TMI Tax Updates - e-Newsletter
April 8, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
CST, VAT & Sales Tax
Wealth tax
Indian Laws
Highlights / Catch Notes
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GST:
Seeking release of detained goods alongwith the truck - invalid documents or not - The truck is exposed to the vagaries of weather and over a period of time the vehicle will be damaged and become a junk. It is well settled that detention of commercial vehicle for a long period in the premises of the police station will not serve any purpose, as it will not only cause loss to the owner but also cause a loss of revenue to the State Exchequer due to non-pliance of the commercial vehicle. - HC
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GST:
Discharge of GST liability - Denial of transition of accumulated credit in respect of Tax Deducted at Source - any deduction made towards anticipated tax liability would assume the character of tax and will not change or fluctuate depending on whether it is held as credit or whether it is an adjustment against tax liability. To attribute such fluctuating character to an amount would distort the scheme of taxation and cause much difficulty in the interpretation on the various ancillary provisions. The interpretation of the provision must be such that it lends itself to certainty in its conclusion. - HC
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Income Tax:
Disallowance of advertising expenditure - the deletion of the addition made by the A.O. qua expenditure incurred on advertising both by the CIT(A) and the Tribunal, to our minds, was in order. The extent of expenditure on advertising does not, in our view, decide as to whether the expenditure incurred is of a revenue nature or of a capital nature. - HC
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Income Tax:
Levy penalty under Section 271(1)(c) - As the assessee attempted a change in the method of accounting, concerning the aforementioned expenses. The method of accounting, as noticed by us, was in line with the AS-7. The only reason that the assessee in the quantum appeal preferred before the Tribunal gave up its claim was on account of the fact that it was a new claim which was sought to be incorporated in the fresh return filed by it in pursuant to the proceedings carried out under Section 153A of the Act - which, as per the advice received, could not have passed muster given the state of law, unless incriminating material had been found qua the assessee in the course of the search. - HC
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Income Tax:
Validity of Assessments made u/s 153C - The A.O. has not followed the proviso to Section 153C of the I.T. Act. No satisfaction note have been recorded in the case of person searched and no notice under section 153C have been issued to the assessee. - Resultantly, all additions stand deleted. - The assessment order is set aside - AT
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Income Tax:
TP Adjustment - sale of an under construction vessel - the TPO by observing that the assessee had lost the “Opportunity cost” had clearly exceeded his jurisdiction. Backed by our aforesaid observations, we are unable to uphold the transfer pricing adjustment worked out by the TPO/DRP as regards the notional interest which as per them the assessee ought to have charged from its AE - AT
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Income Tax:
Addition u/s 69 - undisclosed foreign bank account - addition being the peak balance - Matter remanded back to AO for adjudication of the issue afresh stating that the addition towards interest on outstanding credit balance in foreign bank account can only be made on the basis of some evidence/material. Addition cannot be simply made on the basis of presumption and surmises - AT
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Income Tax:
Seeking withdrawal of Revenue Appeal - Resolution of dispute under Mutual Agreement Procedure [MAP] with the U.S.A. - We are of the considered view that the letter dated 02.03.2021 written by the CBDT to the taxpayer stating therein that since all the issues raised by virtue of the taxpayer’s appeals as well as Revenue’s appeals have been settled once for all under MAP proceedings, nothing survives and as such, the contentions raised by the ld. DR to keep the appeals filed by the Revenue alive till completion of some formalities are not sustainable. - AT
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Income Tax:
Grant of approval u/s 10(23C)(vi) denied - The claim being inadmissible in the preceding years on account of receipts exceeding a specified limit, surely does not impinge upon its character of an institution existing solely for the purpose of education. The findings of the Ld.CIT(E) that the same impinges on the extent and quality of surplus being generated by the applicant society is a very general and farfetched observation/finding with no factual basis at all and, therefore, is of no relevance, in our view. - AT
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Income Tax:
Addition made u/s. 69 on account of Transfer Pricing (TP) adjustment - Assessee cannot be expected to prove negative. The onus is on the Department to substantiate that the assessee has advanced amount to Rabobank London for loan to Tata Tea UK or assessee's funds have been diverted in any manner to fund part of said loan. We find that the TPO and the assessing Officer in draft assessment order has placed reliance solely on the letters furnished by an employee of the assessee without there being any corroborative evidence for making addition u/s. 69 - AT
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Income Tax:
Revision u/s 263 - Addition u/s 68 - in the light of the judicial precedents and in the light of fact that AO has conducted enquiries in respect of share capital collected by the assessee company before accepting the share subscribers identity, creditworthiness and genuineness of the transaction and being satisfied did not find it necessary to make any addition u/s. 68 of the Act, which action could not have been interfered by the Ld. PCIT u/s. 263 of the Act since the jurisdictional condition precedent for invoking the same is not satisfied in the facts of this case - AT
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Income Tax:
Disallowance on account of Royalty - estimated liability - What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in present though it will be discharged at a future date. - Deduction allowed - AT
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Income Tax:
Disallowance of depreciation on car and expenses related to cars which were registered in the name of the directors - the dominion ownership of the car rest with the company. The company being a body corporate is different from the individuals. - In a body corporate there cannot be any element of personal expenses as alleged by the AO - AT
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Customs:
Amendment of bills of entry (b/e) - Section 149 of the Customs Act, 1944 - Change of GST Numbers of unit located in different location - The petitioner succeeds and must be permitted to place all records on material that it has in its possession to prove its plea in regard to the erroneous mention of the GSTIN numbers in the b/e. - HC
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IBC:
Initiation of CIRP - Period of limitation - it is well settled position of law that Annual Returns/Audited Balance Sheets can be referred to and relied on to see if contents therein amount to acknowledgement or not. - The Respondent has not shown that while preparing the balance-sheets the directors in their reports recorded denial or any reservation with regard to the debts shown by the Chartered Accountant to claim that they were time-barred. If the debt became NPA on 30th November, 2013 and there are acknowledgments in the balance-sheets of 2014-15 to 2016-17 the Application filed under Section 7 of IBC on 15th December, 2017 cannot be said to be time-barred. - AT
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VAT:
Priority of charge on the land of the 7th respondent - Recovery of Sales Tax dues - As the 7th respondent ceased to be a Power of Attorney holder of the 6th respondent prior to the coming into force of Section 19C, this Court is of the considered view that protective assessment proceedings under Section 19C could not have been legally invoked against the 7th respondent. - The revenue recovery proceedings initiated by respondents 1 to 4 against the 7 th respondent for recovery of tax dues of the 6th respondent is illegal. All proceedings against the 7th respondent including the attachment of his property for recovery of such dues, are therefore illegal. - HC
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (4) TMI 281
Seeking stay on the investigation - case of petition is that in line with the circular dated 05.10.2018, issued by the Central Board of Excise Customs, Department of Revenue, Ministry of Finance, Government of India, once the Anti-Evasion Unit, CGST, Delhi East and South Commissionerate triggered an investigation against the petitioner, the other units should have held their hands - Evasion of GST - HELD THAT:- Issue notice in the writ petition and the interlocutory application. The counter-affidavit will be filed within four weeks from today.
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2021 (4) TMI 280
Vires of section 16(2)(c) of C.G.S.T. Act, 2017 - Submission at the Bar is that the Group IV matters were listed before Rajarshi Bharadwaj, J. when the post of Additional Solicitor General was held by Kausik Chanda, J. - HELD THAT:- The writ petitions are to be decided on affidavits.
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2021 (4) TMI 273
Detention of goods alongwith the vehicle - e-way bill was in order - petitioner claims that he is the owner of the goods and therefore the penalty amount cannot exceed the amount of tax - petitioner has already deposited twice the amount of tax towards penalty - HELD THAT:- It does appear that the interest of revenue is secure, in-as-much as sufficient amount has been deposited towards the penalty and also 30% of the tax amount is deposited in hard cash. At this stage, learned counsel for the petitioner states that the petitioner is willing to deposit the balance 70% of the amount of tax in cash. Accordingly, the petitioner is permitted to deposit 70% of the demand of tax payable on the goods as a further condition to obtain the release of the vehicle and goods. Application is disposed of with the observation, subject to the petitioner depositing 70% of the amount of tax, the goods and the vehicle shall be released forthwith.
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2021 (4) TMI 272
Seeking release of detained goods alongwith the truck - invalid documents or not - in the challan, E-way bill number and Eff. was not mentioned - HELD THAT:- It is necessary to state that Section 130 of the Central Goods and Services Act, 2017, provides for confiscation of vehicle or conveyance found to be carrying goods without E-way bill. As noticed, the confiscation proceeding was not initiated under Section 130 of the S.G.S.T. Act rather the proceeding has been initiated under Section 6-A(c) of the E.C. Act. It is not disputed that 160 drums of bitumen, which were being transported on the aforesaid truck, were ordered to be released as the documents relating to purchase of bitumen were found to be valid and genuine. Till date no order has been passed in the aforesaid confiscation proceeding and the truck is lying under the open sky in an uncared manner in the premises of the police station. The truck is exposed to the vagaries of weather and over a period of time the vehicle will be damaged and become a junk. It is well settled that detention of commercial vehicle for a long period in the premises of the police station will not serve any purpose, as it will not only cause loss to the owner but also cause a loss of revenue to the State Exchequer due to non-pliance of the commercial vehicle. The petitioner is at liberty to file an appropriate application, along with relevant documents, in the court below - Revision allowed.
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2021 (4) TMI 271
Input Tax Credit - tax dues has not been paid or short paid or refund has been released erroneously or input tax credit has been wrongly availed or utilized as provided under Section 74 of the Odisha Goods and Services Tax Act - HELD THAT:- It may be noted that the period of enquiry as far as Central tax authority is concerned is from July, 2017 to September, 2018 whereas Opposite Party No.3 has issued a show cause notice specific for April, 2018 and, therefore, there is also an overlapping of the periods. The Court quashes the show cause notice dated 23rd July, 2019, the impugned order dated 5th November, 2019 including the order dated Nil all passed by Opposite Party No.3 and directs that till the conclusion of the proceedings initiated against the Petitioner by the DGGSTI, no coercive action be taken against the Petitioner by the Opposite Party No.3 - Petition allowed.
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2021 (4) TMI 268
E-auction - successful bidder for sale of 489.659 metric tons (MT) of scrap materials - the petitioner claims that altogether 434.659 MT of such scrap materials, out of the total of 489.659 MT, was delivered to the petitioner - Seeking direction upon the respondents to deliver the balance 55MT of scrap materials, in the alternative to refund the sale value together with GST, TCS and interest - HELD THAT:- The admitted position, as per the Joint Note dated February 9, 2019 (annexed at page 111 of the writ petition), is that some parts of the scrap lying on the river bed and muddy soil could not be recovered. It further mentioned that, after clearing the earth, if covered materials were found, a fresh programme for witnessing the balance quantity might be done with approval of the competent authority. Such Joint Note, being an admitted document, clearly indicates that the entire materials were not supplied to the petitioner - Also, no reliance can be placed on the internal communications annexed to the supplementary affidavit to the affidavit-in-opposition. What was the quantum of undelivered material to the petition? - HELD THAT:- Since the chart produced in court is contrary to the pleadings in the writ petition, the same cannot be taken as proof, even prima facie, with regard to the quantity of undelivered material. However, since the pleadings of the writ petitioner that 55 MT was the quantum of undelivered material could not be controverted by the respondents, it has to be taken that the quantum of short delivery was 55 MT and not 63.457 MT. That apart, the calculation of 63.457 MT was based on receipts issued by private weighbridges, which cannot be lent much evidentiary weight insofar as the quantum of payment is concerned, in the absence of further corroborative evidence - it is found from the materials and pleadings on record that the respondents were liable to deliver 55 MT of scrap material to the petitioner as per the notice inviting tender as well as the Sale Release Order. Since the specific stand of both the parties is that there was no further development regarding recovery of the balance scrap material after February 9, 2019, when the Joint Note was executed, there does not arise any scope of directing the respondents to deliver such balance material. Thus, no option is left but to direct refund of the costs of such balance material of 55 MT, along with interest, to the petitioner - The respondents shall pay an amount of ₹ 14,11,630/-, along with interest at the rate of 6 per cent per annum from February 9, 2019, till the date of payment, to the petitioner. Such amount will be paid within 90 days from date. Petition allowed.
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2021 (4) TMI 267
Violation of principles of Natural Justice - opportunity extended to the petitioner prior to passing of the orders as the petitioner has not been heard in person - HELD THAT:- Section 74(5) mandated a personal hearing to be granted in all matters prior to finalization of assessments. In light of the admitted position that the petitioner has not been granted a personal hearing prior to finalization of the impugned proceedings, the impugned orders in regard to the periods 2017-18 and 2018-19 are set aside. After hearing the petitioner and considering supporting evidences if any, filed by it, orders of assessment de novo shall be passed within a period of six (6) weeks from the date of personal hearing, in accordance with law - petition disposed off.
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2021 (4) TMI 262
Permission for withdrawal of application - petitioner seeks permission to withdraw the writ application on instruction since the issue relating to payment of interest on the Net Tax Liability stands settled in view of the administrative instructions of Central Board of Indirect Taxes and Customs dated 18th September, 2020 - HELD THAT:- The instant writ petition is dismissed as withdrawn.
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2021 (4) TMI 261
Discharge of GST liability - Denial of transition of accumulated credit in respect of Tax Deducted at Source - provision rendered unworkable or unviable by reason of a particular interpretation - determination of nature of the amount deducted - carry forward of credit as per Income Tax Act and Sales Tax Act - HELD THAT:- In SAIL V. State of Orissa [ 2000 (2) TMI 729 - SUPREME COURT ] three Judges of the Supreme Court found the provisions of Section 13-AA of the Orissa Sales Tax Act,1947, to be beyond the powers of the State Legislature and thus ultra vires. In Nathpa Jhakri Joint Venture [ 2000 (3) TMI 949 - SUPREME COURT ] , the appellant questioned the validity of Section 12 A of the Himachal Pradesh General Sales Tax Act, 1968 and connected Rules, that provided for a deduction of an amount from the bills or invoices of works contractors. The provision had been upheld by the High Court. The provisions of Section 13 are not under challenge and rightly so, since in drafting Section 13, the rationale of aforesaid judgments and many others that have taken a similar view, stand incorporated. Section 13, has, in directing the deduction of tax at source, specifically excluded from its purview three categories of transactions, labour contracts, inter-state transactions, and exempt transactions that stand outside the pale of taxation. Section 13, thus passes the test of constitutionality and the inference that flows from this conclusion is that any amount deducted in line with the mandate of Section 13, have to be with the authority of law - the nomenclature of the terms employed cannot be emphasized, since the relevant statutory provisions, rules and forms use terms such as deposit, amount, tax and other similar terms, interchangeably. There is a distinction between the Income Tax Act and the Sales Tax Act insofar as the concept of carry forward of credit does not form part of the scheme of the IT Act. Under the IT Act, an amount paid as advance tax or amount deducted as tax will have limited use only qua the relevant assessment year - Form P determines the refund after adjusting the monthly payments made towards the final tax liability. This has no bearing on the scheme of tax credit in vogue under the Sales Tax Act that provides for carry forward of credit from year to year, such carry forward and accumulated credit automatically reflected in the account of the assessee with the department and automatically set off against output tax liability. Thus, any deduction made towards anticipated tax liability would assume the character of tax and will not change or fluctuate depending on whether it is held as credit or whether it is an adjustment against tax liability. To attribute such fluctuating character to an amount would distort the scheme of taxation and cause much difficulty in the interpretation on the various ancillary provisions. The interpretation of the provision must be such that it lends itself to certainty in its conclusion. The petitioners held to be entitled to transition TDS under the TNVAT Act in terms of Section 140 of the TNGST 2017 - Petition allowed.
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2021 (4) TMI 259
Constitutional validity and vires of Section 23A(4) of the Central Goods and Services Act, 2017 and Section 43A(4) of the West Bengal Goods and Services Act, 2017 along with Rule 36(4) of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- Let the matter appear in the combined monthly list of February, 2021.
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Income Tax
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2021 (4) TMI 277
Allowability of pre-operative expenses - date of business of the assessee as set-up - reference to steps which the assessee had taken in AY 2008-2009 such as getting itself incorporated and having a PAN number and TAN number allotted to it - HELD THAT:- The reason that we have only emphasised on the steps taken by the assessee in the previous AY, i.e., AY 2009-2010 is to show that, both, CIT(A) and the Tribunal were correct in concluding, in our view, that the assessee had set-up its business and was ready to carry on the same in the previous AY, i.e., AY 2009-2010. Revenue's submission that the business of the assessee was set-up only on 29.10.2009, in our opinion, is not correct. The submission is predicated on one singular fact, which is, that the assessee had launched its experience centre i.e. physical outlet on 29.10.2009. As correctly argued by assessee that there is a difference between setting-up of business and commencement of business. The fact that the assessee had executed lease deeds for its premises, engaged senior employees, carried out local purchase, and sales could not have been possible had it not set-up its business. The fact that the assessee had set-up an experience centre in the FY 2009-2010, which was another mode or platform for selling its goods, cannot have us hold that the assessee had not set-up its business in the previous AY. Therefore, the stated absence of the assessee on an online platform, in our view, is non-sequitur in the fact situation obtaining in the instant case. Disallowance of advertising expenditure - HELD THAT:- The submissions made on behalf of the revenue lacked conviction. Although, Revenue did draw our attention to the AO s view qua the issue, which was, that the advertising expenditure had been incurred to build a brand, i.e., goodwill and therefore, should not be allowed as a deduction, it does not impress us. There is nothing on record to show that the expenditure incurred by the assessee, towards advertising, was not laid out or expended, wholly and exclusively, for the purposes of business. The expenditure incurred, in our view, being a business expenditure, which was incurred wholly and exclusively for the purposes of business, and did not lead to the creation of a capital asset in the assessment year in issue, ought to have been allowed by the AO. The rationale adopted by the A.O. for disallowing the expenditure was completely flawed. Goodwill, which is built, based on the reputation acquired by the business over the years, is an intangible asset, which is monetized, ordinarily, when the business is sold. Therefore, for the A.O. to disallow advertising expenditure on this basis was completely erroneous. Thus, the deletion of the addition made by the A.O. qua expenditure incurred on advertising both by the CIT(A) and the Tribunal, to our minds, was in order. The extent of expenditure on advertising does not, in our view, decide as to whether the expenditure incurred is of a revenue nature or of a capital nature. There is nothing on record, as indicated above, to show that a capital asset was created. In sum, it fulfilled the criteria for allowability of such expenditure, as provided, in Section 37 of the Act. The expenditure was incurred for the subject AY and, therefore, the addition made by the A.O. was rightly deleted by the CIT(A); a decision which was sustained by the Tribunal. Assessee appeal allowed.
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2021 (4) TMI 276
Assessee in default u/s 201(1) - non deduction of tax at source from the amount when such amount had not accrued to payee or any person at all - HELD THAT:- If an assessee fails to deduct the TDS as required under the provisions of the Act, he is treated as assessee in default. Section 194C(1) of the Act mandates that a person who makes a payment to any non resident Indian, has to deduct the tax at the time of payment. Similar language is employed in Section 194J, 194H and 194I. Thus, the tax is required to be deducted at the time when the payment is made. The Supreme Court in SHOORJI VALLABH DAS [ 196 2 (3) TMI 6 - SUPREME COURT ] has held that income tax is a levy on income and the Act takes into account two points of time at which the liability to tax is attracted i.e., accrual of income or its receipt but substance of the matter is the income. It has further been held that if the income does not result at all, there cannot be a levy of tax even though in book keeping entry is made about a hypothetical income which does not materialize. In the instant case, the provisions were created during the course of the year and reversal of entry was also made in the same accounting year. The Assessing Officer erred in law in holding that assessee should have deducted tax as per the rate applicable along with interest. The authorities under the Act ought to have appreciated that in the absence of any income accruing to anyone under the Act, the liability to deduct TDS on the assessee could not have been fastened and consequently, the proceeding under Section 201 and 201(1A) could not have been initiated. For the aforementioned reasons, the substantial question of law is answered in favour of the assessee and against the revenue.
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2021 (4) TMI 275
Levy penalty under Section 271(1)(c) - new claim in line with the change in its accounting policy in its fresh return - Cumulative expenditure comprising interest paid on borrowings, brokerage and other expenses claimed on an accrual basis - a change in the accounting policy vis-avis the aforementioned expenses to align it with Accounting Standard-7 - assessee has made a fresh claim under section 153A - Before the Tribunal, in the quantum appeal, the assessee gave up its claim qua the expenses which was made on an accrual basis assessment year-in-issue had been completed - HELD THAT:- Since this was not a case where the assessee had either concealed particulars of its income and/or furnished inaccurate particulars of its income which are the prerequisite for imposition of penalty, the conclusion reached by the Tribunal that the penalty imposed by the assessing officer was correctly cancelled, by the CIT (A), cannot be found fault with. Where basic facts are disclosed or where a new claim is made because of a change in accounting policy, albeit in a fresh return, and given up because the law, as declared, did not permit such a claim, in such circumstances, initiation of penalty proceedings against the assessee, in our view, is not mandated in law. As the assessee attempted a change in the method of accounting, concerning the aforementioned expenses. The method of accounting, as noticed by us, was in line with the AS-7. The only reason that the assessee in the quantum appeal preferred before the Tribunal gave up its claim was on account of the fact that it was a new claim which was sought to be incorporated in the fresh return filed by it in pursuant to the proceedings carried out under Section 153A of the Act - which, as per the advice received, could not have passed muster given the state of law, unless incriminating material had been found qua the assessee in the course of the search. Therefore, we are unable to agree with Mr. Maratha that the judgment rendered in Zoom Communication Pvt. Ltd.[ 2010 (5) TMI 34 - DELHI HIGH COURT] applies to the facts obtaining in the present case. No substantial question of law
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2021 (4) TMI 274
Depreciation on franchisee cost - whether the depreciation has to be allowed on the entire bid amount of ₹ 3,36,00,000/- or only on the amount of installment paid during the relevant year? - Tribunal held that the depreciation under Section 32(1)(ii) has to be allowed on the entire cost of franchise rights as against franchise fee installment paid during the particular year applicable to tax? - HELD THAT:- The Tribunal has neither taken note of relevant statutory provisions nor has assigned any reasons as to how the order of Chennai Bench of the Tribunal M/S THE INDIA CEMENTS LTD [ 2016 (1) TMI 1028 - ITAT CHENNAI] is applicable to the instant case. The order passed by the Tribunal is bereft of any reasonings and suffers from the vice of non application of mind. The Tribunal which is a final fact finding authority has to assign reasons in support of its decision. The impugned order therefore is cryptic and cannot be sustained in the eye of law. The same is therefore quashed and the matter is remitted to the Tribunal for afresh consideration of matter on merits by a speaking order in the light of relevant statutory provisions expeditiously.
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2021 (4) TMI 270
Bogus LTCG - Penny stock purchases - Claim made u/s 10(38) denied - ITAT remanded the matter back by setting aside the additions - HELD THAT:- As decided in MRS. MANISH D. JAIN (HUF) [ 2020 (12) TMI 740 - MADRAS HIGH COURT ] not only the AO but also the CIT(A) examined the modus operandi of the assessee and held that the shares were purchased through off market and not through Stock Exchange and that the selling rates were artificially hiked later on. The above findings have not been set aside by the Tribunal and there is no reason for the Tribunal to remand the matter to the AO for a fresh consideration. As pointed out in the decision of this Court in the case of Cholamandalam MS General Insurance Co. [ 2013 (7) TMI 90 - MADRAS HIGH COURT] we find in the instant case that there was no material, which necessitated the remand of the case to the Assessing Officer and it is a clear case where the Tribunal had failed to exercise its jurisdiction in the manner known to law.Tribunal, being a last fact finding Authority, is under the legal obligation to record a correct finding of fact. Where all the evidence had been produced and the CIT(A), after full investigation of the evidence and examination of the accounts, had given a definite finding on the question in issue, the Tribunal's order of remand was held to be invalid. In the recent decision in the case of Tharakumari Vs. ITO [ 2019 (3) TMI 647 - MADRAS HIGH COURT] the appeal filed by the assessee in a case relating to penny stock was dismissed after noting the factual findings rendered by the AO, the CIT(A) and the Tribunal. Thus, for all the above reasons, we hold that the order passed by the Tribunal calls for interference. - Substantial questions of law framed are answered in favour of the Revenue
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2021 (4) TMI 266
Assessment of trust - Brought forward of excess application and carry forward of excess application of income of current year to subsequent years - HELD THAT:- Excess application of a charitable fund in a particular year is allowed to be carried forwarded to subsequent year for set off against any shortfall in spending in that year under the provisions of fact - expenses incurred by the trust in earlier years against the income earned by the trust in subsequent year will have to be regarded as application of income of trust. Identical issue has been considered by Hon ble Karnataka High Court in case of CIT (E) vs Ohio University Christ College [ 2018 (11) TMI 1055 - KARNATAKA HIGH COURT] wherein allowed claim of assessee - Decided against revenue.
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2021 (4) TMI 258
Bogus LTCG - addition u/s 68 - disallowing long term capital gains exemption claimed under section 10(38) - Share purchases from penny stock company -HELD THAT:- AO merely declared this company to be penny stock company without bringing any evidence on record. Though the A.O. discussed in the assessment order that Investigation Wing as well as SEBI revealed that Shilpi Cable Technologies Ltd., is engaged in scam, but, no details have been brought on record as to how in assessment year under appeal this company was engaged in scam or indulged in price raise in shares. The Ld. D.R. referred to the assessment order in the case of M/s. Renu Proptech Pvt. Ltd., in which it is mentioned that SEBI has suspended the share transactions of this company in the year 2017. But, the assessment year under appeal is A.Y. 2016-2017, therefore, it would have no impact on the transactions carried-out by the assessee in assessment year under appeal. A.O. thereafter did not bring any evidence on record as to how the transaction of the assessee was not genuine. The Ld. CIT(A) considering the details on record found that there is an increase in the turnover and profit of this company and this company has also declared substantial income and paid the taxes also. There were no basis for the A.O. to hold this company to be penny stock company. The Ld. CIT(A) also found that this company has declared dividend to the shareholders as well as have reputed customers. The assessee kept the shares for more than one year and sold the shares through recognized stock exchange on which STT is also paid. The assessee purchased the shares through banking channel as well as sold the shares through online trading platform of NSE. The payment is also received through banking channel. This company is actually engaged in manufacturing and has substantial assets also. No evidence has been brought on record by the A.O. as to how the assessee s transactions were not genuine. It was also brought on record that assessee is a habitual investor as is evident from the Demat Statement with the Bank. No justification to interfere with the Order of the Ld. CIT(A) in deleting the addition. - Decided in favour of assessee.
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2021 (4) TMI 257
Validity of Assessments made u/s 153C - mandation of recording satisfaction as per section 153C followed or not? - HELD THAT:- No satisfaction note have been recorded under section 153C of the I.T. Act. The A.O. passed the assessment order for the assessment year under appeal i.e., 2013-2014 under section 143(3) considering the preceding A.Y. 2012-2013 to the year of the search. However, the First proviso to Section 153C of the I.T. Act provides that six assessment years for which assessments or re-assessments could be made under section 153C of the I.T. Act would also have to be construed with reference to the date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the six assessment years under section 153C in the case of the assessee would be A.Ys. 2008-2009 to 2013-2014 [under appeal]. Thus the A.O. shall have to pass the assessment order under section 153C of the I.T. Act instead of passing the assessment order under section 143(3) of the I.T. Act. The A.O. has not followed the proviso to Section 153C of the I.T. Act. No satisfaction note have been recorded in the case of person searched and no notice under section 153C have been issued to the assessee. Mandatory provisions of Section 153C shall have to be followed by the A.O. before proceeding in the matter where A.O. is same in the case of person searched or the third party. The mandatory conditions of Section 153C of the I.T. Act shall have to be complied with by the A.O. which is also subsequently clarified by the CBDT in their Circular issued in this regard. Therefore, the contention of the Ld. D.R. have no merit and are accordingly rejected.See M/S. BNB INVESTMENT PROPERTIES AND SHRI RANJAN GUPTA VERSUS DCIT CENTRAL CIRCLE-1. [ 2018 (8) TMI 597 - ITAT DELHI] - Decided in favour of assessee.
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2021 (4) TMI 256
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of clear charge - HELD THAT:- It is an admitted fact that before levy of the penalty A.O. has issued show cause notice Dated 20.06.2014 in all the years in which A.O. has mentioned both the limbs of Section 271(1)(c) of the I.T. Act that assessee have concealed the particulars of your income or furnished inaccurate particulars of such income. Thus the A.O. has not mentioned as to for which limb of Section 271(1)(c) of the I.T. Act penalty shall have to be levied against the assessee. The Hon ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] confirmed the Order of the Tribunal by dismissing the Departmental Appeal in which the Tribunal has allowed the appeal filed by the assessee holding that notice issued by the A.O. under section 274 read with Section 271(1)(c) of the I.T. Act to be bad in Law and it did not specify under which limb of Section 271(1)(c) of the I.T. Act penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The Judgment of the Hon ble Karnataka High Court have been confirmed by the Hon ble Supreme Court [ 2016 (8) TMI 1145 - SC ORDER] Also see M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] - A.O. has issued invalid and defective notices under section 271(1)(c) of the I.T. Act read with Section 274 of the I.T. Act Dated 20.06.2014 before levy of the penalty. Therefore, entire penalty proceedings are vitiated and are liable to be quashed. - Decided in favour of assessee.
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2021 (4) TMI 255
TP Adjustment - short-fall of adjustment under Section 92CA - rectification application moved by the assessee - HELD THAT:- As TPO has passed an order under Section 154 of the Act on 29.08.2019 wherein it is held that now short-fall of adjustment under Section 92CA is only ₹ 38,74,748/-, which is less than 5% of the international transaction i.e. ₹ 88,36,598/- and, therefore, no adjustment is warranted. As the ld. TPO himself based on the order of the ld. CIT (Appeals) has rectified an error and has stated that no adjustment is proposed, appeal of the assessee becomes infructuous and hence dismissed. Selection of comparable TSR Darashaw Ltd. - The difference of adjustment on account of the same results into the total tax effect of ₹ 34,36,924/- which is less than the minimum tax sum for which the Revenue should prefer an appeal before the ITAT, hence the appeal of the Revenue, being low tax appeal, is dismissed.
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2021 (4) TMI 254
TP Adjustment - ALP of the corporate guarantee fees determined by the assessee at 0.43% of the amount of loan - HELD THAT:- We find no reason to dislodge the ALP of corporate guarantee determined by the assessee at 0.43% p.a by adopting Internal CUP method. In the backdrop of our aforesaid observations we are unable to persuade ourselves to subscribe to the determination of the ALP of the corporate guarantee at 2% p.a by the A.O/TPO. We, thus, uphold the ALP of corporate guarantee as determined by the assessee at 0.43% p.a and direct the A.O/TPO to vacate the upward transfer pricing adjustment made in the hands of the assessee. The Grounds of appeal Nos. 1 to 7 are allowed in terms of our aforesaid observations. Interest charged by the assessee at the rate of LIBOR + 2.9% per annum in respect of loan of USD 71.5 million advanced to its AE, viz. Greatship Global Holdings Ltd., Mauritius - HELD THAT:- Board of Directors of the assessee company had sanctioned a loan of USD 75 million in the immediately preceding financial year 2010-11 on which interest rate of LIBOR + 2.9% p.a was fixed. Loan of USD 40 million was disbursed by the assessee to its AE in the financial year 201-11. Further, during the year in question i.e period relevant to A.Y 2012-13 a further loan of USD 31.5 million was disbursed to the AE. TPO in the immediately preceding year i.e period relevant to A.Y 2011-12 had made a TP adjustment in respect of the loan of USD 40 million that was disbursed during the said preceding year and had determined the ALP of the interest charged by the assessee on the said loan at 6.17% p.a. DRP had vide its order for A.Y 2011-12 held that the interest charged by the assessee on the loan advanced to its AE was at arm s length. Now when DRP in the case of the assessee for A.Y 2011-12 had held that the interest charged by the assessee on the loan advanced to its AE at LIBOR + 2.9% was at arm s length, therefore, there would be no justification in holding the same as not being at arm s length during the year in question i.e A.Y 2012-13. Also, the DRP in the assessee s case for A.Y 2010-11 had held that the interest rate of LIBOR + 300 basis points that was charged by the assessee on a loan of USD 4 million given to its AE, viz. GGES (and repaid) as being at arm s length. In the backdrop of the aforesaid facts, we find that the DRP had consistently been holding the interest rate of LIBOR + 2.9% / 3% charged by the assessee on the loans advanced to its AEs as at arm s length. On the basis of our aforesaid observations, we uphold the Internal CUP applied by the assessee for benchmarking the interest charged on the loans advanced to its AE, viz. GGHL; and hold the interest charged by it on the loan advanced to its AE, viz. GGHL at LIBOR + 2.9% as being at arm s length. Grounds of appeal Nos. 8 to 11 are allowed in terms of our aforesaid observations. TP Adjustment in respect of sale of an under construction vessel, viz. Greatship Vimla by the assessee to its AE, viz. Greatship Global Offshore Services Pte. Ltd., Singapore - HELD THAT:- When the form of the transaction of sale of vessel is not found to be different from its substance, the TPO, thus, was not justified in re-characterising the same as a loan transaction and therein working out the ALP of the notional interest which the assesseee ought to have charged on such impugned advance/loan given to its AE, viz. GGOS, Singapore. Observation of the lower authorities that the assessee had failed to lead any document in support of its claim that the market situation for sale of ship was not found favourable, we are unable to concur with the same. As observed by us hereinabove, the assessee vide its detailed submissions filed before the lower authorities had placed on record requisite supporting documents. The scope and domain of the jurisdiction of a TPO is restricted to the determination of the arm s length price of the international transaction of an assessee, and the same by no means could be stretched to providing of advise or commenting on the prudence of the assessee as regards its business decisions or providing guidance as regards the manner in which the business ought to have been carried out. We, thus, are of the considered view that the TPO by observing that the assessee had lost the Opportunity cost had clearly exceeded his jurisdiction. Backed by our aforesaid observations, we are unable to uphold the transfer pricing adjustment worked out by the TPO/DRP as regards the notional interest which as per them the assessee ought to have charged from its AE, viz. viz. GGOS, Singapore. Accordingly, we herein direct the A.O/TPO to vacate the transfer pricing adjustment of ₹ 62,23,256/- made towards notional interest. The Grounds of appeal nos. 12 to 14 are allowed Addition u/s 14A r.w.r. 8D - assessee had suo motto offered a disallowance u/s 14A - HELD THAT:- As the fact situation in the case of the assessee before us remains the same as was there before the Tribunal in the assessee s case for A.Y 2008-09 A.Y 2009-10, therefore, for the sake of consistency and in all fairness we herein on the same terms set-aside the matter to the file of the A.O for the purpose of readjudicating the issue afresh in light of the judgment of the Hon ble Apex Court in the case of Maxopp Investment Ltd . [ 2018 (3) TMI 805 - SUPREME COURT] . Computation of interest u/s 234C - interest for deferment of advance tax is to be levied on the basis of the tax due on the returned income - HELD THAT:- We concur with the claim of the ld. A.R that the interest under Sec. 234C is to be computed on the tax due on the returned income i.e the tax chargeable on the total income declared in the return of income furnished by the assessee for the year in question, as reduced by the amounts contemplated in the Explanation to Sec. 234C(1) of the Act. We, thus, in terms of our aforesaid observations restore the issue to the file of the A.O with a direction to recompute the liability of the assessee towards interest under Sec. 234C on its tax due on returned income as contemplated in the Explanation to Sec. 234C(1) TP Adjustment - computing the guarantee fee - AY 2014-15 - HELD THAT:- In terms of our observations and reasoning adopted while determining the ALP of the corporate/financial guarantee given by the assessee to the foreign banks in order to facilitate raising of loans by its foreign AEs by applying Internal CUP i.e the arithmetic mean of the guarantee commission paid by the assessee to various banks for standing guarantee on its behalf to various parties, we, thus, on the same terms direct the A.O/TPO to take the ALP of the corporate guarantee at 0.49% p.a i.e the arithmetic mean of the guarantee commission that was paid by the assessee to various banks for standing guarantee on its behalf to various parties during the year in question. The Grounds of appeal are allowed in terms of our aforesaid observations.
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2021 (4) TMI 252
Addition u/s 69 - undisclosed foreign bank account - addition being the peak balance of the alleged foreign bank account maintained with HSBC Bank Switzerland - AO computed interest @ 4% on the peak balance of the alleged foreign bank account and in subsequent years, such addition was made on the basis of such premises - HELD THAT:- A perusal of the table reproduced by the AO shows that the notional interest computed by the AO contains the name of the profile client which are ASPREY WORLDWIDE S.A. . RONDERBERG LTD. and TAIRA FOUNDATION. These names claimed match with the names mentioned in the assessment order for the AY 2006-07, wherein, the addition was made on account of peak balance appearing in these bank accounts. It is also mentioned in the said order that the bank accounts are closed in FY 2005-06 on different dates. Find merit in the arguments of the learned counsel for the assessee that if these accounts were closed in FY 2005-06, then the question of computing any notional interest for the impugned assessment year does not arise - no interest income can be earned on a bank account during AY 2016-17 which stand closed in AY 2006-07. However, considering the totality of the facts of the case and in interest of justice, we deem it proper to restore the matter back to the file of the AO for adjudication of the issue afresh stating that the addition towards interest on outstanding credit balance in foreign bank account can only be made on the basis of some evidence/material. Addition cannot be simply made on the basis of presumption and surmises - Grounds raised allowed for statistical purpose.
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2021 (4) TMI 251
Seeking withdrawal of Revenue Appeal - Resolution of dispute under Mutual Agreement Procedure [MAP] with the U.S.A. - HELD THAT:- Bare perusal of the letter dated 02.03.2021 written by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, Foreign Tax and Tax Research Division-1 to M/s. Ratheon Company, the taxpayer in this case, apparently goes to prove that all the issues raised by the taxpayer as well as the Revenue by way of filing aforesaid cross appeals have been settled under MAP, but subject to the acceptance to be conveyed by the taxpayer to the Competent Authority in India within 30 days of the receipt of the communication under Rule 44G (7) of the Income-tax Rules, 1962. We are of the considered view that when all the issues raised by the taxpayer and the Revenue have been settled under MAP, no purpose would be served by keeping the appeals filed by the taxpayer and Revenue alive just for the sake of some procedural formalities as contended by the ld. DR, because procedural technicalities is handmaid of justice. We wish to bring on record that when ld. CIT DR has failed to controvert the assertions made by the ld. AR for the taxpayer made in the light of the letter dated 02.03.2021 (supra) that all the issues pertaining to the appeals filed by the taxpayer as well as Revenue having been settled once for all under MAP , he should not stick to his ceremonial contention that he has not received any intimation from the AO concerned to withdraw the appeals filed by the Revenue. Even otherwise, he would have got the matter expedited at the level of AO, being a senior officer of the Department. CIT DR is not merely a post office to put forward the decision made by the AO rather being an officer of the court, he is required to assist the Bench on the factual and legal aspects involved in the aforesaid appeals in the interest of speedy disposal of litigation for the ease of business, to which Government of India is committed to. We are of the considered view that the letter dated 02.03.2021 written by the CBDT to the taxpayer stating therein that since all the issues raised by virtue of the taxpayer s appeals as well as Revenue s appeals have been settled once for all under MAP proceedings, nothing survives and as such, the contentions raised by the ld. DR to keep the appeals filed by the Revenue alive till completion of some formalities are not sustainable. Hence, the aforesaid appeals filed by the taxpayer are liable to be dismissed as withdrawn forthwith. Levy of interest under section 234B - Whether the appellant doesn t have any advance tax liability in terms of sections 207-209 of the Act? - HELD THAT:- Undisputedly, the taxpayer is a non-resident company having establish Permanent Establishment (PE) in India and its entire tax was to be deducted at source by the payee on payment and as such, the taxpayer was not under any obligation to make payment of advance tax. In these circumstances, levy of interest u/s 234B from the taxpayer is not sustainable in the eyes of law. Following the decision rendered by Hon ble Delhi High Court in GE Packaged Power Inc. [ 2015 (1) TMI 1168 - DELHI HIGH COURT] we are of the considered view that when undisputedly the taxpayer is a non-resident company and tax has been deducted at source on the entire payment made to it by the payee and it is under no obligation to make payment of advance tax and in these circumstances, levy of tax u/s 234B is not sustainable, hence ordered to be deleted. So, ground no.22 is decided in favour of the taxpayer.
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2021 (4) TMI 250
Grant of approval u/s 10(23C)(vi) denied - assessee is a society running a school, namely Rainbow World School - as difficult to verify the activities of the applicant society and arrived at the conclusion whether it existed solely for education? - HELD THAT:- For the purpose of granting approval the prescribed authority is to satisfy himself about the objects and activities of the applicant university/institution, whether its income qualifies for exemption as such under the said provision. In the present case undoubtedly the Ld.CIT(E) has considered the aims and objects of the applicant society and has found no anomaly in the same vis a vis it existing solely for the purpose of education. The reason for the Ld.CIT(E) arriving at the conclusion that it was difficult to verify the activities of the society and come to the conclusion it existed solely for education, was the inadmissible claim of exemption by the applicant assessee in the preceding two years. We are unable to concur with the Ld. CIT(E) on this score. The claim of exemption in the preceding two years is admittedly inadmissible for the reason that it was in contravention of the provisions of section 10 (23C)(iiad) which grant exemption to similar entities without approval subject to receipt of income upto limit prescribed therein The claim being inadmissible in the preceding years on account of receipts exceeding a specified limit, surely does not impinge upon its character of an institution existing solely for the purpose of education. The findings of the Ld.CIT(E) that the same impinges on the extent and quality of surplus being generated by the applicant society is a very general and farfetched observation/finding with no factual basis at all and, therefore, is of no relevance, in our view. Applicant society is not eligible for approval u/s 10 (23C)(vi) on account of the decision of Pinegrove International Charitable Trust [ 2010 (1) TMI 49 - HIGH COURT OF PUNJAB AND HARYANA AT] which addressed the issue whether the societies registered as such qualified as institutions for the purpose of grant of exemption u/s 10 (23C)(vi) - We find that the Ld. CIT(E) has clearly misread and misapplied the said decision as rightly pointed out by the Ld. Counsel for the assessee. The Hon ble High Court in the said decision had clearly held the societies also as eligible educational institutions for exemption u/s 10 (23C)(vi) of the Act as is evident from the relevant portion of the order reproduced in the order of the Ld. CIT(E) also. The assessee, admittedly being registered as a society, it qualified for exemption u/s 10 (23C)(vi) of the Act, as per the said decision. In view of the same, the findings of the Ld.CIT(E) on this account also, we find is incorrect. We hold that there was no basis at all for denial of approval u/s 10 (23C)(vi) - Decided in favour of assessee.
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2021 (4) TMI 249
Disallowance of 5% of the loading and unloading expenses - CIT- A deleted the addition - HELD THAT:- DR has contended that only 5% of the expenses have been disallowed, however, if we look at the basis of such disallowance which is cash payment and in such a situation, as a percentage of expenses incurred in cash, the disallowance comes to 29% as contended by the ld AR. In our view, the issue is not about the percentage of expenses rather the real issue is whether the expenses so disallowed have been incurred for the purposes of business or not. There is no finding by either of the authorities that the expenses have not been incurred for the purposes of business or the test of business expediency has not been satisfied. We are therefore of the considered view that the expenses have been disallowed for the sake of making the disallowances without bringing on record any specifics of disallowable expenses as not incurred for the purposes of business and therefore, the disallowances so made are clearly ad-hoc in nature which cannot be sustained in the eyes of law and the same are hereby directed to be deleted. Appeal of the assessee is allowed.
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2021 (4) TMI 248
Deemed dividend u/s 2(22)(e) - transactions of loan between a company and assessee firm - HELD THAT:- Admittedly, assessee is not shareholder of the company which has advanced loan to assessee. It is also fact that except for the observation by Ld.AO that Mr.Dinesh Bohra is a partner in the assessee form as well as shareholder in the company that advanced loan to assessee. This by itself cannot be significant to treat the amount advanced as deemed dividend to fall within the purview of section 2 (22) (e). See SARVA EQUITY (P.) LTD. [ 2014 (4) TMI 788 - KARNATAKA HIGH COURT] . Assessee has also relied on the decision of Hon ble Madras High Court in case of CIT vs M/s T.Abdul warhead Co[ 2020 (9) TMI 977 - MADRAS HIGH COURT] in support of the proposition that the said payment would stand attracted under the provisions of sec.2(22)(e) when it is paid by a company in which public are not substantially interested by way of advance or loan to shareholder being a person who is the beneficial owner of the shares. Thus it is abundantly clear that the payment has to be made to a shareholder being a person who is the beneficial owner of shares. In the present facts of the case payment has been made to assessee a partnership firm who was not a shareholder in the company who has advanced the loan. The accounts placed in the paper book by assessee that these were termed as short-term borrowings by assessee during the year relevant to assessment year 2012-13 amounting to ₹ 81,67,625/- which has been reduced to ₹ 71,64,625/- during the year under consideration. The amount received by assessee from M/s Fateh Agro Builders Pvt Ltd., cannot be considered to be deemed dividend under the section 2(22)(e) of the Act. - Grounds raised by assessee stands allowed.
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2021 (4) TMI 247
Enhancement of income of the assessee by CIT-A - estimation of profit on turnover - CIT(A) after giving enhancement notice u/s. 251(2), enhanced the income of the assessee at 8% on the total turnover after reducing cash deposits - HELD THAT:- CIT(A) after giving enhancement notice u/s. 251(2) enhanced the income of the assessee at 8% on the total turnover after reducing cash deposits without considering the actual transactions statement, which was available before him, in which, there is a loss. Once the AO had considered and satisfied with these transactions that there is a loss, in our considered view, the CIT(A) again cannot enhance the income without rejecting the facts which were available before him. The purchase and sales are clearly reflected in that statement. No doubt the transactions were outside the books of account but the sales have been accepted by ld. CIT(A). Once the sales have been accepted the purchases cannot be denied i.e. both purchases and sales are genuine. In the statement, which is placed in paper book there is a loss of ₹ 17,69,957/- which is a genuine loss calculated. Therefore, the ld. CIT(A) cannot estimate profit on the turnover. Therefore, we are of the view that the CIT(A) was not justified to make enhancement on the income of the assessee. Thus, we uphold the action of the AO regarding carry forward set off of loss as the assessee did not file his return of income within the prescribed time. Addition on account of dividend received from M/s. Sriram Chits - The authorities below were justified in making addition on this count as the dividend received was not reflected in the return of income filed by the assessee. Addition on account of interest on OD facility and interest on mortgage loan - We are of the view that once the income has been estimated on certain percentage based on the under the head income from profit and business or profession, then, other disallowances on account of expenditure cannot be made. Therefore, the AO was not justified in making further addition after estimating the income of the assessee on the turnover. Therefore, this ground is partly allowed.
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2021 (4) TMI 246
Penalty u/s. 272A(2)(K) - non filing of TDS returns within the prescribed time - HELD THAT:- There is no rebuttal from the departmental side to the clinching fact that since the TDS deductees had not furnished or made available their respective PANs to the assessee/deductor, it was prevented by reasons beyond its control from filing the prescribed TDS returns well within the time prescribed. The fact also remains that their lordships have further observed that full waiver of penalty could not be accepted in the given facts and circumstances. We thus respectfully follow their lordships latter observation and restrict the impugned penalties to the extent of ₹ 25,000/- each in the interest of justice. Necessary computation to follow as per law.
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2021 (4) TMI 245
Addition made u/s. 69 on account of Transfer Pricing (TP) adjustment - Additions on the basis of letters written by one of the employees - contention of Revenue is that the assessee was part of consortium that had extended loan to Tata Tea UK - HELD THAT:- In the present case, the reason for invoking provisions of section 69 of the Act germinates from the contents of letters dated 27/07/2011 and 06/09/2011 written by one of the employee indicating that the assessee has extended loan of GBP 37.50 million as per part of syndicate and the participation/commitment fee of GBP 1,50,000 has been received by the assessee. Apart from the said letters, there is no other material on record to corroborate that the assessee in any manner participated in extending loan facility to Tata Tea UK as part of consortium/syndicate. In the first place the AO has failed to take note of the fact that the contents of letter on the basis of which addition u/s. 69 of the Act was made, were retracted by way of affidavit. Further, the addition cannot be made solely on the basis of phraseology of the submissions made during proceedings. There has to be substantive evidence on record to corroborate with the statements. The findings of the TPO and the Assessing Officer in draft assessment order that the assessee has advanced loans from undisclosed sources is merely based on surmises and conjunctures. It is a well settled legal proposition that suspicion, howsoever strong, cannot take place of evidence. Except from the letters referred above there is no material to back the observations made by the TPO/AO. On the contrary, the assessee has furnished various documents to substantiate that the assessee was not part of syndicate that has extended loan facility to Tata Tea UK, however, the same have been ignored by the TPO and the assessing officer while passing the draft assessment order. In the absence of any cogent evidence, the Revenue has failed to discharge its onus while alleging that there was an outflow of funds from India by assessee or receivables from Rabobank London have been squared off for diversion of funds to syndicate for advancing loan to Tata Tea UK. Assessee cannot be expected to prove negative. The onus is on the Department to substantiate that the assessee has advanced amount to Rabobank London for loan to Tata Tea UK or assessee's funds have been diverted in any manner to fund part of said loan. We find that the TPO and the assessing Officer in draft assessment order has placed reliance solely on the letters furnished by an employee of the assessee without there being any corroborative evidence for making addition u/s. 69 Second limb of presumption is that the commitment charges received by the assessee are in fact, part of interest income on the loan advanced - The assessee is remunerated for the services rendered by way of share in upfront fee, participation/commitment fee. The share in participation/commitment fee at some percentage (0.40%) of the credit allocation of GBP37.5 million was the method of remunerating the assessee for the functions performed. Since, we have already held that the assessee had not participated in extending loan facility to Tata Tea UK through the consortium in any manner whatsoever, the remuneration received by the assessee in lieu of the services rendered cannot be termed as interest income of the assessee from the alleged advancing of loan. The aforesaid income received by the assessee has already been offered to tax, this fact has not been disputed by the Revenue. We find no merit in ground No. 1 and 2 raised by the Revenue in appeal, the same are dismissed, accordingly. Addition in respect of interest paid on External Commercial Borrowings (ECB), payment of guarantee fee and service fee - Addition made primarily for the reason that the assessee has not been able to establish need for the services and the benefit derived from the said services - HELD THAT:- In the instant case the assessee has borrowed funds from Rabobank Hong Kong to finance its working capital requirements. The interest paid to Rabobank Hong Kong on ECB has been reflected in the books. Tax has been duly deducted on the payment of interest. Similarly, in respect of guarantee fee and service fee the assessee has been able to substantiate that the payments have been made for the purpose of assessee's business. The TPO cannot sit in the judgment whether these expenses were necessary for conducting the business or whether any benefit has been derived from the expenditure so incurred. The requirement of the law is that the expenditure should have been incurred 'wholly and exclusively' for the purpose of business. This fact has not been disputed by the Assessing Officer. We find no merit in ground No. 3 and 4 of the appeal by the Revenue, hence, dismissed.
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2021 (4) TMI 244
Penalty u/s 271 - income of the assessee was assessed by the A.O vide his order passed under Sec. 144 - Unexplained interest expenses u/s 69C - quantum appeal against the order passed by the A.O under Sec. 144 was filed by the assessee in the course of hearing of the appeal by the CIT(A) against the penalty imposed by the A.O under Sec. 271(1)(c) - HELD THAT:- As the fate of the quantum appeal filed by the assessee against the assessment framed by the A.O under Sec. 144, dated 28.12.2016 will have a bearing on the penalty imposed under Sec. 271(1)(c) thus, in our considered view the disposing of the appeal against the penalty imposed by the A.O under Sec. 271(1)(c) would not only be premature, but in fact, the same may also lead to multiplicity of litigation. Accordingly, in all fairness, we are of a strong conviction that in the totality of the facts the order passed by the CIT(A) disposing off the appeal against the penalty imposed by the A.O under Sec. 271(1)(c) requires to be restored to the file of the first appellate authority, with a direction, that the same be taken up after disposing off the quantum appeal for the year in question. We, thus, herein restore the present appeal to the file of the CIT(A) for fresh adjudication after disposing off the quantum appeal which is stated to be pending before him. Appeal of the assessee is allowed for statistical purposes.
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2021 (4) TMI 243
Revision u/s 263 - Addition u/s 68 - reopening of assessment u/s 147 - Bogus share capital collected by the assessee company - HELD THAT:- In the instant case, the credit is in the form of receipt of share capital with premium from share applicants. The nature of receipt towards share capital is seen from the entries passed in the respective balance sheets of the companies as share capital and investments. In respect of source of credit, the assessee has to prove the three necessary ingredients i.e. identity of share applicants, genuineness of transactions and creditworthiness of share applicants. For proving the identity of share applicants, the assessee furnished the name, address, PAN of share applicants together with the copies of balance sheets and Income Tax Returns. With regard to the creditworthiness of share applicants, a perusal of their respective balance sheets reveals that these Companies are having enough capital and the investment made in the appellant company is only a small part of their capital. These transactions are also duly reflected in the balance sheets of the share applicants, so creditworthiness is proved. Even if there was any doubt if any regarding the creditworthiness of the share applicants was still subsisting, then AO should have made enquiries from the AO of the share subscribers as held by Hon'ble jurisdictional High Court in CIT vs DATAWARE [ 2011 (9) TMI 175 - CALCUTTA HIGH COURT] which has not been done, so no adverse view could have been drawn. Third ingredient is genuineness of the transactions, for which we note that the monies have been directly paid to the assessee company by account payee cheques out of sufficient bank balances available in their bank accounts on behalf of the share applicants. The share applicants have confirmed the share application in response to the notice u/s. 133(6)of the Act and have also confirmed the payments which are duly corroborated with their respective bank statements and all the payments are by account payee cheques. Thus the assessee has discharged the onus on it; and the AO enquired about it during the reassessment after reopening proceeding for this issue and it has been thoroughly enquired as discussed supra and the view taken by AO is a plausible view in line with the judicial precedence supra and so it cannot be called erroneous. So the Ld. PCIT erred in holding the AO's re-assessment order as erroneous. in the light of the aforesaid judicial precedents and in the light of fact that AO has conducted enquiries in respect of share capital collected by the assessee company before accepting the share subscribers identity, creditworthiness and genuineness of the transaction and being satisfied did not find it necessary to make any addition u/s. 68 of the Act, which action could not have been interfered by the Ld. PCIT u/s. 263 of the Act since the jurisdictional condition precedent for invoking the same is not satisfied in the facts of this case We note that the Ld. PCIT proceeded on wrong, assumption of facts and law. Since the Ld. PCIT has interfered by invoking 263 jurisdiction without satisfying the condition precedent i.e. AO's order to be erroneous as well as prejudicial to the Revenue, the issuance of SCN and consequent impugned action is null in the eyes of law. Therefore, the assumption of revisional jurisdiction is bad in law and so quashed. - Decided in favour of assessee.
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2021 (4) TMI 242
Surrender of undisclosed income in post search proceedings - discrepancies with reference to stock physically found at the factory of the assessee vis- -vis the stock as per stock register was found - head under which the surrender has been made are different than those of declared in the return of income - as per AO assessee fail to file or furnish any transport bills for the goods which are claim to be purchased from M/s. Vishal Traders and M/s. Sanjay Traders - HELD THAT:- AO as well as the CIT(A) has given a clear finding that no evidential material related to the original bills were properly field before the Assessing Officer as well as CIT(A). The so called confirmations and the response to Section 133(6) notices were also not on record. From the assessment order and the order of the CIT(A), it emerges that the assessee has not filed original bills before the Assessing Officer as well as CIT(A). Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer to examine the original bills and vouchers along with the proper confirmations from the respective parties and thereafter make the adjudication. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Appeal of the assessee is partly allowed for statistical purpose.
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2021 (4) TMI 241
TP Adjustment - AO/TPO determined the ALP at NIL - Cost allocation - proof of receiving the services from the AE as well as to justify the payment made to AE is commensurate with the services received - what is the cost incurred and how the fees are determined by the AE for the services rendered? - HELD THAT:- We notice from the record that in the earlier proceedings, assessee has submitted additional evidences before the bench and the Coordinate Bench has admitted those additional evidences. We do not see any reason to reassess the same. Hence, coming to the facts, we notice that business module and functions of the assessee are same during the Assessment Year 2012-13 and Assessment Year 2013-14. In both the Assessment Year's, assessee has submitted the intra group agreements, communications and cost allocations between the group concerns based on allocation method adopted before tax authorities. AO/TPO have rejected the same and analyzed the intra group services on the basis of benefit test. The AO/TPO determined the ALP at NIL. In the current assessment year, TPO determined the ALP at NIL on the reasoning that assessee has not received the services and has not proved the benefit test. Since the facts are similar to the facts in Assessment Year 2013-14[ 2020 (2) TMI 503 - ITAT MUMBAI] , we deem it fit to follow the decision of Coordinate Bench of ITAT for Assessment Year 2013-14. Accordingly, the grounds of appeal raised by the assessee are allowed.
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2021 (4) TMI 240
TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Assessee is a company engaged in the business of software development and 100% subsidiary of Mavenir Systems Inc. US .Companies functionally dissimilar with that of assessee as captive service provider need to be deselected from final list. Working capital adjustment - TPO restricted the working capital adjustment at 1.63% - HELD THAT:- As relying on M/S. RAMBUS CHIP TECHNOLOGIES (INDIA) PVT. LTD., BANGALORE AND VICE-VERSA [ 2015 (7) TMI 1049 - ITAT BANGLORE] we direct Ld. AO/TPO to recompute the working capital adjustment in the case of comparables in actual. We note that in all the transfer pricing cases this Tribunal has been directing the Ld. AO/TPO to grant working capital on actual. Present assessee being a captive service provider there is minimal risk undertaken and therefore there is a necessity to provide adjustment to the margins of comparables in the final list to set apart the differences.
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2021 (4) TMI 239
Disallowance on account of Royalty payable to Kolkata Port Trust (hereinafter KoPT) which has been shown in the books as 'estimated liability' - HELD THAT:- Similar issue had cropped up in A.Y. 2009-10 wherein the A.O. in similar factual circumstances had disallowed the expenditure and the Ld. CIT(A) had allowed it and this action when challenged by the Revenue before the Tribunal, was adjudicated in assessee's favour by upholding the Ld. CIT(A)'s action Respectfully following this order in the assessee's own case and also relying on Supreme Court's decision in the case of Bharat Earth Movers [ 2000 (8) TMI 4 - SUPREME COURT] wherein it was held if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in present though it will be discharged at a future date. Therefore, we dismiss this ground of appeal of the Revenue. TDS u/s 194C - Disallowance u/s. 40(a)(ia) - non-deduction of TDS on 'Fees related to Management Contracts' (which is in the nature of cargo handling fees) - HELD THAT:- We note that the amount of ₹ 1.57 crores debited in the Profit and Loss Account is a mere reversal of irrecoverable fee/excess margin money. Thus we find that the Ld. CIT(A) has rightly reversed the action of the A.O. and allowed the claim of the assessee and it is a trite law that the accounting terminology used in the books of accounts cannot determine the nature of the transaction [Kedarnath Jute Manufacturing Co. Ltd. [ 1971 (8) TMI 10 - SUPREME COURT] . Thus we find no infirmity in the order of the Ld. CIT(A) and so we confirm the same. Disallowance u/s 14A r.w.r. 8D - no expenditure was incurred to earn the dividend income applied Rule 8D(iii) and disallowed 0.5% of average investment value - HELD THAT:- As relying on REI AGRO LTD, KOLKATA VERSUS DCIT CENTRAL CIRCLE-XXVII, KOL [ 2013 (9) TMI 156 - ITAT KOLKATA] we set aside the order of the Ld. CIT(A) and remit the matter back to the file of the AO to compute Rule 8D(ii) only in respect of the investment made by assessee in shares which resulted in dividend in the instant assessment year. With the aforesaid direction we remand the matter back to the file of the AO and the AO is directed to compute the disallowance of 0.5 percent as directed. Deduction of education cess on the income tax paid u/s 40(a)(ii) - allowable deduction or not? - HELD THAT:- Respectfully following the decision of this Tribunal in the case of Reckitt Benckiser (I) Pvt. Ltd [ 2020 (6) TMI 474 - ITAT KOLKATA] , we direct the A.O. to allow the claim in respect of the education cess while computing the total income of the assessee. Refund for dividend distribution tax paid in respect of non-resident shareholders - HELD THAT:- Since this issue has not been considered by the AO, therefore in the light of the aforesaid submission of the assessee, we are of the view that this issue should be remanded to the file of the A.O. for factual verification and adjudication of the claim as per law. The assessee is directed to file before the A.O. all the document regarding amount of dividend paid, copy of agreement, other relevant documents as required by the A.O. to adjudicate the issue. We direct the A.O. to examine the relevant 'double taxation avoidance agreement' in respect to the payment of dividend to the shareholders and adjudicate the issue in accordance with law. For statistical purposes, this additional grounds raised by the assessee in C.O. is allowed. Deduction of education cess on DDT paid which the assessee claims as allowable expenditure - The prayer of the assessee is that to allow the deduction of education cess on DDT paid in respect of the non-resident shareholders since it was not hit by provision of section 40(a)(ii) of the Act and hence it is an allowable deduction - HELD THAT:- This issue we have dealt with while adjudicating ground No. 2 of the CO of the assessee. So on the same reasoning mutatis mutandis this ground is allowed.
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2021 (4) TMI 238
Income from house property - determining the ALV value of the unsold flats - HELD THAT:- As decided in own case. [ 2019 (8) TMI 1668 - ITAT MUMBAI] as relying on case of Ferani Hotels Pvt. Ltd. [ 2014 (11) TMI 985 - ITAT MUMBAI] wherein as deleted the addition confirmed by the CIT (A) on account of notional rent determined by the AO by holding that the ALV of the unsold unit of assessee project is assessable under the head income from house property . Since, the findings of the Ld.CIT (A) is not in accordance with the decision of the coordinate Bench rendered in the case of Ferani Hotels Pvt. Ltd. (supra), we respectfully following the decision of the coordinate Bench set aside the order of the Ld. CIT (A) and allow the appeal of the assessee and direct the AO to delete the addition made under the head income from house property . - Decided in favour of assessee.
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2021 (4) TMI 236
TDS u/s 194C - Disallowance u/s 40(a)(ia) - payment made to the transporter, freight inward charges and clearing forwarding charges - HELD THAT:- There is no ambiguity that the assessee is liable to deduct the TDS under the provisions of section 194C of the Act on the payment made to the transporters and freight inward charges. However, the assessee has been provided an immunity from the deduction of TDS under subsection 6 to section 194C of the Act if the assessee obtains PAN from the transporters. The relevant provisions of subsection 6 to section 194C. Admittedly there is no dispute to the fact that the assessee has obtained PAN from the transporters which were furnished in the TDS return. Thus, in our considered view the claim of the assessee cannot be denied on account of non-deduction of TDS on the payment made to the transporters/freight inwards under sub-section (6) to section 194C . There is provisions under the Act to file the necessary details to the prescribed authority but such prescribed authority has not been nominated under the provisions of law. Thus in the absence of such prescribed authority no fault can be attributed to the assessee for not filing the necessary details as discussed above. In our considered view in the absence of prescribed authority, the details filed by the assessee along with form 26Q should be considered as sufficient compliance on the part of the assessee. Accordingly, we hold that the claim of the assessee cannot be denied in the absence of non-filing of necessary details to the prescribed authority as alleged by the AO. Provisions as provided under sub-section 6 and 7 to section 194C of the Act are independent to each other and therefore they cannot be read in conjunction. In other words non-compliance of the provisions of sub-section 7 to section 194C of the Act the claim of the assessee cannot be denied as there was the compliance on the part of the assessee for the provisions as provided under subsection 6 to section 194C .As decided in M/S ARIHANT TRADING CO. PAHARI [ 2019 (3) TMI 1251 - ITAT JAIPUR] The provisions of section 40(a)(ia) which are deeming fiction relating to non-deduction of TDS have to be read in the limited context of non-deduction of TDS and the same cannot be extended to ensure that even where the assessee complies with his statutory obligation not to deduct TDS on receipt of PAN, merely because the subsequent obligation in terms of filing of prescribed forms has not been complied with, the assessee should suffer disallowance of the expenditure. Disallowance on account of forwarding charges - The disallowance was confirmed by the learned CIT (A) for the reason that the assessee is silent on the issue. However, we find that the assessee has also furnished the copy of the PAN of such transporter which is placed on page 167 of the paper book. Thus what is inferred is that even the contention of the authorities below is assumed correct, then also there cannot be any disallowance on account of non-deduction of TDS as the assessee has complied the provisions of section 194C(6) of the Act which have been elaborately discussed in the preceding paragraph. Hence the ground of appeal of the revenue is dismissed and the ground of appeal of the assessee is allowed. TDS u/s 194I - additional discount given on account of go-down rent and tax not deducted thereon - HELD THAT:- We note that it was the decision of the assessee to extend the discount or not to the parties. Similarly, there was no doubt on the correctness of the claim made by the assessee. The AO has no power to seat on the armchair of the assessee and direct to carry out its business affairs in a particular manner. Therefore we are of the view that such discount extended by the assessee cannot be denied. Provisions of section 194I of the Act cannot be attracted on the discount extended by the assessee to its customers/buyers. Similarly the assessee has claimed discount as deduction which cannot be equated with the rent. Furthermore, we also note that the learned CIT (A) has adjudicated the issue raised before him by allowing the appeal of the assessee but subject to the direction which has been discussed in the preceding paragraph. As such, we do not find any defect in the order of the learned CIT (A).Therefore we do not find any merit in the ground of appeal filed by the revenue. Disallowance of depreciation on car and expenses related to cars which were registered in the name of the directors - AO held that the assessee company and the director are two different person capable of holding assets in personnel capacity - HELD THAT:- Admittedly, it is necessary for the assessee to own the assets for claiming the depreciation on the assets. But the word own has not been defined under the provisions of the Act whether the ownership refers to the legal ownership or the beneficial ownership. Undoubtedly, the assessee in the present case is not the legal owner of the vehicles but it has made the payment for the acquisition of the cars. Thus it can be inferred that the assessee owns the cars in the capacity of beneficial owner. Thus, in our considered view the assessee is entitled for the depreciation on the car - See ELECTRO FERRO ALLOYS LTD. [ 2011 (10) TMI 495 - ITAT, AHMEDABAD] . Regarding the other expenses of fuel and maintenance on such cars, we find that the AO has made the disallowance in adhoc manner which are not permitted under the provisions of law. As such, the AO was under the obligation to pinpoint the personal expenses incurred by the assessee but he has not done so - the dominion ownership of the car rest with the company. The company being a body corporate is different from the individuals. In a body corporate there cannot be any element of personal expenses as alleged by the AO. - Decided against revenue. Disallowance of the commission expenses - As assessee failed to prove the services rendered by the commission agent AO disallowed the same and added to the total income of the assessee - HELD THAT:- The commission paid by the assessee to the party was disallowed by the AO based on his surmise and conjecture which is unwarranted under the provisions of law. The AO has been empowered by the statute under the different sections including the provisions of section 131/133(6) of the Act which authorizes to conduct the investigation/enquiries in the claim made by the assessee before disallowing the same on finding procedural lapses. Thus we do not find any reason to uphold the order of the authorities below. Hence, we set aside the finding of the learned CIT (A) and direct the AO to delete the addition made by him. Thus the ground of appeal of the assessee is allowed.
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2021 (4) TMI 235
Estimation of income - Bogus purchases - HELD THAT:- AO has acknowledged the fact that the assessee has effected the corresponding sales and has also offered to tax the profit on such sales. In such circumstances, only the profit element embedded in the alleged non genuine purchase can be considered for addition. It is further noted by me, in assessee s own case in assessment year 2011-12 on identical facts and circumstances the Assessing Officer had made disallowance at 12.5% of the non-genuine purchases which was sustained by learned Commissioner (Appeals). In further appeal the Tribunal [ 2019 (9) TMI 1509 - ITAT MUMBAI] taking note of the fact that the assessee is dealing in low profit margin items which attract lower rate of tax has restricted the disallowance to 5% of the alleged non genuine purchases. Admittedly, the aforesaid decision of the Tribunal was not available before Commissioner (Appeals) when she decided the appeal for the impugned assessment year. Be that as it may, after perusing the order of the Tribunal in assessee s own case in AY 2011-12 (supra) find that the said decision has been rendered on identical facts and circumstances as involved in the present appeal. Therefore, respectfully following the decision of the coordinate Bench in assessee s own case as referred to above, direct the Assessing Officer to restrict the disallowance to 5% of the alleged non genuine purchases. - Decided in favour of assessee.
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Customs
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2021 (4) TMI 265
Amendment of bills of entry (b/e) - Section 149 of the Customs Act, 1944 - Change of GST Numbers of unit located in different location - argument put forth by the revenue in that case was that, only such documents that were already on record with the respondents could be taken into account to correct the error, if at all and no other documents may be admitted for that purpose - whether the limitation of the technology available at the end of the respondent can stand in the way of the petitioner obtaining substantial relief? - HELD THAT:- The goods have already been cleared for home consumption and thus no amendment may be made, would fall in the face of the proviso to Section 149 which imposes a condition to be satisfied by an importer if he requests amendment after the goods have been cleared. The imposition of the condition itself means that a request for amendment may certainly be considered, subject to satisfaction of the condition imposed - Assessing Authority cannot restrict her examination only to documents that are available on her record - answered in favour of the petitioner. The purpose of transition to the goods and services tax regime is to facilitate the conduct of transactions pan India and all consequences thereof including the seamless availment of credit. The robustness of the information technology system is critical to this venture. It is thus incumbent upon the authorities to ensure that technology is kept up to date in order to facilitate a seamless exchange of data. The impugned order states that ICEA System is limited in its operation and cannot permit any changes once the goods have left for home consumption - The operation of the 2017 Act cannot go back to the Jurassic age denying an assessee relief that it would have obtained under the earlier enactment. Measures must be put in place for this purpose and till such time this is done, amendment of documents must be considered manually. The petitioner succeeds and must be permitted to place all records on material that it has in its possession to prove its plea in regard to the erroneous mention of the GSTIN numbers in the b/e. Though some samples of the documents are placed before the Court - petitioner is permitted to approach the Assessing Authority i.e. R5, seeking amendment of the b/e, which request shall be considered by the Officer and orders passed after hearing the petitioner within a period of four weeks from date of first hearing with all consequential reliefs thereof - Petition allowed.
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Corporate Laws
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2021 (4) TMI 260
Transfer of proceedings to the National Company Law Tribunal - whether the provisions of the Sick Industries Companies Act (Special Provisions) Repeal Act, 2003, as amended by Section 252 of the Insolvency and Bankruptcy Code, 2016 with effect from 01.12.2016 the date notified for the purpose of Section 4(b) of the Sick Industries Companies Act (Special Provisions) Repeal Act, 2003, can be transferred to the NCLT, at this stage? - HELD THAT:- Since the final decision of the matter, either at the hands of this Court or at the hands of the NCLT, even if the proceedings were to be transferred to the NCLT, may take considerably long period from now, no useful purpose will be served by continuing with the aforesaid blanket Status Quo order, which is continuing in this Letters Patent Appeal for the last more than ten years, which, in turn, has not permitted any further negotiations or development or even use of the Assets, as it was informed to us that the production activity of the Respondent No.5 Shree Industries Ltd. is also stopped for the last 8 10 years. This, prima facie, means that while the productive Assets of the Company are going junk because of disuse and no effective resolution of the matter is happening, either by payment to the Secured Creditors and other Creditors nor the Secured Creditors are allowed to take further recovery measures, subject to the rights and contentions of the various parties involved in the matter, therefore, as an interim measure at this stage, it is deemed appropriate to modify the aforesaid blanket Status Quo order - the Respondent No.5 Shree Industries Ltd. and the Respondent No.9 ASREC (India) Ltd., the Assignee of Bank of Baroda and other Secured Creditors, who have not yet been finally settled and paid off by the Respondent No.5 Shree Industries Ltd., are directed to undertake the negotiation process for Settlement of the dues of such Secured Creditors and try to settle the dues of such Secured Creditors in the interregnum period. The matter shall be treated as Part-Heard. Put up on 15.03.2021, as prayed.
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Insolvency & Bankruptcy
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2021 (4) TMI 253
Maintainability of petition - initiation of CIRP - default committed by the Respondent of the Financial Debt which became Non- Performing Assets - winding up petition was filed within time or not - Appellant is Financial Creditor/Assignee - HELD THAT:- Considering the description of the Assignor and Assignee in the assignment agreement, we do not find any defect in the Application filed by the Appellant under Section 7 of IBC describing itself similarly. Appellant is Assignee of Financial Creditor and thus Financial Creditor. There is no substance in this contention raised by the Respondent. Time Limitation - HELD THAT:- It is clear from Section 434 of the Companies Act that the Legislature did not intend to treat the claims of Applicants whose Winding-up Petitions were pending to be hit by Limitation and thus made Provisions for transfer of the claims - Hon ble Supreme Court of India in the matter of B.K. Educational Services [ 2018 (10) TMI 777 - SUPREME COURT ] referred to Report of the Insolvency Law Committee of March, 2018. Said Report, recorded that debts in Winding up Proceedings cannot be time barred . In the present matter, the Learned Counsel for Appellant instead of requesting Hon ble High Court to transfer the winding-up proceedings, (which were in Limitation) to the Adjudicating Authority withdrew the Petition - considering the facts, and provisions and interest of justice, and also the intent of the High Court Order dated 19th August, 2019, the same can be read as an Order which permitted, in effect the lis to be transferred for decision and adjudication to the Adjudicating Authority. This is clear from Paragraph 1 2 of the Order, read with wording in third paragraph which recorded that Permission as prayed for is granted . The third paragraph kept alive factual and legal contentions raised in the petition and also directed that withdrawal of this petition shall not come in the way of Petitioner . However, in the present matter, it is not necessary for us to resort to even this, in order to do justice. The Adjudicating Authority referred to the Judgments being relied on by the Learned Counsel for the Respondents to find that the period of Limitation under Article 137 of the Limitation Act is three years from date of default - The Adjudicating Authority relied on Judgment dated 18th December, 2019 of this Tribunal in the matter of C Shiva Kumar Reddy Vs. Dena Bank and Anr. [ 2020 (2) TMI 699 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] to hold that balance-sheet of the Corporate Debtor could not be relied on and calculated three years from the date of NPA and after making reference to Article 137 of the Limitation Act, 1963 it is held that the Application was time-barred. Balance-Sheets-Acknowledgment - HELD THAT:- There are various Judgements passed by various Hon ble High Courts including High Court of Delhi which have dealt with the Balance Sheet/Annual Returns of Companies and where entries in the same have been treated as acknowledgement of debt and even accepted the same for the purpose of Section 18 of the Limitation Act, 1963. Going through the Judgements of Hon ble High Courts of Delhi and other High courts, what appears is that it is well settled position of law that Annual Returns/Audited Balance Sheets can be referred to and relied on to see if contents therein amount to acknowledgement or not. The discussion of the Judgements summarises that even after referring to the Annual Reports/ Balance Sheets, there are instances where the contents are not relied on to conclude that there is acknowledgement of debt. This is clear from Para 11 of the Judgement in the matter of In re. Padam Tea Company Ltd. [ 1973 (6) TMI 70 - CALCUTTA HIGH COURT ]. Thus, Annual Returns/Audited Balance Sheets, one-time settlement proposals, proposals to restructure loans, by whatever names called, cannot be simply ignored as debarred from consideration and in every given matter, it would be a question of applying the facts to the law and vice versa, to see whether or not the specific contents, spell out an acknowledgement under the Limitation Act - It is clear that Insolvency and Bankruptcy Code is a special law. Section 238 A of IBC states that the provisions of the Limitation Act shall, as far as may apply to the proceedings or Appeals before the Adjudicating Authority and this Tribunal as the case may be. Article 137 of the Limitation Act applies to the applications filed under Section 7 and 9 of IBC has already been held by the Hon ble Supreme Court. IBC has not excluded Application of Section 4 to 24 while determining Period of Limitation and Section 29 (2) appears to be applicable. This being so, Section 18 and 19 of Limitation Act must be said to be applicable. Claim of Appellant is not time-barred - HELD THAT:- The Respondent has not shown that while preparing the balance-sheets the directors in their reports recorded denial or any reservation with regard to the debts shown by the Chartered Accountant to claim that they were time-barred. If the debt became NPA on 30th November, 2013 and there are acknowledgments in the balance-sheets of 2014-15 to 2016-17 the Application filed under Section 7 of IBC on 15th December, 2017 cannot be said to be time-barred. This is apart from admitted payment by cheque in April of 2015 though it is argued that it was part of proposal of One Time Settlement which never materialized - Section 7 application was dismissed on ground of limitation. It is not the case that the application was not complete or defective otherwise. The same is required to be admitted. The Application under Section 7 of IBC as filed by the Appellant is within Limitation - appeal allowed - decided in favor of appellant.
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2021 (4) TMI 237
Permission for withdrawal of appeal - Section 33(2) of the Insolvency Bankruptcy Code, 2016 - HELD THAT:- The direction sought for to interfere with the decision of Committee of Creditors cannot be considered in as much as Resolution Plan was submitted after the last date was over etc. Appeal dismissed as withdrawn.
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PMLA
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2021 (4) TMI 284
Remittance of huge money abroad - fake/forged bill of entries - Accusation of committing offences punishable u/s 3 of the Prevention of Money Laundering Act - HELD THAT:- It is a matter of fact that the offence pertains to the year 2014 and as of now, trial has not proceeded. There is no any possibility or likelihood of completion of trial in near future or at least say 3 years. There is no disagreement on this fact situation. Secondly, though 7 to 8 years have passed, there is no any possibility of completion of investigation even in near future or say at least for 3 to 5 years. These facts are not in dispute since the prosecution agency was not in a position to state at bar as to what further period would require to complete the remaining investigation in the offences alleged against private respondent and other co-accused persons - Since the private respondent, when permitted to travel abroad during the year 2018 to 2020, observed all the conditions in its letter and spirit and there is no grievance ventilated at bar that he committed breach of any of the conditions or there is any material placed before the Court at the time of hearing of previous applications for permission for a short period. Not only that, no any order, whereby the private respondent was permitted to travel abroad, has been challenged by the applicant. The private respondent is granted permission to visit for limited period of 3 months at a time, to provide complete itinerary and contact details both to the Court and the investigating officer, to file undertaking to remain present at the time of conducting trial and not to leave India when crucial witnesses are going to be examined by the Court and further not to stay continuously for more than three months in foreign country at a time and more particularly to move out of India for the purpose of business activities only, are sufficient safeguards provided in the impugned order. On combined reading of the conditions imposed upon the private respondent, it transpires that the Designated Court took all care and caution to secure the presence of the private respondent at the time of trial, to trace the accused as and when he goes out of India as he is required to provide complete itinerary and contact details in advance and not to stay continuously for more than three months in foreign countries. Thus, there is complete check on the movement of the private respondent to the knowledge of the concerned investigating agency and the Court and therefore, to impose condition to seek leave of the Court is futile exercise on the part of the Court. There are no reason to interfere with the impugned order - revision application dismissed.
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2021 (4) TMI 283
Provisional attachment order - money laundering - siphoning of funds - scheduled offence as per the Schedule-A of the Act or not - reason to believe present or not - HELD THAT:- Looking to the fact that presently the petitioner has only been served with a show cause notice in which we are told 20th April, 2021 is the next date fixed and the fact that the order of attachment is provisional in nature which is valid for a period of 180 days only, we do not consider it to be an appropriate case to pass any interim order at this stage particularly when the laundering of 43.69 crores of the amount is not in dispute which in all fairness ought to be returned to the public body i.e., JKCA. The petitioner, in addition, is faced with an order of dismissal of an identical writ petition and as such, has to overcome all the findings returned and the reasoning recorded by the writ court therein before establishing a prima facie case and balance of convenience in his favour for the grant of interim order or to be successful in this petition - the respondents are directed to file their counter affidavit to this petition within a period of three weeks, one week thereafter is allowed to the petitioner to file rejoinder affidavit. List for admission/ final disposal on 11th May, 2021 along with LPA No. 293/2019 which shall also be considered finally on the said date.
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2021 (4) TMI 282
Maintainability of petition - provisional attachment order lost its force with the expiry of 180 days - writ petition having been filed much beyond 180 days commencing from 20th January, 2020 - HELD THAT:- Pendency of the writ petition will, however, not be an embargo on the respondents in proceeding with the complaint no.1262 of 2020 made under the provisions of Section 5(5) of PMLA as the same will not amount to any coercive step in terms of the provisional order of attachment. The matter can be more effectively heard after calling for affidavits - Let affidavit-in-opposition be filed within a period of four week from date. Reply, if any, thereto be filed by two weeks thereafter.
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2021 (4) TMI 279
Seeking grant of Bail - commission of economic offence - predicate or scheduled offence - burden to prove guilty - whether, in view of amendment to Section 45 of PMLA, the twin conditions stipulated therein stands revived post decision of Hon ble Supreme Court in the case of Nikesh Tarachand Shah Vs. Union of India [ 2017 (11) TMI 1336 - SUPREME COURT] ? - HELD THAT:- The question of the constitutional validity of Section 45 of PMLA was dealt with by Apex Court before amendment in the case of Nikesh Tarachand Shah. The grounds of challenge were that, Section 45 of the Act, when it imposes two further conditions before grant of bail is manifestly arbitrary, discriminatory and violative of petitioner s fundamental rights under Article 14 read with Article 21 of the Constitution. The Apex Court enumerated illustrations while examining validity of twin conditions. The first would be cases where the charge would only be of money laundering and nothing else, as would be the case where the scheduled offence in Part A has already been tried and persons charged under the scheduled offence have or have not been enlarged on bail under the Code of Criminal Procedure and thereafter convicted or acquitted. The question is the provision which was held constitutional by Apex Court in the case of Nikesh Shah stands revived in view of Amendment as stated above to Section 45 of the Act - In view of amendment, the original sub-Section (ii) of Section 45 (1) which imposes the said twin conditions automatically stands revived and the said condition therefore remain on statute book. The original Section 45 (1) (ii) has to be inferred and treated as it still exists on the statute book and holds the field even as of today for deciding application for bail by an accused under PMLA. It was further argued that by inserting words under this Act , the Judgment delivered by Supreme Court in Nikesh Shah has become in effective. The Court held that the Apex Court in Nikesh Shah (supra) has declared Section 45 (1) of PMLA in so far as it imposes two further conditions for release on bail to be unconstitutional as it violates Articles 14 and 21 of Constitution of India. After effecting amendment to Section 45 (1) of PMLA. The words under this Act are added to sub-Section (1) of Section 45 of PMLA. However, the original Section 45 (1) (ii) has not been revived or resurrected by Amending Act. Even notification dated 29.03.2018 amending Section 45 (1) of PMLA which came into effect from 19.04.2018 is silent about its retrospective applicability. Hence, contention of respondent cannot be accepted. In the case of Nikesh Tarachand Shah as stated above the Hon ble Supreme Court has declared Clause (ii) of sub-Section 1 of Section 45 of PML Act ultra vires Articles 14 and 21 of the Constitution. Sub-Section 2 the said decision the amendment referred to hereinabove was carried out. Clause (ii) of sub-Section 1 of Section 45 of PML Act places two conditions for release of a person accused of an offence under the Act, on bail, if a Public Prosecutor opposes the bail application, namely the Court is satisfied that there are reasonable grounds for believing that accused is not guilty of such offence and that he is not likely to commit any offence while on bail. The question is whether substitution of the words under this Act in place of words punishable for term of imprisonment of more than three years under Part A of the Schedule in Section 45 of the Act, has impact of meeting with reasonings discussed by the Supreme Court in the case of Nikesh Tarachand Shah for declaring clause (ii) of sub-Section 1 of Section 45 of the Act ultra vires. The Adjudicating Authority had dismissed the original complaint under Section 5 (5) of the PMLA. The appeal is pending, the order is under challenge before the Appellate Tribunal and there is an order of status quo. The applicant was arrested after the period of about 18 months pursuant to registration of ECIR. Ms. Chanda Kochhar and Mr. V. N. Dhoot has been granted bail by Special Court under PMLA. The entire loan amount was repaid to ICICI bank. The applicant is in custody for more than 6 months. The transactions in question were for the period of 2009. The entire loan of ICICI Bank was repaid in 2012. Prior to arrest, applicant had appeared before respondent No.1 on several occasions. His statements were recorded and documents were tendered - The question of absconding does not arise. Considering the circumstances, further detention of the applicant is not necessary. Hence, case for grant of bail is made out. Bail application allowed.
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2021 (4) TMI 263
Money laundering - proceeds of crime - tainted money - amount found in a car outside his house - HELD THAT:- For attracting the penal provisions of the PML Act, the accused should have projected the proceeds of a crime as untainted money. In this case, the sum of ₹ 50,00,000/- as long as it was in the hands of Padmanabhan Kishore (A2) could not have been stated as a tainted money because it is not the case of the CBI in C.C.No.3 of 2013 that Padmanabhan Kishore (A2) had mobilised ₹ 50,00,000/- via a criminal activity. The sum of ₹ 50,00,000/- became the proceeds of a crime only when Andasu Ravinder (A1) accepted it as a bribe. Even before Andasu Ravinder (A1) could project the sum of ₹ 50,00,000/- as untainted money, the CBI intervened and seized the money in the car on 29.08.2011. The prosecution of Padmanabhan Kishore (A2) under the PML Act, is misconceived - Petition allowed.
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CST, VAT & Sales Tax
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2021 (4) TMI 264
Seeking free possession and enjoyment of the property - transactions made by a Power of Attorney holder, prior to coming into the force of the provision - Section 19C of the Kerala General Sales Tax Act - Sales Tax dues - priority of charge on the land of the 7th respondent - attachment and sale of the property through Court proceedings - appropriation of 7th respondent's property towards Sales Tax dues of the 6th respondent - take over of the land by the State without assessment of dues under Section 34 of the Revenue Recovery Act - delay or laches on the part of the petitioner or not - principles of res-judicata. Maintainability of the writ petition in the context of res judicata - HELD THAT:- The petitioner had approached this Court earlier filing O.P. No.10661 of 2002. The said writ petition was filed by the petitioner seeking to direct the respondents to accept land tax from the petitioner, change Thandaper in favour of the petitioner and issue possession certificate to the petitioner. A learned Single Judge of this Court, as per Ext.P12 judgment, held that as the issue involves disputed questions of fact, the petitioner has to establish his rights in a properly constituted civil suit. The petitioner filed W.A. No.2728 of 2007 and a Division Bench of this Court modified the order passed by the learned Single Judge and permitted the petitioner to establish his rights in appropriate forum following appropriate proceedings - This Court, by Ext.P14 judgment in, directed the State to consider the said revision petition. The Government thereupon passed Ext.P21 order dated 10.09.2009. It is the said Ext.P21 order which is under challenge in this writ petition. As a Division Bench of this Court modified Ext.P12 judgment of the learned Single Judge and permitted the petitioner to avail remedies available to him, Ext.P12 judgment of the learned Single Judge cannot be treated as one deciding the issue involved finally, so as to constitute res judicata. Delay and laches - auction certificate in respect of the property in question - HELD THAT:- The petitioner purchased the said property as per Ext.P9 sale deed dated 18.09.2001. The petitioner thereafter approached the authorities to remit land tax and to effect transfer of registry. The petitioner approached this Court for that purpose filing O.P. No.10661/2002 which was dismissed as per Ext.P12, on 19.05.2005. The petitioner promptly challenged the said judgment of the learned Single Judge and obtained liberty to prosecute his statutory remedies, as per Ext.P13 judgment dated 21.11.2007 of a Division Bench of this Court. Ext.P21 order dated 10.09.2009 impugned in this writ petition was passed in continuation of the said Ext.P13 judgment. The writ petition was filed on 18.01.2010. In the circumstances, it cannot be said that the petitioner is guilty of delay or laches in filing this writ petition. Whether Section 19C of the Kerala General Sales Tax Act, 1963 would have retroactivity so as to take in transactions entered into by the 7th respondent as a Power of Attorney holder of the 6th respondent, much prior to the coming into force of Section 19C? - HELD THAT:- The 6th respondent cancelled the Power of Attorney given to the 7 th respondent on 02.07.1989 as per Ext.P4. Respondents 1 to 4 would not admit the cancellation of the Power of Attorney by the 6th respondent as per Ext.P4. However, the 6th respondent, who issued the Power of Attorney, has sworn to an affidavit before this Court that he cancelled the Power of Attorney given to the 7th respondent on 02.07.1989. Ext.P6 would show that the 7 th respondent was given a separate Dealer licence on 10.07.1989. In the circumstances, this Court finds no reason to disbelieve the statements made by respondents 6 and 7 that the 6th respondent had cancelled the Power of Attorney issued to the 7th respondent as per Ext.P4, on 02.07.1989. When the 7 th respondent ceased to be a Power of Attorney holder of the 6th respondent with effect from 02.07.1989, whether Section 19C of the KGST Act which was brought into the statute book only with effect from 29.08.1989 can be invoked against the 7 th respondent for recovery of sales tax dues of the 6th respondent? - HELD THAT:- Section 19C provides for Protective Assessment and enables Assessing Authorities to recover tax dues from agents, employees, managers, power of attorney holders, guarantees or persons who in any other capacity carrying on the business, in the name of a registered dealer - Section 19C was inserted in the Kerala General Sales Tax Act, 1963 as per Act 3 of 1990 and has been given retrospective effect from 29.08.1989. The object of Section 19C is to prevent evasion of tax by dealers indulging in dealing in Benami names i.e., transacting in the names of their nominees, henchmen or others, from whom no amount could be recovered. Section 19C is intended to strike at such transactions by making the real dealer liable for the tax along with the ostensible dealer. Section 19C of the KGST Act may, at the first blush, appear to be procedural in nature inasmuch as it does not create any new tax liability but only provides for recovery of tax already fell due. But, as far as persons like Power of Attorney holders and others enunciated in Section 19C are concerned, it affects their substantive property rights, since they are made liable for tax dues of a registered dealer - Section 19C therefore creates new obligation on persons like the petitioner. Even a procedural law should not be generally applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. A reading of Section 19C would show that realisation of tax dues from persons like the petitioner contemplates assessment of tax dues. Therefore, it is clear that Section 19C is not procedural in nature, but on the other hand, creates a new liability on persons controlling business on behalf of registered dealers - As the 7th respondent ceased to be a Power of Attorney holder of the 6th respondent prior to the coming into force of Section 19C, this Court is of the considered view that protective assessment proceedings under Section 19C could not have been legally invoked against the 7th respondent. The revenue recovery proceedings initiated by respondents 1 to 4 against the 7 th respondent for recovery of tax dues of the 6th respondent is illegal. All proceedings against the 7th respondent including the attachment of his property for recovery of such dues, are therefore illegal. Exts.P15 and P21 are hence set aside - petition allowed.
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Wealth tax
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2021 (4) TMI 269
Refund of wealth tax paid on urban agricultural land to the petitioner along with statutory interest - Assessee stated that in absence of clarity of legal position regarding taxability of wealth tax on agricultural land, he had paid the Wealth Tax on agricultural land owned by the him but as per the amended Section 2(e)(a) of the Act, the urban agricultural land is not assessable for the purpose of wealth tax and the said amendment was inserted vide Finance Act, 2013 with retrospective effect from 01.04.1993 and therefore, the amount already deposited by the writ applicant is required to be refunded - HELD THAT:- There is no dispute with regard to amended provision of Section 2(e)(a) which provides that the urban agricultural land is not assessable for the purpose of wealth tax and the amendment would applicable with retrospective effect i.e. w.e.f. 01.04.1993 - Government of India, Ministry of Finance, Department of Revenue (CBDT) has issued circular No. 11/2015 dated 11.06.2015, whereby, in case of expiry of time limit for claiming refund by way of filing revised return or rectification application, the assessee can file Revision Application under Section 25 of the Act before the Jurisdictional Commissioner of Wealth-tax. In view of the amended provision which provides that the urban land shall not be chargeable to wealth tax and subsequent circular issued by the CBDT as referred to above, it is evident that those who have paid the wealth tax for the urban agricultural land, for which otherwise, they are not liable to pay, they can claim refund either by way of filing revised return or rectification application within time prescribed under the Act and if time limit is expired, then as per the Circular, the refund may be claimed by filing Revision Application before the jurisdictional Commissioner of Wealth Tax, who has been authorized to decide the claim of the refund in accordance with law. It appears from the record that the rectification application filed by the assessee was disposed of on technical ground. Record further shows that the assessee has filed Revision Application dated 14.11.2018 under Section 25(1) of the Act claiming the refund for the year under consideration, which is still pending without any further adjudication. Revenue has fairly stated that the revision is still pending and it can be disposed of subject to necessary orders passed by the court. When the assessee has filed Revision Application as per the CBDT Circular, then, the authority concerned should decide the same in accordance with law. Therefore, in view of above, we dispose of this writ application with a direction to the respondent authority to hear and decide the Revision Application filed by the assessee for claiming of the refund for the year under consideration in accordance with law within period of 2 (two) months from the receipt of this order.
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Indian Laws
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2021 (4) TMI 286
Smuggling - Heroin - sentence of 15 years R.I. with fine of ₹ 2 Lakhs and in default to undergo further one year R.I. - HELD THAT:- In the present case the appellant original accused was found to be in possession of 1 kg heroin which is four times more than the minimum of commercial quantity. 250 gm and above of Narcotic substance/drug is a commercial quantity as per the NDPS Act. The minimum sentence provided under Section 21 of the Act is 10 years R.I. So far as the commercial quantity is concerned, it may be upto 20 years R.I. Therefore, the minimum sentence for commercial quantity shall not be less than 10 years, which may extend to 20 years with fine which shall not be less than ₹ 1 lakh but which may extend to ₹ 2 lakhs. Section 32B of the Act provides for factors to be taken into account for imposing higher than the minimum punishment. While imposing a punishment higher than the minimum term of the imprisonment or an amount of fine, the Court may take into account the factors enumerated in Section 32B of the Act. However, it is required to be noted that Section 32B of the Act itself further provides that the Court may, in addition to such factors as it may deem fit, take into account the factors for imposing a punishment higher than the minimum term of imprisonment or amount of fine as mentioned in Section 32B of the Act. Therefore, while imposing the punishment higher than the minimum term of imprisonment or amount of fine, the Court may take into account such factors as it may deem fit and also the factors enumerated/mentioned in Section 32B of the Act. Therefore, on fair reading of Section 32B of the Act, it cannot be said that while imposing a punishment higher than the minimum term of imprisonment or amount of fine, the Court has to consider only those factors which are mentioned/enumerated in Section 32B of the Act. In the present case the appellant - accused was found to be in possession of 1 kg heroin and he sold it to the informant. Therefore, he cannot be said to be a mere carrier. In given case, even a carrier who is having the knowledge that he is carrying with him narcotic substance/drugs and is found to be with huge commercial quantity of narcotic substance/drugs can be awarded the sentence higher than the minimum sentence provided under the Act - the accused was found to be in possession of 4 times higher than the minimum commercial quantity and therefore, the sentence imposed by the Learned Special Court imposing the sentence of 15 years R.I. with fine of ₹ 2 lakhs, confirmed by the High Court is not required to be interfered with by this Court. It cannot be said that while imposing such punishment the Court has taken into consideration any irrelevant factors. Merely because the accused is a poor man and/or a carrier and/or is a sole bread earner cannot be such mitigating circumstances in favour of the accused while awarding the sentence/punishment in the case of NDPS Act - Appeal dismissed.
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2021 (4) TMI 285
Dishonor of Cheque - accused failed to pay the cheque amount within 15 days of receipt of legal Demand Notice - enforceable outstanding debt/liability or not - complaint sufficient to proceed against the petitioner as contemplated under Sections 138 and 141 of Negotiable Instruments Act or not - continuation of the proceedings against the petitioner, who claims to be neither the signatory of the cheque nor the person in charge of the accused-company - HELD THAT:- The Hon ble Supreme Court in N. RANGACHARI VERSUS BHARAT SANCHAR NIGAM LTD [ 2007 (4) TMI 621 - SUPREME COURT] has held that an advertence to Sections 138 and 141 of the Negotiable Instruments Act shows that on the other elements of an offence under Section 138 being satisfied, the burden is on the Board of Directors or the officers in charge of the affairs of the company to show that they are not liable to be convicted. Any restriction on their power or existence of any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial such a restriction or to show that at the relevant time they were not in charge of the affairs of the Company. Further, the Hon ble Supreme Court in RAJESHBHAI MULJIBHAI PATEL AND OTHERS ETC. VERSUS STATE OF GUJARAT AND ANOTHER ETC. [ 2020 (2) TMI 412 - SUPREME COURT] has held that When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the N.I. Act ought not to have been quashed by the High Court by taking recourse to Section 482 Cr.P.C. . Whether petitioner s employment with the accused-company was confined to maintenance of accounts or he was the Director or Authorized Signatory of accused-company and whether or not the cheque in question was signed by him or whether complainant is able to bring sufficient material before the court to rope in petitioner for the offence in question, are the aspects which can be established during trial, therefore, it would be against principles of law to arrive at a conclusion without going into the merits of the case - petition dismissed.
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2021 (4) TMI 278
Request for proposal (RFP) for selection of distributors for conventional paper and online lotteries - conversion of the distributorship from online lottery to paper lottery - HELD THAT:- Lottery includes gambling as anelement of chance which requires no skill and as held by the Apex court it would not attain the status of trade like other trades or become res commercium. Accordingly, the petitioner has no right to invoke Article 14 of the Constitution of India or under Article 19(1)(g) of the Constitution of India seeking for his protection of his fundamental right for carrying on trade and commerce of the State lotteries. The petitioner is not entitled to objectand be heard by the respondent No. 1 while taking the impugned decision. The impugned decision dated 12.09.2018 does not in any manner injure the interest of the petitioner recognized by law. The inpugned decision was taken within the stipulated terms of the contract to which the petitioner is not a signatory - petition dismissed as not maintainable.
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