TMI Tax Updates - e-Newsletter
April 5, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise Indian Laws

Highlights / Catch Notes

• GST:

  Guidelines for conducting investigation in certain cases - The Directorate General of GST Intelligence (DGGI), in its recent directive dated 08.02.2024, sets forth comprehensive guidelines for conducting investigations into compliance with the Goods and Services Tax (GST) and Central Excise laws. This document, emanating from discussions at the DGGI Annual Conference in November 2023, aims to streamline investigation processes while balancing the ease of doing business for regular taxpayers.
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• GST:

  Guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers - The Instruction No. 01/2023-24-GST (Inv.) is a comprehensive framework aimed at streamlining GST investigations to foster a conducive business environment. It balances enforcement activities with the ease of doing business by introducing clear guidelines for jurisdictional responsibility, approval processes, inter-departmental coordination, and grievance redressal mechanisms.
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• GST:

  Validity of the Order-in-Original - Adjudication of show cause notice - The petitioner argued that they were not given a fair opportunity to present their case and relevant documents. The High Court agreed, emphasizing the importance of fairness and clarity in quasi-judicial adjudication. It held that the adjudicating officer should have considered the preliminary objections first and provided notice of the intention to decide the show cause notice concurrently. Therefore, the impugned Order-in-Original was quashed, and the proceedings were remanded for a fresh decision, ensuring fairness and consideration of all relevant issues.
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• GST:

  Violation of principles of natural justice - It was contended that impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - The High Court found that the impugned order failed to properly consider the petitioner's detailed reply. Instead, it merely stated that the reply was unsatisfactory without providing specific reasons or engaging with the content of the response. This lack of substantive consideration indicated that the Proper Officer did not apply their mind to the petitioner's submission. - Matter restored back for reconsideration.
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• GST:

  Suspension of the GST registration - Prayer for suspension/cancellation of the petitioner be kept on hold to enable the petitioner to complete the said supply to only BHEL - The High Court modified the order suspending/canceling the petitioner's GST registration. The petitioner was permitted to proceed with supplying goods to the specific entity against pending orders. Additionally, the specific entity (referred to as BHEL) was directed to deposit the entire payable amount with the CGST authorities.
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• GST:

  Validity of assessment notice - Disallowance of carry forward ITC through GST TRAN-I filed in online towards payment of entry tax - Transitional credit u/s 140(1) - The respondent admitted that certain materials presented by the petitioner during the inquiry were not considered by the Assessing Officer. Consequently, the High Court set aside the impugned order and remanded the matter back to the respondent for fresh consideration.
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• GST:

  GST registration was suspended - show cause issued as to why the registration be not cancelled - The High Court noted that the rejection of the cancellation application was primarily due to the petitioner's failure to respond to the earlier notice and appear for a personal hearing. However, considering subsequent events and submissions made, the Court set aside the rejection order. - The Court decided to cancel the petitioner's GST registration with effect from the date of their initial application for cancellation, i.e., 23.02.2023. This decision was based on the petitioner's voluntary identification of discrepancies in their returns and the subsequent deposit of a specified sum.
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• GST:

  Limitation u/s 107 of the BGST Act - Filing of Appeal before the Appellate Authority - The Court recognized the validity of Notification No. 53 of 2023, which extended the time for filing appeals until 31.01.2024. It emphasized the special procedure outlined in the notification, including the requirement to pay a portion of the disputed tax amount. - The Court directed the petitioner to comply with the conditions outlined in the notification to maintain the appeal. Failure to meet these conditions would result in the rejection of the appeal.
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• GST:

  Exemption from GST - Scope of the Term "Applicant" for seeking advance Ruling - The case involved a government authority seeking a ruling on the applicability of GST exemption to various services received for conducting examinations. The Authority for Advance Ruling (AAR) initially dismissed the application, citing the Appellant's status as a service recipient rather than a supplier. However, the Appellate Authority (AAAR) overturned this decision, emphasizing the broad interpretation of "applicant" under GST law. They referenced a judgment of the Hon'ble High Court, Calcutta, which underscored the inclusive nature of the term "applicant" and directed the AAR to reconsider the application in light of this interpretation. - Matter restored back to AAR for reconsideration.
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• Income Tax:

  Time limit for verification of return of income after uploading at CPC - The Notification No. 2 of 2024, issued by the CBDT, Directorate of Systems, Bengaluru, addresses the critical procedural aspect of income tax return (ITR) verification within the Indian taxation framework. This notification amends and clarifies the time limits associated with the verification of ITRs post their electronic submission. It draws its authority from Rule 14 of the Centralised Processing of Returns Scheme, 2011, supplementing the previous Notification No. 05 of 2022.
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• Income Tax:

  TP Adjustment - Addition of international transaction related to the demerger - The High court identified a jurisdictional overreach by the AO, who made an adjustment beyond the scope of the TPO's determination. It was noted that the TPO's order did not explicitly dictate the inclusion of the demerged business's value in the ALP calculation, rendering the AO's addition legally unsustainable. The judgement emphasized the sanctity of procedural adherence and the delineated roles of the AO and TPO in the context of transfer pricing adjustments. - The Court set aside the impugned order and remanded the matter back to the AO.
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• Income Tax:

  Validity of reassessment proceedings - non-service of notice u/s 148A(b) through e-mail - Denial of principle of natural justice - The High Court examined the evidence and found that the notice was effectively served at the petitioner's registered address, meeting the requirements of natural justice. As there was no rebuttal to the respondent's evidence, the Court upheld the validity of the notice and dismissed the petitioner's challenge. The Court also noted that the petitioner had alternative remedies available to address the assessment order.
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• Income Tax:

  Validity of reopening order passed without dealing with assessee's submission - The Income Tax Appellate Tribunal (ITAT) had previously ruled in favor of the petitioner in a similar case for the assessment year 2011-2012. The High Court affirmed the ITAT's decision, stating that since the members had already paid taxes on the compensation received, there should not be double taxation. The court also emphasized that the petitioner had entered into the development agreement on behalf of its members, and the compensations were meant for them. - s the order failed to consider the petitioner's explanations regarding the nature of the income and its taxability, the court concluded that it could not be sustained.
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• Income Tax:

  Jurisdiction to entertain petitioner’s Revision application u/s 264 - The Court referenced Section 143(1)(A) and Section 120 of the Income Tax Act, emphasizing that CPC functions as a facilitator to the JAO, who maintains jurisdiction over the assessment process, including demand enforcement and assessment framing. - The Court highlighted the CBDT directive stating that powers under Sections 263 and 264 of the Act are to be exercised by the Jurisdictional Principal Commissioners of Income Tax, affirming the JAO's jurisdictional authority. - Despite initial uncertainty expressed by PCIT– 5 regarding jurisdiction, the Court directed him to exercise jurisdiction upon court order, clarifying that his hesitation should not be construed as a reluctance to perform his duties.
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• Income Tax:

  TP Adjustment - comparable selection - The High Court upheld the ITAT's decision, emphasizing the principle of comparing entities with similar characteristics. It acknowledged the appellant's argument that the comparables had been in business for many years, whereas the appellant had only started operations recently. The High Court agreed that comparing entities with different operational histories was inappropriate. It noted that the appellant's expenses were similar to those of subsequent years when sales had increased, indicating business stabilization.
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• Income Tax:

  Penalty levied u/s 271DA - The Addl. CIT observed that the assessee had violated Section 269ST by splitting invoices for cash receipts of Rs. 2,00,000 or more from a single person. - The Appellate Tribunal noted that the items purchased were marriage dresses and different in nature. - Section 271DA prescribes penalties for contraventions of Section 269ST. The legislative intention behind the introduction of Section 269ST was to discourage cash transactions and promote digital economy. The Tribunal referred to judicial precedents, emphasizing that penalties may not be imposed for technical or venial breaches of the Act. It considered the definitions of 'good cause' and 'sufficient cause,' as well as relevant case laws to determine the applicability of penalties. - The Tribunal concluded that no penalty was leviable.
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• Income Tax:

  Revision u/s 263 - The PCIT primarily questioned the claim of deduction under Section 80IC and criticized the AO for allegedly not conducting a thorough examination during the assessment proceedings. However, upon review, the Appellate Tribunal (AT) found that the AO had diligently examined the matter and that the Assessee had provided necessary information and documents to justify the deduction claimed under Section 80IC. The AT concluded that the PCIT's assertions lacked merit and overturned the decision, emphasizing the importance of considering all relevant information before deeming an assessment order as erroneous.
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• Income Tax:

  Addition u/s 68 - disclosure made by the assessee on the basis of documents impounded during the course of survey proceedings - The Tribunal deleted the addition holding that the statement made during a survey under Section 133A of the Act lacked evidentiary value without corroborative evidence. The Tribunal emphasized that such statements during surveys are not empowered to be taken under oath, and hence, cannot solely form the basis for additions. - The Tribunal deleted the penalty of Rs. 5,000 imposed under Section 271F for late filing of the return, recognizing the assessee's compliance through the belated submission of the return of income.
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• Income Tax:

  Penalty u/s 270A - AO has disallowed the assessee’s claim of deduction u/s 24 and Chapter-VIA deduction as false claims - The appellant contested the penalty on various grounds, including lack of specificity in the penalty notice and attributing the underreporting of income to the actions of their tax consultant. Upon examination, the Appellate Tribunal found that the penalty was incorrectly imposed under section 270A(9)(e) for failure to record receipts in the books of accounts, despite the disallowance of deductions being the primary issue. Therefore, the Tribunal directed the Assessing Officer to delete the penalty.
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• Income Tax:

  Validity of assessment order passed u/s 153C - Third Member Order - addition u/s 69A r.w.s. 115BBE - cash deposited in various bank accounts post demonetization - search and seizure operation carried out in case of Third Party - The tribunal concluded that the assessment order under section 143(3) read with section 153C was invalid. This conclusion was primarily based on the procedural impropriety in the issuance of the assessment order without proper compliance with the prerequisites outlined in section 153C, notably the recording of satisfaction. - Regarding the Cash Deposit, the tribunal underscored the importance of drawing statutory presumptions against the entity in whose name the deposits were made, rather than the assessee, in the absence of incontrovertible proof to the contrary.
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• Income Tax:

  Addition u/s. 69A - unexplained cash deposits in the bank account - The Tribunal found the explanation provided by the assessee regarding the sale consideration for real estate transactions to be credible, especially considering the stamp paper in the purchaser's name and the nature of the assessee's business. - However, discrepancies were noted in the explanation provided for loan proceeds, leading to the Tribunal upholding a portion of the addition as unexplained. - In conclusion, the Tribunal partly allowed the assessee's appeal, directing the deletion of a significant portion of the addition while upholding a portion as unexplained.
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• Income Tax:

  Deduction claimed u/sec. 80P(2)(a)(i) - interest income from the investments made in co-operative/scheduled bank(s) - The Tribunal observed that despite the insertion of subsection (4) to section 80P, which limited the applicability of the provision to certain cooperative banks, the interest income earned by a cooperative society from investments held with a cooperative bank would still be eligible for deduction under section 80P(2)(d).
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• Income Tax:

  Revision u/s 263 - assessment of trust - donations given out of accumulated funds u/s. 11(2) of the Act of earlier previous years - The Tribunal noted the argument that the funds were disbursed only after ensuring they were used for construction purposes, aligning with the trust's objectives. - Upon careful consideration of the provisions of section 11(2) and section 11(3)(d) of the Act, the Tribunal concurred with the Ld. CIT (Exemption)'s finding that the donations made by the assessee from accumulated funds fell outside the permissible scope and were therefore taxable as income. The Tribunal upheld the decision that the assessment order lacked proper inquiry and verification by the AO, justifying the exercise of jurisdiction under section 263 of the Act.
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• Income Tax:

  Disallowance as per order u/s 144C - default in filling of form 35A - The appellant filed a corrected Form No. 35A. The Tribunal ruled that this correction did not constitute filing beyond the time limit, and thus upheld the appellant's contention. - On the issue of disallowed expenses, the Tribunal noted that the appellant had provided sufficient evidence to demonstrate the legitimacy of the claimed expenses related to the sale of a residential property. The assessing officer's rejection of these expenses solely based on procedural grounds was deemed unjustified. Consequently, the Tribunal directed the assessing officer to review the supporting documents and allow the expenses accordingly.
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• Income Tax:

  Penalty u/s. 271(1)(c) - validity of show cause notice issued - The ITAT emphasized the legal necessity for the AO to clearly specify the nature of the default—whether it was for "concealment of particulars of income" or "furnishing of inaccurate particulars." The Tribunal observed that the AO's failure to specify the charge in the Show Cause Notice (SCN) contradicted the principle of providing the assessee with a clear and fair opportunity to defend themselves. The Tribunal allowed the assessee's appeal, setting aside the CIT(A)'s order and the penalty.
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• Income Tax:

  Additions towards the alleged unaccounted sales - The AT noted that the addition had been deleted by the ld. CIT(A), and since there was no appeal from the Revenue, this issue was resolved in favor of the assessee. Concerning the stock difference, it was observed that the gross profit until the survey date was already included in the gross profit for the entire financial year, thus making any additional addition redundant and amounting to double counting. Consequently, the AT directed the Assessing Officer to delete the addition.
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• Customs:

  Authorised Officers u/s 25 read with Section 47 (5) of Food Safety Standards (FSS) Act, 2006 and Regulation 13 (1) of FSS (Import) Regulation, 2017 - Instruction No. 07/2024-Customs issued by the CBIC specifies the review and designation of 155 points of entry for food imports in India, effective from April 1st, 2024. It announces the appointment of Authorized Officers, both from FSSAI and Customs, tasked with food import clearance. The directive aims to enhance food safety and regulatory efficiency by optimizing the distribution of responsibilities across strategically chosen entry points. The annexure details the specific locations and officers, indicating a well-structured approach to safeguarding public health through stringent food safety measures.
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• Customs:

  Errors in submitting Shipping Bills and delivery the manifest (EGM) - The customs office has taken a proactive step by issuing this notice alongside Annexures A and B, which respectively list the EGM errors identified and the shipping bills pending EGM filing for February 2024. Exporters and customs brokers are urged to review these annexures and rectify any discrepancies to ensure their eligibility for export incentives. This initiative represents a move towards increasing transparency and cooperation between the customs authorities and the members of the trade community, aiming to minimize delays and enhance the efficiency of the export process.
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• Customs:

  Notification No. 22/2024-Customs, issued by the Ministry of Finance, exempts Kala namak rice exports from customs duty under certain conditions, aiming to boost India's agricultural exports. The exemption applies to exports through specific customs stations, with a cap of one thousand metric tonnes, and requires a certificate from the Director of Agriculture Marketing & Foreign Trade, Lucknow, Uttar Pradesh.
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• Customs:

  Levy of penalty on the Director of the Company - Valuation of imported goods - import of luxury vehicles by misusing the Transfer of Residence (TR) Scheme - The Tribunal observed that the company involved in purchasing the vehicle was an independent legal entity, and the penalties primarily targeted the company rather than the individual appellants. - It was noted that there were no clear allegations against the individual appellants regarding their direct involvement in the import violation. The penalties primarily targeted the company's actions. - the Tribunal set aside the penalties imposed on the appellants, stating that they were eligible for consequential relief.
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• Customs:

  Levy of penalty u/s 114(iii) and 114AA of the Customs Act, 1962 on Customs House Agent (CHA) - Misuse of signature by an employee of the CHA - attempt to avail fraudulent drawback benefits - The Tribunal noted discrepancies between declared values and actual goods, confirming the Revenue's assessment. Lack of evidence from the appellant to refute these claims further strengthened the Revenue's position. Despite the appellant's claims of signature misuse, no concrete evidence was presented. The Tribunal emphasized the appellant's responsibility as a CHA to verify documents properly. The appellant's failure to prevent misuse of his license, despite past suspensions, was deemed significant. - The Tribunal upheld the penalty.
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• Customs:

  Levy of redemption fine and penalty - valuation of imported goods - brass scrap - The appellate tribunal noted the absence of a market survey conducted by the adjudicating authority for quantifying the redemption fine. However, considering that the appellant did not contest the enhancement of the goods' value and lack of evidence of deliberate misdeclaration, the tribunal reduced the redemption fine to Rs. 2,50,000 and penalty amount reduced to Rs. 20,000.
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• Customs:

  Benefit of concessional rate of Customs duty benefit on the basis of county of Origin Certificate - Malaysian Origin goods - The Tribunal examined the provisions of Notification No. 46/2011-Cus and the AIFTA Rules regarding the origin criteria for preferential tariff treatment. It found that the appellants claimed the goods to be originating in Malaysia under Rule 5 of the AIFTA Rules. Despite the department's doubts, it was observed that there was no confirmation from the Malaysian Government regarding the authenticity of the country of origin certificate. Therefore, the Tribunal ruled that without verifying the authenticity of the certificate of origins, the benefit cannot be denied.
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• Customs:

  Authenticity of the country of origin certificate - concessional rate of duty - The Tribunal observed that while the appellant produced COOs issued by the Malaysian authorities, the DRI's investigation suggested discrepancies. The Tribunal acknowledged the need for further verification of the COOs' authenticity from the Malaysian government. - Despite the DRI's findings, the Tribunal noted that the department failed to obtain verification from Malaysian authorities regarding the COOs' genuineness. Consequently, the Tribunal set aside the impugned order and allowed the appeals for a fresh adjudication.
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• DGFT:

  Directives regarding submission of digitized ANFs, Appendices etc. - The DGFT issued Trade Notice No. 01/2024-25, to digitize the submission of Aayat Niryat Forms (ANFs) and Appendices in line with the Foreign Trade Policy. This directive mandates online submissions via the DGFT website and ensures that trade documents like IEC details, RCMC, and MSME status are accessible online. It also highlights the move towards digital certification of documents and eliminates the need for physical submissions. The notice encourages online communication for any correspondences and provides a feedback mechanism for any difficulties encountered, marking a significant step towards digital governance in trade.
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• DGFT:

  The DGFT issued Notification No. 02/2023 marking a significant update in India's foreign trade policy concerning the export of onions. This notification allows for the export of an additional 10,000 metric tons (MT) of onions, specifically under the HS code 0703 10 19, to the United Arab Emirates (UAE).
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• DGFT:

  Export of 1,000 MT of Kala Namak rice under HS Code 1006 30 90 - The DGFT issued Notification No. 01/2023. It specifically addresses the export policy for Kala Namak rice under the HS Code 1006 30 90, categorizing it as non-basmati white rice (semi-milled or wholly milled rice, whether or not polished or glazed: Other). Notably, the export of this rice variant is generally prohibited, with an exceptional allowance for an aggregate quantity not exceeding one thousand metric tonnes through designated customs stations.
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• Corporate Law:

  Oppression and Mismanagement - Deletion of names of Respondent No. 4 to 8 and 13 from the array of the Respondents - Section 241, 242 and 243 of Companies Act - The Tribunal allowed the deletion of the respondents but imposed a token amount of Rs. 5,00,000/- as compensation for the loss suffered by them due to the order of stay. The Appellant contested this decision, arguing that the imposition of cost was unwarranted since the respondents were rightfully impleaded initially. However, the Appellate Tribunal upheld its decision, stating that the respondents were unnecessarily dragged into the litigation, causing them business losses and reputational harm. The appeal was dismissed, affirming the Tribunal's decision.
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• Corporate Law:

  Recovery of premium dues, interest, default interest, penal interest, interest overdue etc. - priority of charges - The tribunal analyzes the relevant clauses of the Concession Agreement and the Escrow Agreement. It concludes that while premium payment is treated as part of the concession fee, it is distinct and separate from the monthly debt service provision. Therefore, premium payment does not have priority over debt service payments. The tribunal finds merit in the applicant's argument that premium payment is in lower priority to servicing the lenders' debts.
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• Indian Laws:

  Constitutional power of the Central Government over State - The imposition of a Net Borrowing Ceiling on the state - The inclusion of State-Owned Enterprises in the borrowing restrictions - The adjustment of over-borrowing from previous fiscal years against the current year's borrowing limit - Significantly, the Supreme Court decided to refer these constitutional questions to a larger bench, acknowledging the lack of previous authoritative interpretation on Article 293 and recognizing the potential implications for the federal structure of governance in India. - On the matter of granting interim relief to the state, the Court applied the triple-test criteria: prima facie case, balance of convenience, and irreparable injury. The judgment concluded that the state failed to establish a compelling prima facie case, noting discrepancies in the claimed fiscal space for borrowing and highlighting the Union's arguments on over-utilization of borrowing limits.
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• IBC:

  Seeking restoration of petition, which was dismissed for non prosecution - The appellate tribunal acknowledges the assignment agreement between Bank of Baroda and the appellant, which transferred the debt along with all associated rights and interests. The tribunal finds that the assignment was duly recorded and brought to the attention of the adjudicating authority. - The tribunal observes that the appellant took proactive steps to protect its interests, including filing a substitution application and subsequently the restoration application. Despite some procedural delays, the tribunal finds no evidence of negligence or wilful inaction on the part of the appellant.
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• IBC:

  Admission of section 7 application - financial debt or not - The Tribunal affirmed that the disbursal of ₹5 crores to the corporate debtor by the financial creditor was indeed a loan. It pointed out that the financial creditor provided sufficient evidence, including bank transfer details and financial statements, to substantiate the claim. - The Tribunal dismissed the appeal, upholding the Adjudicating Authority's order to admit the Section 7 application and initiate CIRP against the corporate debtor. It affirmed that the financial creditor had successfully proven the existence of a financial debt and a default, warranting the initiation of CIRP.
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• PMLA:

  Money Laundering - seeking grant of bail - offence of fraud and forgery of valuable securities, etc. - twin conditions u/s 45 of PMLA satisfied or not - The High Court granted bail to the applicant in a case related to the BIKEBOT scheme under the Prevention of Money Laundering Act, 2002. The court found that the applicant had no direct involvement in the fraud perpetrated by GIPL and that the transactions involving him were disputed. Despite opposition from the Enforcement Directorate, the court concluded that the applicant's prolonged detention, lack of criminal history, and presumption of innocence warranted bail.
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• PMLA:

  Money Laundering - proceeds of crime - Provisional attachment of properties - Interest of Depositors - The High court recognized the primary aim of the APPDFE Act to protect depositors by ensuring the assets amassed through fraudulent schemes are distributed equitably among them. The court observed that the PMLA, although a central legislation with overriding effect, does not prioritize the restitution of defrauded depositors, focusing instead on the confiscation of assets involved in money laundering. - The court emphasized that the interests of depositors would be better served under the APPDFE Act, which explicitly provides for the equitable distribution of assets to depositors. It noted that allowing the continuation of attachments under the PMLA could impede this objective. - The court quashed the provisional attachment orders issued by the ED.
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• PMLA:

  Money Laundering - illegal mining of granite, causing damages to human life and properties using explosives - scheduled offences - The High Court clarified that the Prevention of Money Laundering Act (PMLA) is a standalone legislation aimed at addressing money laundering activities, irrespective of the nature of the predicate offense. It affirmed that simultaneous investigation and prosecution under PMLA and the predicate offense are permissible. - The Court concluded that the prosecution failed to establish a direct link between the properties in question and the proceeds of the predicate offense. It found no evidence indicating that the accused persons were in possession or enjoyment of the properties acquired through illegal means. - Consequently, it quashed the complaint against certain accused persons, highlighting the lack of evidence connecting them to the alleged illegal activities.
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• PMLA:

  Seeking grant of bail - Money Laundering - The Court observed that the applicant held directorial positions in companies allegedly involved in fraudulent activities. The attachment of properties by the Enforcement Directorate indicated potential money laundering. - The Court noted the seriousness of the allegations against the applicant, including involvement in fraudulent schemes and money laundering. Considering the gravity of the offense, the applicant's alleged complicity, and the rejection of bail for co-accused, the Court deemed it unfit to grant bail.
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• RBI:

  Master Circular - Guarantees and Co-acceptances - Consolidating the instructions / guidelines issued to banks till November 8, 2021, relating to Guarantees and Co-acceptances.
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• Service Tax:

  Levy of service tax - Nature of amount - Deduction from the export price - Deductions towards Bonus, Inspection charges and recycling compensation - The Tribunal determined that the deductions made in the invoices were not payments made to the company providing services, but rather discounts in the transaction of sale. It noted that there was no clear evidence of a service provider or recipient relationship between the appellant and the company in question. Thus, it concluded that the demand raised under Business Auxiliary Service and Technical Inspection and Certification Service was without factual or legal basis.
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• Service Tax:

  Adjustment of excess service tax paid with subsequent service tax liability - case of Revenue is that Rule 6 (3) of Service Tax Rules, 1994 do not provide for such adjustments - The Tribunal found merit in the appellant's argument for adjustment of excess service tax against future liabilities, as per Rule 6(3) of Service Tax Rules, 1994. It clarified that this rule allows for adjustment in cases where services were not provided or partially provided, including instances where recipients made short payments due to service deficiencies. The Appellate Tribunal allowed the appeal, overturning the lower authorities' decision on demanding service tax, interest, and penalties from the appellant.
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• Central Excise:

  Refund of countervailing duty - exit from the status of 100% EOU under the STPI Scheme - denial on the ground that the duty paid on de-bonded goods are IT infrastructure and are capital goods, and hence the CVD paid was not eligible to be availed as credit under the CENVAT Credit Rules, 2004 - The Tribunal noted that the Commissioner (Appeals) went beyond the scope of the appeal by addressing the eligibility of CVD paid on IT infrastructure as capital goods. Citing legal precedent, the Tribunal emphasized that decisions should be based on the grounds raised by the parties in their pleadings. - Consequently, the Tribunal set aside the portion of the Commissioner's decision regarding the eligibility of CVD paid on IT infrastructure as capital goods, as it was outside the scope of the appeal.
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• Central Excise:

  Refund of CENVAT Credit of ADE(TTA) as per Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 - The tribunal noted that the provisions of Rule 11(3) could not be applied retrospectively, especially when the exemption from ADE (TTA) was already in place before the rule's introduction. - Drawing from a plethora of judgments, the tribunal underscored that once a CENVAT credit is lawfully availed, it becomes an indefeasible right of the assessee, not subject to denial or lapsing due to subsequent legal or procedural changes. - Ultimately, the tribunal ruled in favor of the claimant, allowing the appeal and directing a refund of the accumulated CENVAT credit of ADE (TTA), citing eligibility u/s 142 of the CGST Act, 2017 read with Section 11B of the Central Excise Act, 1944.
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Articles

• MONETARY LIMIT FOR INCOME TAX DEPARTMENT TO FILE APPEAL BEFORE APPELLATE TRIBUNAL, HIGH COURT AND SUPREME COURT
• Transportation of goods along with ancillary service of handling goods not be taxed as Cargo Handling Service
• CBDT clarifies provisions under Finance Act 2023 relating to donations made by a trust / institution to another trust / institution for purposes of application of income
• Printing and supply of textbooks to the Government department are taxable under GST
• GST: RECENT DEVELOPMENTS AND UPSURGE IN GST COLLECTION

Notifications

• Central Excise

• 11/2024 - dated 3-4-2024 - CE
  Seeks to amend No. 18/2022-Central Excise, dated the 19th July, 2022 to increase the Special Additional Excise Duty on production of Petroleum Crude.

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• GST - States

• 12/2023 – State Tax (Rate) - dated 5-3-2024 - Jharkhand SGST
  Amendment in Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017

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• 53/2023 – State Tax - dated 29-2-2024 - Jharkhand SGST
  Seeks to notify a special procedure for condonation of delay in filing of appeals against demand orders passed until 31st March, 2023.

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Case Laws:

• GST

• 2024 (4) TMI 161
  Validity of the Order-in-Original - Adjudication of show cause notice - adjudication was not fair - No opportunity to raise preliminary objections - prayer for amendment of the Petition for incorporating the additional prayer - HELD THAT:- We are of the clear opinion that there is much substance in the contentions as urged on behalf of the Petitioner that the adjudicating officer ought to have granted an opportunity to the Petitioner to raise all contentions in the course of adjudication in the event he intended to decide the Show Cause Notice and not the preliminary objections. In such situation, the Petitioner could not have been taken unaware of the intentions of the adjudicating officer. There cannot to be any vagueness in the course of quasi-judicial adjudication and by taking a party by surprise on what would be actually adjudicated, more particularly, when there was a High Court Order. To undertake a quasi-judicial adjudication is a solemn exercise which needs to be fulfilled with fairness and having all attributes of judicial adjudication. We may observe that the Order dated 1st December, 2023 passed by this Court was clear to the effect that, on 5th December, 2023, the Petitioner would raise before the adjudicating officer its preliminary objections, it was such issue which was expected to be decided. Significantly, on the backdrop of the Court s Order dated 1st December, 2023, the Petitioner was not put to a specific notice that, apart from the preliminary objections, the show cause notice itself would be taken up for consideration and would be decided. The hearing on the preliminary objections took place on 5th December, 2023, sans a faintest idea to the Petitioner that a final order on the show cause notice would be passed. Further, no opportunity to place on record the relevant documents was granted to the Petitioner, nor the same could be raised for want of the Petitioner s knowledge that the show cause notice itself is being taken up for decision much less on the ground, that the show cause notice needs to be decided by 31st December, 2023, failing which, it would be barred by limitation. Considering the well settled principles of law in regard to quasi-judicial adjudication necessarily a fair and proper opportunity was required to be made available to the Petitioner and a clear notice, that final adjudication on the Show Cause Notice was to be held, should have been provided. Thus, we are of the opinion that the impugned Order-in-Original deserves to be quashed and set aside and the proceedings remanded to the adjudicating officer for deciding all the issues, including the preliminary objections, by a fresh order to be passed. Ordered accordingly. Petition stands disposed of in the aforesaid terms.

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• 2024 (4) TMI 160
  Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - excess claim Input Tax Credit - under declaration of ineligible ITC - ITC claimed from cancelled dealers - return defaulters and tax nonpayers - HELD THAT:- The observation in the impugned order dated 28.12.2023 is not sustainable for the reasons that the reply filed by the Petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was unsatisfactory. He merely held that the reply is not satisfactory which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details - the order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 28.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication. Petition disposed off.

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• 2024 (4) TMI 159
  Suspension of the GST registration - no copy of the suspension order has been received by the petitioner - GST portal is still showing the registration as suspended - incarcerated the commitments - Prayer for suspension/cancellation of the petitioner be kept on hold to enable the petitioner to complete the said supply to only BHEL - HELD THAT:- The order suspending/cancelling the GST registration of the petitioner is modified to the extent that the petitioner would be permitted to make supplies to BHEL against the pending orders. BHEL is also directed to deposit the entire amount payable to the petitioner with the CGST Faridabad, South Division. It is clarified that deposit made by BHEL with the said GST Authorities shall be subject to further orders to be passed by this Court. It is clarified that this order has been passed in the peculiar facts and circumstances of the case and also because supplies are to be made to a PSU-BHEL and also the fact that non-supply is likely to affect some important projects of the State.

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• 2024 (4) TMI 158
  Cancellation of GST registration retrospectively - erroneous order of cancellation - non-filing of GST returns instead of non-filing of GST registration - Validity of Show Cause Notice issued - HELD THAT:- We notice that the Show Cause Notice and the impugned order are bereft of any details accordingly the same cannot be sustained and neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent s contention is required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. It is clear that both the petitioner and the respondent want the GST registration to be cancelled, though for different reasons. In view of the above that that Petitioner does not seek to carry on business or continue the registration, the impugned order dated 01.01.2021 is modified to the limited extent that registration shall now be treated as cancelled with effect from 06.05.2019 i.e., the date when the petitioner field an application seeking cancellation of GST registration. Petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017. Petition is accordingly disposed of in the above terms.

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• 2024 (4) TMI 157
  Cancellation Of GST registration retrospectively - Validity of Show Cause Notice and Order - No cogent reason specified in notice - No opportunity of personal hearing - HELD THAT:- We notice that the Show Cause Notice and the impugned order are bereft of any details accordingly the same cannot be sustained and neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent s contention is required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. It is clear that both the petitioner and the respondent want the GST registration to be cancelled, though for different reasons. In view of the fact that Petitioner does not seek to carry on business or continue the registration, the impugned order is modified to the limited extent that registration shall now be treated as cancelled with effect from 20.09.2021 i.e., the date when the Show Cause Notice was issued. Petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017. Petition is accordingly disposed of in the above terms.

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• 2024 (4) TMI 156
  Validity of assessment notice - disallowance of carry forward ITC through GST TRAN-I filed in online towards payment of entry tax - section 140(1) of the State Goods and Services Tax Act r/w 117(1) of the State Goods and Services Tax Rules - HELD THAT:- The petitioner claims that certain materials placed by the petitioner during the enquiry were not considered by the Assessing Officer. The respondent also conceded the same. Therefore, the order impugned in this writ petition is set aside and the matter is remanded back to the file of the respondent for fresh consideration. The petitioner shall appear for enquiry before the respondent along with the required materials on 04.04.2024. The writ petition is allowed.

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• 2024 (4) TMI 155
  Cancellation of GST registration retrospectively - No reasons for cancellation in Show Cause Notice - Petitioner had no opportunity to even object to the retrospective cancellation of the registration - HELD THAT:- In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent s contention is required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. It is clear that both the petitioner and the respondent want the GST registration to be cancelled, though for different reasons. In view of the fact that the Petitioner does not seek to carry on business or continue the registration, the impugned order dated 08.06.2022 is modified to the limited extent that that registration shall now be treated as cancelled with effect from 08.06.2022 i.e., the date of the order for cancellation of registration. Petitioner shall make all the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017. Petition is accordingly disposed of in the above terms.

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• 2024 (4) TMI 154
  Cancellation Of GST registration retrospectively - Validity Of Show Cause Notice - Does not specify any cogent reason - Notice does not give the name or designation of the officer or place where the petitioner has to appear - Petitioner being a senior citizen could not reply to the said notice as she received the notice late - No opportunity for personal hearing - request for condonation of delay is rejected - HELD THAT:- We notice that the Show Cause Notice and the impugned order are bereft of any details. Accordingly, the same cannot be sustained. Neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. Further, the said Show Cause Notice also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Thus, the petitioner had no opportunity to even object to the retrospective cancellation of the registration. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. Thus, the order cannot be sustained and is accordingly set aside. The GST registration of the petitioner is restored. Petitioner shall, however, make all necessary compliances and file the requisite returns and information inter alia in terms of Rule 23 of the Central Goods and Services Tax Rules, 2017. The petition is accordingly disposed of in the above terms.

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• 2024 (4) TMI 153
  Cancellation Of GST registration retrospectively - Validity of Show Cause Notice - not specify any cogent reason - No opportunity of personal hearing - demand including penalty - order has been passed under Section 73 of the Central Goods Services Tax Act, 2017 - Petitioner not declared the correct tax liability while filing the annual returns - HELD THAT:- We notice that the Show Cause Notice dated 31.01.2023 and the impugned order dated 09.02.2023 are bereft of any details. Accordingly, the same cannot be sustained. Neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. It may further be noticed that registration of the petitioner was cancelled retrospectively and even as per the respondent, once the registration is cancelled retrospectively with effect from 02.07.2017, petitioner would not have been able to access the online portal and as such would not have received the Show Cause Notice on 23.09.2023 which led to the passing of the impugned order dated 14.12.2023. Thus, order dated 14.03.2024 rejecting the revocation of cancellation of GST registration and impugned order dated 09.02.2023 cannot be sustained and is accordingly set aside. The GST registration of the petitioner is restored. The petitioner shall, however, make all necessary compliances and file the requisite returns and information inter alia in terms of Rule 23 of the Central Goods and Services Tax Rules, 2017. Further, the impugned order dated 14.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication. Thus, orders dated 09.02.2023, 14.12.2023 and 14.03.2024 are set aside. Petition is allowed and disposed of in the above terms.

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• 2024 (4) TMI 152
  Cancellation of GST registration retrospectively - Show Cause Notice does not give any reasons - Petitioner seeking to cancel its registration - HELD THAT:- Petitioner had filed an application for revocation of cancellation of registration on the ground Due to non filling of return you have cancelled my GST registration. But reason behind my this delay is my father expired during this period and i also changed my accountant whose delayed my return Pursuant to order, we are informed that petitioner had appeared before the Assistant Commissioner on the date and time fixed in support of his application seeking revocation of the cancellation of registration. Learned counsel for respondent submits that certain queries have been raised which have been responded by the petitioner and accordingly no decision on the application for revocation has been taken. Thus, this petition is disposed of directing the Proper Officer to decide the application of the petitioner seeking revocation within a period of two weeks from today. Petition is accordingly disposed of in the above terms.

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• 2024 (4) TMI 151
  Maintainability of petition - availability of statutory remedy of Appeal - absence of constitution of Appellate Tribunal - HELD THAT:- The petitioner is desirous of availing the statutory remedy of Appeal under the said provisions. Apparently, acknowledging the absence of constitution of Appellate Tribunal, in exercise of the power conferred under section 172 of the CGST Act, 2017, the Government of India based on the recommendation made by the G.S.T. Council, has issued Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 on 03.12.2019 - In tune with the said Removal of Difficulties Order dated 03.12.2019, the Central Board of Indirect Taxes and Customs, GST Policy Wing vide Circular No. 132/2/2020-GST Dated 18th March, 2020 has come out with the clarification in respect of appeal having regard to non-constitution of the Appellate Tribunal. Taking into account the aforesaid Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019 issued by the Government of India and subsequent clarification issued by the Central Board of Indirect Taxes and Customs (GST Policy Wing) vide Circular No. 132/2/2020 dated 18th March, 2020, it is deemed proper in the interest of justice to dispose of this writ petition subject to conditions imposed - petition disposed off.

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• 2024 (4) TMI 150
  GST registration was suspended - show cause issued as to why the registration be not cancelled - Validity of order - application seeking cancellation of GST registration was rejected - HELD THAT:- Learned counsel for the petitioner submitted that petitioner has shut all business activities. As per the petitioner he on his own found discrepancy in his return and accordingly deposited a sum. Show cause notice dated 10.11.2023 was issued to the petitioner after a gap of 9 months seeking to cancel its registration. Said notification was issued on the ground that Section 29(2)(e)- registration obtained by means of fraud, willful misstatement or suppression of facts . The show cause notice required the petitioner to appear before the undersigned i.e. authority issuing the notice. Notice did not give the name or designation the officer or place where the petitioner has to appear. Thereafter, vide show cause notice dated 10.11.2023, the registration of the petitioner was suspended w.e.f. 10.11.2023. Thus, the order dated 10.11.2023 rejecting application of the petitioner seeking cancellation of its registration is set aside. The GST registration is cancelled with effect from 23.02.2023 i.e. the date when the petitioner first applied for cancellation of its registration. Petitioner shall, however, comply with Section 29 of the Central Goods and Services Tax Act, 2017 and furnish all the details as required by the said provisions. The petition is accordingly disposed of in the above terms.

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• 2024 (4) TMI 149
  Long delay in filing the revocation application - GST registration was cancelled - HELD THAT:- In that view of the matter, the delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. The writ petition is disposed of in the above terms.

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• 2024 (4) TMI 148
  Validity of show cause notice demanding tax and interest - No opportunity of personal hearing - non payment of tax due in the GSTR-1 return and claim of excess input tax credit - HELD THAT:- The appellant uploaded Ext.P3 reply in Form GST DRC-06 along with necessary attachments through the registered web portal of GST Department. The appellant specifically requested for an opportunity of personal hearing. However, it appears that the 1 st respondent issued Ext.P5 order finalising the demand without referring to Ext.P3 reply or granting the appellant an opportunity for personal hearing. Thus, the impugned order clearly violates the principles of natural justice. Hence, we are of the view that Ext.P5 cannot be sustained and it is liable to be set aside. Accordingly, we allow the appeal setting aside the impugned judgment as well as Ext.P5. The 1st respondent is directed to pass fresh order after taking into account the contentions raised by the appellant in Ext.P3 reply and after giving him an opportunity of personal hearing.

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• 2024 (4) TMI 147
  Limitation u/s 107 of the BGST Act - Filing of Appeal before the Appellate Authority - Notification No. 53 of 2023- Central Tax - extended the time for filing appeal against an order passed by the Proper Officer - HELD THAT:- In the present case, the appeal was filed and was dismissed by the first Appellate Authority. In such circumstances, it is only proper that the appeal be restored to the files of the Authority subject to the conditions under paragraph no. 3 being satisfied. Hence the petitioner would be entitled to satisfy paragraph no. 3 of the aforesaid Notification by paying up the deficient amounts as would be required to maintain the appeal under the notification. We specifically says the deficient amount, since on filing the appeal 10% of the amount of tax in dispute arising from the order impugned would/ought to have been remitted. We set aside the impugned order at Annexure-P/3 and direct the assessee to satisfy the aforesaid conditions before the time stipulated in Notification; i.e. 31.01.2024, in which event, the appeal would be taken up and considered on merits. And if the conditions are not satisfied, then necessarily the appeals ought to be rejected or would stand rejected. We allow the writ petition on the above terms.

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• 2024 (4) TMI 146
  Exemption from GST - Scope of the Term Applicant for seeking advance Ruling - services provided by the suppliers to the Board of Secondary Education in relation to conducting examination - N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 read with explanation in paragraph 3 clause (iv) and read with Circular No. 151/07/2021-GST dated 17th June, 2021 - HELD THAT:- In the case of M/s Anmol Industries Ltd. versus West Bengal Authority for Advance Ruling, Goods and Services Tax, [ 2023 (5) TMI 288 - CALCUTTA HIGH COURT ] the Hon'ble High Court, Calcutta held that the court set aside the ruling of AAR and remanded back the matter to AAR to decide the application on merits and in accordance with the law. It is observed that AAR Rajasthan have not taken note of the above judgement of the Hon'ble High Court as the judgement had not been pronounced at the relevant point of time. Thus, it will be in the fitness of things if the Authority for Advance Ruling consider the ratio of the judgement pass a ruling thereafter. It is left open to the Authority for Advance Ruling to consider applicability of the judgement as per settled principles of jurisprudence. The Ruling of AAR. Rajasthan dated 17.06. 2022. is set aside and the matter is remanded back to the AAR to decide the application afresh after considering the judgement of Hon'ble High Court, Calcutta delivered in the case M/s Anmol Industries Ltd. Versus West Bengal Authority for Advance Ruling, Goods and Service Tax.

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• Income Tax

• 2024 (4) TMI 145
  TP Adjustment - Addition of international transaction related to the demerger - whether the AO can proceed to make transfer pricing adjustment beyond the ALP determination by the TPO in light of the mandate of Section 92CA? - HELD THAT:- As in order to compute the ALP of the international transactions, the AO may refer the matter to the office of the TPO, with prior permission of the Principal Commissioner of Income Tax [PCIT] or Commissioner of Income Tax [CIT]. Mandate of Section 92CA(4) of the Act would reflect that the AO shall calculate the total income of the assessee in conformity with the ALP determined by the TPO. We may usefully refer to the dictum laid down in the case of CIT v. S.G. Asia Holdings (India) (P) Ltd., [ 2019 (8) TMI 661 - SUPREME COURT] wherein, the Court settled the controversy around the word may used in Section 92CA(1) and is no longer res integra. The Hon ble Supreme Court also referred to CBDT instruction no. 3/2003 and ruled that it is mandatory for the AO to refer the matter to the TPO in order to determine the ALP of the international transactions if selected for scrutiny on the basis of transfer pricing risk parameters. It is abundantly clear that in cases, where certain international transactions may have a bearing on the computation of total income, the AO ought to refer the matter to the TPO in order to determine the ALP of the international transactions and the AO, while computing the total income of the assessee, shall proceed in conformity with the ALP determined by the TPO. It is trite position of law that if the legislative scheme prescribes an act to be done in a certain manner, it ought to be done in that manner, and that manner alone. As per the legislative mandate behind Section 92CA of the Act, the ALP determination of any international transactions falls in the domain of the TPO. Moreover, the dictum laid down in CIT v. S.G. Asia Holdings [Supra] noticeably elucidates that the AO is not clothed with the powers to ascertain the ALP of any international transaction that is selected on the transfer pricing risk parameters. Furthermore, Section 92CA(4) of the Act evidently mandates that the AO cannot deviate itself from the TPO order while computing the total income of the assessee. In the present case, the TPO order solely reflects the transfer pricing adjustment. However, the AO, without affording an opportunity of hearing to the assessee, proceeded to add an amount to the total income of the assessee, which addition was neither determined nor directed by the TPO, as the ALP of the international transaction related to the demerger of the business. The said course of action was not available to the AO and it is a clear case of excess. Therefore, we find ourselves unable to sustain the impugned order as it clearly breaches the legislative mandate of Section 92CA of the Act. WP allowed.

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• 2024 (4) TMI 144
  Validity of reassessment proceedings - non-service of notice u/s 148A(b) through e-mail - Denial of principle of natural justice - petitioner submitted that the notice u/s 148A(b) ought to have been served on the petitioner's registered e-mail with the Income Tax Department - HELD THAT:- In the instant case, a careful perusal of the averments made by the petitioner manifests that the petitioner seems to have ingeniously given an impression about violation of the principles of natural justice. The averments, however, do not unequivocally allude to the fact that no notice at all has been served upon the petitioner u/s 148A(b). Rather, what is sought to be contended is that the service of the notice through e-mail was not effected. In our considered view, the same does not seem to be the mandate of Section 148A(b) - Revenue has countered the version of the petitioner by placing on record the delivery report at the address of the petitioner. There is no quarrel regarding the address on record or the delivery report. Additionally, we find that there is no rejoinder to the averments made in the affidavit by the Revenue. The same, therefore, remains uncontroverted. It could be said that the statutory requirement was substantially fulfilled by the Revenue and to permit a challenge on a flimsy ground, as raised before us, would effectively amount to violence with the language of the statute. The requirement of natural justice stood fulfilled once the notice was served at the admitted address of the petitioner and the Revenue cannot be faulted in that case, irrespective of the consequences that flow therefrom. We additionally find that the order of assessment came to be passed and the petitioner has an efficacious alternative remedy to take appropriate recourse in accordance with law. No reason, much less a cogent reason, to entertain the instant writ petition or to annul the order passed under Section 148A(1)(d).

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• 2024 (4) TMI 143
  Validity of reopening order passed without dealing with assessee's submission - escapement of income is on the basis of audit objections raised - HELD THAT:- Petitioner explained that as regards the first issue being the value in lieu of additional FSI plus Fungible FSI, the same was subject matter of assessment proceedings and therefore, it was a clear case of change of opinion. As regards the second part Petitioner explained that the same issue under the original development agreement was considered by the ITAT for AY 2011-2012 and the ITAT has held that the amount was not taxable in the hands of Petitioner. In the order passed under Section 148A(d) of the Act, the AO has not dealt with any of these submissions of Petitioner. Therefore, in our view, such an order which does not deal with the submissions of Petitioner, cannot be sustained. In the result impugned order is hereby quashed and set aside. The consequential notice issued u/s 148 of the Act is hereby quashed and set aside.The matter is remanded to the AO for de-novo consideration. Decided in favour of assessee.

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• 2024 (4) TMI 142
  Jurisdiction to entertain petitioner s Revision application u/s 264 - application came to be rejected by PCIT 5, Mumbai on the ground that Deputy Commissioner of Income Tax (DCIT), CPC is not reporting to the PCIT 1, Mumbai. According to PCIT 5, PCIT 1, Mumbai can neither exercise any kind of monitoring of the work of DCIT, CPC nor can issue any directions to him. Therefore, he cannot be treated as subordinate to PCIT 1 HELD THAT:- Petitioner as submitted, and rightly so, that u/s 143(1) (A) the Board has formulated a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or a refund due to, assessee as required under Sub Section (1) of the Act. CBDT had also notified a scheme on 4th January 2012 in exercise of the powers conferred by Sub Section 1(A) of Section 143 of the Act. We agree with Petitioner that the CPC only acts as a facilitator to the Jurisdictional Assessing Officer (JAO) who holds jurisdiction over assessee u/s 120 of the Act. Merely because the return is processed by CPC, the regular jurisdiction of the JAO is not curtailed and he continues to hold the same jurisdiction . This is evident from the fact that a demand resulting from the processing of a return under Section 143(1) of the Act by CPC is also enforced by the JAO. It is JAO who issues a notice u/s 143 (2) of the Act if the return is to be selected for scrutiny and frames the assessment. We would also add that even under the faceless regime, once the assessment has been framed by the Faceless Assessing Officer (FAO), all records are transferred to the JAO for recovery of demand and other incidental matters. In fact in many matters before us PCIT have exercised jurisdiction in identical situation. Therefore, for Respondent No. 1 to say that he will have no jurisdiction to entertain petitioner s application u/s 264 of the Act because the DCIT, CPC is not reporting to him is not correct. CBDT has issued directions on 18th September 2020 (F No. 187/3/2020-ITA-1) in which it is noted that the power under Section 263 and 264 will be exercised by the Jurisdictional Principal Commissioners of Income Tax concerned. Therefore, certainly if the powers can be exercised by the Jurisdictional Principal Commissioners of Income Tax and the faceless regime, certainly it only confirms our view expressed above that CPC only acts as a facilitator to the JAO and merely because the return is processed by CPC the regular jurisdiction of the JAO is not curtailed and he continues to hold the jurisdiction. Since we have already expressed our view that the JAO will have jurisdiction, we hereby quash and set aside the impugned order. Respondent No. 1 PCIT 5 is directed to dispose petitioner s application under Section 264 of the Act in accordance with law.

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• 2024 (4) TMI 141
  TP Adjustment - relevance of capacity under utilisation factor alongwith other factors for determining TP adjustment - comparable selection - ITAT directing to make appropriate capacity utilization adjustment while computing net margin of the tested party (i.e. assessee) - HELD THAT:- In the assessment order the TPO provided all set of 12 comparables to assessee. The set of 3 comparables selected by assessee were sent for bench marking. Assessee raised various objections to the proposed comparison and the main ground of objection was that assessee had started production only in the month of May 2007 and the sales have started only from the month of July 2007. Whereas, the comparables were in the business for many years. This objection was rejected by the TPO. The CIT(A) upheld the findings of the TPO. The ITAT has rightly came to a conclusion that comparison has to be made between two equals. We agree with the finding of the ITAT that assessee who started the business in a particular year cannot be compared with assessee who are doing business for many years. On facts, the ITAT has given a finding that though there has been no major sales throughout the whole year, the expenses incurred by assessee are almost the same as compared to the expenses of the next year. It is also a fact that assessee had achieved sales of Rs. 62 crores in the next assessment year and assessee could achieve that turnover because the business by that time had got stabilised. No infirmity in the order passed by the ITAT. Therefore, no substantial question of law arise.

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• 2024 (4) TMI 140
  Penalty levied u/s 271DA - cash receipts by assessee of Rs. 2,00,000/- or more from a single persons by splitting the invoices against sale of goods at its stores - violation of provisions of section 269ST - whether good and sufficient cause proved? - proceedings of search and seizure operation that was conducted on director of assessee company - CIT(A) confirmed addition and held that the assessee has issued two bills to the customer bifurcating it below Rs. 2,00,000/- as obvious i.e. circumventing the provisions of section 269ST - CIT(A) held that no person issues two bills to the same customer for two different items HELD THAT:- The Hon ble Apex Court in the case of Hindustan Steel Ltd Vs. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] held that held that penalty may not be imposed when there is technical or venial breach of the provisions of the Act. 'Good cause as defined Lexicon - Reason which is found to be adequate or proper and justified by a court or a competent authority dealing with the matter. Sufficient cause - The expression sufficient cause implies no negligence nor inaction nor want of bonafides on the part of the party . See MYSORE FERTILISER COMPANY [ 1982 (11) TMI 15 - MADRAS HIGH COURT] ,CHEMBARA PEAK ESTATES LIMITED [ 1989 (8) TMI 35 - KERALA HIGH COURT] ,BHIKAJI RAMCHANDRA [ 1982 (2) TMI 1 - BOMBAY HIGH COURT] and JAIPUR ELECTRO PRIVATE LIMITED [ 1979 (10) TMI 6 - RAJASTHAN HIGH COURT] The default, if any, at most be said to be a technical default. It has been held by the Hon ble Apex Court in the case of Hindustan Steels vs. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] that penalty cannot be levied merely because the authorities are empowered to levy and when there is technical or venial breach of the provisions of the Act, the authorities competent to impose penalty shall be justified in refusing to impose the penalty - Appeal of the assessee is allowed.

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• 2024 (4) TMI 139
  Revision u/s 263 - PCIT found the order to be erroneous and prejudicial to the interest of Revenue on account of non-examination of the genuineness of the sundry creditors and allowing 80IC deductions - HELD THAT:- Observations of PCIT that the assessment order was passed without due diligence is not well founded. Apparently, the AO had called for relevant information on regular basis and which were responded by the assessee. The reply, shows that the assessee had provided relevant information including audit report justifying the claim of deduction. We find no force in the contention of ld. DR that the AO may have examined the question of eligibility, but, not the quantum. The two aspects supplement each other. PCIT has concluded the fact of assessment order being passed without due diligence on the basis that although the assessee had furnished balance sheet, Profit Loss Account and Form No.10CCB, the AO had not enquired from the assessee to comply with the queries raised in this regard. Certainly, the assessment order is silent on some aspects, but, at the same time, the PCIT before whom the assessee had given a detailed explanation of the income from two units and how they were reported in the financials and other relevant evidences available in assessment record have not been examined to give a finding that what was the extent of claim of deduction of the assessee which was left out of the scrutiny of the AO. Merely making a bald allegation of assessing officer not carrying out investigations sufficiently or to say, to the satisfaction of the PCIT, cannot be basis to invoke the provisions of section 263 - Thus PCIT has fallen in error in concluding that the order of the ld.AO was erroneous so far as prejudicial to the interest of the Revenue. Decided in favour of assessee.

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• 2024 (4) TMI 138
  Addition u/s 68 - disclosure made by the assessee on the basis of documents impounded during the course of survey proceedings - HELD THAT:- First of all we note that the statement on oath is not permitted during Survey proceedings, for that reliance is placed on the judgment of Hon`ble High Court of Kerala in the case of PAUL MATHEWS SONS [ 2003 (2) TMI 25 - KERALA HIGH COURT] We note that in the assessee's case under consideration, during the course of survey action u/s 133A of the I.T. Act, 1961, the statement of the assessee was recorded u/s 131 (1A) of the I.T. Act, 1961 on oath on 05.03.2014, which is against the provisions of law. Besides, the statement taken during Survey has no evidential value without any corroborative evidence and for this reliance is placed on the judgment of Hon`ble High Court of Madras, in the case of S. Khader Khan Son, [ 2007 (7) TMI 182 - MADRAS HIGH COURT] (Madras), wherein the Hon`ble Court held that section 133A does not empower any ITO to examine any person on oath; so statement recorded under section 133A has no evidentiary value and any admission made during such statement cannot be made basis of addition. We note that in assessee's case under consideration, the addition was made by the assessing officer based on the statement only, which is not permitted. Therefore, we note that during the survey proceedings no any incriminating material or tangible material was found by survey team in respect of addition made and it is settled position of law that statement on oath taken during Survey has no evidential value without any corroborative evidence. AO did not bring on record any corroborative evidence to make addition except statement of assessee. Moreover, the assessee, vide his letter during the assessment proceedings had requested the assessing officer to furnish him the incrimination material/corroborative evidences found during survey, by the survey team, in respect of addition which the assessing officer failed to provide to the assessee, and made the addition without corroborative evidences, which is not sustainable in the eye of law. We also note that during the assessment proceedings the assessee stated in the written submission that By not offering Rs. 2,50,00,000/- in the Return of Income, the assessee has in a way retracted his statement , thus, we note that assessee has not accepted the statement recorded on oath during survey and rather it was retracted by him. Based on these facts and circumstances, we delete the addition. Returned loss - As we find merit in the submission of Ld.CIT-DR to the effect that since the assessee has failed to furnish any explanation before the assessing officer, was well as before the ld CIT(A) therefore, we remit this issue back to the file of the assessing officer with the direction to the assessee to furnish explanation/justification of business loss before the assessing officer and then assessing officer should adjudicate the issue in accordance with law. Penalty u/s 271F - assessee did not file the return of income as per due date prescribed u/s 139(1) - As submitted assessee has furnished the belated return of income u/s 139(4) - HELD THAT:- As Act permits the assessee to file the belated return of income, in case he did not file original return of income u/s 139(1) of the Act, and the assessee has made sufficient compliance by filing belated return. Section 271F deals with the penalty for failure to furnish return of income. If an assessing officer has imposed a penalty under this section, it is possible for the penalty to be deleted or waived if sufficient cause is shown by the assessee. According to the assessee, there was a business loss hence assessee did have positive income, therefore assessee decided not to file the original return of income u/s 139 and this is the sufficient cause not to file the original return of income within the time prescribed under section 139(1). Therefore, assessee filed the belated return of income under section 139(4) - We note that the assessee has explained the sufficient cause or reason, not to leave the penalty u/s 271F therefore, we delete the penalty imposed u/s 271F of the Act. Assessment u/s 144 - assessee did not file the required details and documents before AO - On appeal, the ld. CIT(A) passed the ex-parte order on merit based on the material available on record - HELD THAT:- AO has issued notices, however assessee could not appear. Before CIT (A), the assessee could not appear because the notices for hearings were not delivered to the assessee. Considering the above facts, we note that assessee could not plead his case successfully before the ld. CIT(A). We also note that Ld. CIT(A) has not passed the order as per the mandate of provisions of section 250(6) - CIT(A) did not pass order on merit based on the material available on record and based on assessee`s reply. Hence, we are of the view that one more opportunity should be given to the assessee to plead his case before the AO. We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of Assessing Officer for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Assessee ground of appeal allowed for statistical purposes.

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• 2024 (4) TMI 137
  Correct head of income - 'Income from House Property or Income from other Sources - taxing gross composite rental income received from let out building space along with inbuilt infrastructure and other amenities - HELD THAT:- We find force in the contention of the Counsel that the impugned quarrel is coming from earlier assessment years wherein it has been decided in favour of the assessee and against the Revenue [ 2022 (8) TMI 1502 - ITAT DELHI] wherein Tribunal recorded its unequivocal finding that the lease deed under consideration was composite one and that it answered the description u/s 56(2)(iii) of the Act. Another objection of the Revenue that it is related party transaction has also been rejected by the Tribunal by saying that no adverse view has been taken in determination of ALP with AE by the Ld. TPO nor provisions of Section 40A(2) have ever been invoked. Thus decided in favour of the assessee with the direction to the Ld. AO to follow the decision of the Hon'ble Delhi High Court in Jay Metals [ 2017 (7) TMI 618 - DELHI HIGH COURT] in respect of the assessee's claim of expenses and depreciation u/s 57 - Decided in favour of assessee. Alternate remedy for challenging Scrutiny assessment - disallowance made while processing the return u/s 143(1) - HELD THAT:- As intimation passed u/s 143(1) of the Act goes into oblivion once this scrutiny assessment is framed. The intimation passed u/s 143(1) of the Act can be questioned u/s 154 of the Act by way of a rectification application. The assessee can also file an appeal against the said intimation before the First Appellate Authority. In the case under consideration, we find that though the assessee has preferred rectification application before the CPC / AO but has not received any plausible reply / order. We are of the considered view that the remedy is available elsewhere and as the assessee has triggered the available remedy it would be appropriate to consider the remedy there . The remedy sought by the assessee is not available from this forum. Decided against assessee. Non-granting of full tax credit - HELD THAT:- AO is duty bound to allow the tax credit of all the taxes paid by the assessee for the year under consideration. Therefore, we direct the AO to give full tax credit after due verification as per the provision of the law. Ground is allowed for statistical purpose

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• 2024 (4) TMI 136
  Penalty u/s 270A - AO has disallowed the assessee s claim of deduction u/s 24 and Chapter-VIA deduction as false claims - HELD THAT:- Sub-section 9(e) of Section 270A is for failure to record any receipt in books of accounts. However, in the case of the assessee, there is no such failure to record any receipt in the books of assessee. The addition is on account of disallowance of certain deductions claimed under Chapter-VIA and Section 24 of the Act. Therefore, AO has levied penalty under incorrect section. Therefore, the penalty is not-maintainable. Hence, we direct the AO to delete the penalty - Decided in favour of assessee.

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• 2024 (4) TMI 135
  Validity of assessment order passed u/s 153C - addition u/s 69A r.w.s. 115BBE - cash deposited in various bank accounts post demonetization - search and seizure operation carried out in case of Sh. Mohit Goel, erstwhile Director of RBPL[third paty] and CCTV Footage obtained from bank as close relatives and associates carrying cash to bank Difference in opinion between the Ld. Members constituting the Division Bench - appointment of Third Member - HELD THAT:- Only enquiry conducted by the AO was with Kotak Mahindra Bank, Noida Branch and as a result of such enquiry, AO received CCTV footages and number of deposit slips. In the CCTV footage some close relatives/associates of Shri Rajesh Chawla were found in the bank along with one of the Directors of M/s RBPL, Sh. Anmol Goel. It is not understood how the AO could, with absolute certainty, conclude that the close relatives/associates of Sh. Rajesh Chawla were carrying demonetized cash. In so far as cash deposits made in Kotak Mahindra Bank on other dates, the Assessing Officer has absolutely no evidence to establish that any close associate or relative of Sh. Rajesh Chawla went to the bank for depositing the cash. In fact, the deposit slips indicating deposit of cash in the bank account of M/s RBPL clearly reveal that they bear signatures of either Sh. Sumit Kumar or Sh. Anmol Goel. None of the close relatives/associates of Sh. Rajesh Chawla were found to have signed the deposit slips recovered from the concerned bank. Surprisingly enough, the AO has chosen not to examine Sh. Sumit Kumar, who had signed most of the deposit slips, or employees of the concerned bank to ascertain the identity of the person who carried cash and deposited in the bank account. Thus, the CCTV footage obtained from the bank only leads to a presumption and does not contain any conclusive evidence to establish that the close relatives and associates of Sh. Rajesh Chawla were carrying demonetized cash for depositing in the bank account of M/s RBP L. It is fairly well settled, presumption howsoever strong cannot be substitute for evidence. No addition can be made purely on the basis of presumption and suspicion unless there are evidences on record to justify the addition. In the facts of the present appeal, the AO has not brought any conclusive evidence to establish beyond reasonable doubt that it is the assessee who has given demonetized cash for depositing in the bank accounts of M/s RBPL. It may be a fact that Sh. Anmol Goel, one of the directors has also stated in his statement recorded u/s 132(4) of the Act that cash to the tune of Rs. 30 Crores was received from Sh. Rajesh Chawla was deposited in the bank accounts of M/s RBPL post demonetize, however, the statement recorded cannot be taken on its face value as there is every possibility that to explain the source of unaccounted cash deposited in the bank accounts, Sh. Anmol Goel might have taken the name of Sh. Rajesh Chawla to save his own skin. In any case of the matter, Sh. Anmol Goel, being the Director of M/s. RBPL, is an interested person, hence, without any other corroborative evidence his statement cannot be relied upon. In any case of the matter, cash was found deposited in the bank accounts of M/s RBPL. Deposit slips also bear signature of either the directors or persons connected to M/s RBPL. Therefore, in terms with section 132(4A) r.w.s 292C of the Act, the presumption has to be drawn against the person from whose possession/custody the money was found/seized. Though, the presumption postulated u/s 132(4A) r.w.s 292C of the Act is a rebuttable presumption, however, the initial burden is entirely on the person from whose possession the money was found to establish through proper evidence that either it does not belong to him or it is from explainable source. Facts recorded by Ld. First Appellate Authority clearly establishes that the Assessing Officer has not made detailed enquiry and has not brought enough material on record to conclusively prove that demonetized cash deposited in the banks account of M/s RBPL came from the assessee company. Except Kotak Mahindra Bank, Noida Branch, the Assessing Officer has not conducted any enquiry worth its name in respect of cash deposited in other bank accounts. On the contrary, the finding of facts recorded by Ld. First Appellate Authority clearly reveal various missing links in the enquiry conducted by the Assessing Officer with regard to the cash deposited in the bank accounts of M/s RBPL. Thus, based on such half backed enquiry the assessee cannot be hauled up for the cash deposited in the bank accounts of M/s RBPL by ignoring the statutory mandate of Section 132(4A) r.w.s 292C of the Act. AO should have directed his energy in conducting enquiry with M/s RBPL and with people closely associated with it to ascertain the source of cash deposits in the bank accounts of M/s RBPL. Instead of doing that the Assessing Officer has simply relied upon the statement recorded u/s 132(4) of the Act from Sh. Mohit Goel, who was no way connected with M/s RBPL and is a person of questionable integrity, considering the fact that he was involved in fraud and absconded for a considerable period before being arrested by law enforcement agency. Thus upon considering the totality of facts and circumstances of the case, third member agree with Ld. Accountant Member that the addition a part of which was sustained by Ld. Commissioner (Appeals), cannot be made. Consequently, the alleged commission payment is also unsustainable. Decided in favour of assessee. Additions representing labour expenses and unaccounted/unexplained purchases and unexplained liability - As Accountant Member has not recorded any specific finding on these issues. Whereas, Ld. Judicial Member has sustained the addition and has restored the addition to Ld. First Appellate Authority - HELD THAT:- In absence of any specific finding recorded by Ld. Accountant Member on these two issues, according to third member, there is no difference of opinion on the issues. Therefore, agree with the view expressed by Ld. Judicial Member. However, as discussed earlier, these issues are purely academic, considering the fact that I have agreed with the view of Ld. Accountant Member that the assessment order passed u/s 143(3) r.w.s 153C of the Act is invalid, hence, deserves to be quashed. Therefore, the matter ends there, as, the Assessing Officer cannot proceed any further.

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• 2024 (4) TMI 134
  Addition u/s. 69A - unexplained cash deposits in the bank account - assessee has mentioned about the receipts of sale consideration as per the sale of agreement in his books of accounts but contention of the Revenue is that the purchase agreement was not signed by the purchaser - HELD THAT:- On perusal of the Agreement of Sale, it is clear that the stamp paper is also in the name of the purchaser. Apart from the above, the assessee is engaged in the real estate business. Thus it is apparent that the assessee has received sale consideration of Rs. 30 lakhs as per the agreement of sale and filed the confirmation letter saying that the purchaser has paid the sale consideration to the assessee. Therefore, assessee has properly explained the source of cash deposit to this extent. For loan receipts assessee has availed a loan on 26/9/2016 and withdrawn the same on 29/9/2016. But, the assessee has deposited the said amount on 13/11/2016. The assessee has not properly explained as to why the loan was availed by the assessee and for what purpose he has withdrawn the amount on 29/11/2016 and deposited the same after one and half months. Therefore, the contention of the assessee is not tenable. Assessee has not properly explained the source for the cash deposit. Petty cash in hand for petty expenses and the same was deposited due to demonetization - As considering the assessee s submissions and the assessee s nature of the business and the material available on record, find force in the argument of the assessee and therefore the cash deposit of such amount is treated as explained. Deposit of old currency notes which are kept for petty expenses and obtained the new currency notes from the Bank we find force in the argument of the assessee and therefore the cash deposit hereof is treated as explained. Appeal of the assessee is partly allowed.

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• 2024 (4) TMI 133
  Deduction claimed u/sec. 80P(2)(a)(i) - interest income from the investments made in co-operative/scheduled bank(s) - HELD THAT:- As decided in RENA SAHAKARI SAKHAR KARKHANA LTD [ 2022 (1) TMI 419 - ITAT PUNE] we respectfully follow the view taken in the case of Totagars Cooperative Sale Society[ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and State Bank Of India [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] wherein it was observed that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Decided in favour of assessee.

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• 2024 (4) TMI 132
  TP adjustment - margin computation for provision of services to the AEs by the assessee - AR submitted that for the assessment year 2020-21, while computing the operating margin on cost for rendering of the same engineering and other related services, the learned TPO considered only the segmental operating margin on cost, but not at the entity level - HELD THAT:- We are of the considered opinion that the details furnished by the assessee in respect of margin computation for provision of services to the AEs by the assessee, vide Annexure-A to the submissions made before the TPO on 08/01/2021 deserves consideration and for such purpose, we restore the issue to the file of the AO/ TPO, who will consider the same and take a fresh look on this issue, after affording an opportunity to the assessee. Ground raised treated as allowed for statistical purpose. Adjustment towards reimbursement of expatriates salary, bonus and the provident fund costs - AR submits that the copy of the deputation agreement is now available with them and they are ready to furnish the same and therefore an opportunity may be granted to the assessee to produce such agreement before the authorities and get the matter disposed of on merits - HELD THAT:- As in view of the fact that the earlier issue was restored to the file of the learned AO/TPO, we deem it just and proper to restore this issue also to the file of the learned AO/learned TPO with a direction to the assessee to produce all the requisite documents sought by the TPO on the earlier occasion and cooperate with the proceedings. Ground is accordingly treated as allowed for statistical purpose. Disallowance of miscellaneous expenditure considering the same as prior period expenses and also capital in nature - According to the assessee, for the purpose of construction of a temporary site office, the assessee entered into a service contract and incurred an expenditure on account of site mobilization work subcontracted and submitted the invoices - HELD THAT:-We find force in the argument of the learned AR and since this matter requires verification at the end of the learned AO/learned TPO, this issue is also restored to the file of the learned AO/learned TPO to verify the invoices and take a view as to the nature of this expenditure. Loss on projects - assessee submitted that it is following the Accounting Standard-7-Construction Contract describes and lays out the accounting treatment in respect of the revenue and costs in relation to a construction contract and it has to be used in for the accounting of construction contracts in the financial statements of the contractors - HELD THAT:- We deem it just and necessary to give an opportunity to the assessee to take such a plea before the learned DRP and to have the facts verified by the learned DRP in the light of ICDS-III. For this purpose, we restore this issue to the file of the learned DRP and the assessee will make all the submissions relating to this aspect to the learned DRP. Appeal of the assessee is treated as allowed for statistical purposes

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• 2024 (4) TMI 131
  Revision u/s 263 - assessment of trust - donations given out of accumulated funds u/s. 11(2) of the Act of earlier previous years - as per CIT amount accumulated / set apart with the assessee trust within the meaning of section 11(2) of the I.T. Act has been paid / donated to Shri Raghunath Balika Vidyalaya and Hindu College during the relevant previous year, such application of funds by the assessee is clear violation of explanation to section 11(2) r.w.s. 11(3) HELD THAT:- Amount has been paid as donation to other Trust / Charitable Organisations and such payment will be hit by Explanation to 11(2) r.w.s. 11(3)(d) of the Act and in view thereof the amount donated by the assessee to other institutions i.e. Hindu College and Shree Raghunath Balika Vidyalaya out of accumulated fund should have been brought to tax by the AO. Hence, Ld. CIT(E) correctly observed that that as per Explanation to section 11(2) of the Act read with section 11(3)(d) of the Act, donations given out of accumulated funds u/s. 11(2) of the Act of earlier previous years are not allowable as application of income for charitable or religious purposes and the same shall be deemed to be income of the assessee of the previous year 2016- 17, therefore, AO failed to examine this issue, which should have been done during the assessment u/s. 143(3) of the Act and accordingly assessment order exhibits lack of proper inquiry / verification by the AO, which was required to be carried out in the instant case. As a result thereof, Ld. CIT(E) has rightly held that the assessment order to be erroneous in so far as it is prejudicial to the interest of the revenue as per provisions of section 263 of the Act and accordingly, the same was set aside u/s. 263 of the Act to the file of the AO for making a donovo assessment after proper examination of the issue involved and due verification wherever required by way of affording reasonable opportunity of being heard to the Assessee Trust and pass a speaking and well reasoned order. Hence, the order of Ld. CIT (Exemption) in our considered opinion, does not require any interference on our part, hence, we uphold the same and accordingly, the Ground Nos. 1 to 3 raised by the assessee stand dismissed.

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• 2024 (4) TMI 130
  Disallowance as per order u/s 144C - default in filling of form 35A - Expenditure pertaining to stamp duty and registration charges in respect of society transfer fees paid by the assessee out of the aforesaid capital gain amount disallowed - as per AO assessee has not furnished the supporting document regarding making payment of aforesaid expenditure claimed by the assessee - assessee objection filed before DRP rejected on the ground that original form no. 35A was non signed by the authorized representative and the fresh form no. 35A filed by the assessee cannot be considered because it was filed beyond time HELD THAT:- Assessee has made correction in the form 35A which cannot be treated as filed beyond time limit, therefore, we don t find any justification in the finding of the DRP for treating the form 35A as not filed. On merit we find that the assessing officer has not considered that assessee has actually incurred the expenses pertaining to stamp duty and registration charges and society transfer charges as per the terms and conditions of the agreement and evidence of payment as reflected in the copy of bank statement, therefore, we direct the assessing officer to allow the claim of the assessee after verification of the copy of agreement and copy of bank statement filed by the assessee. Accordingly, the appeal of the assess is allowed.

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• 2024 (4) TMI 129
  Penalty u/s. 271(1)(c) - validity of show cause notice issued - mentioning of both limbs in notice issued - as per AO assessee had deliberately furnished inaccurate particulars of income as well as concealed the particulars of income - HELD THAT:- Though the A.O. in the penalty order passed u/s. 271(1)(c) had mentioned both the limbs by stating that the assessee had furnished inaccurate particulars of income as well as concealed the particulars of income , but the penalty notice issued u/s. 274 r.w.s. 271(1)(c) of the Act dated 24.09.2021 reveals that the assessee was called upon to explain why penalty u/s. 271(1)(c) of the Act may not be imposed upon him for having concealed the particulars of income . We are of the considered view that now when as per the settled position of law the two defaults, viz. concealment of income and furnishing of inaccurate particulars of income are separate and distinct defaults, and not overlapping, therefore, the AO had grossly erred, wherein he vide the SCN, had on one hand called upon the assessee to explain as to why penalty u/s 271(1)(c) may not be imposed on her foe having concealed the particulars of income , but thereafter had vide his penalty order u/s. 271(1)(c) visited the assessee for a penalty for both the defaults, viz. furnished inaccurate particulars of income as well as concealed the particulars of income . The aforesaid approach adopted by the A.O. cannot be merely dubbed as a technical default as the same had divested the assessee of her statutory right of a proper opportunity to be heard and defend her case. The assessee had been saddled with penalty u/s 271(1)(c) without validly putting her to notice about the default for which the same was sought to be imposed. A.O had failed to discharge his statutory obligation of fairly putting the assessee to notice as regards the default for which she was being proceeded against, therefore, the penalty under Sec. 271(1)(c) imposed by him being in clear violation of the mandate of Sec. 274(1) of the Act cannot be sustained. Decided in favour of assessee.

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• 2024 (4) TMI 128
  Estimation of gross profit - addition on account of alleged gross profit @ 28% on alleged unaccounted sales during the impugned assessment year - as submitted discrepancy in stock was duly reconciled by the assessee - appellant and thus, the allegation of DCIT that the stock has been sold by the assessee - appellant outside books of accounts, is completely based on suspicion and surmises - HELD THAT:- There is no dispute that during the assessment proceedings, the Assessing Officer has examined the books of account which were produced before him. We find that the profit and loss account has been made for the period 01.04.2011 to 13.12.2011 which is the date of survey. Assessment has been made and income has been declared for the F.Y. 01.04.201 to 31.03.2012 wherein the gross profit is shown at Rs. 2,68,36,334/-. Addition on account of gross profit amounts to double addition as gross profit of the assessee as per books of account included gross profit of alleged sales outside the books. Thus addition on account of alleged unaccounted sales has been deleted by the ld. CIT(A) and as mentioned above, gross profit as on 31.03.2012 includes the profit on the alleged unaccounted sales. We do not find any merit in the addition - We accordingly, direct the Assessing Officer to delete the addition. Assessee appeal allowed.

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• Customs

• 2024 (4) TMI 127
  Jurisdiction - proper officer to issue SCN - Valuation of imported goods - power tools and its parts and accessories - mis-declaration of value - HELD THAT:- The view taken by the Division Bench of this Court in the case of LAXMI ORGANIC INDUSTRIES LTD VERSUS UNION OF INDIA, THROUGH ITS SECRETARY, DEPARTMENT OF REVENUE ORS. [ 2023 (12) TMI 1157 - BOMBAY HIGH COURT] , needs to be followed in the present proceedings inasmuch as, in the present proceedings, the Show Cause Notice is dated 31st December 2020, which was issued during the COVID-19 Pandamic. For such reason, the Show Cause Notice could not be taken forward. In the meantime, the Supreme Court pronounced its decision in the case of M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] . What has been laid down by the Supreme Court in such decision is the law of the land under Article 141 of the Constitution of India. The adjudicating officer is thus bound by the law as laid down by the Supreme Court in the said decision. The Petitioners can certainly raise such plea placing reliance on the said decision of the Supreme Court, and in that case it would be incumbent for the adjudicating officer to consider the applicability of the said decision, and if so applicable, abide by the said decision in adjudicating the said Show Cause Notice dated 31st December 2020. The Petition is accordingly disposed of directing the Respondents to adjudicate the Show Cause Notice dated 31st December 2020 as expeditiously, as possible, and, in any event, within a period of six months from today. As the show cause notice is issued more than three years back, there cannot be any further delay in the adjudication of the same. Petition disposed off.

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• 2024 (4) TMI 126
  Levy of penalty on the Directors of the Company - Valuation of imported goods - import of luxury vehicles by misusing the Transfer of Residence (TR) Scheme - re-determination of value - HELD THAT:- The Custom House found that the car import violated the EXIM policy and the value declared was also low. They hence cleared the goods only after enhancing the value, denying concessional rate of duty under the TR facility and collecting fine and penalty for the violations noticed. The goods after clearance were purchased by the Appellants. As per post clearance investigation by DRI the car was once again subject to adjudication proceedings based on fresh violations that were allegedly unearthed by DRI. M/s Mothers Pride is a limited company and is an independent legal entity. The learned Original Authority has not clearly brought out any charge against the appellants other than that they were involved in the purchase of the car. There is no allegation that the Appellants were the importers of the impugned car. The main charge and the action that follows in the Order in Original was mainly against M/s Mothers Pride. Since they are not before me, the issues relating to valuation, duty, interest and penalty pertaining to them are not of concern in this appeal. The fact that the car was not in the possession of the importer for one year was noticed by the assessing officers at the time of import itself and penal action taken for the same. Hence a subsequent penal action does not survive for the same FTDR Act violation. Moreover, once the penalty was paid and the goods cleared for home consumption, the restrictions of sale etc. which would have been present had the goods been cleared under TR concession no longer holds good. In such a situation the Appellant cannot be said to have infringed any provision of the Customs Act, even if they had due to ignorance, participated in procuring the impugned car for the company and sought to cloak the purchase under a veil of legalese involving a car loan. The impugned order in as much as it relates to the penalty imposed on the Appellants is set aside - Appeal allowed.

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• 2024 (4) TMI 125
  Levy of penalty u/s 114(iii) and 114AA of the Customs Act, 1962 on Customs House Agent (CHA) - Misuse of signature by an employee of the CHA - attempt to avail fraudulent drawback benefits - HELD THAT:- There is no dispute as regards fact of duty drawback claimed by the exporter and there is also no dispute that all the four shipping bills were filed by the appellant-CHA, though the appellant has claimed that it was one Suresh, his ex-employee who has used / misused his name by filing the shipping bills. But however, there is no evidence placed in this regard. Here in the case on hand, the appellant is found to have blamed his ex-employee, the another person for misusing his signature / office seal but, however, no supporting document is filed and hence, the initial burden stands undischarged. Section 114 empowers levy of penalty for attempt to export goods improperly and it is not specific to the exporter alone. In the case on hand, since the exporter had accepted the Order in Original by not challenging the same, the fact of improper export stands proved and the appellant s role being a CHA who filed shipping bills, thus becomes any person u/s 114 - There is also no rebuttal as to the finding of the Revenue authorities that his license had already been suspended on earlier two occasions which should have been taken seriously by the appellant to prevent further misuse and the same should have acted as a deterrent but, however, the appellant appears to have allowed the further misuse of his CHA license which has resulted in filing the shipping bills in question. There are no infirmity in the order of the first appellate authority - appeal dismissed.

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• 2024 (4) TMI 124
  Levy of redemption fine and penalty - valuation of imported goods - brass scrap - import of brass scrap in the guise of aluminium scrap - enhancement of value - HELD THAT:- On perusal of the impugned order, there is no market survey conducted by the adjudicating authority. However, it has to be noted that the appellant is not contesting the enhancement of value of the goods. Further, there is no evidence put forward by department to conclude that there was any deliberate intention on the part of appellant to import brass scrap. The purchase order and other documents show that the importer had placed the order only for import of Aluminium scrap. Due to the urgent requirement, the appellant sought for release of the goods. This does not indicate that they had placed order for import of brass scrap. The redemption fine and penalty imposed are on the higher side. The redemption imposed is reduced to Rs.2,50,000/- and the penalty imposed is reduced to Rs.20,000/-. The impugned order is modified to the extent of reducing the redemption fine and penalty - Appeal allowed in part.

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• 2024 (4) TMI 123
  Denial of benefit of N/N. 46/2011-Cus dtd. 01.06.2011, as amended - concessional rate of Customs duty benefit on the basis of county of Origin Certificate - Malaysian Origin goods - HELD THAT:- In the present disputed matter appellant has claimed the goods to be originating in Malaysia as provided under Rule 5 of the AIFTA Rule i.e. not wholly obtained or produced. In respect of all the subject consignments, the appellants produced certificate of origin in Form A-1 issued by the Ministry of Internal Trade and Industry (MITI) of Government of Malaysia showing the Regional Value content of the subject goods as more than 35% +CTSH . However case of the department is that intelligence gathered by the DRI officers suggested that the said RVC was misstated as the overseas suppliers and goods also not origin of Malaysia. It is also noticed that in the disputed matter the Revenue without getting confirmation from the Malaysia Government about their doubt of authenticity of the country of origin certificate and activity of respective suppliers of the goods proceeded to deny the benefit in respect of COOs issued by Suppliers to the appellants is not genuine and consequently denied Exemption Notification No. 46/2011, dated 1-6-2011 and consequential demand was confirmed - as per the documents submitted by the appellants it prima facie appears that there is no doubt on the authenticity of the country of origin certificate issued and import of the goods by Appellants on the basis of said COOs. However, to clear any doubt it is the burden on the department to get the verification from the Malaysia Government regarding authenticity of Certificate of origin which has not been discharged by the department in the present matter. Without checking the authenticity of certificate of origins, the certificate of origins cannot ne discarded and on that basis benefit cannot be denied - in the interest of justice, one chance is given to the department to get the verification from concerned authorities about the genuineness of the certificate of origin issued by supplier of Malaysia to importers, thereafter to pass a fresh order. The impugned orders are set aside - Appeals are allowed by way of remand to adjudicating authority for passing fresh orders preferably within a period of six months from the date of this order.

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• 2024 (4) TMI 122
  Extended period of limitation - authenticity of the country of origin certificate - concessional rate of duty under N/N. 46/2011-Cus dated 01.06.2011, as amended and N/N. 53/2011-Cus. dated 01.07.2011, read with N/N. 189/2009-Cus (N.T.) dated 31.12.2009 - misrepresentation of the Regional value content (RVC) to be above 35%, whereas the actual RVC was much less than 35% - valuation of CR SS Flat products - HELD THAT:- In the present disputed matter appellant has claimed the goods to be originating in Malaysia as provided under Rule 5 of the AIFTA Rules i.e. not wholly obtained or produced. In respect of all the subject consignments, the appellant produced certificate of origin in Form A-1 issued by the Ministry of Internal Trade and Industry (MITI) of Government of Malaysia showing the Regional Value content of the subject goods as more than 35% +CTSH . However case of the department is that intelligence gathered by the DRI officers suggested that the said RVC was misstated as the overseas supplier M/s. Bahru did not have integrated stainless steel factory and had only facility to manufacture CR SS products with annealing and pickling lines, sendzimir, skin-pass and finishing line during the material time and mainly used hot-rolled coils supplied by other factories belonging to the group from Non-AIFTA countries. The Revenue without getting confirmation from the Malaysia Government about their doubt of authenticity of the country of origin certificate and activity of M/s Bahru proceed to deny the benefit in respect of COOs issued by M/s Bharu is not genuine and consequently denied Exemption Notification No. 46/2011, dated 1-6-2011 and consequential demand was confirmed. We find that as per the documents submitted by the appellant it appears that there is no doubt on the authenticity of the country of origin certificate issued and import of the goods by Appellant on the basis of said COOs. However, to clear any doubt it is the burden on the department to get the verification from the Malaysia Government regarding authenticity of Certificate of origin which has not been discharged by the department. Therefore, in the interest of justice, one chance is given to the department to get the verification from concerned authorities about the genuineness of the certificate of origin issued by M/s Bahru and their manufacturing activity, thereafter to pass a fresh order. The impugned order is set aside - Appeals are allowed by way of remand to adjudicating authority for passing a fresh order.

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• Corporate Laws

• 2024 (4) TMI 121
  Oppression and Mismanagement - Deletion of names of Respondent No. 4 to 8 and 13 from the array of the Respondents - Section 241, 242 and 243 of Companies Act - HELD THAT:- The very fact that the stay granted against the Respondent No. 4 to 8 and 13 continued for two years and was vacated on 18.12.2019 may be with an observation that Respondent No. 4 to 8 were nowhere related with such transaction, the recourse of which lie in the civil court and also the fact that the said order was not challenged rather the civil suit was filed by the Appellants and thereafter in order to avoid legal complication of maintaining the main petition on the same cause of action against Respondent No. 4 to 8 and 13 against whom the civil suit has also been filed on the same cause of action, application for deletion of their name and the prayer made in the main petition would be enough to show that Respondent No. 4 to 8 and 13 were unnecessary dragged in the litigation initiated against them in the main petition in which Respondent No. 4 to 8 and 13 had to file their reply, contested the application and the said proceedings continued for two years till the stay was vacated and the application bearing 219 of 2020 was filed in the year 2020 is sufficient to hold that Respondent No. 4 to 8 and 13 had rightly been awarded the amount of Rs. 5,00,000/- by the Tribunal on account of being unnecessarily dragged in the main petition in which stay was also operating against them in respect of the plot in question which is stated to have been purchased by them lawfully as alleged. There is no error in the approach of the Tribunal in so far as direction granted in the impugned order, which does not call for any interference by this Court - Appeal dismissed.

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• 2024 (4) TMI 120
  Recovery of premium dues, interest, default interest, penal interest, interest overdue etc. - priority of charges - waterfall mechanism - whether as per the Concession Agreement and the Escrow Agreement, payment of premium has priority over the payment of debts of the Bank? - HELD THAT:- The Concessionaire has agreed that it shall pay to the Authority for each year of the Concession Period, a premium in the form of an additional concession fee. The Clauses 25.4 and 26.2 contain an agreement of Concessionaire to pay the Authority a premium in the form of an additional concession fee. The definition, thus, clearly indicate that premium is treated to be additional concession fee - on looking into Clause 31.3.1 and Clause 4.1.1, it is clear that both the provisions provide same priority and Clauses (e) [Concession Fee due and payable to the Authority], (f) [monthly proportionate provision of Debt Service due in an Accounting Year] and (g) [Premium due and payable to the Authority] are the same. The bone of contention between the parties are that since Clause (e) uses word Concession Fee due and payable to the Authority , it is higher in priority from Clause (f), which deals with monthly proportionate provision of Debt Service due in an Accounting year and concession fee includes the premium, hence, the premium has to be paid priority to the payment under Clause (f). Parties having categorized premium in different Clause, which is below the monthly proportionate provisions of Debt Service due in an Accounting year, it cannot be said that the same was done without any meaning and premium payment is in lower priority to monthly proportionate provision of Debt Service due in an Accounting Year. There are substance in the submission of learned Counsel for the Applicant that with regard to withdrawal from Escrow Account, the priority as given in Clause 4.1.1 of Escrow Agreement has to be followed. It is noticed that in the present case, the resolution of Respondent No.2 as per the Resolution Framework approved by this Tribunal on 12.03.2020 is in final stages. The order dated 15.09.2021 passed by the NCLT has been brought on the record, which notices the approval by Justice D.K. Jain also. When an entity is to be resolved as per Resolution Framework, payments to all creditors/ claimants including the Lenders have to be as per the Resolution of the Entity - It is also relevant to notice that when Resolution of Respondent No.2 is at the final stages, there is no occasion for Respondent No.1 to proceed to terminate the Concession Agreement to further complicate the Resolution of an Entity. Application allowed.

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• Insolvency & Bankruptcy

• 2024 (4) TMI 119
  Seeking restoration of petition, which was dismissed for non prosecution - seeking substitution of the Appellant in place of the Bank of Baroda in the main company petition, after dismissal of the main company petition - whether the Appellant had taken appropriate steps to substitute itself in place of the original applicant, Bank of Baroda? - HELD THAT:- It is the case of the Appellant that their counsel was present during the hearing of the main company petition who informed the Adjudicating Authority that pursuant to the assignment agreement they had already filed an I.A. with the NCLT Registry seeking substitution of the Appellant in place of Bank of Baroda in the main company petition but the said IA was yet to be numbered and notified for hearing. The Appellant was diligent and vigilant in pursuing the main company application and had taken steps to file the substitution application. Want of diligence or wilful inaction is attributable only when something that is required to be done is not done at all or not done in a timely manner - there are no delay or negligence on the part of the Appellant to deprive him of his statutory and legitimate right to prosecute the main company petition. The Adjudicating Authority in the impugned order, on the one hand, has held that the Appellant had stepped into the shoes of the Bank of Baroda and had the same right against the Corporate Debtor as that of Bank of Baroda including all rights exercisable under the IBC - Appellant cannot be treated as the original applicant of the main company petition and hence the said petition cannot be restored by the Appellant. The Adjudicating Authority further held that in terms of Rule 48 of NCLT rules, 2016, only the original applicant can approach or file an application before the Adjudicating Authority for restoration of the application. The original application has been dismissed on ground of non-appearance of the Bank of Baroda and since in this application, the Appellant was not a party, it could not have filed the restoration application. Coming to the definition of the word applicant in the NCLT Rules, 2016 we find that Rule 2(4) defines applicant to mean a petitioner or an appellant or any other person or entity capable of making an application including an interlocutory application or a petition or an appeal under the IBC. Tested against this definition of an applicant , let us now see whether the Appellant fits into this definition of an applicant - The Adjudicating Authority has also expressly acknowledged this position by stating that following the assignment agreement, the Appellant had stepped into the shoes of the original applicant, Bank of Baroda. The Adjudicating Authority has further opined in the impugned order that the Appellant enjoyed the same right against the Corporate Debtor as that of Bank of Baroda. It also held that the Appellant as an assignee was entitled to all rights exercisable under the IBC. That being the case, the Appellant clearly qualifies to be an applicant under the NCLT Rules and therefore enjoys the locus to file the restoration application before the Adjudicating Authority. When an application which is dismissed for non-appearance of the petitioner can be restored on satisfying the Tribunal that he was prevented by some sufficient cause from appearing before the Tribunal, likewise, in the present facts of the case, opportunity ought not to be denied to the Appellant from seeking restoration of the main company petition which has been dismissed for non-prosecution by the original applicant. It is not in the interest of justice to deny a person the opportunity to file an application for restoration for no ostensible lapses. The Adjudicating Authority was not correct in dismissing the application for restoration - the impugned order is set aside - Appeal allowed.

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• 2024 (4) TMI 118
  Admission of section 7 application - financial debt or not - financial creditor or not - default or not in the re-payment of the loan by the Corporate Debtor which entitled the Respondent No. 1 to file a Section 7 application in the capacity of a Financial Creditor qua the Corporate Debtor - when a debt is to be treated as a financial debt in the context of IBC? - HELD THAT:- In PIONEER URBAN LAND AND INFRASTRUCTURE LIMITED ANOTHER VERSUS UNION OF INDIA OTHERS [ 2019 (8) TMI 532 - SUPREME COURT ], it has been held that any debt to be treated as financial debt, there must happen disbursal of money and the disbursal must be against consideration for time value of money. The concept of time value of money has been further explained to also include a transaction which does not necessarily culminate into money being returned to the lender or interest being paid in respect of money that has been borrowed. Holding Section 5(8) to be a residuary provision which has a catch-all nature, it held that it can include anything which is equivalent to the money that has been loaned as long as commercial effect of borrowing or profit as the aim is discernible. The Hon ble Supreme Court while dilating on this subject in the matter of PROFESSIONAL FOR JAYPEE INFRATECH LIMITED VERSUS AXIS BANK LIMITED ETC. ETC. [ 2020 (2) TMI 1259 - SUPREME COURT ] propounded that in terms of Section 5(8) of the IBC, the essential condition of financial debt is disbursement against the consideration for time value of money. Having taken cognizance of the statutory provisions of IBC and the reigning judgements of the Hon ble Apex Court, it can be safely concluded that it is settled law that for any debt to be treated as financial debt, the pre-requisite is disbursal of money to the borrower for utilization by the borrower and that the disbursal must be against consideration for time value of money even if it is not interest bearing. When a Financial Creditor who has disbursed money to a Corporate Debtor against consideration for time value of money can trigger the insolvency resolution process against the Corporate Debtor? - HELD THAT:- As per the scheme of IBC, that stage arises when a default takes place, in the sense that a debt which has become due, in fact and in law, but has not been paid. Default as defined in Section 3(12) of IBC means non-payment of a debt once it becomes due and payable, and non-payment could be of the whole amount or even part thereof. This has been elaborately discussed by the Hon ble Supreme Court in the case of SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT ] holding that What is important is that at this stage, if an application is filed before the adjudicating authority for initiating the corporate insolvency resolution process, the corporate debtor can prove that the debt is disputed. When the debt is so disputed, such application would be rejected. In the present case, it is an undisputed fact that a sum of Rs. 5 crore was transferred to the account of Corporate Debtor and the disbursal of this amount took place on 01.01.2014. Sufficient material has been placed on record by the Respondent No. 1 to prove that money was actually disbursed to the Corporate Debtor - Neither has any claim been made that any part of this sum was repaid by the Corporate Debtor. Respondent No. 1 has thus produced incontrovertible and unimpeachable evidence to prove the existence of debt liability on the part of the Corporate Debtor. The IBC does not provide for any prescriptive requirement for the Financial Creditor to place on record formal written agreements/documents between the parties to establish that the disbursal made was in the form of loan with interest. Given this background we therefore find that the Adjudicating Authority committed no error in holding that there was a financial debt owed by the Corporate Debtor to Respondent No. 1. The essential ingredients of financial debt in the context of IBC consists of disbursal accompanied by consideration for time value of money. We now proceed to examine whether in the present case, disbursement of money took place against the consideration for time value of money and whether commercial effect of borrowing is found to underpin the transaction. The concept of time value of money has nowhere been defined in the IBC. Time value of money is not only a regular or timely return received for the duration for which the amount is disbursed as an amount in addition to the principal, but also covers any other form of benefit or value accruing to the creditor as a return for providing money for a long duration - Once the Adjudicating Authority is subjectively satisfied that there is a debt and a default has been committed by the Corporate Debtor and the Section 7 application is complete in all respects, the Adjudicating Authority in the exercise of summary jurisdiction has to admit the Section 7 application - this is a case where all the pre-requisites for filing a Section 7 stood fulfilled and the Adjudicating Authority cannot be held to have committed an error in admitting the Corporate Debtor into CIRP for having defaulted in repaying a financial debt which was above the threshold limit. The Adjudicating Authority has rightly come to the conclusion that the Respondent No.1 has successfully proved the financial debt and default on part of the Corporate Debtor in admitting the Section 7 application and initiating the CIRP process - there are no reason to interfere in the impugned order passed by the Adjudicating Authority - appeal dismissed.

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• PMLA

• 2024 (4) TMI 117
  Money Laundering - seeking grant of bail - offence of fraud and forgery of valuable securities, etc. - twin conditions u/s 45 of PMLA satisfied or not - HELD THAT:- It is not in dispute that applicant has no role in fraud, etc. committed by M/s Garvit Innovative Promoters Ltd. through BIKEBOT scheme. The applicant is neither named in 55 FIRs lodged by the investors nor charge-sheeted in those cases. After registration of ECIR by the Enforcement Directorate, the complicity of Mr. Dhirendra Pal Solanki had come at initial stage of investigation in the statement dated 22.11.2019 and 23.11.2019 of Sanjay Bhati (Chief Managing Director of M/s Garvit Innovative Promoters Ltd.) in which he has disclosed inter alia that Rs. 20 crores, out of proceed of crime was transferred in the account of Mr. Dhirendra Pal Solanki, but till date, Enforcement Directorate has neither arrested Mr. Dhirendra Pal Solanki nor made him accused - The Enforcement Directorate in compliance of order of this Court, filed an affidavit dated 15.03.2024 mentioning inter-alia that the role of Mr. Dhirendra Pal Solanki is also being investigated and efforts are being made to finalize the investigation with regard to transfer of proceeds of crime generated in this case by various entities. So far as the twin conditions as provided in Section 45 of the PML Act, 2002 is concerned, it is well settled that Court is not required to record a positive finding that accused has not committed an offence under the PML Act, 2002 and while releasing him on bail he will not commit an offence. The Court has to maintain a balance between the subsequent judgement of conviction or acquittal and is required to record reasonable reasons of satisfaction on the basis of facts and circumstances of the each case with broad probabilities as to whether there is possibility of the accused committing a crime after grant of bail - There is no positive evidence of cash transaction also between the applicant and Mr. Dhidrena Pal Solanki except statement of Mr. Dhidrena Pal Solanki and presumption against the applicant, hence this Court is prima-facie satisfied that twin conditions provided in Section 45 of the PML Act, 2002 stand satisfied under the facts of this case in favour of the accused-applicant. Applicant is languishing in jail since 21.07.2023 having no criminal history and maximum sentence for the alleged offence is up to seven years. It is well settled that judicial custody should be purposeful and cannot be punitive. Keeping in view the nature of the offence, evidence, complicity of the accused, detention period, present status of trial of the applicant, submissions of the learned counsel for the parties as noted above and the fact that there is no apprehension of absconding the applicant, the applicant has made out a case for bail - Bail application allowed.

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• 2024 (4) TMI 116
  Money Laundering - illegal mining of granite, causing damages to human life and properties using explosives - scheduled offences - predicate offences - purchase from proceeds of crime or not - prosecution on the basis of presumption or not - HELD THAT:- Unconcluded predicate offence trial is not a bar for proceeding under the PMLA. The said grounds raised by A6 and A7 is not sustainable in view of the Supreme Court judgment in Vijay Madanlal Choudhary and others vs. Union of India and others [ 2022 (7) TMI 1316 - SUPREME COURT] . The Hon'ble Supreme Court after considering the object of the PMLA and the expression 'proceeds of crime' and 'money laundering' used by the legislators had held that, PMLA is a stand alone Act. The pre-requisite is a commission of a predicate offence. It is not even necessary that the person accused in the PMLA case must be an accused in the predicate offence. Law even permits joint trial of both the cases and it is not appropriate to canvass that only after the trial in predicate offence end in conviction, the proceeding in PMLA should commence. The complainant had arrived at a conclusion that the subject landed property measuring 35 cents of land in S.No.310/2B, at Melur Village is property involved in money laundering. Whereas, the records relied by the complainant indicates that A14 is the owner of the property and A15 is the purchaser of it. This transaction was on 11.07.2017. For arriving at a prima facie satisfaction that this property possessed by A1 which he purchased out of proceeds of crime, the complainant has to show material that the said property is in possession and enjoyment of A1 - In the absence of these link material, the conclusion arrived by the complainant remains without base. There is no material to show the sale price for the sale deed executed in favour of Siddique Raja through her Power Agent Bilal Mohammed was actually paid by A1. To attract prosecution under PMLA, there must be a predicate offence and the proceeds in that crime must have been attempted to be laundered. In this case, it is not the case of the complainant that the property of the Manimegalai which she sold to Siddique Raja, was in possession of A1after he got the Power of Attorney from A14 paying Rs. 6,60,000/- or after the sale agreement in favour of his brother Azad Mohammed (A11). In the absence of material to link the possession or enjoyment of the property with A1, the inference of the complainant is highly preposterous. The above reasoning equally applies to Siddique Raja (A15) also, since there is no material to show he only lend his name for A1 and he is a benami for A1 or the whole or part sale consideration emanated from A1. Merely because, the conveyance deed show undervaluation than the guideline value, it may be a ground to suspect tainted money been used in the said transaction. All tainted money need not be proceeds of crime. In the absence of link that the tainted money was the proceeds of the predicate offence, in which A1 and others facing, the prosecution under PMLA has to fall to ground, since it cannot stand without the basic ingredient. Petition dismissed.

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• 2024 (4) TMI 115
  Money Laundering - proceeds of crime - Provisional attachment of properties - Seeking to raise the attachment of the properties mortgaged to the petitioner bank - seeking declaration that G.Os.issued by Home Department, Government of Andhra Pradesh, to the extent of the properties mortgaged by M/s. Agri Gold Farm Estate India Private Limited to the petitioner Bank as illegal, arbitrary, unjust and violation of Article 300-A of the Constitution - HELD THAT:- In the instant case, the prime charge against the accused persons is that they have collected deposits from the depositors by making false promises of high returns by contravening Section 5 of the APPDFE Act. As rightly contended by the learned Advocate General, the said provision is not included in the schedule offence under PML Act - The prime intention of any legislation more particularly in the matters relating to economic offences would be to restore back the position or status of victim or deceived as much as possible by recovering the property illgotten from the accused. Mere confiscation of the property to the State would not serve the purpose of legislation, if it would not come to the rescue of the victim. Though the PML Act is a central legislation having overriding effect that too subsequent in point of time to the State legislation i.e. APPDFE Act, the interest of the depositors would well be subserved if the properties of the accused firm remained attached under APPDFE Act so that there may be equitable distribution among the depositors. The Enforcement Directorate may go on investigating the case initiated by it into the offences said to have been committed by accused. However, in view of the reasons given above that the attachment made under the provisions of the APPDFE Act would subserve the interest of the depositors, the Provisional Attachment Orders passed by the Enforcement Directorate are liable to be quashed, for the reason that the same would deter the primary objective of the APPDFE Act in mitigating the hardship of the depositors - All the depositors are natives of this State and the properties attached are situated in this State and the possible inconvenience that may be caused to the depositors, who had parted with their hard earnings with the Company by way of deposits, in approaching the Authority under PMLA Act for pursuing their claims to get back the amount, is also taken into consideration while reaching to the conclusion that proceeding with the matter before the Special Court designated under APPDFE Act would subserve the interest of the depositors. The Enforcement Directorate is at liberty to participate in the proceedings before the Special Court, Eluru under the provisions of APPDFE Act for taking necessary action on the surplus of the amount of the sale proceeds of the auction of the attached properties in accordance with the provisions of the PLM Act. Further, the Enforcement Directorate is free to deal with the properties, which were not attached by the investigating agency of the predicate offence and are covered under Provisional Attachment Orders impugned in these writ petitions, in accordance with the provisions of the PMLA Act. Petition disposed off.

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• 2024 (4) TMI 114
  Seeking grant of bail - Money Laundering - money collected through cheating - beneficiaries of the money collected by GIPL from the investors on the pretext of supplying e-bikes to them - HELD THAT:- The applicant is the Director of M/s Mars Envirotech Limited and M/s Accord Hydraulics Private Limited. Preferential shares were purchased by ITV, PTPL and PBPL the sister concern of GIPL by transferring huge amount. The applicant was also made an Investment Advisor in Pental Technologies Private Limited, sister concern of GIPL with full authority and financial powers. The properties of the applicant have been attached by the Enforcement Directorate which would go to show that there has been money laundering and a money trail was found showing his complicity and criminality. The applicant was one of the beneficiaries of the money collected by GIPL from the investors on the pretext of supplying e-bikes to them. M/s Accord Hydraulic Private Limited as per an agreement dated 01.12.2018 was to install a production and manufacturing unit for production of e-bikes but no e-bikes was supplied. The investigation in the matter has concluded and charge sheet has been submitted which also shows the implication of the applicant in the matter. Looking to the facts and circumstances of the case, the nature of offence, the gravity of incident, the magnitude of money involved, the applicant being a beneficiary of the money collected through cheating, the criminal antecedents of the applicant and the rejection of bail of coaccused by this Court and the Apex Court, this Court does not find it to be a fit case for bail. Bail application dismissed.

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• Service Tax

• 2024 (4) TMI 113
  Levy of service tax - Nature of amount - Business Auxiliary Service - Technical Inspection and Certification Service - payments received from overseas buyer (M/s. Bon Prix, Germany through M/s. JPS Trading Company) after deducting certain amounts towards Bonus, Inspection charges and recycling compensation which are shown as deductions from the export price shown in the shipping bills. Department was of the view that the appellant is paying these charges which are deductions towards Bonus, Inspection charges and recycling compensation for the furtherance of their business and as such, the services received are classifiable under Business Auxiliary Service (BAS) and Technical Inspection and Certification Service (TIC) and are taxable at the appellant s end. HELD THAT:- It is found that M/s. JPS Trading Company, Dubai through their Indian office viz., M/s. Fashion Force, Coimbatore is carrying out quality check of the garments being exported by the appellant to M/s. Bon Prix, Germany. M/s. JPS Trading is rendering the service of a Buying agent for M/s. Bon Prix, Germany. So, the service provider and the service receiver are located in a non-taxable territory. From the facts of the appeal, it is evident that there is neither any written or oral agreement between the appellant and M/s. JPS Trading Company, Dubai. When M/s. JPS Trading Company is a buying agent for M/s. Bon Prix, Germany, it cannot be called simultaneously as a commission agent for the appellant for promoting export of garments. In identical facts in the cases of M/S. ORIGINAL KNIT EXPORTS VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, COIMBATORE [ 2024 (2) TMI 84 - CESTAT CHENNAI] , M/S. HARINI COLOURS VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE [ 2024 (1) TMI 526 - CESTAT CHENNAI] and M/S. VEERA CREATIONS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE [ 2024 (1) TMI 525 - CESTAT CHENNAI] , where the Service Tax demands were confirmed under BAS and TIC and where M/s. JPS Trading Company, Dubai was the buying agent and garments were exported by these appellants to M/s. Bon Prix, Germany, the Tribunal Chennai have set aside the Service Tax demands raised and also penalty imposed in favour of the exporters of the garments. The confirmation of the demand of Service Tax and the imposition of penalties cannot be sustained, and so the impugned order dated 18.08.2014 is ordered to be set aside - Appeal allowed.

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• 2024 (4) TMI 112
  Adjustment of excess service tax paid with subsequent service tax liability - case of Revenue is that Rule 6 (3) of Service Tax Rules, 1994 do not provide for such adjustments - HELD THAT:- From perusal of the Rule 6 (3), it is evident that such adjustment is provided in respect of services which were either not provided or partially provided for any reason. The phrase 'partially provided for any reason' would include the short payments made by the recipient or adjustments made by the recipients while making payments to the service provider against any deficiency in the services provided. Commissioner (Appeals) has in the impugned order referred to the credit note dated 31.03.2010 addressed to their client M/s Vipul IT Infrasoft Pvt. Ltd. but have refused to accept the same for a simple reason that the same was issued without any apparent discussion and negotiation and being in respect of only one bill. Accordingly, raised doubt regarding the genuineness of the credit note, the doubt in the mind of Commissioner (Appeals) is specified by any evidence which has been part of record. On the contrary, it is submission of the appellant that the figures stated in the balance sheet for the year 2009-10 wherein the total value of services provided is shown as Rs.24,55,90,004/- instead of Rs.27,63,86,166/- as claimed in the ST-3 returns. After this difference in the true values is on account of the amount refunded by way of issuance of credit note as this amount of Rs.3,24,07,774/- inclusive of service tax of Rs.10,65,330/- was refunded back to their service recipients, the same was excess payment and could have been adjusted as per Rule 6(3) in subsequent returns. On going through sub-rule 3, it is found that the excess amount of service tax paid by the assessee can be adjusted against his service tax liability for the subsequent period. Only condition for eligibility of this sub-rule is that if assessee has refunded the value of taxable service and service tax thereon to the person from whom it was received. Appellant claims that appellant has refunded the excess S-T to its customers - the finding of the Commissioner (Appeal) that this sub-rule is applicable only to the case of excess payment of service tax which can be made good in subsequent period and not to the case where taxable values are not ascertainable for longer period as sub-rule 6(3) does not say so, cannot be agreed upon - appellant s contention is agreed upon that sub-rule 6(3) is not dependent on provision of sub-rule 6(4). Moreover there is no time limit prescribed under sub-rule 6(3) for making adjustment. There are no merits in the observations made by the Commissioner (Appeals) which are on the basis of various presumptions as indicated in the impugned order. As there are no merits in the order in respect of the merits of the issue, the issue of limitation and penalty not considered. Appeal allowed.

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• 2024 (4) TMI 111
  Nature of transaction - deemed sale or service - appellant is a subsidiary of Lindstrom OY Finland and is engaged in leasing work-wear to their clients on the conditions mentioned in the agreements with their clients - possession and effective controls remained with the customers - HELD THAT:- The issue involved in the present case has earlier been considered in the appellant‟s own case for the earlier period by various Benches of the Tribunal and has held in favour of the appellant/ assessee. Reliance can be placed in M/S. LINDSTROM SERVICES INDIA PVT. LTD. VERSUS PRINCIPAL COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2021 (9) TMI 71 - CESTAT CHENNAI] where it was held that The issue as to whether the activity of renting of workwear is a service or deemed sale has been analyzed by this Tribunal in the appellant s own case [ 2020 (11) TMI 14 - CESTAT CHENNAI ] for a different period, where it was held that work wear does not amount to supply of tangible goods so as to attract service tax. The final order of Chennai Bench of CESTAT were appealed by the Revenue before the Hon ble Supreme Court - the Hon ble Supreme Court in PRINCIPAL COMMISSIONER OF GST AND CENTRAL EXCISE VERSUS M/S LINDSTROM SERVICES INDIA P. LTD. [ 2023 (10) TMI 601 - SC ORDER] has dismissed the appeals of the Revenue as being without merit and the copy of the order is also placed on record. The issue has finally been settled by the Hon ble Supreme Court in favour of the appellant and therefore, by following the ratio of the above said decision, the impugned orders are not sustainable in law - Appeal allowed.

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• 2024 (4) TMI 110
  SSI Exemption - rendering of branded service or not - suppression of facts or not - invocation of Extended period of limitation - HELD THAT:- There is no reason for mis-interpretation of SSI Exemption notification. In this view of the matter, having no merits in the grounds of Appeal, the Appeal is dismissed.

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• Central Excise

• 2024 (4) TMI 109
  Refund of countervailing duty - exit from the status of 100% EOU under the STPI Scheme - denial on the ground that the duty paid on de-bonded goods are IT infrastructure and are capital goods, and hence the CVD paid was not eligible to be availed as credit under the CENVAT Credit Rules, 2004 - HELD THAT:- It is well settled that the decision of a case cannot be based on grounds outside the pleadings of the parties. Since the matter whether IT infrastructure are capital goods and the CVD paid on it was eligible or not as CENVAT credit and thereby to a refund was not an issue before the Commissioner (Appeals), he could not have opined on the same. By doing so, he has first answered the appeal in the Appellant s favour and then gone beyond the appeal made by the appellant to deny the refund. The Hon ble Apex Court in Krishna Priya Ganguly etc. Vs. University of Lucknow Ors. etc. [ 1983 (10) TMI 298 - SUPREME COURT ] and Om Prakash Ors. Vs. Ram Kumar Ors., [ 1990 (11) TMI 430 - SUPREME COURT ], observed that a party cannot be granted a relief which is not claimed. Hence the learned Commissioner (Appeals) could not have given Revenue the benefit, if any, of an issue of which they were not aggrieved and had not filed an appeal or cross objection. This being so, the merits of the issue, need not be gone into. The impugned order is hence modified and that part of the decision on whether IT infrastructure are capital goods and the credit of CVD taken are eligible for refund is set aside being made based on grounds outside the pleadings of the appellant - Appeal allowed.

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• 2024 (4) TMI 108
  Refund of CENVAT Credit of Additional Duties of Excise (Textiles and Textile Articles) (ADE(TTA)) as per Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 - denial on the grounds that the Appellant is not eligible for CENVAT Credit as per Rule 11(3) of the CENVAT Credit Rules, 2004 - rejection also on the ground that the refund claim for the same amount was rejected in the past. Denial on the ground that credit of Additional Duty of Excise ADE (TTA) was lapsed in terms of Rule 11 (3) of Cenvat Credit Rules, 2004 - HELD THAT:- It is found that the appellant availed the exemption from ADE (TTA) in respect of their finished product vide Notification No. 31/2004 dated 09.07.2004 at that time Rule 11 (3) of Cenvat Credit Rules, 2004 was not in force whereas the same came into force on 01.03.2007 vide Notification No. 10/2007 CE (NT), therefore, the provisions of Rule 11 (3) cannot be applied retrospectively in respect of exemption Notification No. 31/2004- CE - issue decided in the case of COMMISSIONER OF C. EX., BANGALORE-II VERSUS GOKALDAS INTIMATE WEAR [ 2011 (4) TMI 1123 - KARNATAKA HIGH COURT ] upheld by the Hon ble Supreme Court in COMMISSIONER VERSUS GOKALDAS INTIMATE WEAR [ 2016 (3) TMI 1391 - SC ORDER ], it is settled law that the provisions of Rule 11 (3) of Cenvat Credit Rules, 2004 shall not apply in respect of the exemption notification which was issue prior to insertion of Rule 11(3). Therefore, in the present case also, the refund claim cannot be rejected by invoking Rule 11(3) of Cenvat Credit Rules, 2004 - decided in favour of appellant. Rejection on the ground that the refund claim for the same amount was rejected in the past - HELD THAT:- The appellant had filed the refund claim under altogether different provision i.e. Rule 5 and notification issued thereunder. The refund claim was rejected for non compliance of the condition of Rule 5 and notification thereof. Once the refund claim was rejected under Rule 5, the accumulated Cenvat credit of ADE (TTA) stands restored in the appellant s Cenvat account and the same can be utilized in future but in the present case since the appellant could not utilize the same and due to the introduction of GST with effect from 01.07.2017, the accumulated credit of ADE (TTA) cannot be utilized by the appellant. The only remedy is to claim the refund under Section 142 of CGST Act, 2017. Therefore, the rejection of refund in the past under Rule has no relevance and does not create any embargo for processing the refund claim which is otherwise admissible to the appellant in terms of Section 142 of CGST Act, 2017 - reliance can be placed in the case of KIRLOSKAR TOYOTA TEXTILE MACHINERY PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU SOUTH GST COMMISSIONERATE [ 2021 (8) TMI 818 - CESTAT BANGALORE] where it was held that refund can be granted of the cesses viz. Education Cess and Higher Education Cess which could not be transitioned into GST - In view of the above judgment, the appellant, being also on the same footing, claiming the refund of accumulated ADE (TTA) are eligible for refund. The appellant are eligible for the refund of accumulated Cenvat credit of ADE (TTA) in terms of Section 142 of the CGST Act, 2017 read with Section 11 B of Central Excise Act, 1944 - the impugned order is set aside - Appeal allowed.

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• Indian Laws

• 2024 (4) TMI 107
  Constitutional power of the Central Government over State - The imposition of a Net Borrowing Ceiling on the state - The inclusion of State-Owned Enterprises in the borrowing restrictions - The adjustment of over-borrowing from previous fiscal years against the current year's borrowing limit - True import and interpretation of the expression if and in so far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends contained in Article 131 of the Constitution - scope and extent of Judicial Review exercisable by this Court with respect to a fiscal policy - balance of convenience. Whether the Plaintiff State can be granted the ad-interim injunction? - HELD THAT:- It has been admitted by the Plaintiff State that there has been over-borrowing/over-utilization of the borrowing limit between the F.Ys. 2017-18 and 2019-20. It is not denied that if, as contended by the Union, such over-borrowings are adjustable in the succeeding years, then the State has already exhausted its borrowing limits for the F.Y. 2023-24 - prima facie, there is a difference in the mechanism which operates when there is under-utilization of borrowing and when there is over-utilization of borrowing. The Plaintiff State has not been able to demonstrate at this stage that even after adjusting the over-borrowings of the previous year, there is fiscal space to borrow. There are prima facie merit in the submission of the Union of India that after inclusion of off budget borrowing for F.Y. 2022-23 and adjustments for over-borrowing of past years, the State has no unutilized fiscal space and that the State has over-utilized its fiscal space - the argument of the Plaintiff cannot be accepted at the interim stage that there is fiscal space of unutilized borrowing of either INR 10,722 crores as was orally prayed during the hearing or INR 24,434 Crores which was the borrowing claimed in the negotiations with the Union. The Plaintiff State has failed to establish a prima facie case regarding its contention on under-utilization of borrowing. Further, with respect to its other contentions, while the Plaintiff has sought to construe Article 293 restrictively to limit the Central government s power only to the loans granted by it, the Defendant has contended that if Article 293 is read in such a manner, it would render this provision redundant as the Central Government has an inherent power as a lender to impose conditions on such loans even in the absence of any express constitutional provision. Similarly, the Defendant has contested the Plaintiff s narrow reading of the term borrowing and has argued that off-budget borrowings could also be included in the same if they are used to by-pass the conditions imposed under Article 293 of the Constitution - Since this Article has not been the subject of an authoritative pronouncement of this Court so far, the Plaintiff s contention over the Defendant s interpretation cannot be acceptedby taking it on face value. Since the Plaintiff State has failed to establish the three prongs of proving prima facie case, balance of convenience and irreparable injury, State of Kerala is not entitled to the interim injunction - Appeal disposed off.

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