TMI Tax Updates - e-Newsletter
June 27, 2023

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws FEMA Service Tax Central Excise

News

1. QCI and Odisha Government launch Odisha Gunvatta Sankalp in Bhubaneswar

2. Auction for Sale (re-issue) of (i) ‘7.06% GS 2028’, (ii) ‘7.26% GS 2033’ and (iii) ‘7.30% GS 2053’

3. Centre approves Rs. 56,415 crore to 16 States for Capital Investment under ‘Special Assistance to States for Capital Investment 2023-24’ Scheme for giving timely boost to capital spending by States

4. Third Infrastructure Working Group Meeting to take place in Rishikesh from June 26-28, 2023

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS-PoD-2/P/CIR/2023/100 - dated 26-6-2023

Format of Compliance Report on Governance for InvITs

2. SEBI/HO/DDHS-PoD-2/P/CIR/2023/101 - dated 26-6-2023

Format of Compliance Report on Governance for REITs

3. SEBI/HO/MRD/MRD-POD- 3/CIR/P/2023/104 - dated 26-6-2023

Investor Service Centres of Stock Exchanges

4. SEBI/HO/DDHS-PoD-2/P/CIR/2023/103 - dated 26-6-2023

Format for Annual Secretarial Compliance Report for REITs

5. SEBI/HO/DDHS-PoD-2/P/CIR/2023/102 - dated 26-6-2023

Format for Annual Secretarial Compliance Report for InvITs

6. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2023/99 - dated 23-6-2023

Trading supported by Blocked Amount in Secondary Market - to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

7. SEBI/HO/CFD/POD-2/P/CIR/2023/93 - dated 20-6-2023

Master Circular on (i) Scheme of Arrangement by Listed Entities and (ii) Relaxation under Sub- rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957

Customs

8. Public Notice No. 50 /2023 - dated 22-6-2023

Examination of Export goods at Export Docks in two Shifts.

9. PUBLIC NOTICE NO. 06/2023-24 - dated 12-6-2023

Mandatory additional qualifiers in import/export declarations in respect of certain products wef 1.7.2023 -reg

10. PUBLIC NOTICE NO. 49 /2023 - dated 12-6-2023

AEO programme digitization - Ease of doing business- Dispensing with physical submission of documents for AEO applications-Reg.

11. Public Notice No. 48/2023 - dated 9-6-2023

Implementation of Hon’ble Supreme Court's directions as per judgment dated 28.04.2023 in matter of Civil Appeal No. 290 of 2023 relating to ‘pre-Import condition’-reg.

Highlights / Catch Notes

Income Tax

• New Rules for Charitable and Educational Institutions' Tax Exemption Applications u/ss 10(23C), 12A, and 80G.

  Notifications : Income-tax (Eleventh Amendment) Rules, 2023 - Charitable, religious, educational institutions and / hospitals - Various rules towards procedure of filing of application for approval u/s 10(23C), 12A and 80G and related form, amended / modified. - Notification
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• Finance Act 2023 amends section 115BAC: new tax rules for individuals and HUFs, introduces FORM No. 10-IEA.

  Notifications : New Tax Regime u/s 115BAC in respect of Individuals, HUF and others as Amended By Finance Act, 2023 - Various changes made in corresponding rules for income taxable as Salary and for Depreciation in case of Business or Profession income - Introduction of FORM No. 10-IEA for exercising to option or withdrawing from the option u/s 115BAC - Income-tax - Notification
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• Debate on Section 14A Amendment: Is It Retrospective or Prospective? High Court Suggests Prospective Application.

  Case-Laws - HC : Disallowance u/s 14A r.w.r. 8D - scope of amendment made by the Finance Act, 2022 to Section 14A - Amendment is retrospective or prospective in nature - the amendment of Section 14A, which is “for removal of doubts” cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood. - HC
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• Supreme Court Affirms High Court: Tax Department Can Reassess u/s 143(3) Within 60 Days of Notice Quash.

  Case-Laws - SC : Validity of assessment order - Jurisdiction to AO to adjudicate the assessment u/s 143(3) - While quashing the notice, High Court has granted the liberty to the department to initiate proceedings afresh as per law - Revenue contended that assessee is precluded from challenging the jurisdiction beyond the period of 30 days of the receipt of notice u/s 142(1) - Apex Court maintained the order of HC - However, AO is free to complete the assessment (in case the assessment order has not been issued) within the next 60 days. - SC
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• Court Rules Against Multiple Legal Remedies for Same Issue; Petitioner Must Proceed with CIT (Appeals) u/s 154.

  Case-Laws - HC : Maintainability of Writ Petition simultaneously while filing the statutory appeal before the CIT(A) - Rejection of application for rectification u/s 154 - Denial of full TDS credit - No justification for the petitioner to be permitted to ride multiple horses for the same cause of action. Hence, let the petitioner pursue the appeal filed before the first appellate authority. - HC
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• Assessing Officer's Dual Role in Income Tax: Investigator vs. Adjudicator u/ss 147, 144, 144B.

  Case-Laws - HC : Role of AO as adjudicator in making the computation - Assessment made u/s 147 r.w.s. 144 and 144B - It is clear that the Parliament intended the AO to be both investigator, for purpose of detecting income having escaped assessment and adjudicator, for making the best judgment assessment. - AO abdicated his role as adjudicator in making the computation - Matter restored back - HC
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• High Court Rules No Breach of Mandatory Requirements for Reopening Assessment u/s 148A by Assessing Officer.

  Case-Laws - HC : Validity of reopening of assessment - At the stage of taking decision under Section 148 AO is required to form an opinion based on information available before him, other materials on record and reply of an assessee submitted under Clause (b) of Section 148A of the Act, regarding “fitness of a case” for issuance of notice under Section 148A. - We do not find breach of any mandatory requirement stipulated under Section 148A of the Act - HC
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• Section 271B Penalty Not Imposed for Minor Delays in Tax Audit Report Filing Without Malicious Intent.

  Case-Laws - AT : Penalty u/s 271B - delayed filing of audit report u/s 44AB - when the Tax Audit Report was made available to the AO before completion of assessment proceedings, then for venial technical breach without any mala fide intention of the assessee, the penalty cannot be levied u/s 271B. - AT
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• Trust Deed Presented, CIT(E) Directed to Grant Section 12AB Registration Without Specified Unmet Conditions.

  Case-Laws - AT : Denial of Registration u/s. 12AB - when the Trust Deed was there before the CIT(E) and the assessee furnished all the necessary details of the activities carried out up to the stipulated date, there was no reason for the ld. CIT(E) to deny the benefit of registration u/s. 12AB without specifically pointing out the nonfulfillment of the requisite condition(s) for the grant of registration. - CIT(E) directed to grant the registration u/s. 12AB - AT
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• Revised Tax Return Filed Timely u/s 139(5) But Unsubstantiated Capital Loss Claim Deemed Invalid.

  Case-Laws - AT : New claim of capital losses in the revised return - Return filed within the due date prescribed u/s 139(5) but subsequent to the due date prescribed u/s 139(1) - Assessee has failed to furnish any explanation whatsoever on the nature and character of transactions resulting in such capital loss. An unsubstantiated and uncorroborated claim is thus, in any case, untenable in law. Hence, on this score too, the claim does not meet the ingredients of provisions of S. 139(5) of the Act. - AT
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• Section 40(a)(i) exempts TDS on sales commissions to foreign agents without permanent establishment in India for services rendered abroad.

  Case-Laws - AT : Disallowance u/s 40(a)(i) - Non deduction of TDS - sales commission paid to agents outside of India, who are having no permanent establishment in India, in respect of services rendered outside of India and related to earning of income outside of India by the assessee cannot be subject to TDS under the Act. - AT
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• Club Membership Fees Deduction Allowed for Director's Cricket Club of India Membership Post Company to LLP Conversion.

  Case-Laws - AT : Deduction of club membership fees paid to Cricket Club of India in the name of Director - Business was closed / wounded up as the company was converted to LLP - Since the assessee company functions through the director/share-holders and even though converted to LLP, still will be functioning through the key persons; and it is noted that membership was for Shri. Anand Didwania, who was a director & later partner of LLP and so, is a key person of assessee company/LLP. - Claim allowed - AT
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Customs

• Manufacturer Negligence: EOU Mis-declares Job Worker Details, Violates Duty-Free Import Rules, Fails to Verify Manufacturing Unit.

  Case-Laws - AT : 100% EOU - mis-declaration - the appellant has violate the faith imposed in them in as much as they did not even bother to check whether the job worker declared by them for manufacture of intermediate product exist at the time declared manufacturing unit or not. It also shows the carelessness on the part of the manufacturer in failing to ensure as that the duty free import or acquired are being sent to the right place which have been declared by them for manufacture of the intermediate products. - AT
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• Refund Case Examines Duty Transfer to Buyer; CA Certificate Insufficient as Sole Proof; Further Evidence Required for Decision.

  Case-Laws - AT : Refund - Unjust enrichment - burden of duty is transferred to the buyer of the goods or not - Merely CA Certificate per se cannot be the sole ground for proving that they have not passed on the incidence of duty, if the sanctioning authority is not satisfied with the documents and he may also rely in addition on any other documents in order to come to the conclusion as to whether duty incidence has been passed on to customer or not in the facts of the case - Matter restored back - AT
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• Revenue Cannot Challenge Final Refund Orders or Initiate Recovery u/s 28 for Alleged Erroneous Refunds.

  Case-Laws - AT : Recovery of Refund - The original orders passed by the adjudicating authority in sanctioning the refunds in favour of the appellants were not challenged by Revenue before the Commissioner (Appeals). Therefore, with regard to those two adjudication orders, the matter has attained finality and the question of maintainability of the refund claims cannot be questioned by Revenue at a subsequent stage, by initiating proceedings under Section 28 ibid, for recovery of the refund amounts, considering the same as erroneous refund - AT
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DGFT

• Norms Committee Launches New Online Module to Streamline Advance Authorization Process for Trade and Tax Stakeholders.

  Circulars : Fixation/review of Norms of advance authorization by Norms Committee (NC-7) from new online Norms Fixation IT module - Trade Notice
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• Steps to Extend Export Obligation Period and Issue Discharge Certificate for Advance Authorisation by DGFT.

  Circulars : Process for EOP extension and issuance of EODC for Advance Authorisation for Annual requirement - Trade Notice
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Service Tax

• Kandla Port Trust avoids penalty as service tax already paid; no demand in show cause notice u/s 73(1).

  Case-Laws - AT : Levy of Service Tax - leasing of the land of Kandla Port Trust - The show cause notice was issued only for demand of interest and penalty and there is no demand of service tax. The appellant have admittedly paid the service tax without raising any protest. It is for this reason the Revenue has not demanded the service tax under Section 73 (1) of Finance Act, 1994 - Since, no demand raised in the SCN, the levy of penalty u/s 78 is not sustainable - AT
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Central Excise

• Court Grants Refund for Unused Cenvat Credit Post-GST Transition; Education Cess and Secondary Education Cess Included.

  Case-Laws - AT : Cash Refund claim of education cess - Transition to GST regime - the appellant are not in a position to utilize Cenvat credit of Education Cess and Secondary and Higher Education Cess due to introduction of GST with effect from 01.07.2017 - Refund allowed - AT
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Case Laws:

• Income Tax

• 2023 (6) TMI 1077
  Bogus purchases - Consequent bogus sales - as per HC as confirming ITAT and CIT(A) order addition is without any basis - Also as purchases made are not bogus purchases, the sales made out of such purchases cannot be treated as bogus sales - Disallowance of interest paid to Hawala operators be deleted as when the loan was received had not disallowed same as not genuine, having not disallowed the principal as not genuine, there is no justification for making any disallowance of interest paid to the above parties. HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. The special leave petition(s) stand(s) dismissed accordingly.

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• 2023 (6) TMI 1076
  Validity of assessment order - Jurisdiction to AO to adjudicate the assessment u/s 143(3) - While quashing the notice, High Court has granted the liberty to the department to initiate proceedings afresh as per law - Revenue contended that assessee is precluded from challenging the jurisdiction beyond the period of 30 days of the receipt of notice u/s 142(1) - HELD THAT:- As records also reveals that the assessee had participated pursuant to the notice issued u/s 142 (1) and had not questioned the jurisdiction of the assessing officer. Section 124(3)(a) of the Income Tax Act precludes the assessee from questioning the jurisdiction of the assessing officer, if he does not do so within 30 days of receipt of notice u/s 142 (1). In the present case, the facts did not warrant the order made by the High Court. At the same time, this Court notices that the High Court had granted liberty to the concerned authority to issue appropriate notice. AO is free to complete the assessment (in case the assessment order has not been issued) within the next 60 days. In such event, the question of limitation shall not be raised by the assessee.

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• 2023 (6) TMI 1075
  Benami Property Transactions - Retrospective application of law enacted in the year 2016 - HELD THAT:- The issues raised in these petitions is squarely covered by the judgment of this Court in Union of India Anr. Vs. Ganpati Dealcom Pvt. Ltd. ( 2022 (8) TMI 1047 - SUPREME COURT] As petitioner(s) contends that review of the said judgment is pending. Since as of now the issue stands covered by the judgment in the case of Ganpati Dealcom Pvt. Ltd. case (supra), we dismiss these special leave petitions for the same reasons and ground.

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• 2023 (6) TMI 1074
  Income deemed to accrue or arise in India - Taxability of amount received - PE in India - HELD THAT:- The issue raised by the Revenue in the present special leave petitions is covered against them vide judgment Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] Ld Additional Solicitor General states that a Review Petition has been filed against this judgment, which is currently pending and the right of the Revenue to revive the present special leave petitions may be reserved, in case the Review Petition is allowed. Special leave petition is dismissed, as the same is covered by the said decision of this Court.

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• 2023 (6) TMI 1073
  Maintainability of Writ Petition simultaneously while filing the statutory appeal before the CIT(A) - Rejection of application for rectification u/s 154 - Denial of full TDS credit - there is shortfall in the grant of tax credit that ought to have been as per Form 26AS available at that point in time - HELD THAT:- As petitioner has availed statutory remedies and rectification as well as appeal and as on date, the appeal filed by it challenging the very order impugned in this Writ Petition, is pending. No justification for the petitioner to be permitted to ride multiple horses for the same cause of action. Hence, let the petitioner pursue the appeal filed before the first appellate authority. While disposing the appeal, the appellate authority, will needless to say, consider the full TDS available to the petitioner s credit at the relevant point in time. Writ Petition stands dismissed in terms of the above order.

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• 2023 (6) TMI 1072
  Assessment made u/s 147 r.w.s. 144 and 144B - Role of AO as adjudicator in making the computation - Petitioner submits, his client never had taxable income and this was the first assessment, consequent upon she having sold her property and it was land and building - HELD THAT:- As demand of tax and interest etc. was made consequent to discovery by revenue that there had been a high value transaction entered into by petitioner, on having sold her property. There is no other allegation or particulars of otherwise income had or concealed by petitioner, as appearing from impugned assessment order. Here we must be mindful that the AO may, u/s 147 assess income having escaped assessment. In impugned assessment order, also stands invoked is section 144, providing for best judgment assessment. It is clear that the Parliament intended the AO to be both investigator, for purpose of detecting income having escaped assessment and adjudicator, for making the best judgment assessment. There does not appear to be any dispute that the property consisted of land and building and there is absence of enquiry on relief under section 148, the revenue was mandated to give. In the present case the Assessing Officer abdicated his role as adjudicator in making the computation. In the circumstances, we are inclined to accept that petitioner deserves a further opportunity to file a return.

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• 2023 (6) TMI 1071
  Validity of reopening of assessment - order passed u/s 148A(d) holding it to be a fit case for issuance of notice u/s 148 - AO as been stated that the earlier notice was set aside by this Court on the ground that mandatory provision of allowing not less than 7 days time to submit reply to the notice u/s 148A(b) was not afforded to her and, accordingly, in the light of the Court s order, the assessee was allowed reasonable time of 15 days to submit her reply to the notice u/s 148A(b) dated 05.07.2022. HELD THAT:- Statement referred to in the report of the Investigation Wing was not supplied to the petitioner, despite repeatedly demanded - Here is not a case where the AO did not have any information based on which a notice was issued to the petitioner under Clause (b). It is not in dispute that the copy of the report of the Investigation Wing available to the AO in the form of not on J.M. Balanced Fund- Annual Dividend Option beneficiaries was provided to the petitioner well in advance on 08.08.2022. It is not the petitioner s case that the said information/report was wholly irrelevant for exercise of power u/s 147 of the Act. We reiterate that at the stage of taking decision under Section 148 AO is required to form an opinion based on information available before him, other materials on record and reply of an assessee submitted under Clause (b) of Section 148A of the Act, regarding fitness of a case for issuance of notice under Section 148A. It would have been different matter had there been no information at all or information available with the Assessing Officer were though irrelevant, still the Assessing Officer reached a conclusion that it was a fit case for issuance of notice under Section 148 of the Act. We, accordingly, do not find it a fit case for interference in exercise of writ jurisdiction under Article 226 of the Constitution of India. In any event, the petitioner is at liberty to raise all the aspects which are being raised in the present writ application before proceeding, consequent upon issuance of notice under Section 148 of the Act. Whether there was no prior approval of the specified authority taken under Section 148(d) of the Act and the approval which was taken was under the proviso to Section 148 of the Act and for the said reason also, the impugned order is bad? - On comparative examination of Sections 148 and 148A of the Act, it can be easily culled out that Section 148A lays down the requisite conditions before issuance of a notice under Section 148 of the Act. The proviso to Section 148 restricts the Assessing Officer from issuance of a notice without prior approval of the specified authority. Section 148A lays down a procedure as a condition precedent for issuance of a notice under Section 148. The condition of prior approval of specified authority u/s 148 is satisfied once prior approval of specified authority is granted under Clause (d) of Section 148A of the Act, in our considered opinion. We do not find breach of any mandatory requirement stipulated under Section 148A of the Act which would require this Court s interference at the stage of issuance of notice, in exercise of extraordinary writ jurisdiction under Article 226 of the Constitution of India.

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• 2023 (6) TMI 1070
  Exemption u/s 10(37) - interest received by the assessee on enhanced compensation u/s 28 of the Land Acquisition Act, 1984 - whether taxable being part of compensation? - HELD THAT:- As authorities below have treated interest received by the assessee on enhanced compensation u/s 28 of the Land Acquisition Act, 1984 as Income from other sources and denied exemption u/s 10(37) of the Act. The facts and circumstances of the present case are identical and similar to the case of Ram Kishan I [ 2020 (12) TMI 1244 - ITAT DELHI] wherein Tribunal categorically held that the interest received by the assessee u/s 28 of the Land Acquisition Act, 1984 on enhanced compensation is part and parcel of the compensation, if the agricultural land of the assessee has been acquired under compulsory acquisition and, thus, the same is exempt income u/s 10(37) of the Act. Appeal of the assessee is allowed.

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• 2023 (6) TMI 1069
  Penalty u/s 271B - delayed filing of audit report u/s 44AB - HELD THAT:- As submitted that the assessee was unable to file the ROI along with tax audit report within the date stipulated in the notice u/s 148 due to Covid pandemic lock down and income tax portal was under maintenance, and the assessee has filed the tax audit report u/s 44AB during the course of assessment proceedings, which was also considered by the AO before concluding the assessment. Thus, when the Tax Audit Report was made available to the AO before completion of assessment proceedings, then for venial technical breach without any mala fide intention of the assessee, the penalty cannot be levied u/s 271B. Respectfully following the above decision of case of Balaji Logistics v. ACIT [ 2022 (9) TMI 1432 - ITAT CHENNAI] it is not a fit case for levy of penalty u/s 271B and penalty levied u/s 271B stands deleted - Decided in favour of assessee.

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• 2023 (6) TMI 1068
  Denial of Registration u/s. 12AB - Assessee claimed that it has furnished all the details - CIT(E) noted that assessee did not furnish proper evidence in support of its reply and whatever was furnished was cryptic, inadequate and non-verifiable - HELD THAT:- The prescription of section 12AB(1)(b)(i) is that where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or subclause (v) of the said clause, CIT(E) may call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about - (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects. Having seen all the documents furnished by the assessee as called for by him, CIT(E) failed to point out anything adverse either against the genuineness of the activities of the trust or the compliance of other laws. In our considered opinion, when the Trust Deed was there before the CIT(E) and the assessee furnished all the necessary details of the activities carried out up to the stipulated date, there was no reason for the ld. CIT(E) to deny the benefit of registration u/s. 12AB without specifically pointing out the nonfulfillment of the requisite condition(s) for the grant of registration. We, therefore, overturn the impugned order and direct to grant the registration u/s. 12AB of the Act. The facts and circumstances for the other appeal in respect of rejection of approval u/s. 80G(5) are mutatis mutandis similar. CIT(E) has given the same reasons for denial of approval u/s. 80G(5) as were given in his order rejecting the grant of registration u/s. 12AB. Appeal against registration u/s. 12AB, we overturn the impugned order and direct to grant approval u/s. 80G of the Act. Appeal of assessee allowed.

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• 2023 (6) TMI 1067
  Altogether new claim of capital losses in the revised return - Return filed within the due date prescribed u/s 139(5) but subsequent to the due date prescribed u/s 139(1) - whether the assessee is entitled to carry forward such capital losses claimed in the revised return? - Whether the loss claimed in the revised return meets requirement of S. 139(5)? - HELD THAT:- To be entitled to carry forward the business loss or capital loss, the assessee is required to file the return u/s 139(1) - Section 80 by a non obstante clause prohibits claim of carry forward of such losses unless determined u/s 139(3) - Section 139(3) in turn, makes the mandate of the law clear that the loss return must be filed within time limit permissible u/s 139(1) - The revision of return u/s 139(5) is also circumscribed by expression discovers any omission or any wrong statement in the original return. In the instant case, the original return filed u/s 139(1) does not make reference to existence of any capital loss at all. The loss has been claimed for the first time in the revised ROI beyond the time limit prescribed under S. 139(1) - provision of S. 80 thus comes into play. The law codified thus is plain and concrete and does not admit of any ambiguity. The revenue authorities, in our view, have thus rightly held that the capital loss claimed beyond the time limit u/s 139(1) thus can not be carried forward u/s 74 of the Act in the factual matrix. We do not find any reason to think differently. In the instant case, an altogether fresh claim of capital loss has been made in the revised return filed beyond 139(1) time limit. It is not a case of mere correction or modification in the existing claim of capital loss. The capital loss claimed when seen qua revised return filed under s. 139(5), the claim of carry forward thereof, clearly does not pass the muster of law. No error in the action of the revenue in denial of carry-forward of capital losses claimed in the revised return. Whether Section 139(5) permits an assessee to file a revised return only if he discovers any omission or any wrong statement in the original return filed by him? - How and where the accounting entries in this regard has been made in the financial statement is totally unknown. How an inadvertent omission to account for such whopping losses has resulted, is not answered despite specific opportunity. The propriety of such capital loss itself is thus under cloud. It is quite difficult to affirm that the omission or wrongful statement in the original return towards such colossal loss is sheer inadvertence and not deliberate or willful. Such claim of loss in the revised return without showing inadvertence even at the stage of second appeal thus has been rightly denied. A reference to case of Kumar Jagdish Chandra Sinha[ 1996 (4) TMI 5 - SUPREME COURT] is quite apt to the facts of the case where was held that revised return can not be filed to cover up deliberate omission etc. in the original return. Thus, from this perspective also, phraseology of S. 139(5) does not permit claim of capital loss by way of a revised return. The claim of the Assessee towards incurring impugned capital loss and carry-forward thereof fails on this count too. Assessee has failed to furnish any explanation whatsoever on the nature and character of transactions resulting in such capital loss. An unsubstantiated and uncorroborated claim is thus, in any case, untenable in law. Hence, on this score too, the claim does not meet the ingredients of provisions of S. 139(5) of the Act. Appeal of the assessee dismissed. Disallowance of interest/financial charges - As per AO cash flow statement furnished by the assessee proves that interest expenses were incurred for the loans taken by it which was utilized for making investment in shares of NDTV Ltd. and hence it has nothing to do with the earning of interest income which was earned subsequently on fixed deposits made out of sale proceeds by a part of investment in shares - HELD THAT:- The interest income has arisen independently out of fixed deposits fixed with bank, the source of which in turn is sale of investments. The interest expenditure on the other hand has been incurred on borrowers utilized for investment in acquisition of shares of NDTV Ltd. Thus, apparently the assessee has failed to discharge the onus which lays upon it to show that incurring of expenditure has resulted in corresponding income taxable under the head income from other sources . In the absence of any live nexus between the expenditure and the corresponding income, the Revenue Authorities have rightly disallowed the claim of interest expenses having regard to the narrower scope of deductions eligible u/s 57(iii) - We thus decline to interfere with the action of the Assessing Officer and the First Appellate Authority.

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• 2023 (6) TMI 1066
  Reopening of assessment u/s 147 - Unexplained cash credit u/s 68 - assessment proceedings were initiated beyond 4 years - concept of change of opinion - whether assessee was not able to establish the genuineness of transactions and creditworthiness of creditors? - HELD THAT:- As during the scrutiny proceedings u/s 143(3) Assessee had already disclosed all the details and facts regarding the share application money on the specific query and considering the fact that the assessment proceedings were initiated on satisfaction borrowed from report of Investigation Wing, in the absence of any whisper or allegation on the Assessee regarding non disclosure of fully and truly all material facts in the reasons, in our considered opinion the proceedings initiated u/s 148 of the Act cannot be sustained. It is well settled law that the AO cannot invoke the provisions of Section 147 148 of the Act merely on the change of opinion wherein the original assessment u/s 143(3) of the Act was completed after due consideration of the facts. Thus reassessment proceedings initiated by the A.O. u/s 147/148 on mere change of opinion and reviewing the completed assessment is contrary to the settled position of law - Decided in favour of assessee.

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• 2023 (6) TMI 1065
  Nature of expenditure - Machinery repairs consumption of spares - revenue v/s capital expenditure - HELD THAT:- AO in the remand report has not given any specific findings as to how the said expenditure has given any enduring benefit to the assessee - no infirmity in the order of Ld. CIT(Appeals) while holding that machinery repairs / consumption of spares crores qualifies as revenue expenditure. With respect to payment to NUOVO PIGNONE, in our view, CIT(A) has correctly observed that the same does not qualify as capital expenditure and further, on perusal of the details of expenditure, it is seen that these are annual maintenance charges paid by the assessee company and hence they are not on capital account. Finally, with respect to plant repairs and maintenance expenditure expenses it is seen that majority of the expenses are below 25,000/-. Even CIT(Appeals) has not given any specific finding as to why the aforesaid expenditure should be treated on capital account and what enduring benefit has accrued to the assessee by way of the aforesaid expenditure. We further observe that the aforesaid expenditure towards plant repairs and maintenance constitutes only 2.48% of the Gross Block of Plant and Machinery and further this percentage is lower as compared to the previous two assessment years i.e. AY 2006-07 (2.63%) and AY 2007-08 (2.62%). Accordingly, we are of the considered view that the aforesaid expenditure is allowable as revenue expenditure. Loss accrued on foreign exchange derivatives - assessee entered into contracts to convert its export realization in Euro into USD to pay for its imports in USD.held that losses of foreign exchange derivatives on outstanding contracts are notional and contingent in nature and cannot be allowed as per Instruction No. 2/2020 issued by CBDT on 23.03.2010 - HELD THAT:- We observe that this issue is directly covered in favour of the assessee by order of ITAT Ahmedabad in assessee s own case for A.Y. 2009-10, 2010-11 and 2011-12 in [ 2021 (11) TMI 766 - ITAT AHMEDABAD] wherein the ITAT has allowed the assessee s appeal. Disallowance on account of expenses claimed in respect of turnkey project - AO held that the assessee has only claimed the expenses on an estimated basis on percentage of completion of project and therefore, the said expenses were required to be capitalized since the assessee is following project completion method - HELD THAT:- The assessee has been consistently following the percentage completion method in earlier assessment years and also in the subsequent assessment years, and no defects have been pointed out in such method of accounting. During the course of assessment proceedings, the assessee has given complete details regarding income earned from such project and which was also accepted by Assessing Officer as taxable income on current year basis upon method of accounting regularly followed by the assessee. Accordingly, considering the facts of the instant case we are of the considered view that CIT(Appeals) has not erred in facts and in law in holding that the aforesaid expenditure is allowable as revenue expenditure. Disallowance u/s 14A - assessee earned exempt dividend income and made a suo moto disallowance - HELD THAT:- CIT(Appeals) has not erred in facts and in law in restricting the addition made under section 14A of the Act to the amount of exempt income earned by the assessee. Addition u/s 115JB - AO disallowed the expenditure computed u/s 14A while calculating book profit u/s 115JB - HELD THAT:- It is a well settled principle that the amounts disallowed under Section 14A r.w.r. 8D cannot be added to net profit while computing books profits under Section 115JB of the Act. Recently, in the case of Atria Power Corporation Ltd. [ 2022 (8) TMI 1322 - SC ORDER] dismissed the SLP of the Department against High Court ruling that disallowance made u/s14A could not be added in assessee-company s income for purpose of computation of income under section 115JB Also in the case of J.J. Glastronics (P.) Ltd. [ 2022 (4) TMI 1187 - KARNATAKA HIGH COURT] held that amounts disallowed under section 14A could not be added to net profit while computing book profit under section 115JB of the Act. Also in the case of Vireet Investment (P.) Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] held that computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to computation as contemplated under section 14A read with rule 8D. Addition u/s 41(1) as deemed income of the assessee - HELD THAT:- Since there was noting on record to indicate that there was cessation of liability during the year under consideration. Therefore, this ground of appeal of the revenue is dismissed. Disallowance u/s 40(a)(i) - sales commission expenses and recruitment expenses on the ground that assessee has not deducted TDS on the aforesaid payments - HELD THAT:- We observe that with respect to payments towards recruitment charges similar issue has been decided in favour of the assessee, in assessee s own case [ 2021 (11) TMI 766 - ITAT AHMEDABAD] by ITAT Ahmedabad for A.Ys. 2009-10, 2010-11, 2011-12 as held since the Assessing Officer has not disproved the fact that assessee has made payment on account of reimbursement of expenditure on which no TDS is deductable. Therefore, this ground of appeal of the Revenue stands dismissed. No TDS was required to be deducted on payments made towards reimbursement of recruitment charges. With respect to commission paid to various parties for services carried out outside of India and is related to earning of income outside of India and hence, such payment falls within the Exceptions provided in Section 9(1)(vii)(b) of the Act. We observe that the Ld. D.R. has not brought anything to controvert the findings given by Ld. CIT(Appeals). It is a well settled law that sales commission paid to agents outside of India, who are having no permanent establishment in India, in respect of services rendered outside of India and related to earning of income outside of India by the assessee cannot be subject to TDS under the Act. Accordingly, CIT(Appeals) has not erred in facts and in law in deleting the aforesaid addition. Disallowance u/s 92CA - assessee had granted loans to various Associated Enterprises and assessee had calculated arms length interest of LIBOR plus 2.5% i.e. 7.69% in USD terms and notional interest income was offered to tax - HELD THAT:- In the instant case, the assessee has worked out the ALP at LIBOR plus 2.5%. Further, the Ld. CIT(Appeals) has also not appreciated the fact that the mark-up of 3.72% computed by the TPO works out to nearly 72% of LIBOR which in our view, is quite excessive. Accordingly, we are of the considered view that the assessee is justified in computing the ALP at 7.69% (i.e. at LIBOR plus 2.5%) and the appeal of the assessee is allowed with respect to this Ground of Appeal. Disallowance in respect of late payment of employees contribution to PF ESI - HELD THAT:- As in the case of Checkmate Services (P.) Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] wherein the Supreme Court held that for assessment years prior to AY 2021-22, non obstante clause under section 43B could not apply in case of amounts which were held in trust as was case of employee s contribution which were deducted from their income and was held in trust by assessee-employer as per section 2(24)(x), thus, said clause would not absolve assessee-employer from its liability to deposit employee s contribution on or before due date as a condition for deduction. Where assessee-company failed to pay employees contribution towards EPF and ESI within due date prescribed in respective Acts, deduction under section 36(1)(va) was not allowable.The issue is decision in case of Gujarat State Road Transportation Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] wherein it was held that where assessee did not deposit employees contribution to employees account in relevant fund before due date prescribed in Explanation to section 36(1)(va), no deduction would be admissible even though he deposits same before due date under section 43B of the Act.

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• 2023 (6) TMI 1064
  Deduction of club membership fees paid to Cricket Club of India - Membership in the name of Director - Business Expenditure or not - Business was closed / wounded up as the company was converted to LLP - HELD THAT:- The facilities of the Club would be utilized by the director/partner for meeting and interacting with other members of Cricked Club of India and thus would ultimately benefit the assessee (even though converted to LLP). The Kolkata Tribunal in the case of M/s. MKJ Tradex Ltd [ 2018 (3) TMI 1172 - ITAT KOLKATA] has succinctly described the advantage of assessee company/its employees becoming members of a club which is not repeated again for the sake of brevity. Since the assessee company functions through the director/share-holders and even though converted to LLP, still will be functioning through the key persons; and it is noted that membership was for Shri. Anand Didwania, who was a director later partner of LLP and so, is a key person of assessee company/LLP. So entrance fees paid by the assessee on behalf of Shri Anand Didwania for becoming member of the Cricket Club of India would inure benefits for the business of the assessee/LLP. And therefore, in the light of decision in the case of United Glass MFG Co. Ltd. [ 2012 (9) TMI 914 - SUPREME COURT] it is held to be an allowable deduction in the facts and circumstances of this case. Therefore, AO is directed to delete addition - Appeal of the assessee is allowed.

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• 2023 (6) TMI 1063
  TP adjustment towards payment of central services - inter group services - HELD THAT:- The assessee has submitted evidences not only demonstrating the rendition of central services but also commensurate benefits derived from such services to the assessee. The assessee has done the bench marking analysis similar to AY 2015-16 and 2016-17 for the year under consideration also and therefore the impugned issue is squarely covered by the above decision of the coordinate bench and therefore respectfully following the same we direct the AO/TPO to delete the addition made towards inter group services. Disallowance u/s 14A r.w.r. 8D - AR submitted that the assessee s suo-moto disallowance is appropriate and scientific - HELD THAT:- For the year under consideration assessee has investments the details of which has already been furnished before the AO. As noticed that that AO has applied Rule 8D without having recorded his satisfaction or examining the nature of investments whether they have yielded any exempt income or not. Therefore respectfully following the above decision of the coordinate bench in assessee s own case we delete the disallowance made by the assessing officer. Disallowance of ESOP expenditure - ESOP expenses has not crystalised and that the same is capital in nature - HELD THAT:- As decided in assessee own case [ 2023 (3) TMI 1376 - ITAT MUMBAI] we hold that the addition made by the AO towards ESOP expenses be deleted.

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• Customs

• 2023 (6) TMI 1062
  100% EOU - Permission for import and acquisition of the raw materials duty free, for use of the same in the manufacture of export products - mis-declaration - failure to declare whether the job worker declared by them for manufacture of intermediate product exist at the time declared manufacturing unit or not - N/N. 52/2003-Cus dated 31st March 2003 - HELD THAT:- With an objective to encourage exports, the Government of India has imposed lot of faith and has allowed import and acquisition of the raw materials duty free for use of the same in the manufacture of export products - The relevant notification No. 52/2003-Cus dated 31st March 2003 allowed import and acquisition of raw material without payment of any duty subject to certain undertakings and paper formalities. In this case, the appellant has violate the faith imposed in them in as much as they did not even bother to check whether the job worker declared by them for manufacture of intermediate product exist at the time declared manufacturing unit or not. It also shows the carelessness on the part of the manufacturer in failing to ensure as that the duty free import or acquired are being sent to the right place which have been declared by them for manufacture of the intermediate products. The declared job worker M/s. Heartwell Life Sciences was fully aware that the duty free raw materials sent by the appellant M/s. Sun Pharmaceuticals Industries Ltd. to them were not being put to the process at the declared address. If there was any difficulty in getting the duty free imported raw materials processed for the purpose of manufacture of intermediate products at the given address at plot no. A/1, 7304, GIDC Estate, Ankleshwar. They had enough time to come clean and inform the authorities that goods are being taken to M/s. Hemdeep Organics Pvt. Ltd. explaining the difficulties being faced by them to process the same on the declared address. There have been some procedural lapses in this matter however, the impugned order-in-original has confirmed duty and imposed redemption fine as well as penalties under various sections of Customs and Central Excise Acts. From the findings given in the impugned order, no discussion has been made as to the effect whether the duty free imported raw materials which were supplied to the job worker who did not exist at the given address, were received back after the processing or not - duty, redemption fine and penal action can be confirmed only if it is established that duty paid on raw material which was sent to the job workers have not been received by the 100% EOU of the appellant. Since the impugned orders are silent on this aspect, the matter need to be re-adjudicated - appeal disposed by way of remand.

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• 2023 (6) TMI 1061
  Refund of Customs Duty - burden of duty is transferred to the buyer of the goods or not - principles of natural justice - HELD THAT:- It is an admitted fact that the Original Authority has granted the refund based on this Tribunal s Judgment [ 2017 (3) TMI 700 - CESTAT HYDERABAD] , without examining the same from the angle of unjust enrichment as provided under the Customs Act, 1962, against which the Department filed an Appeal before the Commissioner (Appeals). The Commissioner (Appeals) has come to the conclusion that the Appellants did not succeed in establishing their case against the presumption provided under Sec.28D and in consequence, the amount of refund granted has to be held erroneously granted to the Appellants which is liable to be recovered from them as per law. The entire issue of whether they were entitled to exemption or not, has already been decided by this Tribunal and the only limited issue was the consequential refund available to them. The Original Authority has granted the same without examining the principle of unjust enrichment, whereas, the Appellate Authority has set aside the said Order holding that Appellants have not been able to cross the bar of unjust enrichment by proving that they have not passed on the incidence of duty. In the interest of justice, the matter needs to be referred back to the Original Authority to go through the documents furnished by them and any other additional evidence or documents which he might require to come to the conclusion whether the principle of unjust enrichment is invokable in the instant case or otherwise. It is however to be noted that merely CA Certificate per se cannot be the sole ground for proving that they have not passed on the incidence of duty, if the sanctioning authority is not satisfied with the documents and he may also rely in addition on any other documents in order to come to the conclusion as to whether duty incidence has been passed on to customer or not in the facts of the case. Appeal allowed by way of remand.

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• 2023 (6) TMI 1060
  Recovery of erroneous refund, without challenging the order sanctioning the refund - Refund of Additional Duty of Customs (CVD) (excess duty paid) - import of Mobile phones falling under CTH 851712 90 - N/N. 12/2012-C.E. dated 17.03.2012 - whether the incidence of excess paid CVD amount has been borne by the appellants and such incidence has not been passed on to any other person? - principles of unjust enrichment - HELD THAT:- It is an admitted fact on record that re-assessment order passed in the disputed B/Es were not questioned or objected to by the department, which is evident from the fact that no appeals were preferred by the Revenue against the finally assessed B/Es. Thus, under such circumstances, the plea cannot be raised by Revenue that the re-assessment of B/Es are neither proper nor justified. Considering the ratio of judgement of Hon ble Supreme Court in the case of ITC [ 2019 (9) TMI 802 - SUPREME COURT] , the Hon ble Bombay High Court in the case of Dimension Data India P. Ltd. [ 2021 (1) TMI 1042 - BOMBAY HIGH COURT] , in a writ petition filed under Article 226 of the Constitution of India, have held that if there is an error in the B/Es, the same can be rectified by amendment in terms of Section 149 of the Customs Act, 1962. In the case in hand, the B/Es were re-assessed by the department pursuant to the applications filed by the appellant under Sections 149 ibid and 154 ibid. In the present case, the facts are not under dispute that the original orders dated 06.04.2019 and 26.02.2019 passed by the adjudicating authority in sanctioning the refunds in favour of the appellants were not challenged by Revenue before the Commissioner (Appeals). Therefore, with regard to those two adjudication orders, the matter has attained finality and the question of maintainability of the refund claims cannot be questioned by Revenue at a subsequent stage, by initiating proceedings under Section 28 ibid, for recovery of the refund amounts, considering the same as erroneous refund - under such circumstances, it cannot also be said that the grant of refund is erroneous and the same should be recovered by taking recourse to Section 28 ibid. Therefore, the impugned order, confirming the demand along with interest against the appellants under Section 28(1) ibid, read with Section 28(4) ibid, and Section 28AA cannot be sustained. Further, penalty imposed under Section 114A ibid, cannot also be sustained. Accordingly, the adjudged demands confirmed in the impugned order are set aside. Whether the amount in dispute should be credited to the CWF in terms of sub-section (2) of Section 27 ibid, or should it be paid forthwith by crediting the refund amount in favour of appellants in terms of the proviso appended to sub-section (2) of Section 27 ibid.? - HELD THAT:- The provisions for grant of refund of duty are contained in Section 27 ibid. Sub-section (2) to Section 27 ibid, mandates that if the refund sanctioning authority is satisfied that the whole or part of the duty paid by the applicant is refundable, then he may make an order in crediting the refund amount to the CWF. On reading of the said statutory provision, it transpires that crediting the refund amount to the CWF is the rule and granting of the same as refund to applicant-assessee/importer is an exception, carved out in the proviso clause appended thereto. Any amount debited to the P L account has to be resulted in generation of revenue and accordingly, there lies no claim for recovery of this amount. On the other hand, without considering the same as expenses in the P L account, if the same is reflected in the Balance Sheet as Claims Receivable under the head Current Assets: Loans and Advances , then it has to be construed that the incidence of the duties/taxes have not been passed on to any other person and the incidence of the same has been borne by the assessee/importer. Under such circumstances only, the benefit of refunds should accrue to the person who has paid such duty/tax to the Government exchequer. To put it differently, it can be said that if an amount paid is not charged to the revenue and carried as an asset in the Balance Sheet, then there lies a claim of recovery from the person against whom these amounts have been considered as recoverable for the given value. The matter should go back to the original authority for proper analysis of the books of accounts maintained by the appellants for a conclusion, as to whether the incidence of excess paid duty (claimed as refund) has been borne by the importer-appellants or transferred/passed on to any other person - the appeal is allowed by way of remand to the Original authority only for the limited purpose of examination of the applicability of doctrine of unjust enrichment - Appeal allowed by way of remand.

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• Corporate Laws

• 2023 (6) TMI 1059
  Seeking mandamus in relation to an ongoing investigation and seek compliance of sections 217 and 220 of The Companies Act, 2013 - jurisdiction to hear the present writ petition on the same cause of action - whether the present writ petition is barred by the principle of constructive res judicata? - HELD THAT:- The statutory position under section 212 of The Companies Act, 2013 and the decision of the Supreme Court in Rahul Modi [ 2019 (3) TMI 1411 - SUPREME COURT ], discourage passing of orders which would be contrary to law. The observations made with regard to the legitimate expectation of the petitioners for completion of the investigation within a reasonable time frame however remains. The SFIO is hence expected to act in terms of such legitimate expectation as well as the principles of equity and fair play with regard to completing the investigation within a reasonable time frame. Application disposed off.

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• FEMA

• 2023 (6) TMI 1058
  Contravention of Section 8(1) and 9(1)(a) of FERA by the Company - petitioner and other individuals working for the Company were made vicariously liable for the alleged contravention by the Company by virtue of Section 68 of the Act - HELD THAT:- As in view of order of the Special Director, ED, the court quashed the proceedings in respect of the company alone, (the sole petitioner before it). As considering the status of the present case, which has been dropped by the complainant in respect of all the accused persons, the proceedings in Case pending before the Learned Metropolitan Magistrate, 11th Court, Calcutta under Sections 56 and 68 of the Foreign Exchange Regulation Act, 1973 is liable to be also quashed in respect of all the petitioners therein including the petitioner in this revision. Revisional application is allowed.

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• Service Tax

• 2023 (6) TMI 1057
  Levy of Service Tax - leasing of the land of Kandla Port Trust - appellant claims that tax is not leviable on the ground that the oil companies to whom the bills were raised were having unauthorized occupation of the land as the lease contract was expired - SCN not issued under Section 73 (1) of FA - interest - penalty - HELD THAT:- The appellant have raised the ground of taxability on the service of renting of immovable property for the first time before this Tribunal. However this issue is neither in the show cause notice nor in the impugned order. The show cause notice was issued only for demand of interest and penalty and there is no demand of service tax. The appellant have admittedly paid the service tax without raising any protest. It is for this reason the Revenue has not demanded the service tax under Section 73 (1) of Finance Act, 1994. Extended period of limitation - interest - HELD THAT:- As regard the issue whether the interest is recoverable and penalty was rightly imposed or otherwise, it is found that the show cause notice for recovery of interest and imposition of penalties was issued much after the normal period of limitation. It is undisputed fact that or malafide intention on the part of the appellant particularly being a trust of Government of India. Therefore, the invocation of the extended period is not legal and proper. The show cause notice was issued under the extended period is clearly time barred. Penalty - HELD THAT:- As regard the penalty though the same is not imposable for the above reasoning of the show cause notice being time barred. Moreover, the penalty under section 78 can only be imposed when the demand of service tax is raised under section 73 (1) of the Finance Act, 1994 - In the present case there is no demand raised in the show cause notice or otherwise under Section 73 (1) of Finance Act, 1994. In this undisputed position also the penalty under section 78 is not sustainable. In view of the judgment in PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT] the show cause notice being time barred the impugned order is not sustainable. As it is stated above since the show cause notice has not raised the demand of service tax which appellant had admittedly paid, the issue of taxability is left open. Appeal allowed.

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• 2023 (6) TMI 1056
  Levy of Service Tax alongwith interest and penalties - Late Payment Charges collected - non-reversal of Cenvat credit under Rule 6 of Cenvat Credit Rules - Trading of Scrips on own account - reimbursement expenses - levy of penalties. Late Payment charges - HELD THAT:- The decision of the Tribunal in the case of South Eastern Coalfields Ltd [ 2020 (12) TMI 912 - CESTAT NEW DELHI] cited by the Appellant is squarely applicable in this case where it was held that any penal charges recovered for non-performance of contractual obligation cannot be said to be towards rendition of declared service under Section 66E(e) of the Finance Act, 1994 - the demand confirmed in the impugned order on Late Payment Charges amounting to Rs 5,09,45,857/- is not sustainable. Credit reversal under Rule 6 of Credit Rules - imposition of Penalty of Rs.34,443/- and Rs 1390/- - HELD THAT:- The Appellant has not contested the issue. They have deposited the tax amount along with interest before issue of the Notice - there was no case of fraud or willful suppression established in the findings by the adjudicating authority. Since the entire amount of taxalong with interest has been deposited well before the issuance of the Show Cause Notice, the Notice need not have been issued as per Section 73(3) of the Finance Act, 1994. Therefore, the penalties of Rs.34,443/- and 1390/- imposed in the impugned order is liable to be set aside - the same is set aside. Demand of Service Tax of Rs.20,14,912/- along with interest and penalty under Rule 6 of Credit Rules - Appellant has engaged himself in trading of scrips on their own account, which is an exempted service - HELD THAT:- The reversal of proportional credit under Rule 6 has been settled by the Hon ble Telangana High Court in the case of M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT ] wherein it has been held that the Department cannot raise the demand of the amount exceeding the proportionate reversal pertaining to the common input services. Rule 6(3) of the Credit Rules merely offers options to an output service provider who does not maintain separate accounts in relation to receipt, consumption and inventory of inputs/input services used for provision of output services which are chargeable to duty/tax as well as exempted services. If such options are not exercised by the service provider, the provision does not contemplate that the Service Tax authorities can choose one of the options on behalf of the service provider. Thus, when common input services are used in dutiable and exempted services, the Appellant are entitled to reverse the proportional credit attributable to exempted services. Accordingly, the Appellant has rightly reversed the proportional credit along with interest. Hence, the Notice need not have been issued under Section 73(3) of the Finance Act, 1994.Accordingly, we hold that penalty equivalent to the amount paid is not imposable in this case, as there is no findings of any suppression of fact available in the impugned order. Service tax demand of Rs.17,72,562/- on account of reimbursement of expenses from group companies on cost sharing basis - HELD THAT:- Reliance placed in the decision of Hon ble Supreme Court in the case of Gujarat State Fertilizers Vs Commissioner of C.Ex. [ 2016 (12) TMI 103 - SUPREME COURT] and decision of the Tribunal in the case of Historic Resort Hotels Pvt. Ltd Vs CCE, Jaipur-II [ 2017 (9) TMI 1066 - CESTAT NEW DELHI] , wherein it has been held that reimbursements claimed from various group companies on cost sharing basis cannot be said to be towards provision of any taxable service - This view has been taken by Tribunal Kolkata in the case of Haldiram Marketing Pvt Lts Vs Commissioner [ 2023 (2) TMI 783 - CESTAT NEW DELHI ] - It is observed that the Ld. Commissioner has not given any finding with regard to the submissions of various decisions of the Tribunal in the impugned order - the demand on this issue is not sustainable. Penalties on above demands - HELD THAT:- There is no fraud or collusion or suppression of fact involved in this case. Hence, the penalty is not imposable in this case. They place reliance on the decision of the Tribunal, New Delhi, in the case of Vandana Global Vs. Commissioner (Appeals), CGST, Raipur [ 2022 (12) TMI 450 - CESTAT NEW DELHI] - It is observed that there is no suppression of fact findings by the adjudicating authority in the impugned order. In view of the above decisions, it is held that the penalties imposed in the impugned orders are not sustainable. Appeal allowed in part.

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• Central Excise

• 2023 (6) TMI 1055
  Cash Refund claim - Transition to GST regime - non-utilization of Cess due to transition provisions coming into force on implementation of GST from 1 July, 2017 - HELD THAT:- The learned Advocate states that subsequently sufficient decisions have clarified the position in their favour. He particularly seeks to rely on USV PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, DAMAN [ 2023 (2) TMI 230 - CESTAT AHMEDABAD ]. As also on the decision of CESTAT-New Delhi in EMAMI CEMENT LIMITED, NU VISTA LIMITED VERSUS COMMISSIONER (APPEALS) , CGST, CENTRAL EXCISE, RAIPUR [ 2022 (3) TMI 1254 - CESTAT NEW DELHI ]. He drew attention to para 4 5 of the decision of co-ordinate Bench of Ahmedabad to emphasize the refund cannot be denied because of particular situation as brought out in above decision due to which the assessee was unable to avail the higher education Cess on etc. This Court is of the view, the matter stands covered by the above decisions cited by the learned Advocate - the issue is no longer res integra, the appellants are entitled to cash refund. Appeal allowed.

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