 1 to Section 148, and upto 10 years as provided in Clause (b) of Section 149(1) in certain exceptional cases, defined as circumstances where income chargeable to tax, within the meaning of asset that has escaped assessment amounts to or is likely to amount to fifty lakh rupees (50,00,000/-) or more in that year. In the instant case, the property under consideration has been obtained by the Petitioner and his brother by the law of inheritance and succession, that too, after the demise of their father. A perusal of the deed would transpire that the Petitioner and his brother upon demise of their father became joint owners of the property under consideration with respective share of 50% each and both being joint vendors in the said transaction are entitled to equal share of the consideration amount, viz., 32,68,000/- each. Since, the income escaping assessment is less than 50 lakhs, Section 149(1)(b) could not have been invoked. The said contention of the Petitioner has also been backed up by the Respondents which is a specific admission by the Respondents that only one half of the consideration is chargeable to tax in the instant case i.e., 32,68,000/- which is certainly less than the monetary limit of Rs, 50,00,000/- as prescribed in Section 149(1)(b) of the Act and the said fact was not available by the AO. At this stage, it is also profitable to refer Section 26 of the Income Tax Act, 1961 which provides that where a property is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not be assessed as an Association of Persons, but the share of each person in income of the property shall be included in his total income. As in the instant case the deed (Annexure-1) would transpire that the Petitioner and his brother upon demise of their father became joint owners of the property under consideration with respective share of 50% each and both being joint vendors in the said transaction are entitled to equal share of the consideration amount, viz., 32,68,000/- each; since the income escaping assessment is less than 50 lakhs, Section 149(1)(b) of the Act could not have been invoked. Accordingly, one of the contentions of the Revenue that the petitioner can very well explain the facts in the Assessment proceedings and the writ application is not maintainable; does not appear to be impressive as we are of the view that directing the petitioner to explain the facts before the AO will be a futile exercise by the Assessee in view of the specific provision enshrined u/s 149(1)(b) of the Act since the income escaping assessment is less than 50 lakhs, and Section 149(1)(b) of the Act could not have been invoked. It can be construed that the assessment proceeding initiated by the Department is barred by limitation, as also, is beyond jurisdiction. Hence, the entire enquiry proceeding along with impugned order u/s 148A(d) of the Act along with Notice issued u/s 148 of the Act deserves to be quashed.

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• 2024 (2) TMI 545
  Continuation of criminal proceedings as against company no longer in existence/ dissolved/ amalgamated - Protection u/s 32 of IBC - Legal effect of amalgamation of two companies - corporate existence of the transferor company - criminal liability of a company being merged/dissolved - HELD THAT:- The moment the Corporate Insolvency Resolution Process is initiated against the corporate debtor and the application is accepted by the NCLT, the moratorium comes into operation. Once the resolution plan is accepted by the NCLT and orders are passed and the Corporate debtor gets into hands of the new management, all the past liabilities including the criminal liability of the Corporate debtor gets wiped off and the new Management takes over the company with clean slate. In the instant case, the A1 company has now gone into the hands of the new management, pursuant to the order passed by the NCLT. In view of the same, the new management takes over the A1 company as a clean slate and the criminal liability can no longer be mulcted as against A1 company. Therefore, the continuation of criminal proceedings as against A1 company can no longer subsist. Company has been taken over by a new management and the criminal liability cannot be passed on to the new management. The criminal liability of a company cannot be transferred to another company or the new management ipso facto. Therefore, the new management apart from not taking over the criminal liability of the A1 company, cannot also be made to undergo criminal prosecution for the offence committed by the persons who were incharge of the company during the relevant point of time. This Court has already recorded the fact that A2 has already died and therefore, the charge abates insofar as A2 is concerned. Accordingly, the proceedings as against A1 company in all these complaints stands quashed. It is left open to the respondent to identify the persons who were in-charge of running the company and were involved in the day today affairs of the company during the relevant point of time and it will be left open to the respondent to continue the criminal prosecution as against those officers.

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• 2024 (2) TMI 544
  Capital gain computation on the transfer of property - AO mechanically adopted the stamp duty value/segment rate as the deemed sale consideration - assessee failed to participate in the assessment proceedings - non-reference to the Valuation Officer for determination of FMV - determining FMV of the property as on the date of transfer - HELD THAT:- Failure on the part of the assessee to comply with the notices issued by the A.O and, thus, participate in the assessment proceedings was due to compelling circumstances prevailing at the relevant point of time i.e., death of his father on 06.08.2018. A.O while adopting the stamp duty value of Rs. 31,55,100/- as the deemed sale consideration for computing capital gain on the transfer of the aforesaid property which was claimed by the assessee to have been sold for Rs. 3.50 lacs, should not have mechanically adopted the stamp duty value/segment rate as the deemed sale consideration, and in all fairness, ought to have referred the matter to the District Valuation Officer (DVO) for determining of the FMV of the property as on the date of transfer. Thus as there were justifiable reasons for the assessee in not participating in the course of the proceedings before the A.O, as a result whereof, there was no occasion for him to have sought a reference to the DVO for determination of FMV of the property under consideration. The assessee had in the facts/submissions filed before the CIT(Appeals) categorically stated that as property under consideration was wall locked land located in between constructed buildings belonging to third parties with no independent access/approach road, therefore, for the said reason the said property was sold at a distress value of Rs. 3.50 lacs. Assessee has specifically brought to the notice of the CIT(Appeals) the locational disadvantages of his property, therefore the latter in exercise of powers vested with him which are co-terminus with that of the A.O ought to have considered the said material aspect and should have called for a remand report with a direction to the A.O to make a reference to the Valuation Cell for determining the FMV of the aforesaid property in question. Thus the matter in all fairness requires to be restored to the file of the A.O who is directed to make a reference to the Valuation Officer for determination of FMV of the aforementioned property as on the date of transfer - We are also unable to persuade to concur with the adoption of the cost of acquisition of the property under consideration at Rs. Nil by the A.O while calculating STCG on the sale of the same. AO is also directed to verify the aforesaid claim of the assessee qua the cost of acquisition of the aforesaid property under consideration, and allow his claim for deduction of indexed cost of acquisition if the same is found in order.

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• 2024 (2) TMI 543
  Validity of assessment made u/s 153C r.w.s. 153A - Period of limitation - reckoning of date of satisfaction note - HELD THAT:- The date of handing over of the materials was not mentioned in the satisfaction note and, therefore, in the absence of mentioning the date of handing over of the materials the date of satisfaction note shall be reckoned as the date of handing over of the materials and consequently the time limit of calculating the six years has to be calculated from this date i.e. 02.02.2016. In this scenario the assessment year 2008-09 is beyond the period of six assessment years and, therefore, we hold that the assessment made for the AY 2008-09 is barred by limitation. Grounds raised in the cross objection of the assessee on this issue are allowed. Since, we have held that the assessment made u/s 153C r.w.s. 153A is time barred. As argued absence of any seized incriminating documents/materials the addition cannot be made in the assessment completed u/s 153C r.w.s. 153A - In the case of PCIT Vs. Abhisar Buildwell Pvt. Limited [ 2023 (4) TMI 1056 - SUPREME COURT] held that in respect of completed or unabated assessment no addition can be made by the AO in the absence of any incriminating material having been found during the course of search u/s 132 or requisition u/s 132A of the Act. On perusal of the assessment order, we noticed that there is no reference to any seized documents or materials based on which the addition was made by the AO. AO in the course of assessment proceedings issued show-cause notice to establish the genuineness of the transaction and creditworthiness of the parties on the basis of the submission of the assessee that it had taken various unsecured loans in the assessment year under consideration. Therefore, it is very much clear that the addition made u/s 68 of the Act is not based on any seized documents or materials impounded in the course of search or requisition. AO could not have made any addition while framing the assessment u/s 153C r.w.s. 153A of the Act - cross objection filed by the assessee is allowed.

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• 2024 (2) TMI 542
  Assumption of jurisdiction by ITO, Ward-4(2), Jaipur sending reopening notice u/s 148 - as there was difference in the sale consideration disclosed by the assessee vis- -vis adopted by the Stamp Duty Valuation Authority, therefore, the AO formed an opinion that addition u/s 50C of the Act is required to be made - When it came to the knowledge of the AO at Jaipur that he does not have jurisdiction then he transmitted the record at his own and ultimately assessment order has been framed by ITO, Ward-4(3), Kolkata HELD THAT:- There is no dispute with regard to the fact that in the PAN data assessee is having address of Kolkata only. The ITO, Ward-4(2), Jaipur had issued notice u/s 148 of the Act on 26.03.2018. This must have been with an idea that if record is being transmitted to the ITO having jurisdiction over the assessee then time limit will expire because on 31.03.2018, six year would come to an end. This notice has been issued by an ITO who does not have territorial jurisdiction over the assessee. Therefore, whole proceeding has been vitiated. An assessee can have property in various parts of the country but that would not mean wherever he has undertaken a transaction, the AOs of all those areas will assume jurisdiction over the assessee. It is an incorrect assumption of jurisdiction by ITO, Ward-4(2), Jaipur. The assessment order on the basis of an incorrect re-opening cannot be sustained. Therefore, we allow this appeal and quash the assessment order. Appeal of the assessee is allowed.

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• 2024 (2) TMI 541
  Validity of reopening of assessment - valid approval granted by the Pr. CIT or not? - reason to believe or reason to suspect - Unexplained cash credit - assessee got the illegal gratification from Mr. Amit Sharma in lieu of the contracts awarded to him and the figure mentioned in the loose papers or the figures of illegal gratification - HELD THAT:- As there were factual mistakes in the reasons recorded and there is no independent application of mind by the A.O. and the approval has been granted on the very same reasons which were earlier discarded by the Office of the JCIT. There is also contradiction with the claim made before the Settlement Commission by the very same PCIT and the reasons recorded. Thus, in our opinion, the approval granted by the Pr. CIT is a mechanical approval. A.O. made addition on the ground that the assessee got the illegal gratification from Mr. Amit Sharma in lieu of the contracts awarded to him and the figure mentioned in the loose papers or the figures of illegal gratification and the same is taxable as unexplained cash credit in the hands of the assessee. The assessee during the year 2016 had taken a rented accommodation from one Mr. Amit Sharma, Dehradun to substantiate the said claim, the assessee produced the rent Agreement - A.O. mentioned several wrong facts in the reasons. Further, the case of the father of the assessee was reopened u/s 148 of the Act, but no addition has been made on the said issue. From reading the above facts and circumstances it is clear that the A.O. has entertained a wrong belief and was not having tangible material on the basis of which a person having common prudence can entertain a belief that any income has escaped assessment. As there is no independent application of mind by the A.O, there is an approval on the very same reasons which were earlier discarded by the Office of the JCIT and there is a contradiction compared to submissions made before the Settlement Commission by the very same officer, therefore, it can be safely concluded that the approval granted u/s 151 of the Act by the Office of PCIT is mechanical approval and hence the assumption of jurisdiction by the A.O. is bad in law. Decided in favour of assessee.

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• 2024 (2) TMI 540
  Disallowance being expenses related to Trial Sales - assessee failed to furnish all bills/vouchers pertaining to above expenditure before the AO - CIT(A) deleted the addition - HELD THAT:- The grievance of the Revenue is not based on any solid foundation. Is this not a fact that in the immediately preceding assessment year 2010-11 similar claim has been accepted vide order of assessment u/s 143(3) of the Act? Without bringing on record anything new and adverse to take a different view in the subsequent year is against the Rule of consistency. CIT(A) has found that invoices amounting to Rs. 1.72 crores were produced before the Ld. AO during the assessment proceedings. That too has been ignored and no credit even therefor has been allowed by the Ld. AO. Books of account have been maintained which are duly audited. It is also not a case of rejection of books of account. There is nothing on record to show that the claim of the assessee is not legally bonafide as alleged by the Ld. AO. The impugned disallowance is not justified at all. CIT(A) has deleted the disallowance after having allowed opportunity to the Ld. AO. We decline to interfere and reject this ground. Disallowance u/s 43B - deduction claimed was on account of leave encashment and furnished list of employees to whom leave encashment was paid during the year - CIT(A) deleted addition - grievance of the Revenue that the Ld. CIT(A) did not appreciate that payments pertained to earlier years and the assessee did not establish that these payments were disallowed in earlier assessment years - HELD THAT:- AO referred to the Departmental records of earlier years, the facts could have easily been verified. This was not done. Before the Ld. CIT(A) details have been furnished. Nothing averse has been pointed out. The finding of the Ld. CIT(A) is in consonance with the decision of the Hon ble Supreme Court in UOI vs. Exide Industries Ltd. [ 2020 (4) TMI 792 - SUPREME COURT] as observed that with the application of clause (f) of section 43B, the eligibility for deduction arises in the previous year in which the payment is actually made and not that in which provision was made in that regard, irrespective of the system of accounting followed by the assessee. We, therefore, reject this ground being devoid of any merit. Disallowance u/s 14A - expenses in respect of exempt income disallowed - CIT(A) held that section 14A will not apply if no exempt income is received or receivable during the relevant previous year - HELD THAT:- CIT(A) has recorded finding of fact that the assessee has not claimed any exempt income and therefore impugned disallowance is not called for. Agreeing with the finding of the Ld. CIT(A), this ground is also dismissed. Nature of expenses - advertisement expenses - CIT(A) deleted the disallowance concluding that none of the payments would provide any long term benefit to the appellant, therefore, the expenditure cannot be held to be of capital in nature. - HELD THAT:- The grievance of the Revenue is baseless. We do not find any reason to deviate from the above findings of the Ld. CIT(A) in the absence of any adverse material brought on record by the Revenue. This ground is also rejected. Disallowance of depreciation - CIT(A) held the assessee has not provided the evidence of installation and put to use of the Plant and Machinery either at the assessment or appellate proceeding stage and confirmed the impugned disallowance - before the Ld. CIT(A) the assessee had asserted that the record shows that assets have been installed by the assessee and therefore there is no reason to draw adverse inference as to their usage for the purposes of business - HELD THAT:- We do not find any adverse comment on the above contentions raised by the assessee before the Ld. CIT(A). Before us the Revenue has not brought any material to show that the law laid down in decisions Refrigeration and Allied Industries Ltd [ 2000 (8) TMI 37 - DELHI HIGH COURT] and Capital Bus Services [ 1980 (2) TMI 69 - DELHI HIGH COURT] is inapplicable to the facts of the assessee s case which unequivocally assert that assets were put to use and tax audit report vouches for it.

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• 2024 (2) TMI 539
  Condonation of delay filling appeal before ITAT - inordinate delay of 530 days involved in filing of the present appeal had crept in because of mistake of the assessee in approaching a wrong forum for seeking redressal of its grievance - entitlement of Deduction u/s 80P - HELD THAT:- As it is not a case, that the assessee by filing an application u/s. 154 of the Act had approached a wrong forum, but a case where the assessee had foregone/ given up his right to carry the order of the CIT(Appeals) approving the intimation u/s. 143(1) by the CPC, Bengaluru, therefore, the claim of assessee under a bonafide belief had approached a wrong forum does not merit acceptance. To sum up, as it was the assessee society who had consciously taken a call in not assailing the order of the CIT(Appeals) dated 19.04.2022, wherein declining of its claim for deduction u/s. 80P of the Act by the CPC, Bengaluru vide intimation u/s. 143(1) dated 07.06.2019 was approved, therefore, it is incorrect on the part of the Ld. AR to claim that the assessee had approached a wrong forum/remedy by seeking redressal of its grievance by filing an application u/s. 154 of the Act. It is not a case that the assessee had neither assailed the declining of its claim for deduction u/s. 80P of the Act by the CPC, Bengaluru u/s. 143(1)(a) of the Act, but it is a case where it had chosen not to carry the same any further in appeal before the Tribunal after its appeal was dismissed by the CIT(Appeals). Thus wo not find favour with the contention of the Ld. AR that the inordinate delay of 530 days involved in filing of the present appeal had crept in because of bonafide mistake of the assessee in approaching a wrong forum for seeking redressal of its grievance. As there was no justifiable reason for the assessee to file the appeal before us after 530 days, therefore, there appears to be no reason to adopt a liberal view and condone the delay therein involved. Decided against assessee.

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• 2024 (2) TMI 538
  Addition on account of share premium received on the contours of Section 56(2)(viib) - Premium has been charged to existing shareholder - Related parties / subscriber having pre-existing right in the company - AO rejected the DCF Method adopted by the assessee and adopted Net Asset Liability Method described in Rule 11UA of the Income Tax Rules, 1962 to ascertain the value of shares and thereby concluded that no premium of shares allotted is justified - CIT(A) found merit in the plea of the assessee that the provisions of Section 56(2)(viib) cannot be justifiably invoked HELD THAT:- The issue is no longer res-integra. The effect of issue of shares to holding company at a premium has been examined in the case of BLP Vayu (Projects-I) Pvt. Ltd. . [ 2023 (6) TMI 209 - ITAT DELHI] wherein as essentially observed that where the allotment has been made to existing shareholders, the deeming provisions of Section 56(2)(viib) would not ordinarily be applicable. This apart, in the instant case, the assessee has also supported the premium determined on issue of shares by DCF Method. Thus, the premium charged is supportable by the valuation report and the premium has been charged to existing shareholder. Thus effectively, the benefit if any arising to the company in turn benefits to the subscriber having pre-existing right in the company. While applying Section 56(2)(viib), the purpose for which deeming provision has been inserted is not achieved in the instant case. Hence, in our view, the conclusion drawn by the CIT(A) cannot be faulted either on facts or in law. Appeal of the Revenue is dismissed.

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• 2024 (2) TMI 537
  Applicability of the MFN benefits into the India Netherlands DTAA - favorable benefit of lower tax rate of 5% to dividend income - HELD THAT:- AR conceded that issue decided in favour of the Revenue because without a separate notification, applicability of the MFN clause and benefit of restricted scope of source taxation in relation to the income on Dividend cannot be allowed to the assessee. As there is no specific notification for the applicability of the MFN benefits into the India Netherlands DTAA. Ld. DR has no objection. In view of the above factual matrix, the Ground No. 1 is dismissed. Charging tax at 15% plus surcharge and cess on assessed income in computation sheet in contrary of levy of tax at 10% in accordance with the assessment order - HELD THAT:- We deem it fit and proper to restore the matter for verification purpose and decide the same in accordance with law. Needless to say that the assessee should be given an opportunity of being heard. Levy of interest u/s 234A 234B is consequential in nature - AO is directed to re-compute the interest u/s. 234A 234B, if any, afresh in accordance with law.

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• 2024 (2) TMI 536
  Scope of jurisdiction in rectification proceedings u/s 154 - correctness of upward adjustment on account of contingent liabilities on the basis of Tax Audit Report for the purposes of drawing intimation under section 143(1) r.w.s 154 - HELD THAT:- In view of the narrow and limited scope of section 154 of the Act, it is difficult to say that CPC-AO has committed apparent error per se within the scope of section 154 of the Act while adopting the figures towards inadmissible expenses debited to P L account as certified by the Tax Auditor. In the wake of guidance provided by Tax Audit Report, the CPC do not appear to have committed any apparent error while making adjustment under section 154 of the Act. Any position to be taken contrary to the Tax Audit Report being in the realm of subjectivity is plainly opposed to the basic tenets of section 154 of the Act. Therefore without expressing our opinion on merits, we are convinced that alleged error sought to be pointed out on behalf of the assessee does not fall within the sweep of prima facie mistake of apparent nature envisaged under section 154 - The appeal of the assessee in rectification proceedings is thus not maintainable and hence requires to be summarily dismissed at the threshold as fairly accepted on behalf of the assessee owing to narrow scope of such proceedings. Thus having regard to the fact that plea of the assessee that such expenses/liability has not been claimed at the first instance and thus no disallowance is warranted has not been addressed on merits, we consider it expedient to grant liberty to the assessee in the interest of fair play to pursue appellate remedy against the original proceedings in accordance with law if so legally advised. FAA shall take into account such bonafides while admitting belated appeal against order under Section 143(1) for adjudication on merits and shall take a benign view in the matter.

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• 2024 (2) TMI 535
  Additions u/s 56(2)(viib) - treat the share premium to be excessive consideration over FMV - consideration received by the assessee towards premium on issue of equity shares represents the FMV or exceeds the FMV? - CIT(A) found force in the plea of the assessee and accepted that deeming provisions of Section 56(2)(viib) is wholly inapplicable in the facts of the present case - HELD THAT:- As the figures adopted for the purposes of valuation as per book value or NAV method, are corroborated by the audited financial statement filed by the assessee. Besides, there is no requirement in law to furnish valuation report from independent valuer for the purposes of determination of valuation under Rule 11UA(a) of the Rules. We observe that the book value of assets and liabilities adopted for the purposes of NAV method of valuation is in consonance with last audited balance-sheet items as on 31.03.2016 whereas the allotment has been stated to be made in November, 2016 during the Financial Year 2016-17 relevant to Assessment Year 2017-18. AO misdirected himself in law on seeking valuation report which requirement do not emanate from the law codified in this regard. The phraseology of clause (a) to sub-rule (2) of Rule 11UA read with Explanation (a) to Section 56(2)(viib) do not thrust the requirement of Valuation Report for substantiation of valuation under NAV method. Thus conclusion of facts arrived at by the CIT(A) and the primary facts on which such conclusion is based bears a direct nexus. The CIT(A), in our view, has applied its mind to the relevant consideration while determining the issue. The audited balance-sheet testifies the FMV. We thus see no perceptible reason to deviate from the findings of the CIT(A). Appeal of the Revenue is dismissed.

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• 2024 (2) TMI 534
  Penalty levied u/s 271D - assessee has availed cash loan in contravention of provision of section 269SS - Assessee has submitted that though the assessee has initially availed loans from close relatives, which were subsequently the loans, were treated as gift and credited to his capital account, therefore, levy of penalty under section 271D of the Act is unwarranted - HELD THAT:- As perused the details furnished by the assessee, wherein, the assessee furnished copies of the confirmation letters from the lender, which were filed before the authorities below and find that assessee s father-in-law as well as assessee s wife, who have confirmed that the loan amount shall be treated as gift. The assessee s mother passed away and produced death certificate. Moreover, the assessee has shown reasonable cause for receiving money towards purchase of machineries. Thus, we are of the opinion that the explanation offered against show cause notice before the authorities below were reasonable and therefore, levy of penalty under section 271D of the Act is untenable. As relying on case of Ms. Nanda Kumari v. ITO [ 2019 (1) TMI 413 - MADRAS HIGH COURT] we direct the Assessing Officer to delete the penalty levied under section 271D of the Act. Decided in favour of assessee.

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• 2024 (2) TMI 533
  Penalty u/s 271(1)(c) - CIT(A) justification in deleting the penalty levied by AO u/s 271(1)(c) when Department is presently in appeal before the High Court of Gujarat against the order passed by Hon ble ITAT deleting the quantum addition - HELD THAT:- At the time of hearing before us, we observe that, in the quantum appeal, the Tribunal has deleted the quantum addition in [ 2021 (4) TMI 199 - ITAT AHMEDABAD ]. In the light of the order of the Tribunal in the quantum proceedings where the Tribunal deleted the addition, and in view of the Department s appeal to the High Court challenging the deletion of the said addition, it is pertinent to note that the High Court has neither overturned the Tribunal s order nor issued a stay order as of now. Accordingly, the Tribunal s decision retains its legal validity, and presently no addition stands. Consequently, the penalty imposed by the Department under Section 271(1)(c) of the Act on the impugned addition is legally unsustainable. Decided in favour of assessee.

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• 2024 (2) TMI 532
  Adjustment made to the income returned in the intimation made by the CPC u/s 143(1) - exemption u/s 11/12 denied as assessee had failed to furnish the necessary Form 10B one month prior to the due date of filing of return of income u/s 139(1) - procedural v/s mandatory requirement - assessee pleaded as requisite Form 10B had been prepared much in advance i.e. 70 days prior to the filing of the return, but had not been filed by the assessee since its income was below the taxable limit. HELD THAT:- Since the failure to file Form No.10B was the only reason for the adjustment made to the return of income of the assessee subjecting its entire income to tax on the filing of the Form 10B to the ld. CIT(A), the assessee ought to have been allowed its claim of exemption to its entire income. As in the case of Association of Indian Panelboard Manufacturer [ 2023 (3) TMI 1374 - GUJARAT HIGH COURT] has categorically held that filing of Form 10B alongwith the return of income is only a procedural requirement and cannot be treated as mandatory requirement for the purpose of claiming exemption u/s 11 12 of the Act and even if filed at a later stage the assessee is entitled to exemption claimed. As in the case of Shree Bhairav Seva Samiti [ 2022 (12) TMI 445 - ITAT MUMBAI] allowed assessee s claim to exemption u/s 11 as held that even if form 10B is filed at a later stage exemption cannot be denied u/s 11. Thus no hesitation in holding that the assessee s claim of exemption to its entire income u/s 11 of the Act is to be allowed. The AO/CPC is accordingly directed to delete the adjustment made in the intimation u/s 143(1) - Decided in favour of assessee.

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• 2024 (2) TMI 531
  Bogus LTCG - exemption u/s. 10 (38) denied - addition u/s 68 as relying upon the interim order of the SEBI - Based upon the investigation report of Pr. DIT, Investigation Wing Kolkata unit the AO formed a belief that the said company is a penny stock company and heavily drawing support from the investigation report - HELD THAT:- We find that the very same AO has framed the assessment of the brother of the assessee Sh. Mukesh Mittal who claimed LTCG on sale of shares of the very same company Radford Global Limited. In the case of the brother the quarrel travelled upto the Tribunal and this Tribunal in Sh. Mukesh Mittal Versus Income tax Officer, Ward-41 (1) , New Delhi [ 2021 (3) TMI 1169 - ITAT DELHI ] held that assessee submitted sufficient documentary evidences before A.O. to prove genuineness of the transaction. The assessee purchased the shares through banking channel and actually got the shares transferred in his name. The purchases are supported by bank statements. The transaction of the sale have been made through Demat Account which is corroborated by contract note and other details and transaction is carried out through banking channel through stock exchange through Demat Account on which Security Transaction Tax have also been paid. The A.O. merely relied upon interim order of the SEBI to make addition against the assessee, otherwise, there were no evidence or material on record to disprove the claim of assessee. Since the interim order of the SEBI have been revoked against the assessee and M/s EBFL, therefore, nothing survives in favour of the A.O. The A.O. did not make any further investigation or enquiry into the matter and merely relied upon the interim order of the SEBI and investigation carried out by the Kolkata Wing. It is not clear from the assessment order whether Investigation Wing report have been confronted to the assessee or any right of cross-examination have been allowed to any statement recorded at the back of the assessee. The assessee asked for the cross-examination of any statement which is used against the assessee for making the addition. But, the assessment order is silent on this aspect. Therefore, the above facts clearly show that assessee entered into the genuine transaction and as such the profit on sale of scrip was exempt from tax. Assessee has successfully discharged the onus cast upon him by the provisions of section 68 of the Act and such discharge is purely a question of fact. We, accordingly, direct the AO to accept the long term capital gain declared as such and allow exemption u/s. 10 (38) of the Act -we delete the impugned addition made on account of unexplained cash credits u/s. 68 - Decided in favour of assessee.

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• 2024 (2) TMI 530
  Reopening of assessment u/s 147 - notice beyond limitation of 4 years - re-opening of already concluded assessment - addition u/s 68 of the act as unexplained cash credits - HELD THAT:- We find that the entities from whom the assessee received the share application are the same which has been subject matter of Section 147 and the reasons recorded thereof in the year 2013 as well as in 2017. We find that the amount received from these five entities have been examined u/s 148 accepted under the order passed u/s 147/143(3) in 2014 and again reasons for reopening has been for the same reasons and for the same entities in 2017 also. There was no new information received by the Assessing Officer other than what has been received by the Directorate of Investigation in 2013. Hence , reopening of the case twice for the amount received from same entities, in the absence of any new material is construed as bad in law and hence the Assessment order is treated as void ab initio. Decided in favour of assessee.

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• 2024 (2) TMI 529
  Taxability of interest on income tax refund received - PE in India or not? - whether shall be taxable as business income under Article 7 of India-France DTAA as against offered to tax as interest income under Article 12 of India-France DTAA ? - as manifested even if it is assumed that assessee has a PE in India in the form of India branch office, but since the said PE has not been carrying out any business activity in India since February, 2012, the income in question, i.e., interest on income-tax refund cannot be said to be effectively connected with such permanent establishment , and, therefore, it does not fall in the ambit of Paragraph 5 of Article 12 so as to be taxed as business profits in terms of Article 7 of India France DTAA HELD THAT:- Tribunal in the case of Clough Engineering Ltd. [ 2011 (5) TMI 562 - ITAT, DELHI] noted in similar circumstances that the real test to be applied is not whether the interest is business income or not, but as to whether the debt-claim in respect of which the interest is paid is effectively connected with the PE or not. Thus the aforesaid decision of the learned Special Bench answers the extant controversy quite squarely inasmuch as it cannot be said that interest on income tax refund is effectively connected with the PE either on the basis of the asset-test or the activity-test, especially when there is no dispute to the position before us that India branch office of the assessee has not carried out any business activity during the previous year relevant to the assessment year under consideration. As the provisions of Paragraph 2 of Article 12 of the India-France DTAA are clearly attracted and, there is no scope for considering the instant case in terms of Paragraph 5 of Article 12 so as to invite taxability in terms of Article 7 of the DTAA. In fact, we find that in the context of India-France DTAA, the Mumbai Bench of the Tribunal in the case of Aker Solutions India SDN BHD [ 2022 (11) TMI 1445 - ITAT MUMBAI] relying upon the decision of .Clough Engineering Ltd. [ 2011 (5) TMI 562 - ITAT, DELHI] had taken a similar view with respect to the interest on income tax refund received under Section 244A of the Act. On an appeal filed by the Revenue, the Hon ble Bombay High Court in the case of DIT Vs. Credit Agricole Indosuez [ 2015 (6) TMI 974 - BOMBAY HIGH COURT] did not find it expedient to interfere with the aforesaid decision of the Tribunal, and, thus, the same stands affirmed. Thus we find that the case of the assessee for taxing the income by way of interest on tax refund at the rate of 10% in terms of Paragraph 2 of Article 10 of the India France DTAA is liable to be upheld. Assessee appeal allowed.

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• 2024 (2) TMI 528
  Disallowance u/s. 40A(2) - addition being 50% of the total back office charges paid to group consultant - as per AO payment made by the assessee is in excess of fair market value HELD THAT:- As the assessee has entered into agreement with to group consultant to the agreement states the services offered and the schedule of fees @ 0.5% of total income. AO has not brought any material on record to show that the payment made to group consultant is unreasonable and excessive and has made disallowance on adhoc basis, merely stating that the order of the ITAT in group case has not been accepted by the revenue. AO has observed that the assessee may have benefitted from the bulk or centralized purchasing done though to group consultant but it does not justify the entire payment. Once it is accepted by the AO that the assessee is benefited through to group consultant , no adhoc disallowance is called for - we delete the disallowance u/s. 40A(2) of the Act. Decided in favour of assessee.

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• 2024 (2) TMI 527
  Assessment u/s 153A - Bogus LTCG on share transactions - incriminating material found during the course of search or not? - HELD THAT:- Assessee is a regular investor as brought to our notice as per the Balance Sheet of the assessee as on 31.03.2013, assessee held shares and Debentures worth of Rs. 26,23,89,205/-. It shows that the assessee is a regular investor and had also made the investment in the scrip under consideration. AO observed that assessee had made huge profit out of this investment because of this, it makes the script as suspicious and penny stock. We cannot agree to the above observation, merely because of huge profit, it does not make the script a penny stock. Further, it is fact on record that the financials of the company are not commensurate with the purchase and sale price in the market. The assessee has purchased the shares from open market, D-mated the scrips and subsequently sold the same in the stock exchange. It clearly raises several doubt on the purchase and sales transactions recorded in this case. There is no discrepancies in the documents filed by the assessee claiming the deductions u/s 10(38) of the Act. At the same time, even though all the characteristics of the penny stock exists in the present case, still the revenue has not brought on record any materials linking the assessee in any of the dubious transactions relating to entry, price rigging or exit providers. Even in the SEBI report, there is no mention or reference to the involvement of the assessee except in the latest SEBI report of 2020, there is only restriction on trading of this script but there is no reference to assessee. We can only presume that the assessee is one of the beneficiary in this transactions merely as an investor who has entered in investment fray to make quick profit. Even the assessing officer has applied the presumptions and concept of human probabilities to make the additions without their being any material against the assessee. Even otherwise, in the cases of Swati Luthra [ 2019 (7) TMI 526 - ITAT DELHI] and Radheyshyam Khandelwal v. ACIT [ 2021 (7) TMI 493 - ITAT INDORE] dealt with identical scrip wherein the assessees have also earned Long Term Capital Gain at the high volume and the Tribunal ultimately decided the issue in favour of assessee. Thus transaction involving the LTCG is genuine - DR submission that this scrip transaction is suspended by the SEBI and he brought to our notice the SEBI order, however, there is no specific findings against the script under consideration or on the assessee. It was also brought to our notice that this script is still traded in the stock exchange. Decided in favour of assessee.

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• 2024 (2) TMI 526
  Income from house property - determination of annual letting value (ALV) of the of the vacant portion of the property situated at 2 nd , 3 rd and 4 th floors of the premises of the assessee - HELD THAT:- Admittedly, the assessee is the owner of Nithin Complex, which is a commercial property, consisting of the ground and four floors, having the total vacant area of 24000 sft and out of the said 24000 sft, 9000 sft was let out by the assessee and the remaining area of 15,000 sft was lying vacant during the year under consideration. Out of the said 15000 sft, 12000 sft was on the 3rd and 4th floors wherein 3000 sft was on the first floor and 2nd floor. In our opinion, the area which was situated on the 1st and 2nd floors being situated on the same floor, the adjoining floors are required to fetch the similar rent which are being received by the assessee on the adjoining properties situated at ground, 1st and 2nd floors. In our view, the ALV of 3000 sft of the area lying vacant on 1 st and 2 nd floors are required to be determined by applying the rate of Rs. 38/- per sft. Remaining area of 12000 sft situated at 3 rd and 4 th floors of the property - As seen Municipal Rental Value (MRV) as claimed by the assessee was in the range of Rs. 5/- per sft whereas assessee has let out the portion to the Girls hostel @ Rs. 10/- per sft and the AO has claimed ALV @ Rs. 38/- per sft. Properties situated on 3rd and 4th floors of the property will definitely fetch less rent when compared with ground and 1st floors of the property because 3rd and 4th floors are not connected with lift and the occupants have to climb three stairs to reach the point and even the 3rd and 4th floors of the property are not in use for so many years and are lying vacant for many years and therefore, the ALV taken by the AO and confirmed by the CIT(A) are, in our view, was on the higher side and are required to be estimated. Since the property of the assessee is situated in a remote area of Anantapuram, it cannot be possible for the Assessing Officer to find out comparable premises which is situated at 3rd and 4th floors - we have to estimate the ALV taking the question of the lettable value as taken by the municipal rental value of the Girls hostel and also the rent which was fetched by the assessee from the ground and 1st floor. Having observed the above, it came to our notice that the ld.CIT(A) had noted that the assessee was asked to furnish the rejoinder to the comments of the Assessing Officer. However, the assessee has not given any reply to the rejoinder and only submitted that the appeal for A.Y. 2012-13 is pending for adjudication, raising the identical issue before the Tribunal and fixed for hearing on 25.07.2023. In our view, once the appeal of the assessee for A.Y. 2012-13 has been dismissed by the Tribunal for the reasons mentioned therein, we do not find any reason to give relief to the assessee on the grounds raised before us. In case, the Tribunal while hearing the M.A. filed by the assessee, recalls the order then the assessee may file the application to recall the present order on this issue. In view of the above, the grounds raised by the assessee are dismissed. Unexplained cash deposits u/s 68 - Onus to prove - HELD THAT:- AO made addition the in the hands of the assessee for the cash deposited in her account. However, in the appellate proceedings and in the remand report, it was admitted by the Assessing Officer that the assessee had withdrawn the amount from the firm, and deposited the said amount in her bank account. Thus, the assessee was able to demonstrate the availability of cash and the source thereof. AO has not doubted the availability of the cash or its source. Therefore, in our view, no addition can be made in the hands of the assessee, more particularly, when the assessee has withdrawn the amount from the partnership firm in which she was a partner and deposited the withdrawn amount on the same date in her bank account. Assessee was able to discharge her onus. - Decided in favour of assessee.

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• 2024 (2) TMI 525
  Deposits of demonetized currencies - substantial increase in cash sales - preponderance of probability in favour of the assessee or not? - HELD THAT:- CIT(A) came to a conclusion that there is adequate stock available with the assessee. Assessee has not filed the details of stock before the AO and it was only submission made before the CIT(A). As further submission that when the assessee was not able to establish that sufficient stocks available with them, how the assessee could have been made sales as shown by it. Under these facts, CIT(A) has applied the preponderance of probability in favour of the assessee and deleted the addition, which appears to be not correct. Before us, the assessee filed certain details, such as, stock item register of Gold Jewels 22 kt, ledger account of purchase gold coins, etc. However, with those details, we are unable to find out sufficient stock is available with the assessee or not. It is the duty of the assessee to establish that there is sufficient stock available with the assessee and subsequently, sale was made. Thus, the preponderance of probability in favour of the assessee cannot be applied in this case - we set aside the order of the CIT(A) and remit the matter back to the file of the AO to examine the details filed by the assessee and decide the issue - Appeal filed by the Revenue is allowed for statistical purposes.

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• 2024 (2) TMI 524
  Validity of reopening of assessment u/s 147 - addition made on account of unexplained money u/s 69A - as alleged consideration was obtained by the assessee from the secondary market out of artificial price rigging of shares of KAFL in connivance with the entry operators - off market purchase of shares - exemption for long term capital gains u/s 10(38) - addition made merely by placing reliance on the Kolkata Investigation Wing report - HELD THAT:- AO had not proved with any cogent evidence on record that assessee was involved in converting his unaccounted income into exempt long term capital gains by conniving with the so called entry operators and brokers who were involved in artificial price rigging of shares. No evidence is brought on record to prove that assessee was directly involved in price manipulation of the shares dealt by him in connivance with the brokers and entry operators Transactions could not be treated as sham merely because they are done in off-market, if the assessee had discharged his onus of proving the fact that shares purchased by her were dematerialized in the Demat account and held by the assessee till the same were sold from the Demat account of the assessee. The transaction of holding the shares are reflected in Demat account and sale of shares are through Demat account. More so, when there is no dispute regarding the purchase price and sale price of shares. We are unable to persuade to accept to the contentions of the ld. DR that Kolkata Investigation Wing had conducted a detailed enquiry with regard to the scrip dealt by the assessee herein and hence whomsoever had dealt in this scrip, would only result in bogus claim of long term capital gain exemption or bogus claim of short term capital loss. Merely because a particular scrip is identified as a penny stock by the income tax department, it does not mean all the transactions carried out in that scrip would be bogus. So many investors enter the capital market just to make it a chance by investing their surplus monies. They also end up with making investment in certain scrips (read penny stocks) based on market information and try to exit at an appropriate time the moment they make their profits. The transactions of sale of shares were done in online platform of BSE through the registered share broker from whom the received the sale consideration. The broker also receives payments for all his transactions from Stock Exchange. The seller and the buyer cannot know the names of each other as well as their respective brokers, who were involved in the trading transactions in the secondary platform. In such a situation, it cannot be presumed that there could be any transfer of cash between the buyers and sellers to convert the unaccounted money of the beneficiaries as alleged by the ld AO. There is absolutely no evidence brought on record whatsoever to allege that money changed hands between the assessee and the broker or any other person including the alleged exit provider whatsoever to convert unaccounted money for getting benefit of LTCG as alleged. Hence I hold that in the absence of any material to show that huge cash was transferred from one side to another , addition cannot be sustained. Thus all the observations, conclusions and findings of the ld. AO are based on suspicion, surmises and hearsay. It is trite law that the suspicion howsoever strong cannot partake the character of legal evidence. Entire case of the revenue hinges upon the presumption that the assessee has ploughed back her own unaccounted money in the form of bogus LTCG. However, this presumption or suspicion how strong it may appear to be true, but needs to be corroborated by some evidence to establish a link that the assessee had brought back her unaccounted income in the form of LTCG. Reopening of assessment had been initiated by mere surmise and conjecture without having any cogent material to form a reasonable belief that income of the assessee had escaped assessment within the meaning of section 147 of the Act. Hence hold that the assumption of Jurisdiction u/s 147 of the Act is void abinitio in the instant case. Even on merits, find that there is no case for making any addition u/s 69A of the Act in the hands of the assessee, thus assessee would be entitled for relief by way of exemption for long term capital gains u/s 10(38) of the Act in the facts and circumstances of the instant case. Accordingly, the grounds raised by the assessee are allowed.

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• 2024 (2) TMI 523
  TP Adjustment - comparable selection - ALP which is worked out after applying the 5% range - HELD THAT:- TPO had adopted certain criteria for rejection of comparables as highlighted above. If those criteria itself are adopted on the comparables which has been chosen by the ld. TPO and applying the filters adopted by him on the final set of comparables selected by him under ITES and IT segment, then as noted by the CIT (A) the arithmetic mean in ITES segment comes to 13.73% and in IT segment comes to 17.51%. In that case, in ITES segment margin shown by the assessee and margin which has been determined falls within the tolerance limit of +/- 5% as provided in proviso to Section 92CA which was applicable prior to 01/10/2009, then assessee s price of Rs. 30,29,93,009/-, which is well within the tolerance range, because -5 comes to Rs. 29,28,59,642/- and +5% comes to 32,36,86,978/-. CIT (A) has correctly held that in such a case, no adjustment is called for. Similarly, in software services, the assessee s price is Rs. 7,39,80,534/- whereas +/-5% range comes between Rs. 7,18,98,974/- to Rs. 7,94,67,787/-. Accordingly, no adjustment can be made. Thus, we do not find any infirmity in the order of the ld. CIT (A) and the same is confirmed. Accordingly, the appeal of the Revenue is dismissed.

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• 2024 (2) TMI 522
  TP Adjustment - comparable selection - HELD THAT:- Mold-Tek has provided derivative losses during the year and this is foreign currency exposure, which has to be considered while comparing the results before it can be selected. It is also pertinent to note that while working out the operating margin of the said company, provision for derivative loss of Rs.. 6.43 crores made by Mold-Tek technologies Ltd. was excluded by the Assessing Officer treating the same as non-operating expenses whereas in the case of Rushabh Diamonds [ 2013 (11) TMI 520 - ITAT MUMBAI ], it was held by the Division Bench of this Tribunal that the gain or loss arising from the forward contract entered into for the purpose of foreign currency exposure on the export and import has to be taken into consideration while computing the operating profit. Therefore, respectfully following the above decision, we are inclined to direct the TPO/AO to remove the above company from the final list of comparables. M/s Eclerx and Accentia Technologies Ltd. be eliminated as functionally different. Restricting working capital adjustment - We observe that TPO has adopted the adhoc 2% for finalizing the WCA without assigning any reasons for adopting the above said percentage. We are inclined to remit this issue back to the file of TPO to adopt the reasonable percentage on actual basis based on the data available on record. Accordingly, this ground of appeal is allowed for statistical purpose. Non-grant of TDS Credit - As considering the overall merits on the submissions made by the assessee we are inclined to remit this issue back to the file of AO with a direction to verify the records submitted by the assessee on merit as per law. It is needless to say that assessee may be given a proper opportunity of being heard. In the result, the issue under consideration is remitted back to the file of AO for statistical purpose. Computation of deduction u/s 10A - HELD THAT:- As relying on HCLTechnologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT ] we hold that the expenses excluded from the export turnover have to be excluded from the total turnover as well while computing deduction under section 10A of the Act. Accordingly, ground raised by the revenue is dismissed. Disallowance u/s 14A r.w.r.8D - HELD THAT:- We observe that the assessee has earned dividend income from domestic and foreign companies and the 14A disallowance applicable only on the dividend earned by the assessee from domestic companies. Further, the assessee has made submissions that the Assessing Officer has not recorded satisfaction before invoking rule 8D. It is fact on record that the AO has invoked rule 8D considering the fact that the rule 8D is applicable for this year and instead of going into this aspect, we are inclined to direct the Assessing Officer to make disallowances based on the settled position of law, in the following cases, the Hon ble High Courts and coordinate benches has given clear findings that the disallowance u/s 14A is restricted only to the extent of exempt income earned and the investments to be considered for making disallowances are only on those investments which has actually earned the dividend. Assessing Officer is directed to re-work disallowance u/s.14A under rule 8D(2)(iii) by adopting only those investments which has yielded exempt income. The assessee gets the relief accordingly. This ground of appeal is partly allowed. TP Adjustment in relation to financial data analysis services - comparabaility analysis - HELD THAT:- Comparable TCS e-serve is distinguishable on the basis of high turnover and brand value not on the basis of functionality test. In our view, whether the turnover makes the difference. We observe that the Turnover of TCS is Rs..1578 crores in this segment, whereas the Turnover of the assessee is Rs.. 114 Crores, there is significant difference and it is about 14 times - we direct the Transfer Pricing Officer to exclude the comparable TCS e-serve from the final list of comparables.

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• 2024 (2) TMI 521
  Undisclosed cash credit u/s 68 - non-appearance of directors - As per DR assessee has failed to prove the genuineness of transaction and creditworthiness of the share applicants - CIT(A) deleted the addition - HELD THAT:- All the share applicants are (i) income tax assessees, (ii) they are filing their income tax returns, (iii) share application form and allotment letter is available on record, (iv) share application money was made by account payee cheques, (v) details of the bank accounts belonging to share applicants and their bank statements, (vi) in none of the transactions there are any deposit of cash before issuing cheques to the assessee, (vii) all the share applicants are having substantial creditworthiness represented by their capital and reserves. Hon ble Calcutta High Court in the case of PCIT Vs. Naina Distributors Pvt. Ltd [ 2023 (6) TMI 1362 - CALCUTTA HIGH COURT] has decided the issue in favour of the assessee by holding that mere non-production of director cannot be the ground for making any addition in the hands of assessee u/s 68 - Thus addition made by the Ld. AO towards share capital including share premium is directed to be deleted. Thus, grounds taken by the revenue in this regard are dismissed.

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• 2024 (2) TMI 520
  Additional income offered on account of excess stock during the course of survey - business income of the assessee OR income from other sources liable to be taxed at a higher rate prescribed u/s 115BBE - HELD THAT:- As decided in case of M/s. Brij Mohandas Devi Prasad [ 2023 (7) TMI 1086 - ITAT INDORE] alleged excess stock was not kept separately at any other place and was part of the total business tock found at the assessee s business premises are sufficient enough to indicate that the alleged investment in excess stock is part of the business income. We also find that alleged excess stock was duly accepted by assessee as part of unaccounted business and source thereof stated during the course of search itself and no other incriminating material was found during search proceedings and therefore is not an undisclosed income as held by the ld. AO. We, therefore, find no infirmity in the finding of CIT(A) rightly holding that the provision of section 115BBE of the Act are not applicable on the surrendered income on account of excess stock found during the course of search. Thus once the facts emerging from record shows that the excess stock found during survey was a part of entire lot of stock of assessee, part of which is recorded in books of account and part of the same was not found recorded and therefore, treated as excess stock at the time of survey and consequently surrendered by the assessee and also offered to tax in the return of income then the excess stock cannot be treated as deemed income u/s 69 or 69B . Decided in favour of assessee.

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• 2024 (2) TMI 519
  Claim made for the first time in the course of original assessment - Depreciation on goodwill - whether the claim made by the appellant regarding depreciation on goodwill for the first time in the course of original assessment can be legally entertained in light of the decision of Hon ble Supreme Court in the case Goezte (India) Ltd [ 2006 (3) TMI 75 - SUPREME COURT] ? - HELD THAT:- The ratio laid down by the Hon ble Supreme Court in the case of Jute Corporation of India Ltd. [ 1990 (9) TMI 6 - SUPREME COURT] that the first appellate authority has the power to entertain new claim if the grounds raised are bonafide, was not disturbed by the Hon ble Supreme Court in their decision in Goetze (India) Ltd [ 2006 (3) TMI 75 - SUPREME COURT] . Also see case of CIT Vs Pruthvi Brokers Shareholders Private Limited [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] In the decided case, the High Court explained that the decision of Supreme Court in the case of Goetze India Limited (supra) was confined to where the claim was made only before the AO and not before the appellate authorities. The Hon ble High Court held that jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Hon ble Supreme Court. We accordingly hold that, the powers of the Ld. CIT(A) being the first appellate authority as well as this Tribunal are wide enough to entertain the appellant s plea for depreciation on goodwill, which had not been claimed in the return of income, but relevant facts on the issue was placed before the AO. Depreciation claimed by the appellant - goodwill acquired under slump sale - We hold that the decision of Hon ble Supreme Court in the case of Smifs Securities Ltd [ 2012 (8) TMI 713 - SUPREME COURT] shall be applicable and therefore depreciation is allowable on goodwill acquired under slump sale u/s 32(1) of the Act in the relevant year. Hence, the plea raised by the Revenue that the depreciation on goodwill claimed by appellant is unsustainable in light of the amendment to Section 2(11) 32 of the Act is rejected. Valuation of goodwill on which the depreciation has been claimed by the appellant - The valuer had to make forecast on the basis of some material, like growth of the business, economic/market conditions, expected demand and supply, cost of capital and host of other factors, but to estimate the exact figures was beyond their control. Accordingly, the actual results of CCB business cited by the Revenue to doubt the genuineness of acquisition of goodwill and correctness of the projections made in the valuation exercise cannot be countenanced. Moreover, before us as well as the lower authorities, the appellant had also placed the valuation report obtained from independent valuer, M/s Dalal Shah which supported the price paid for acquisition of goodwill. It is noted that, initially the Revenue had disputed the valuation report citing non-filing of under-lying records/basis for preparation of valuation report -Although these underlying archives were provided to the Revenue and the appellant had also extended the opportunity to the Revenue to inspect their server/digital records to ascertain its veracity, the Revenue is noted to have not opted for it for extraneous considerations. Instead, the Revenue has made bald assertions doubting its correctness. Such action of the Revenue is against the spirit of fair play and therefore cannot be countenanced. The goodwill in question is thus noted to be in the nature of acquired goodwill and the price paid by the appellant, irrepsective of the fact that it was paid to related party, constituted the cost of acquisition in the hands of the appellant, in terms of Section 43(1) of the Act. The aforesaid material information, according to us, is sufficient to entertain the claim for depreciation on the goodwill acquired by the appellant. Hence, the purported errors/infirmities cited by the Revenue in the valuation of goodwill at Rs. 160 crores is held to be immaterial. Consequently, the objections / submissions put forth by the appellant in their rejoinder to the errors/infirmities pointed out by the Revenue, stands rendered academic in light of the facts of this case. Accordingly, on overall facts of the case, as discussed above, and in light of the decision of Hon ble Supreme Court in the case of Smifs Securities Ltd (supra), we hold that the appellant was legally entitled to claim depreciation on the goodwill acquired pursuant to slump sale acquisition of CCB Business from VEGL. The AO is accordingly directed to compute and allow the same in accordance with law. Appeal of the assessee is allowed.

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• 2024 (2) TMI 518
  TP Adjustment - comparable selection - HELD THAT:- comparables cannot be excluded on the ground of loss making and the profit margin is low. Not applying the PSM as approved by the TPO to non AE transactions and determining the profit on estimate basis - HELD THAT:- Addition has been made purely on estimate basis and, therefore, cannot be sustained. The issue is covered by the decision of Star International Movies Ltd [ 2019 (10) TMI 1342 - ITAT MUMBAI] as considered the similar issue and has deleted the addition made by the Assessing Officer as held that the income from non AE transaction cannot be taxed separately by applying net profit rate of 28%. Taxability of income from transfer of channel as short term capital gains - taxability in India or not? - HELD THAT:- From the perusal of the down linking license obtained by the assessee from Ministry of information and Broadcasting of India to operate Star World channel in India, it is also established that the ownership of the Star World channel is outside India. Given this, when the ratio laid down in in the case of Cub Pty Ltd [ 2016 (7) TMI 1094 - DELHI HIGH COURT] case is applied, we see merit in the argument of the ld AR that the impugned asset is not an asset situated in India since it is owned by a person outside India and therefore the situs of the asset is also outside India. Accordingly in our considered view, the income arising out of the transfer of Star World channel, being an asset outside India by the assessee to SIML will not fall within the provisions of section 9(1)(i) and accordingly not taxable in India. Asset as situated in India since there is clear cut nexus and strong business connection of the transferred asset to India due to very nature of the asset and its ability to continually and regularly generate income from India and therefore taxable in India - Though there may be merit in the argument that viewership in India affects the valuation / purchase price of the transaction, we are not in a position to concur with the said contention of the revenue in the absence of any concrete material brought on record to prove the claim that the substantial value of the channel is derived from assets located in India. We further notice that in the case of Asia Satellite Telecommunications Co Ltd [ 2011 (1) TMI 47 - DELHI HIGH COURT] has held that merely because the footprint area includes India and the programmers by ultimate consumers/viewers are watching the programs in India, even when they are uplinked and relayed outside India, would not mean that the assessee is carrying out its business operations in India. We are of the view that the Star World Channel having viewership India generation income cannot be a reason for holding that the channel is an asset situated in India. Therefore on this count also the addition made is not tenable. Taxation of royalty income @42.23% by AO - AR submitted that since the assessee being a foreign company, the applicable tax rate of royalty income is as provided under section 115A of the Act which is at 10.5575% whereas the Assessing Officer has applied the tax rate at 42.23% - HELD THAT:- As relying on case of Star International Movies Ltd. [ 2019 (10) TMI 1342 - ITAT MUMBAI] we direct the Assessing Officer to tax the royalty income at the appropriate rate as provided in section 115A of the Act.

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• 2024 (2) TMI 513
  Disallowance u/s. 14A - interest expenditure pertaining to tonnage tax business - AO did not accept the assessee s computation of disallowance and proceeded to recomputed the disallowance u/s. 14A r.w.r.8D - HELD THAT:- This issue is covered in favour of the assessee by the Tribunal in assessee s own case [ 2023 (9) TMI 1427 - ITAT MUMBAI] as held that interest expenditure pertaining to tonnage tax business has to be excluded while computing disallowance under Rule 8D(2). The said decision has been followed in assessee s own case for A.Y.2009-10, 2010-11, 2012-13 and 2014-15. As investments are more than the reserves for the company itself - From the perusal of the balance sheet we find the aforesaid contention is correct and once it is an admitted fact that assessee has own surplus funds for exceeding the investments made, then no disallowance of interest can be made. This issue now stands covered by the judgment of South Indian Bank Ltd [ 2021 (9) TMI 566 - SUPREME COURT] Accordingly, disallowance made by the ld.AO under Rule 8D(2) is deleted. AO has disallowed a further sum under clause 2(iii) of Rule 8D, being the amount computed 0.5% of the average value of investments held by the assessee - However, the actual expenditure claimed of the Treasury Division based on the divisional Profit Loss Account was only Rs 22,54,612/- The administrative expenditure under clause 2(i) 2(ii) of Rule 8D cannot exceed the actual expenditure incurred by the Treasury Division - This issue is also decided by the Tribunal in assessee s own case for the earlier years. Thus, the enhancement made by the ld. AO over and above the disallowance made by the assessee is uncalled so the same is directed to be deleted. Disallowance u/s. 14A while computing the book profit u/s. 115JB - This issue now stands covered in the favour of the assessee by the decision of assessee s own case in the earlier years whereas the Tribunal has followed the decision of the Special Bench in the case of Vireet Investments Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] Foreign exchange gain written back on cancellation of vessel construction contract taxed u/s. 28(iv) - HELD THAT:- Here in this case the said receipt was in capital account and therefore, prima facie Section 28(iv) is not applicable. The reason being the income which can be taxed u/s. 28(iv) must be not only referable to a benefit or perquisite, but must be arising from business or exercise of profession. Here, assessee is in the business of operation of ships and not in the business of constructing or buying / selling ships. As decided in the case of Mahindra Mahindra Ltd [ 2018 (5) TMI 358 - SUPREME COURT] waiver of loan for acquiring capital assets cannot be taxed as a perquisite u/s. 28(iv) of the Act as receipt in the hands of the assessee are in the form of cash / money and further, the same cannot be taxed as a remission of liability u/s. 41(1) of the Act as waiver of loan does not amount to cessation of trading liability. Thus, we hold that foreign exchange gain written back on cancellation of vessel construction contract which were earlier capitalised in the vessels as capital receipt and outside the purview of chargeability u/s. 28(iv) of the Act. Accordingly, this ground of assessee is allowed. Short grant of TDS credit - We are directing the ld. AO to examine this issue and grant credit in accordance with law. TP adjustment on performance guarantee given on behalf of the AE - HELD THAT:- Since, immediately preceding and succeeding years, the Tribunal has held that performance guarantee needs to be benchmarked and therefore, we set aside this issue to the file of the AO / ld. TPO holding that; firstly, 1% per annum cannot be applied as it is too high and without any basis; Secondly, assessee has adequate security and therefore, benchmarking of the performance guarantee needs to be substantially lower than the pure financial guarantee; Thirdly, the assessee has entered into contract on 16/01/2011 with Lamprell Energy Ltd., to construct this. It has given performance guarantee to the said company on 28/02/2011. Thus, the performance guarantee was in existence only for one month during the F.Y.2010-11 and therefore, if at all any transfer pricing adjustment it should be made only for the period of one month. With this direction, this ground of appeal is treated as partly allowed for statistical purposes. Accordingly, assessee s appeal is partly allowed. General average claims - insurance claims received on account of damages to ships which were insured, which were reflected under Miscellaneous Operating Income in the audited Profit Loss Account - AO stated that the said income, in the normal course, would have been liable to tax under Section 41(1) of the Act - HELD THAT:- Any loss which is brought forward from a non- tonnage tax year must be set off against the tonnage tax income, even if the shipping company has opted for the tonnage tax scheme. As a corollary thereof, any income which has resulted from any expenditure claimed in an earlier year and which has accrued as the income for the year to which the tonnage tax scheme applies would also most certainly have to be considered as part of the tonnage tax income accordingly. In any case, this issue is covered in favour of the assessee by the Tribunal in assessee s own case for A.Y.2006-07, 2007-08 and 2008-09, respectfully following the same, this issue is passed against the department.

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• Customs

• 2024 (2) TMI 517
  Seeking release of seized Gold - Smuggling - foreign marked gold bars - SCN did not consider the e-mail issued by the Petitioner informing Respondent Nos. 1 2 that it was the owner of the said gold - HELD THAT:- The request made by the learned Counsel for the Petitioner is reasonable and, therefore, Respondent Nos. 1 2 would have to be directed to decide the representations made by the Petitioner within a period of six months from the date of intimation of this Order, without being influenced by the Order-in-Original dated 13th January, 2023. As requested by the learned Counsel for the Petitioner, till a decision is taken in respect of the representations of the Petitioner, status-quo should be maintained in respect of the said gold. Further, in the event of the Petitioner succeeding in proving its case, the Respondents will have to be directed to restore to the Petitioner the said gold or equivalent amount of gold or to compensate the Petitioner by making payment of an amount equivalent to the market value of the said gold as on date. Respondent No. 1 is directed to consider the representations made by the Petitioner by its letters dated 19th June, 2019, 13th September, 2019, 19th December, 2019, 3rd January, 2020 and 24th October, 2020 and take a decision in respect of the same within a period of six months from the date of intimation of this Order, after giving a personal hearing to the Petitioner, and without being influenced by the Order-in-Original dated 13th January, 2023 - Petition disposed off.

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• 2024 (2) TMI 515
  Levy of penalty u/s 114AA of Customs Act, 1962 - Smuggling - Red Sanders - prohibited goods or not - it is revealed that both the containers that were stuffed with sanitary ware and self sealed in the factory of M/s. Sanyo were taken to a plot enroute Mundra port and declared goods were substituted by red sanders logs - HELD THAT:- In the absence of any admission and knowledge about the offending goods penalties under Section 114(i) and 114AA cannot be imposed and that too on the basis of incomplete investigation. There is total lack of investigation on the aspects of who broke the seals on the plot enroute and how they got substituted and where have the substituted goods gone. Main culprits are still at large. Exporters earning precious foreign exchange cannot be allowed to be victimised and still further penalised. The lack of knowledge brought on record by the Commissioner (Appeals) in his findings is supported in evidence not only by various statements but also circumstantial evidence. The incomplete investigation coupled with all above narrative does not justify imputation of malafide and penalties under Section 114 (i) and Section 114AA. The reasoning of the Commissioner to that extent is not well founded for the imposition of penalties which require malafide and unconditional knowledge of offending goods. Department has failed to point out as to how sealing process was found to be lacking and that engaging of any transportation is not an option available to exporter of goods in sealed container. A onetime engagement of a transporter does not make him an employee, even otherwise. Employer cannot be held responsible for penalty under Section 117, as held in SHRI AMIT RAJKUMAR SINGHANIA, SHRI JITU SHARAD SHIRSAT, ANJANA NILESH JADHAV, SHRI MANISH DHIRAJLAL BAROT, M/S. CHITALIA LOGISTICS P. LTD., SHRI HARSHWARDHAN THAKUR VERSUS COMMISSIONER OF CUS. (ACC) , MUMBAI [ 2019 (8) TMI 1791 - CESTAT MUMBAI] . The penalty under Section 114 (i) and under 114AA as imposed by the Commissioner is liable to be set aside - even penalty under Section 117 too cannot imposed on the firm, as required by the department in its appeal as same requires existence of a provision in the Customs Act, 1962, the violation of which has been committed and for which no specific penalty exists. The show cause notice of the department seeking imposition of penalty under other section, defies such situation - Penalty thus under Section 117 cannot be imposed as rightly held by Commissioner (Appeals). The appellant party s appeals are allowed and the department s appeals are dismissed.

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• 2024 (2) TMI 514
  Revocation of Customs Brokers licence of the appellant - forfeiture of security deposit - Levy of penalty - violation of Regulations 10(a), 10(d), 10(e), 10(m) and 10 (n) of CBLR. Violation of Regulation 10(a) - appellant had not obtained any authorization for the consignments from the importer M/s. Angel Corporation at all - HELD THAT:- In this case, investigations revealed that M/s. Angel corporation had nothing to do with the imports and Shri Tarkeshwar Dubey was the master mind of the operation which he undertook for some Somalians. The Airway Bill issued by the airline showed the goods as Dry Khat but Shri Dubey changed the description of the goods in the Airway Bill and sent them to the appellant who filed the Bills of Entry with wrong description of the goods. There is nothing on record to show that the appellant was involved in the smuggling of Dry Khat or profited from it. However, the question in this appeal is simply whether the appellant had obtained the authorization from the importer firm, as was required as per Regulation 10(a) or not - Had the appellant approached M/s. Angel Corporation, the importer and obtained the documents from them, or at least, checked with M/s. Angel Corporation even through a phone call or email, it would have known in no time that the consignment was not imported at all by M/s. Angel Corporation and the entire racket of smuggling of the psychotropic substance would have come to light - there are no hesitation in holding that the appellant had failed to obtain authorization from M/s. Angel Corporation, the importer and thereby violated its obligation under Regulation 10(a). Contravention of Regulation 10(d) - failure to advise Angel Corporation to comply with the provisions of the Act and allied Acts, but it has not even contacted the client - HELD THAT:- Regulation 10(d) requires that the Customs Broker to advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be. Learned counsel for the appellant denies that there was any violation of Regulation 10(d) at all - In this case, the client of the appellant on paper is M/s. Angel Corporation. Not only did the appellant not advise Angel Corporation to comply with the provisions of the Act and allied Acts, but it has not even contacted the client. In fact, it filed the Bill of Entry in the name of M/s. Angel Corporation without even contacting them and thus the import of the psychotropic substance dry khat took place - there are no hesitation in holding that the appellant had violated Regulation 10(d). Violation of Regulation 10(e) - filing of Bills of Entry on the basis of the wrong information provided by a person - HELD THAT:- This Regulation requires the Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage - The entire facts of the case are not that the appellant had provided wrong or incorrect information to its clients but that it had filed Bills of Entry on the basis of the wrong information provided by a person who was not the importer but some other person - it is not found from the facts of this case that the appellant had provided any wrong or incorrect information. Therefore, the appellant did not violate Regulation 10(e). Violation of Regulation 10(m) - processing done carelessly without taking due care - HELD THAT:- This Regulation requires the Custom Broker to discharge his duties with utmost speed and efficiency and without any delay. From the facts of this case, it does not appear that the appellant had delayed any processing. In fact, the problem is that it had processed them carelessly without taking due care - it is not found that the appellant had violated regulation 10(m). Violation of Regulation 10(n) - requirement to verify the identity of the importer and whether it was operating at the declared address - HELD THAT:- The appellant would have been correct if it had obtained the documents from the importer M/s. Angel Corporation. Obtaining the documents from some other person and filing benami Bills of Entry to clear mis-declared cargo, which in this case, happens to be a psychotropic substance banned under NDPS Act cannot, in our view, constitute fulfilment of Regulation 10(n) - the Commissioner was correct in holding in the impugned order that the appellant had violated Regulations 10(a), 10(d) and 10(n). A Customs Broker is expected to behave and operate responsibly and he cannot simply file benami Bills of Entry which, in this case, resulted in import of a psychotropic substance. Filing of Benami Bills of Entry, if condoned, can have severe consequences. Customs procedures are based on trust and selective controls based on risk assessment. If Customs Brokers start filing Benami Bills of Entry, in the name of any importer, it can open the floodgates for free import of any contraband including, drugs, arms and explosives. Since examination is on selective basis, chances are that the contraband may not be detected (especially if mis-declared as a low risk import good) - filing Benami Bills of Entry is a serious violation and calls for toughest action. There are no reason to interfere with the impugned order and uphold it. The appeal is, accordingly, rejected.

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• 2024 (2) TMI 512
  Import of Apples - authenticity of the Country of Origin Certificate (COO) - Imports from South Asian countries under South Asian Free trade agreement (SAFTA) - Exemption from basic customs duty (BCD) in terms of Notification No. 99/2011 Cus dt. 09.11.2011 - period March 2014 to March 2015 - HELD THAT:- So far the availability of exemption from duty under Notification No. 99/2011-Cus is concerned, we find that the Certificate of Origin has been reported to be not issued by the ACCI (prescribed authority). Further, as required under Rule 12(b)(iv) of the SAFTA Rules, the goods were not under the customs control in the country of transit. Further, as required under Article 18 of SAFTA Procedures, a through bill of lading/Airway bill has not bee produced. Thus, the Appellant is not entitled to benefit of exemption under Notification No. 99/2011-Cus. Thus, no case of fraud or forgery is made out against the Appellant/importer. Upon appreciation of evidence on record, including statements recorded during investigation of Appellant/importer and other persons, no case is made out that the Appellant/importer colluded with the exporter or its agent in fabricating or forging any document. It is further evident that the origination or import of apples from Afghanistan is corroborated also by other documents like Phytosanitary Certificates, which even mentioned route of transport, inter alia, including Dubai and Iran. Further, admittedly, Afghanistan is a landlocked country and there is no direct access with India. Further, there appears to be nothing unusual for the exporter in Afghanistan to ship the apples to Dubai for faster movement as fruits are perishable in nature. The SCN is bad for selective reliance of evidence on record. Further, we find, the Appellant/importer has imported apples under proper permit issued by the Ministry of Agriculture, Government of India, specifying the country of export as Afghanistan. These aforementioned evidences support the bonafide of Appellant/importer - the provisions of Sec 28(4) are not attracted as the conditions, precedent in the said section, are not available to Revenue like fraud, suppression, misstatement, etc., with intent to evade duty. Valuation - HELD THAT:- The enhancement is bad as no differential duty was proposed on account of revaluation in the SCN. We also hold that the shipping documents at Jabel Ali port, Dubai are not the prescribed documents under the Customs Valuation Rules - Revenue has not fully relied upon the shipping bills/documents filed at Dubai port, which also mentions the country of origin as Afghanistan. Further, in some of the shipping documents the declared value at Dubai port is lesser than the declared transaction value in India. In this view of the matter also, rejection of transaction value and enhancement of value on the basis of contemporaneous import price or documents filed at Dubai is held bad. Further, no evidence has been led by Revenue, of any remittance by Appellant/importer, over and above the transaction value. Accordingly, the enhancement in the transaction value is set aside. The Appellant/importer is liable to duty as per the declared value only - all penalties imposed are set aside - the Appeal of importer Asra Enterprises is allowed in part. Appeal of Revenue is accordingly, dismissed.

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• 2024 (2) TMI 511
  DFIA scheme - exemption from basic customs duty and additional customs duty - introduction of new condition by way of amendment - department was of the view that the appellants have mis-declared as they failed to fulfill the condition and are therefore liable to pay duty and penalty - Show Cause Notice is issued beyond the period of six months as envisaged under Section 28 of Customs Act 1962 - Time limitation - suppression of facts or not - HELD THAT:- The plastic granules of various grades were imported by the appellant under duty free import authorization scheme read with Customs Notification no.40/2006-Cus dated 1/5/2006. In appeal no.C/41597/2014, the goods were cleared prior to 19.02.2009. The Notification no.17/2009-Cus dated 19.02.2009 had brought in condition no.(iii) (a) by which the transferee importer has to execute a bond that the goods will be used within six months in manufacture of dutiable products. It is noted that the amendment was challenged by many importers before the Hon ble High Court of Madras and the Hon. ble High Court vide judgement reported in the case of TARAJYOT POLYMERS LTD. VERSUS UNION OF INDIA, THE COMMISSIONER OF CUSTOMS (APPEALS) , THE DEPUTY COMMISSIONER OF CUSTOMS, DFIA [ 2017 (11) TMI 494 - MADRAS HIGH COURT] held that the amendment cannot be applied retrospectively. The Tribunal in similar matters vide Final Order No.4481/4486/2019 dated 11.3.2019 [ 2019 (3) TMI 715 - CESTAT CHENNAI] had set aside the demand interest and penalties for the clearances which were partly prior to 19/2/2009 and after 19/2/2009. The Tribunal had considered the issue of the amendment to the notification no.40/2006 and held that the allegation of misdeclaration and intention to evade customs duty cannot be saddled on the importer as the period is the transition period of the introduction of the amendment. In the present case, as there is no evidence to establish fraud, misrepresentation or suppression of facts with intend to evade payment of duty. The Show Cause Notice issued on 3.12.2010 and 21.5.2010 invoking the extended period cannot sustain. The demand, interest and penalties imposed in appeals C/41601 C/41602/2015 therefore requires to be set aside. Appeal allowed.

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• Corporate Laws

• 2024 (2) TMI 510
  Revival of the Appellant / Company - Removal the company for non-filing of Annual Return - Going Concern or not - Misinterpretation of meaning and purport of Liberty granted to the Appellant - disregard by Tribunal of clear liberty granted to the Appellant by the Hon ble High Court, by holding that since the Company petition was not pending, there was no question of receiving additional documents in a disposed of petition/proceeding - HELD THAT:- The power of a Tribunal to permit Additional evidence to produce / documents is in the jurisdiction of the Appellate Authority. A document not relevant for deciding the question of controversy in a given proceeding / suit is not to be accepted as additional evidence. Also, if there is any gap or lacuna in evidence to be filled up, the discretionary power conferred upon the Appellate Authority does not authorise the Appellate Authority to fill the gap in question. The Tribunal / Court of Law is to see whether the Petitioner/Appellant lacked due diligence to be seen, and he cannot be allowed to fill up the lacuna at the belated stage. Moreover, the production of additional evidence is not to be permitted where a person does not satisfy the Tribunal / Court that such evidence was not within the knowledge or could not be produced with due diligence. Even though in the present case, the Appellant has come out with a reason that the Petitioner/Appellant had engaged a Part Time Employee to file the Annual Return before the Registrar of Companies and that because of the reason unknown to the Appellant, the said employee left and therefore, the Return could not be filed on time for the financial years 2016-2017 and 2017-18 and by the time it came to the knowledge of the Appellant/Petitioner Company, his name was already struck off from the register maintained by the Registrar of Companies , the Tribunal, in CP(Appeal) No.69/CTB/2020 on 21.08.2020, at para No.11 had clearly observed that before striking off the name of the company from its register, ROC, had issued a show cause notice to the Company enquiring whether the said Company was carrying any business or was in operation . This Tribunal , on going through the impugned order dated 08.08.2023 in CA 15/CB/2023 in CP/69/CTB/2020 is of the considered view that the Appellant had not filed CA 15/CB/2023 in CP/69/CTB/2020 within the two years period as envisaged under Section 420 (2) of the Companies Act, 2013 and in fact had filed the CA 15/CB/2023 in CP/69/CTB/2020 before the Tribunal 16.12.2022, after the lapse of two years period on 16.12.2022. Therefore, the Tribunal had rightly opined that the CA 15/CB/2023 was not to be considered in regard to the receiving of additional documents / additional evidence. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2024 (2) TMI 509
  Maintainability of section 9 application - initiation of CIRP - It was held by NCLAT that The present was a case filed by the Operational Creditor only for recovery of its contractual dues with regard to default committed as per the case of the Appellant on 30.04.2015 for stage 1 and 23.10.2018 for stage 2. The Adjudicating Authority did not commit any error in rejecting Section 9 application as barred by time - HELD THAT:- There are no reason to interfere with the order of the National Company Law Appellate Tribunal - appeal dismissed.

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• 2024 (2) TMI 508
  Liquidation of Corporate Debtor - CoC s decision to liquidate was tainted with material irregularity and arbitrariness or not - Whether the decision of the Adjudicating Authority is based on incorrect premise that once the CoC had decided with the requisite majority to liquidate the CD, such a decision would not be amenable to judicial scrutiny? - ineligibility under Section 29-A(b) of the IBC - classification of wilful default is dehors the RBI circular. Whether CoC s decision to liquidate was tainted with material irregularity and arbitrariness or not? - HELD THAT:- Adjudicating Authority has noted that the CoC had, with 100% voting, recommended that the CD should be liquidated and that there were no reasons on record for the adjudicating authority not to disagree with the recommendations of RP/CoC. Further, as per Section 33(2) of the IBC 2016, where the Adjudicating Authority has been intimated by the Resolution Professional about the decision of the CoC for initiation of liquidation, it has go to along with it. Adjudicating Authority has gone along with the recommendations of the COC and ordered for its liquidation. Therefore, it cannot be faulted for not reviewing the decision of the CoC when no such grounds are available. The Appellants also brings the issue of the hesitation of the interim resolution professional, which is recorded in the first CoC meeting dated 08.11.2021. In the CIRP proceedings under the IBC, the decision of the CoC is supreme and IRP or RP s subjective views and feelings cannot dictate the outcome or change the direction of the proceedings. The members of the CoC decided to go for liquidation and IRP has to record like that without inserting his feelings - it cannot be said that there has been material irregularity in the decision of the CoC. The arguments relating to material irregularity cannot be accepted and are therefore rejected. Whether the decision of the Adjudicating Authority is based on incorrect premise that once the CoC had decided with the requisite majority to liquidate the CD, such a decision would not be amenable to judicial scrutiny? - HELD THAT:- There are no grounds for the judicial scrutiny of the Resolution plan, as envisaged under Section 30(2) or Section 61(3) of the IBC or any other provisions of the IBC. Therefore, no error can be found in the orders of the Adjudicating Authority. The judgment of NCLAT referred to by the Appellant is with respect to Hero Fincorp Limited Vs. M/s Hema Automotive Private Limited [ 2023 (1) TMI 305 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] which is distinguishable. As noted in Sreedhar Tripathi [ 2022 (10) TMI 1143 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] judicial review of the decision of the CoC is not precluded and it depends on the facts of each case - Facts of the case in hand are distinguishable as the CoC in its very first meeting had decided to go for liquidation basis their commercial wisdom and therefore, this judgement is not helpful for the Appellant. None of the judgements relied upon by the Appellant help them. Therefore, the decision taken by the CoC to liquidate a CD cannot be subjected to judicial review in the facts of this particular case. Whether the Applicants ineligibility under Section 29-A(b) of the IBC does not take effect if the classification of wilful default is dehors the RBI circular? - HELD THAT:- The decision of the Adjudicating Authority and the recommendations of the CoC don t refer to the ineligibility basis Section 29- A(b) of the IBC. Even then it is noted from the minutes of the first CoC meeting of 8.10.2021, which is post Oral Order dated 18.04.2019 of Hon ble High Court of Gujarat, the Appellant was present and resolution of the CD was discussed with him and thereafter basis their commercial wisdom, it was decided to go for liquidation of the CD. CoC had given a clear finding that there were no chances of getting an EoI or possibility of revival of the CD basis the facts of the case. Conclusion:- The CoC has taken a commercial decision, basis their discussion within the lenders and also with the Appellant and they have come to a conclusion for liquidation of the CD. Commercial wisdom of the CoC has been exercised in a clear and forthright manner. The Adjudicating Authority has also relied upon that. There are no irregularity on the part of CoC or Adjudicating Authority, so these averments of the material irregularity and arbitrariness cannot be sustained. The liquidation was ordered by the Committee of Creditors with 100% majority vote. This was very clearly and un-ambiguously established in the very first meeting of CoC. The commercial wisdom of the COC has been converted into a decision of liquidation as per Section 33(2) of the IBC, instead of going for calling for resolution claim. When such a decision has been taken and when no grounds have been made out as per Section 61(4) of the IBC and there is no grounds of material irregularity, there are no justification for review of the orders of the Adjudicating Authority, which are based on commercial wisdom of the CoC. Appeal dismissed.

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• PMLA

• 2024 (2) TMI 507
  Provisional Attachment Order - Money Laundering - proceeds of crime - Petitioner being Housewife - company had prepared 17 fake bills of entry and presented the same before the ICICI Bank for making foreign outward remittances - HELD THAT:- Section 5 of the PMLA postulates that where the Director or any other officer not below the rank of Deputy Director authorised by the Director, on the basis of material on possession has reason to believe, which has to be recorded in writing, that any person is in possession of any proceeds of crime and such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings, he may, by order in writing, provisionally attach such property for a period not exceeding 180 days from the date of the order. The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. It is well settled that where any Statute provides a procedure to deal with the issues which arises under the Statute, the High Court while exercising its jurisdiction under Article 226 of the Constitution of India ordinarily must not interfere with the scheme unless there is a patent lack of jurisdiction. The present case is not a case of patent lack of jurisdiction. The Adjudicating Authority has the power to look into the facts of the case of the Petitioner before coming to a conclusion as to whether the properties in question are proceeds of crime or not. It has been contended by the Petitioner that one accused has been discharged and proceedings against one accused has been abated because of his death. It is pertinent to mention that apart from individuals, even companies have been made accused. Merely because proceedings have been dropped against some individuals does not mean that the proceedings against the Petitioner should or will be dropped. The offences under the PMLA Act are distinct from offences under the IPC. The companies can still be convicted for the predicate offence and the Petitioner can be prosecuted under the PMLA Act. This Court is not inclined to interfere under Article 226 of the Constitution of India - the writ petition is dismissed.

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• Service Tax

• 2024 (2) TMI 516
  Demand of service tax - Supply of tangible goods for use - transfer of right to use goods - deemed sale - HELD THAT:- The ld. Commissioner (Appeals) has observed that in the instant case the custody of the assets was given to FKOL, as they were granted Exclusive Licence to use the goods, but they had no possession and effective control of the goods and neither were free to make use of the said assets in the manner and purpose other than as specified in the said agreement. Nor FKOL were free to allow/assign or licence the goods for use by others. Further, FKOL was not free to remove these assets from the premises of the Appellant. Further observed as per Clause 2.7 of the agreement, that during the terms of the agreement the Appellant can sell its right or interest on the said assets. This agreement only allows FKOL to use the laboratory infrastructure developed by the Appellant for a specific purpose of oncological research, without transferring the possession or control. The exclusive possession with right to use the goods was given by the Appellant to M/s. FKOL, who were free to use the goods. It is further found from the Clause 2.7 of the agreement, which provides that even if the Appellant decides to sell or transfer its right, title or interest in the goods during the term or the extended term for right to use granted, the Appellant shall take prior consent from FKOL and further ensure that right to use of FKOL under the agreement are not disturbed/preserved and their interest is not prejudicially effected. Thus, evidently, the Appellant had granted exclusive right to use without disturbance or encumbrance to their clients FKOL and accordingly, it is held that they have rightly paid the Sales Tax/VAT on transfer of right to use the goods, to their customers, which is a transaction of deemed sale. Accordingly, it is held that service tax is not attracted. The impugned order is set aside - appeal allowed.

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• 2024 (2) TMI 506
  GTA Service - Declaration by the Goods Transport Agency in the consignment note has not been made so as to comply with the two conditions of Notification No. 32/2004- ST dated 03.12.2004 - HELD THAT:- It is merely for the purposes of removing the inconvenience in availing the benefit under the notification that the circular provides as an option to make declaration on the consignment note as compliance of the condition of the notification in question. It does not prohibit making a declaration separately. The finding of fact has been recorded in the order in original by the Commissioner of Central Excise that conditions have been satisfied by the respondent herein. The Tribunal has concurred with the findings. The findings recorded are findings of fact based on consideration of relevant materials on record. No substantial question of law arises from the impugned order of the Tribunal in view of the fact briefly noted and the detailed discussion and findings of facts recorded in the order in original passed by the Commissioner of Service Tax. The appeal is dismissed at the admission stage.

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• 2024 (2) TMI 505
  Violation of principles of natural justice - recovery of nonpayment/ short payment of service tax - petitioner did not file any reply neither he produced any documents as directed by SCN - opportunity of hearing was given to petitioner or not - HELD THAT:- The petitioner has been granted four opportunities of personal hearing. In respect of the three opportunities earlier granted there is not even request for adjournment. It is only on the fourth opportunity i.e. 09.10. 2020 fixing the date for hearing on 16.10.2020, a letter was addressed. Admittedly, the petitioner did not file any reply to the said Show Cause Notice. The whole effort of the petitioner was to postpone the finalisation of the order. The authority cannot indefinitely wait for the petitioner s appearance for personal hearing before the authority concerned. The petitioner himself has not availed the three earlier opportunities of hearing and with respect to the fourth opportunity, the petitioner has filed adjournment, this Court is of the considered view that there has been no violation of the principles of natural justice as alleged by. Moreover, there is a remedy of appeal and this ground also can be taken before the appellate authority. There is no bar under the statue that the ground of violation of principles of natural justice cannot be taken before the appellate authority and, it can be taken only before this Court. The impugned order is well reasoned order. There are no merit in the writ petition - petition dismissed.

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• 2024 (2) TMI 504
  Abatement from service tax - electrical contract works to various Government Departments - indivisible/composite contract or not - subjected to TDS as per the provisions of Section 194C of Income Tax Act, 1961 or not - HELD THAT:- The appellant has executed works contract involving both material and service and hence the activity is in the nature of composite works contract and therefore is covered by the ratio decision of the Hon ble Apex court in the case of Larsen Toubro Ltd. [ 2015 (8) TMI 749 - SUPREME COURT ] wherein it is held that works contract is leviable to service tax only after 01.06.2007. Following the ratio of the Hon ble Apex Court and the subsequent catena of judgments on the issue, it is found that the appeal filed by the appellant is maintainable and hence the appeal against the confirmation of demand of service tax on Erection, Commissioning or Installation Service is allowed. As regards the benefit of Notification 45/2010-ST dated 20.07.2010, it is not necessary to decide on this issue. As regards the penalties imposed, since the demand itself is not sustainable the penalties are dropped. Demand on Rent-a-Cab service - HELD THAT:- Since the appellant has not adduced any evidence to the effect that the service is used either directly or indirectly in the other services rendered by the appellant and hence the appeal in this regard is disallowed and the penalties imposed under Section 77 78 are upheld. Appeal disposed off.

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• 2024 (2) TMI 503
  Eligibility of CENVAT credit - Input services or not - insurance service - Gold Care warranty scheme - premium for the master insurance policy issued to the appellant - The Cenvat credit was denied on the ground that, Insurance Company was providing service in relation to insurance of the gold belonging to the customers of the appellant and which was purchased from the appellant. - HELD THAT:- The issue in present appeals is similar to the issue considered by Larger bench in the matter of M/s South Indian Bank (supra) and held that insurance service provided by the Deposit Insurance Corporation to the banks is an input service and Cenvat credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering output services . Similarly in the matter of THE COMMISSIONER OF CENTRAL EXCISE SERVICE TAX CUSTOMS, BANGALORE (ADJUDICATION) , THE COMMISSIONER OF SERVICE TAX VERSUS M/S. PNB METLIFE INDIA INSURANCE CO. LTD. [ 2015 (5) TMI 68 - KARNATAKA HIGH COURT ], the issue that came up for consideration before the Karnataka High Court was whether an assessee can avail Cenvat credit of service tax paid on re-insurance services by treating the said service as an input service . PNB Metlife India Insurance Company was carrying on life insurance business and on the insurance policy issued by it, service tax was charged from the customers. It also procured re-insurance service from overseas insurance companies and availed Cenvat credit of service tax paid on such services received by it. The Cenvat credit was denied by the Department for the reason that re-insurance service cannot be considered as an input service since it takes place after the insurance policy is issued. The Hon ble High Court noted that since re-insurance has to be taken under Section 101A of the Insurance Act, 1938, it is a statutory obligation and, therefore, has to be considered as having nexus with the output service and, therefore, would be an input service , for which Cenvat credit can be availed. Hon ble High Court held that We only reiterate that the issuance of insurance policy by insurer, and then taking of reinsurance by it, is a continuous process, and in the facts of the present case, it cannot be said that the same would not be an input service eligible for Cenvat credit within the meaning of Rule 2(l) of the Cenvat Credit Rules, 2004 . Further, held that denial of such CENVAT credit would be against the ethos of Cenvat credit policy, as the same would amount to double taxation, which is not permissible in law. Regarding finding of the Adjudicating authority denying the benefit on the ground that the document produced by the appellant are without proper serial number, considering the provisions of Reserve Bank of India Act, 1934 on Financial Institutions and also by considering the proviso of Rule 4(a)(1) Service Tax Rules, 1994, any document by whatever named called would be used in the place of an invoice, bill or challan. Thus, the reason given by the Adjudicating authority for such finding is per se illegal and unsustainable. Appeal allowed.

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• 2024 (2) TMI 502
  CENVAT Credit - M.S. angles, channels, beams etc. used for the purpose of erection and installation of hoarding through which the appellant is providing advertising service - HELD THAT:- In the issue in the present case i.e. eligibility of the Cenvat credit on the steel materials such as M.S. angle, channels, G.P. Coils, beams etc. used in fabrication of hoardings which is further used for advertising service this Tribunal in CHITRA PUBLICITY COMPANY PVT. LIMITED VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2019 (11) TMI 19 - CESTAT AHMEDABAD] remanded the matter by giving detailed observation. The present case is sequel of the earlier case involving the same issue for the subsequent period. Therefore, in the interest of justice this matter along with earlier remanded matter needs to be decided together on merit. Thus, this matter also should go back to be decided a fresh. Accordingly, the impugned order is set aside and the matter remanded to the adjudicating authority for deciding a fresh considering the observation made - Appeal is allowed by way of remand to the Adjudicating Authority.

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• 2024 (2) TMI 501
  Taxability - Classification of services - Goods Transport Agency Services or not - consignment note were not issued - providing services by way of Transportation of Food Grains from various godowns to the individual PDS Shop and/or other destination contained in such contract/agreements - HELD THAT:- Undisputedly, in the present case appellant was not issuing any consignment note which is an essential requirement for classification of their services under the category of GTA. This fact about not issuance of consignment note is not disputed by the revenue that being so the services provided by the appellant cannot be classifiable under the category of GTA services for making the demand of service tax. Adjudicating authority in the impugned referred to ceratin documents which though were not consignment note etc., to hold that these documents are consignment notes. In case of The Ramco Cements Limited [ 2023 (9) TMI 1257 - CESTAT CHENNAI] Chennai Bench has held that we find that the other orders relied upon by the Ld. Consultant clearly confirm the view that the essential requirement is the issuance of consignment note in order to be covered under the definition of GTA and in the absence of the same, the transporters/contractors rendering transport services in mines cannot be said to be GTA and therefore, their service cannot be made amenable to the levy of Service Tax under the category of transportation of goods by road service. There are no merits in the impugned order and the same is set aside - appeal allowed.

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• 2024 (2) TMI 500
  Demand of differential duty - change/increase in the tax rate of Service Tax from 5% to 8% - point of Taxation Rules, 2012 - services rendered by the Appellant prior to 14/5/2003 - time limitation - HELD THAT:- The very issue was before the Hon ble Delhi High Court in the case of CST Vs. Consulting Engineering Services [ 2013 (1) TMI 434 - DELHI HIGH COURT] , wherein, the Hon ble High Court has held Since the taxable event in the present case took place prior to 14-5-2003, the rate of tax applicable prior to that date would be the one that would apply. In the present case, the rate of 5% would be applicable and not the rate of 8% - the demand set aside on merits. Time Limitation - HELD THAT:- There are force in the Appellant s submission that there was no cause for the Revenue to issue the Show Cause Notice in 2008, for the services provided by the Appellant prior to 30/05/2003, wherein the invoices amounts were realized latest by August 2004. At that particular point of time, in the absence of any specific Rule coming into play, it was left to the interpretation of the Appellant and the Revenue. In such a case, the Department cannot fasten the suppression clause on the Appellant. Therefore, the confirmed demand is liable to be set aside even on account of limitation also. The Appeal is allowed both on merits and on account of time bar.

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• Central Excise

• 2024 (2) TMI 499
  Determination/calculation of deduction - deduction on equalized basis - price declaration in terms of Rule 173C of erstwhile Central Excise Rules, 1944 - HELD THAT:- This Bench of the Tribunal and also the Principal Bench, New Delhi have decided the issue in favour of the appellants in their own case. Commissioner (Appeals) vide OIA dated 26.11.2015 has relied upon CBEC Circular, No. 20/90-CX-1 dated 20.08.1990, which clarified that Assessees who intend to deduct equalized sales taxes, octroi etc. from the cum duty price may be permitted to do so on the condition that such deductions are substantiated, from time to time, on the basis of information available in records regarding the actual amounts paid as taxes, octroi, etc. As long as the assessable values claimed are correct and are not manipulated in order to avoid duty, it is felt that the assessing authorities may allow deductions on account of sales tax, octroi etc. The Hon ble Apex Court in the case of Grasim Industries Ltd. [ 2018 (5) TMI 915 - SUPREME COURT] has validated the above circular even in the new valuation regime and observed the measure of the levy contemplated in Section 4 of the Act will not be controlled by the nature of the levy. So long a reasonable nexus is discernible between the measure and the nature of the levy both Section 3 and 4 would operate in their respective fields. Both the appeals are allowed.

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• 2024 (2) TMI 498
  100% EOU - method of valuation - applicability of section 4A of the Central Excise Act (CEA) 1944 - removal (of instant coffee) to institution or not - clearance of excisable goods only in bulk/pouches or tins to their C F agents, who in turn sell the same in bulk to institutions for consumption or for use in other products - time limitation - intent to evade - HELD THAT:- This is a case where depending on the nature of packet size, the applicability of Sec 4A would have to be determined. If the sale is to the institution directly, Sec 4A would not be applicable. However, when the sale is through C F agent, the question is whether it could be covered within the ambit of Sec 4A or otherwise. From the submissions made, it is obvious that C F agents were only acting as freight and forwarder and the goods were all along meant for institutional buyers only. Therefore, this transaction could be considered in the nature of institutional sale in terms of explanation to the Rules. There is nothing contrary on record to prove that these goods were not meant for institutional buyers or there was any resale by such buyers. Therefore, the goods would be covered under the exemption. Similarly, for packet sizes of less than 10gm also Sec 4A would not be applicable. For small packets cleared in bulk, in a packed condition, the Appellants have relied on the judgment of COMMISSIONER OF CENTRAL EXCISE, RAJKOT VERSUS M/S MAKSON CONFECTIONERY PVT. LTD. [ 2010 (9) TMI 10 - SUPREME COURT] , whereby the Hon ble Supreme Court upheld the decision of the Tribunal holding that a package containing about 100 or more individual pieces of an article like clairs brand chocolate, each weighing 5.5gm, would qualify for exemption under Rule 34 of Standards of Weights Measures (Packaged Commodities) Rules. Therefore, relying on this ratio, even if the instant coffee of pouches less than 10gm were cleared in bulk and not meant for retail sale, it would be exempted under Rule 34 and therefore, will not attract Sec 4A of Central Excise Act 1944. Time Limitation - no intent to evade - HELD THAT:- The element of intention to evade is clearly missing. It is evidently a case of interpretation where they were under the impression that despite having C F agents involved in transaction to the institutional buyers, they were still not covered within the ambit of Sec 4A. Therefore, in the facts of the case, the department has not been able to establish the grounds for which extended period can be invoked. There was no requirement for the Appellants to follow Sec 4A for determining the duty for the payment of Central Excise Duty on the goods cleared to DTA - the Impugned Order set aside - appeal allowed.

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• 2024 (2) TMI 497
  Levy of personal penalty on the director under Rule 26 of CER - short payment of duty - appellant is a co-noticee and the main noticee i.e. Company M/s. Span Nihon Kohden Diagnostics Private Limited has settled their case under SVLDR Scheme - HELD THAT:- The penalty on the appellant being the director of the company was imposed under Rule 26 of Central Excise Rules, 2002 in connection with the case of short payment of duty by M/s. Span Nihon Kohden Diagnostics Private Limited. It is found that the case against the main notice i.e., the company is related to valuation of the goods. The allegation against the company is that the company has not paid the duty correctly and the goods were sold to the related person. The issue of valuation is based on the strict interpretation of Section 4 of the Central Excise Act and the rules made thereunder. However, the appellant under a belief that since the goods are sold, duty is paid on the transaction value, for the clearance of goods proper invoices were raised, therefore, there is no suppression of fact on the part of the appellant s company. The case is based on only interpretation of valuation provision of Central Excise. Therefore, it cannot be said that the director of the company has any mala fide intention. In this fact, the personal penalty on the director is not correct and legal. The penalty under Rule 26 is set aside and appeal is allowed.

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• 2024 (2) TMI 496
  Levy of special additional duty (SAD) - DTA clearance from 100% EOU when the goods were cleared as a stock transfer to their own unit - case of the department is that since the appellant have cleared their goods to their own unit, they have not paid the VAT/Sales Tax which was construed by the department as exempted from VAT/Sales Tax - Applicability of exemption N/N. 23/2003-CE dated 31.03.2003 (Sr. No. 1) - HELD THAT:- The Tribunal in various decisions has taken a consistent view that the stock transfer from EOU to their other unit is not falling under category of sale. The said supplier will not be treated as exempted from payment of VAT/ Service Tax. Therefore, there is no violation of condition of Notification 23/2003-CE - reliance can be placed in Micro Inks [ 2014 (2) TMI 207 - CESTAT AHMEDABAD ], VVF Ltd. [ 2014 (2) TMI 922 - CESTAT MUMBAI ] and Sti Industries [ 2014 (12) TMI 1130 - CESTAT AHMEDABAD ]. The demand of SAD confirmed by the adjudicating authority is not sustainable - Hence, the impugned order is set aside - Appeals are allowed.

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• CST, VAT & Sales Tax

• 2024 (2) TMI 495
  Validity of assessment order - entitlement for benefit of deemed assessment - period of limitation expired prior to the issuance of the revision notice - breach of principles of natural justice - HELD THAT:- The petitioner did not participate in the proceedings. The documents on record also reflect that the tax liability was determined largely in view of the mismatch between data provided by the petitioner when compared with data provided by the petitioner s suppliers. It is in the interest of justice to provide an opportunity to the petitioner to place relevant documents on record and contest the tax demand. Solely for that reason, the impugned orders warrant interference. Assessment orders dated 27.08.2021 in respect of assessment years 2011-2012 and 2012-2013 are quashed on the ground of being barred by limitation - assessment orders pertaining to assessment years 2013-2014, 2014-2015 and 2015-2016 are quashed and these matters are remitted for re-consideration - Petition disposed off.

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• 2024 (2) TMI 494
  Validity of SCN issued - barred by limitation under Section 31 of the Bihar Value Added Tax Act, 2005 or not - HELD THAT:- It has to be noticed that the show-cause notice is totally without jurisdiction since the limitation prescribed as per the Statute has expired. The contours of the jurisdiction under Article 226 of the Constitution of India to interfere with appellable orders laid down by the Hon ble Supreme Court in State of H.P Ors. v. Gujarat Ambuja Cement Limited Anr.; (2005) 6 SCC 499 [ 2005 (7) TMI 353 - SUPREME COURT ] is noticed - It has been held that if an assessee approaches the High Court without availing the alternate remedy, it should be ensured that the assessee has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. While reiterating that Article 226 of the Constitution confers very wide powers on the High Court, it was clarified that nonetheless the remedy of writ is an absolutely discretionary remedy. The High Court, hence, can always refuse the exercise of discretion if there is an adequate and effective remedy elsewhere. Article 226 can definitely be invoked by the assessee, since the re-assessment notice is after the limitation period - the Assessing Officer-respondent no. 2 in both the writ petitions is restrained from proceeding against the assessee based on the impugned show-cause notices - The writ petitions, hence, are allowed.

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• Indian Laws

• 2024 (2) TMI 493
  Jurisdiction - Constitutional Validity of Rule 9(3)(b) of the Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 - ultra vires section 21 A (4) of the Chartered Accountants (Amendment) Act, 2006 or not - Whether Rule 9(3)(b) of the Rules, 2007 is inconsistent with and beyond the rule-making power of the Central Government? - professional misconduct - HELD THAT:- Experience of legislative drafting in India has shown that, generally, the delegation of power to formulate rules follows a standardized pattern within statutes. Typically, a section of the statute grants this authority in broad terms, using phrases like to carry out the provisions of this Act or to carry out the purposes of this Act. Subsequently, another sub-section details specific matters or areas for which the delegated power can be exercised, often employing language such as in particular and without prejudice to the generality of the foregoing power. Judicial interpretation of such provisions underscores that the specific enumeration is illustrative and should not be construed as limiting the scope of the general power. This approach allows for flexibility in rulemaking, enabling the authorities to address unforeseen circumstances. A key principle emerges from this interpretation: even if specific topics are not explicitly listed in the statute, the formulation of rules can be justified if it falls within the general power conferred, provided it stays within the overall scope of the Act. In State of Jammu and Kashmir v Lakhwinder Kumar and Ors., [ 2015 (7) TMI 218 - SUPREME COURT ], this Court held that when a general power to make regulations is followed by a specific power to make regulations, the latter does not limit the former. This is the principle of generality vs enumeration : a residuary provision can always be given voice. In the instant case, the ultra vires challenge has been mounted on the ground that the impugned Rule exceeds the power conferred by the parent Act. On looking at the parent Act, the rule-making power has been conferred under Section 29A, which is titled as Power of the Central Government to make Rules . While sub-clause (1) of Section 29A sets out the general power of delegation, sub-clause (2) provides for enumerated heads - Admittedly, Rule 9(3) goes beyond what is provided for under Section 21A(4) in terms of the options available to the Board of Discipline in case it disagrees with the opinion of the Director (Discipline). Other than the option of advising the director to further investigate, Rule 9(3) provides the additional option to the Board for proceeding to deal with the complaint by itself or referring it to the Disciplinary Committee, depending on whether the alleged misconduct falls under the First Schedule or the Second Schedule. Object of the CA Act vis a vis Chapter on Misconduct - HELD THAT:- The Chartered Accountants Act, 1949, is a legislation that governs the regulation of the chartered accountancy profession in India. The chapter on Misconduct in the Chartered Accountants Act, 1949, plays a crucial role in maintaining the ethical standards of the profession in India. Its main objectives are to set ethical guidelines, prevent actions that may compromise public interests, ensure accountability among chartered accountants, and preserve the profession s reputation. This Chapter defines and prohibits professional misconduct, while aiming to uphold honesty, integrity, and professionalism in the practice of chartered accountancy. By addressing instances of misconduct, it establishes a framework for accountability, reinforcing the credibility of individual professionals and the reputation of the entire profession. To achieve these goals, the Act includes a disciplinary mechanism, ensuring a fair and transparent process for investigating and adjudicating alleged cases of misconduct. There are no hesitation to conclude that the impugned rule is completely in sync with the object and purpose of framing the Chapter on Misconduct under the Act. As has been rightly argued by the learned counsel for the Respondent, accepting the contention of the Appellant will create an anomalous situation. The Director (Discipline) who functions as a secretary to the Board of Discipline as per Section 21A (2) will be having greater powers than the Board itself. The prima facie opinion of the Director will become nothing but a final opinion if the Board will have no option except to direct the Director (Discipline) to further investigate the matter - even if it accepted for the sake of argument, that Rule 9(3) cannot be saved under Section 29A(2)(c), as it directly relates to furthering the purposes of the Act in ensuring that a genuine complaint of professional misconduct against the member is not wrongly thrown out at the very threshold, it can be easily concluded that the impugned Rule falls within the scope of the general delegation of power under Section 29A(1). Appeal dismissed.

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• 2024 (2) TMI 492
  Dishonour of Cheque - insufficiency of funds - whether the prosecution initiated under Section 138 of N.I. Act by and on behalf of the company can be initiated through power of attorney? - Section 141 of N.I. Act - HELD THAT:- It is a settled principle that if the payee is a company the complaint has to be filed in the name of the company. Section 142 of the N.I. Act does not specify as to who should represent the company, if the company is the complainant. A company can be represented by an employee or even by a known employee, who is duly authorized and empowered to represent the company either by resolution or by a power of attorney. Further, where the company is a complainant, who will represent the company, and how the company will be represented in 138 proceedings is not covered by the Code. Section 200 of the Code mandatory requires an examination of the complaint, and whether the complainant is an incorporeal body, it is only one of its employee or authorized representative can be examined on behalf of the company. With the result, the company becomes a dejure complainant and the person, who is representing the company whether it is employee or the authorized representative becomes de facto complainant, thus, in every complaint lodged by a company, which is a separate juristic personality, there is a complainant dejure and a complainant de facto. This application has been pending since last 8 years and the trial could not proceed, it is in the interest of justice that the trial may be concluded expeditiously in accordance with law, preferably within a period of six months from the date of receipt of certified copy of this order without granting any unnecessary adjournments to either side. The instant application filed by the directions of the company is devoid of merit, and is, accordingly, dismissed.

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• 2024 (2) TMI 491
  Dishonour of cheque - Funds Insufficient - Cross-examination of complainant was carried out - accused was provided with due opportunity to examine the complainant or not - failure to appreciate the statement of the accused - failure to satisfy necessary ingredients of the offence complained of - principles of natural justice - HELD THAT:- This Court notes that the present petitioner had filed an application under Section 311 of Cr.P.C. for cross-examination of respondent no. 2 before the learned Trial Court on 07.01.2023 after a delay of more than three years and five months from the date of cross-examination of CW-1 i.e. on 26.07.2019. The present petitioner, in his application filed under Section 311 of Cr.P.C. before the learned Trial Court had stated that the complainant needs to be confronted with several documents in relation to his previous alleged relation with one Upender Gupta, without which the complainant s version would go unrebutted, and such questions could not be put to the complainant as there was communication gap between the accused and his counsel. This Court notes that the learned Trial Court, while dismissing the application of present petitioner filed under Section 311 of Cr.P.C., had considered this ground and had observed that the complainant had been extensively cross-examined on 26.07.2019, and the accused had failed to show any sufficient cause to justify the delay of more than three years or any reason as to why the recall of CW-1 for further cross-examination was essential for just decision of the case. Upon thorough examination of the evidence presented, including the cross-examination of the complainant Ghanshyam Dass, this Court notes that that the complainant Ghanshyam Dass was extensively questioned with regard to his association with his attorney and the individual named Upender Gupta. During his cross-examination on 26.07.2019, the complainant disclosed that he has known accused Rajesh Marwah for approximately 7-8 years through his attorney, Mr. Upender Gupta. Furthermore, it was revealed that the complainant has had a relationship with Mr. Upender Gupta for approximately 15-20 years, and had entrusted him with the authority to settle the matter at hand through a Special Power of Attorney (SPA) - It is also noted that the appellant opted not to call Upender Gupta as a witness to substantiate his defense during the proceedings before the learned Trial Court. It is also noted that in the current application, the appellant has not expressed a desire to summon Upender Gupta as additional evidence in the present appeal. Instead, the appellant seeks to conduct further cross-examination of the complainant-respondent as an additional evidence. Thus, it is clear that the petitioner had extensively questioned the complainant in his cross-examination, and there is no ground to further examine the complainant. In these circumstances, this Court is of the opinion that the provisions of Section 391 of Cr.P.C. cannot be used to delay the proceedings or to cause inconvenience to the other party as that also amounts to miscarriage of justice by delaying the proceedings under Section 138 NI Act, and abuse of process of law, especially in cases where complainant has already been cross-examined in detail and no grounds are shown to recall the witness. This Court does not find any merit in the present petition and the same stands dismissed.

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