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TMI Tax Updates - e-Newsletter June 14, 2022 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise Indian Laws Highlights / Catch Notes GST: Disbursal of refund amount - action of withholding of the petitioner/assessee’s claim of refund in question by the respondent CGST authority and not refunding the same to the petitioner in spite of the order of the Appellate authority dated 5th February, 2021, holding such claim in favour of the assessee company/petitioner, is arbitrary and unjustified and accordingly respondent CGST authorities concerned are directed to refund the amount as per the aforesaid order of the Appellate authority - HC Visit to Get Source GST: Validity of refund order - Failure to get Certificate of Export in time - the revisional authority passed an order assessing the tax liability of the appellant/writ petitioner - Tax authorities are to adjudicate upon the tax liability in accordance with law. The liability to taxation in respect of assessee should not escape assessee and likewise where the assessee was not in a position to show certain evidences which impacts the tax liability, reasonable opportunity should be afforded to such assessee to bring such evidences to the notice of the tax authorities. - HC Visit to Get Source Income Tax: Control of income-tax authorities - U/s 118 of IT ACT 1961 - Specifies the income-tax authority or authorities as subordinate to such other income-tax authority or authorities - reversion/deployment and re-designation of existing posts of Income-tax Authorities. Visit to Get Source Income Tax: Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961 - Higher TDS/TCS rate on the “Specified Persons” - “specified person” means a person who has not furnished the return of income (ITR) and aggregate of TDS/TCS in his case is 50K or more - Earlier notification modified. Visit to Get Source Income Tax: Validity of Ex-parte order without considering the merit of the case - principles of natural justice - Assessment u/s 153A - there was no representation on behalf of the assessee before the Ld. CIT (A). Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal based on the material available on record. In this situation, we are of the considered view that the when there is no representation on behalf of the assessee, the First Appellate Authority ought to have decided the issues on merits and in accordance with law instead of simply dismissing the appeal in limine. - AT Visit to Get Source Income Tax: On money receipts - additions based on the disclosure made before the Settlement Commission, however, the application was rejected by the commission - As a settled principle of law that where it is found that the assessee is charging on-money/premium in respect of booking of flats, the entire receipts on account of on-money/premium charged would not to be treated as the undisclosed income of the assessee but only net profit rate could be applied on unaccounted sales/receipt for the purpose of making addition. - Action of CIT(A) for addition of 30% of the gross amount of on-money receipt as unaccounted income sustained - AT Visit to Get Source Income Tax: Penalty imposed u/s 271AAA - in course of search and seizure operation when the assessee came forward and offered certain income to show his bonafide and ultimately followed it up by actually offering such income to tax, in our view, the assessee should be given the benefit of the exceptions provided under sub-section (2) of section 271AAA. In any case of the matter, it is a fact on record that the assessee is no more and has been substituted by his legal heir, in course of proceeding before us. Thus we delete the penalty imposed under section 271AAA of the Act. - AT Visit to Get Source Income Tax: Disallowance of deduction claimed u/s 80P - As it is clear from the byelaws and particularly primary objects and principle business of the assessee that the assessee is not doing any activity falling in the purview of primary agricultural credit society or a primary cooperative agricultural and rural development bank. The assessee is neither providing any agriculture credit facility nor providing any service of rural development bank. The other conditions as provided under Banking Regulation Act, 1949 for the primary Cooperative Bank are also satisfied in case of the assessee and hence, once the assessee falls in the definition of Cooperative Bank, the benefit of deduction under section 80P is not available to the assessee. - AT Visit to Get Source Income Tax: Interest expenses u/s 36(1)(iii) - Addition of interest component considering that there is no commercial expediency in lending to sister concerns - AR explained the accounting concept on the weighted average rate of interest considering the variability of interest rate range from @8.75% to 16% though this approach cannot be incorporated in the audited financial statements but the reasonableness and explanations to provide the loans to sister concerns cannot be over looked and the group transfers between one sister concern to another sister concern as per requirement of funds. - Additions deleted - AT Visit to Get Source Income Tax: Validity of Faceless Assessment Order - The impugned order does not indicate the reason for not granting such opportunity despite request for the same having been made within time and received by the respondent no.3. We find from the facts of the present case that failure to grant such opportunity to the petitioner has definitely caused prejudice to the petitioner. On the ground that the principles of natural justice have been violated, the impugned order of assessment is liable to be set aside. - HC Visit to Get Source Income Tax: Penalty u/s 271B - non-compliance of the provisions of sec. 44AB - delay in filing the tax audit report - The reasons are definitely such that they were beyond the control of the assessee and since the Income-tax Act is a welfare legislation the practical difficulties of the tax payers assessee and the bonafide nature has to be considered. - the assessee had even submitted the Doctor's Certificate under whose treatment the accountant was admitted in the hospital. The ld. CIT(A) should have considered all these facts in its proper perspective. - No penalty - AT Visit to Get Source Customs: Demand of Interest and penalty on amount already recovered towards duty foregone - advance licence scheme - There can be no doubt that such condition was not in existence at the time of import and the show cause notice is also conspicuously silent on the availability of section 28AB of Customs Act, 1962 for such charging. The licence and the exemption notification are silent on such contingent charging; the sole provision cited by lower authorities is paragraph 128 of Handbook of Procedures which can hardly be claimed as a statutory prescription of the Foreign Trade Policy. - the charging of interest and imposition of penalty is set aside - AT Visit to Get Source Customs: Confiscation of improperly imported consignment - import of natural rubber RSS3 - restriction on import - Private contracts are always subject to public policy and laws and if in terms of the changed law the performance under the contract becomes impossible, the contract becomes void. Further, in this case, although the contract was signed on 12.01.2016, subsequent actions in pursuance of the contract viz., issue of the commercial invoice on 25.01.2016 and dispatch of the goods by bill of lading dated 03.02.2016 took place well after the DGFT notification. Therefore, the appellant was clearly violated the law. - AT Visit to Get Source DGFT: Inclusion of agencies in Appendix 2G of Appendices and Aayat Niryat Forms of Foreign Trade Policy, 2015 20 in terms of Para 2.55 (d) of HBP 2015 20. - 2 Agencies are notified as PSIAs alongwith their approved equipments. Additional areas of operation in respect of Agency at Sl.No. 3 is notified for a period upto 27.12.2023 only. Visit to Get Source DGFT: Amendments in Chapter 5 of the Handbook of Procedures 2015-20, related to Export Promotion Capital Goods Scheme to reduce 'Compliance Burden' and enhance 'Ease of doing Business' Visit to Get Source Corporate Law: Companies (Appointment and Qualification of Directors) Second Amendment, Rules, 2022 - independent director - Any individual whose name has been removed from the databank , may apply for restoration of his name on payment of fees of one thousand rupees - online proficiency self-assessment test - Notification Visit to Get Source Corporate Law: Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2022. - Power of ROC to call for information, to ask for removal of defects if any, and re-submission of application. Visit to Get Source Corporate Law: Punishment for contempt of orders of this Tribunal - the Respondents had no right under the compromise memo not to comply with the undertaking to discharge its dues to ARCIL, or disregard the orders passed by this Tribunal. In any case, the Respondents are bound to comply with the directions/orders of this Tribunal. - The Respondent Nos. 2 to 5 have willfully and deliberately disobeyed the orders passed by this Tribunal - The Respondent Nos. 2 to 5 are directed to jointly and severally pay a sum of Rs. 5.5 Crore to the Petitioner together with interest at the rate of 18% p.a. till the date of payment, within a period of 30 days from the date of this order - Tri Visit to Get Source Indian Laws: Dishonor of Cheque - insufficiency of funds - acquittal of the accused - The proviso to Section 138 of the Act affords clear indication that ‘giving notice’ in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer at his correct address - this Court has no hesitation to hold that in connection with complaint case, demand notice was duly served upon the accused. - The order of acquittal passed in favour of the accused/respondent is liable to be set aside - HC Visit to Get Source IBC: Recovery of outstanding amounts - NPA - Forum Shopping - It is a settled law that the practice of Forum Shopping be condemned as it is an abuse of law. This case is beyond doubt falls under the category of Forum Shopping as it is a classic example of Forum Shopping when the Respondent Bank has approached one Court for relief but does not get the desired relief and then approached another court for the same or similar relief. - It is deemed fit and proper to remand back the matter to the Adjudicating Authority to give a patience hearing also to the Appellant and the Respondents including the RP and then to decide the matter - AT Visit to Get Source IBC: Suspension of initiation of Corporate Insolvency Resolution Process - time limitation - Section 10A of the IBC, 2016 - OTS is a mechanism available with the banks for years together to allow survival of Debtors and maintain cash flow for banks. However, repeated failure reflects either the intention of the Corporate Debtor/Appellant is not fair as in every OTS the settlement amount is going down and thereby reflecting that delay in CIRP will make the organization weaker and the object of the code for maximization of the value of assets of such persons shall not happen. - AT Visit to Get Source Service Tax: CENVAT Credit - Service Tax paid on deposit insurance service provided by Deposit Insurance and Credit Guarantee Corporation (DICGC) - the credit of the Service Tax paid on the basis of premium paid to DICGC is eligible. The impugned order disallowing the credit and confirming the demand, interest and penalty is set aside. - AT Visit to Get Source Central Excise: Extended period of limitation - demand of duty - it is settled legal principle as laid down by the Hon’ble Supreme Court in catena of decisions that something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before the assessee is saddled with any duty liability. Therefore, mere short payment of duty by the appellant is not sufficient in order to invoke the extended period. - AT Visit to Get Source Central Excise: Entitlement of interest on refund amount - relevant time for calculation of interest - In the present matter the time limit for payment of the refund amount to the Appellant by the Central Excise authorities (without interest) expired on 19-08-2005. Since, claimed amount was finally paid to the Appellant on 04.04.2016, the Appellant is entitled for the statutory interest from 20-8-2005 to the date when the refund was eventually paid, i.e., 04-4-2016. - AT Visit to Get Source Central Excise: Valuation of Excisable Goods - scrap generated during the course of manufacture of tractor parts on job work basis - The scrap generated during the process of manufacture has been cleared by them on payment of appropriate duty. The scrap is generated after the process of manufacture and the same is not includible in the assessable value of the goods cleared by the job worker to the principal manufacturer. - AT Visit to Get Source Central Excise: Reversal of CENVAT Credit - input services - generation of electricity which was captively used but some part thereof was also sold by them/exempt goods - common input - The department cannot compel the assessee to opt for a particular option. Further, w.e.f. 01.04.2008 Rule 6 (3A) has been introduced, according to which the assessee is eligible to reverse proportionate credit on inputs and input services used in manufacture of exempted goods. - AT Visit to Get Source TMI Short Notes Insolvency and Bankruptcy: Power of NCLT/NCLAT vis-à-vis writ jurisdiction of the high court. Indian Laws: Corporate Debtor includes a corporate guarantor even if Principal Borrower being an individual/sole proprietorship. Articles Doctrine of 'Substance over form' in lieu of Indirect taxes LOK ADALAT AWARD CANNOT BE REVERSED OR SET ASIDE Incentives received for market services within India cannot be considered as trade discount nor export service. Notifications GST - States 38/1/2017-Fin(R&C)(227)/394 - dated 7-6-2022 - Goa SGST Amendment in Notification No. 38/1/2017- Fin(R&C)(8) dated the 30th June, 2017 38/1/2017-Fin(R&C)(226)/393 - dated 7-6-2022 - Goa SGST Seeks to amend Notification No. 38/1/2017-Fin(R&C)(47)/429 dated the 31st January, 2018 38/1/2017-Fin(R&C)(02B/2022-Rate)/396 - dated 7-6-2022 - Goa SGST No refund shall be made of all such tax which has been collected, but which would not have been so collected, notification no.38/1/2017- Fin(R&C)(25/2019-Rate) dated 01-10-2019 38/1/2017-Fin(R&C)(02A/2022-Rate)/395 - dated 7-6-2022 - Goa SGST Exempts the supplies of unintended waste generated during the production of fish meal (falling under heading 2301), except for fish oil, during the period commencing from the 1st day of July, 2017 and ending with the 30th day of September, 2019 (both days inclusive) 6/2022-TNGST - dated 7-6-2022 - Tamil Nadu SGST Goods and Services Tax - Notification issued by Commissioner of State Tax, under T.N.G.S.T Act 2017 & T.N.G.S.T Rules 2017 5/2022-TNGST - dated 26-5-2022 - Tamil Nadu SGST Amendment in Notification No. 4 of 2020, dated 23.03.2020 4/2022-TNGST - dated 26-5-2022 - Tamil Nadu SGST Commissioner of State Tax, notifies the officers Circulars / Instructions / Orders GST - States - 10/2022 (PP2/GST-15/20/2022) - dated 7-6-2022 TNGST Act, 2017- Identification and prevention of bill traders in the newly applied cases — certain instructions-issued News Intervention by Commerce & Industry Minister Shri PiyushGoyalat the G-33 Ministerial Meeting at the 12th WTO Ministerial Conference held in Geneva IICA celebrates Azadi Ka Amrit Mahotsav with exhibition of ESG-CSR “Benchmarking the best practices” Income Tax Department aims to spread tax literacy among children through games, puzzles and comics Case Laws: GST 2022 (6) TMI 553 Disbursal of refund amount - Revenue and assessee both have filed writ petition - non-consideration of definition of non-taxable supply as defined in the CGST Act, 2017 or not - whether the CGST authorities concerned have ignored the expression mutatis mutandis appearing in Section 2 (2) of Cess Act and have not given any justification as to why domestic supply of finished goods which are subject to nil rate of Compensation Cess cannot be construed as exempted supplies. - HELD THAT:- From legislative scheme of the Cess Act it appears that the cess is an impost to counterbalance the loss of revenue of the States on account of subsumption of various taxes commencement of the GST regime. Hence, cess is a levy which partakes the character of all the levies, which now are subsumed in GST. Cess is akin to the components of GST, which is a constitutionally approved amalgam of State taxes, which existed prior to the commencement of the GST regime. The goods and services Tax Compensation Cess Rules, 2017 were also framed and made effective from 1st July, 2017 wherein the Central Goods and Services Tax Rules, 2017 were adapted. There are no reason to interfere with the impugned order dated 5th February, 2021, for the reason that Appellate authority while passing the impugned order has neither committed any procedural irregularity nor any jurisdictional error nor any violation of principles of natural justice and the impugned order is based on cogent reasons and is speaking one and so far as findings of fact is concerned, in exercise of constitutional writ jurisdiction under Article 226 of the Constitution, this Writ Court is not inclined to act as an Appellate authority and differ with the same and substitute the said findings of the Appellate authority. Action of withholding of the petitioner/assessee s claim of refund in question by the respondent CGST authority and not refunding the same to the petitioner in spite of the order of the Appellate authority dated 5th February, 2021, holding such claim in favour of the assessee company/petitioner, is arbitrary and unjustified and accordingly respondent CGST authorities concerned are directed to refund the amount as per the aforesaid order of the Appellate authority Petition disposed off. 2022 (6) TMI 552 Validity of refund order - Failure to get Certificate of Export in time - the revisional authority passed an order assessing the tax liability of the appellant/writ petitioner - undue benefit of circumstances which are beyond the control of the appellant/writ petitioner - HELD THAT:- The appellant/writ petitioner received the document dated August 25, 2021 which impacts the tax liability of the appellant/writ petitioner. The appellant/writ petitioner is not at all fault in not receiving the document dated August 25, 2021 that the appellant/writ petitioner seeks to place before the revisional authority. It is not a case that the appellant/writ petitioner was in possession of certain documents which the appellant/writ petitioner did not place before the revisional authority. Rather, it is a case where the appellant/writ petitioner received a document subsequent to the order of the revisional authority. Tax authorities are to adjudicate upon the tax liability in accordance with law. The liability to taxation in respect of assessee should not escape assessee and likewise where the assessee was not in a position to show certain evidences which impacts the tax liability, reasonable opportunity should be afforded to such assessee to bring such evidences to the notice of the tax authorities. Another opportunity should be granted to the appellant/writ petitioner to place the document dated August 25, 2021 before the revisional authority - the appellant/writ petitioner is at liberty to approach the revisional authority within fortnight from date with regard to the order of assessment dated May 3, 2021. If so approached, the revisional authority is requested to reconsider its order passed on refund taking into account the document dated August 25, 2021 in accordance with law. Application disposed off. Income Tax 2022 (6) TMI 572 Reopening of assessment u/s 147 - Proceedings initiated under Section 148A against the individual PAN number - deposit of the cash in the HUF account - HELD THAT:- As claim of the petitioner is that he has submitted the documentary evidence showing the cash transaction, the deposit of the cash in the HUF account. However, the wrong entry was made in the account by giving the personal PAN number. This was explained in the explanation and the same was not considered by the respondent. The contention of the petitioner is that he has submitted his explanation along with the documentary evidence. However, the respondent stated in the impugned order that documentary evidence was not furnished. It is a specific contention of the petitioner is that, sufficient time was not granted to him before passing this order. Therefore, this Court remits the case back to the authorities with the following direction: (i) The petitioner shall appear before the authority along with the documentary evidence. (ii) The respondents shall grant personal hearing and consider the explanation and the documents that would be filed by the petitioner. (iii) The respondent is directed to consider the specific stand of the petitioner that individual PAN number was granted while opening the HUF account . The impugned order is set aside and the respondents are directed to complete the said exercise and pass fresh order within a period of twelve (12) weeks from the date of receipt of a copy of this order. 2022 (6) TMI 571 Reopening of assessment u/s 148 - contravention of the amended Section 148-A - HELD THAT:- Both the petitioner and learned Standing Counsel for the respondents state that the contentious issues relating to the provisions of reassessment were laid to rest in the recent Judgment of the Hon'ble Supreme Court in Union of India -vs- Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT ] In particular, it is stated that the amended procedure is made applicable both in respect of notices issued prior to 01.04.2021 and subsequent thereto. In view of the settled legal position, the impugned communication is quashed and the matter is remanded for further proceedings in accordance with paragraphs 26 and 27 of the Judgment in Union of India -vs- Ashish Agarwal cited supra. 2022 (6) TMI 570 Rent receipts - Correct head of income - two agreements of leave license and service charges which were entered into by the assessee - income under the head income from house property or income from other sources - HELD THAT:- The facilities are incidental and ancillary to the predominate nature of transaction being letting out of the premises. In case of CIT vs National Storage Private Limited [ 1962 (7) TMI 44 - BOMBAY HIGH COURT] has held that where house property is given on leave and licence basis for earning income therefrom, the true character of the income derived is income from house property and the said character is not changed and the income doesn t become income from trade or business where the hiring is inclusive of certain additional services such as heating, cleaning, lighting or sanitation where are relatively insignificant and only incidental to the use and occupation of tenements. We find that the dicta laid down by the Hon ble Jurisdictional High Court squarely applies in the facts of the present case and respectfully following the same, amount received as services charges have to be assessed under the head Income from house property . The matter is thus decided in favour of the assessee and the grounds of appeal are disposed off accordingly. Disallowance of interest paid to Saraswat Co opertative Bank - Addition holding that the loan taken from the bank is not used towards house property and that the same was obtained to be utilized for investment in sponge iron project and the said findings has since been confirmed by the ld.CIT(A) - HELD THAT:- As perused the material available on record. In absence of any demonstrative evidence on record that the loan amount was utilized for repayment of earlier loans obtained for the purpose of housing, deduction towards interest cannot be allowed while computing the income under the head income from house property . However, given the undisputed fact that the assessee has taken the loan for the purposes of his business and has incurred the interest liability the same is directed to be allowed while computing the income under the head Profits and Gains of Business and Profession . In the result, the ground of appeal is allowed. Disallowance being 15% of the expenditure claimed on account of depreciation on car, insurance, interest on car loan and conveyance holding it to be personal expenses - HELD THAT:- It is an admitted position that the vehicle has been used for personal purposes of the assessee and has thus not been used exclusively for the business purposes and therefore, the AO is well within his right to determine appropriate percentage of whole of the vehicle expenses including depreciation, insurance and interest on car loan as relatable to personal and non-business purposes and restrict the claim as relatable to business purposes. In the instant case, the AO has determined 15% as relatable to personal and non-business purposes which we found reasonable and in light of the same, we see no justifiable basis to interfere with the findings of the ld CIT(A) and the same is hereby confirmed and the ground so taken by the assessee is dismissed. Addition on the basis of TDS certificate mentioning interest income received from UCO Bank - HELD THAT:- AO has returned a finding that the assessee has reported interest income as against interest in TDS certificate whereas the whole of TDS credit as shown in the TDS certificate of Rs 4440/- has been claimed by the assessee. CIT(A) has returned a finding that the contention of the assessee that he has actually received less interest income is not supported by any bank statement or any other documentary evidence. Further, during the course of hearing, nothing has been brought on record in terms of quantum of deposit, tenure and rate of interest basis which the amount of interest income can be reasonably determined. In the result, we see no justifiable basis to interfere with the findings of the ld CIT(A) and the same is hereby confirmed and the ground so taken by the assessee is dismissed. Addition received as advance against agreement of sale of land at village Chhatarpur, which was found credited in the capital account of the assessee - HELD THAT:- CIT(A) has returned a finding that neither during the assessment proceedings nor during the appellate proceedings, the assessee has furnished any supporting evidence or documentation in support of his contention that the amount so received by him is on account of forfeiture of amount in relation to cancellation of transaction of property. Nothing has been brought on record during the present proceedings to controvert the said findings of the ld CIT(A). It is therefore a case where certain contentions regarding nature and source of transaction have been raised by the assessee which are however not supported by any documentation and in such a scenario, we do not see any infirmity in the action of the AO and in action of the ld CIT(A) in confirming the same. In light of the same, we do not see any justifiable basis to interfere with the findings of the ld CIT(A) and the same are hereby confirmed and the ground of appeal taken by the assessee is dismissed. Addition u/s 68 - HELD THAT:- Regarding transactions with Umesh Gupta and Dilip Thakre, where the assessee has filed the necessary confirmations, a fact not disputed by the lower authorities, the addition is hereby directed to be deleted and in respect of other transactions, we find that the assessee has clearly failed to discharge the initial onus cast on him to satisfactory explain the said transactions with appropriate documentation, the additions are hereby confirmed. In the result, the additions are hereby deleted and remaining additions of Rs 1,00,000/- are sustained. In the result, the ground of appeal is partly allowed. Loan received from mother - It is an admitted fact as emerging from the records that the mother of the assessee has confirmed before the same Assessing officer in her own assessment proceedings that she has given the amount of Rs 1 lacs to the assessee and in her hands as well, the addition of the said amount has already been made on substantive basis. In such circumstances, we agree with the contention of the ld AR that the addition in the hands of the assessee does not lie and if at all, any addition has to be made, the same can be made in the hands of the mother of the assessee where the matter is currently pending before the Assessing officer in the set-aside proceedings and which the Assessing officer is free to decide as per law. In the result, the addition so made is directed to be deleted and the ground of appeal is allowed. 2022 (6) TMI 569 Validity of Ex-parte order dismissing the appeal without considering the merit of the case - principles of natural justice - Assessment u/s 153A - Assessee has declared an additional income in response to the notice u/s. 153A - addition as undisclosed income and as unexplained u/s. 68 - HELD THAT:- On examining the facts of the case, we find that the Ld. CIT(A) had posted the case on several occasions. However, there was no representation on behalf of the assessee before the Ld. CIT (A). Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal based on the material available on record. In this situation, we are of the considered view that the when there is no representation on behalf of the assessee, the First Appellate Authority ought to have decided the issues on merits and in accordance with law instead of simply dismissing the appeal in limine. Therefore, following the principles of natural justice as well as considering the prayer of the Ld. AR and also the issues involved in the appeal, in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT(A) in the proceedings failing which the Ld. CIT(A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on record. 2022 (6) TMI 568 Assessment of trust - disallowance in the expenses incurred in organizing the golf tournament - HELD THAT:- We find that the assessee is a reputed management institute existing solely for the purpose of imparting education in the field of management and approval u/s 10(23C)(vi) of the Act has been granted and is in force. The golf tournament was organized during the year. Various corporates were invited and the sponsorship was taken. Total expenditure incurred for organizing this tournament amounting to Rs. 34,31,858/-. Ld. CIT(A) has confirmed the disallowance made by ld. AO at Rs. 34,31,858/-. So far as organizing golf tournament is concerned, the said event cannot be said to be a part of the educational activity for which the Trust is established. Therefore, so far as golf tournament is concerned the said activity is not educational activity. As regards the quantum of disallowance of golf tournament expenses is concerned, we find that the golf tournament is a separate activity carried out by the assessee Trust for which it received sponsorship of Rs. 30,17,250/- from various corporates and the same is duly reflected in the credit side of income and expenditure account of the assessee Trust and this fact has been well taken note of by the ld. AO also in the assessment order. Therefore, the excess expenditure incurred by the assessee Trust on the said golf tournament amounts to Rs. 4,14,608/- [sponsorship of Rs. 30,17,250/- (-) golf tournament expenditure of Rs. 34,31,858/-]. Therefore, only a sum of Rs. 4,14,608/- can be considered as the amount not spent for the objects of the Trust and we, therefore, sustain the disallowance only to this extent. Thus, the sole issue raised by the assessee in ground no. 1 to 4 is partly allowed. 2022 (6) TMI 567 Capital gain u/s 45 - long term capital gains in the hands of the assessee - Addition invoking provisions of section 50C - HELD THAT:- There is no capital asset as on the date of execution of conveyance deed on 31.03.2005 and there is no transfer of any capital asset since the assessee does not hold any legal title to the land as on the date of execution of conveyance deed on 31.03.2005 and the transaction is null and void on the basis of order of the District Judge, Warora dated 29.02.2020. As claimed that order of the Collector, Chandapur dated 27.04.1992, which was under challenge at the time of assessement and first appellate proceedings, cancelling the auction has been set-aside and the Collector, Chandapur has been asked to decide the matter afresh after providing reasonable opportunity to the assessee. We find that this issue is fundamental and germane to decide the present matter and given that the order of the District Judge dated 29.02.2020 has been passed subsequent to passing of the impugned order dated 11.12.2012, therefore, we admit the additional ground of appeal so raised before us and to consider the order of the District Judge, in the interest of substantial justice, and the ground of appeal is set-aside to the file of the Assessing officer to decide the same taking into consideration the order of District Judge dated 29.02.2020 as well as proceedings before the Collector, Chandapur and any other documentation/information as so required after providing reasonable opportunity to the assessee. Other contentions raised by the assessee in support of other grounds of appeal are left open and not adjudicated upon. Since we have set-aside the aforesaid ground of appeal, other grounds of appeal are also set-aside to the file of the AO to examine the same afresh as per law taking after providing reasonable opportunity to the assessee and the assessee is at liberty to raise the contentions as so raised before us and as so advised. Appeal of the assessee is allowed for statistical purposes. 2022 (6) TMI 566 Addition u/s 68 - Share Capital Security Premium' received by the assessee as unexplained credits' - HELD THAT:- We observed that the company has been found by fresh IIT graduates as a startup company looking to the future potential in online gaming business. The Assessing Officer has given categorically finding that the source of fund was not doubted. CIT(A) has also considered the decision in the case of Major Metal Ltd [ 2012 (4) TMI 227 - BOMBAY HIGH COURT] wherein the addition was sustained on the ground that genuineness of the transaction was not proved and creditworthiness of the creditor was also not proved whereas, in the present case the Assessing Officer has accepted the nature and source of funds. In our opinion, when the source of fund is not doubted by the Assessing Officer then he is not justified in making addition in terms of section 68 of the Act. Any addition for receipt of share premium having value more than the market value of the shares could be made in terms of section 56(2) of the Act and not u/s 68 of the Act. - Decided in favour of assessee. 2022 (6) TMI 565 Addition u/s 68 - unexplained cash credit - Unexplained LTCG on share transactions - HELD THAT:- As at the time of sale of shares, the price has increased astronomically by almost 1945%. Further, he found that as per investigation conducted by Investigation Wing of the department at various places, it was found that this company is a penny stock company. Thus, based on such information available on record, he called upon the assessee to explain, why the long term capital gain offered should not be treated as unexplained cash credit under section 68 - Though, the assessee offered some explanation to claim that the share transaction was genuine, however, the AO was unconvinced. Ultimately, he proceeded to complete the assessment by treating the long term capital gain as unexplained cash credit under section 68 of the Act. Further, he added back an amount as commission paid to avail the bogus long term capital gain. The additions so made by the AO were also confirmed by learned Commissioner (Appeals). On a careful reading of the orders passed by the departmental authorities, it is observed, as per the investigation conducted in relation to the shares of the company, on which, the assessee offered long term capital gain, it was found that it is a penny stock company. It was also found that due to price manipulation and rigging, there was astronomical increase in the price of the shares. As it appears from the facts on record, the assessee has not furnished any strong evidence before the departmental authorities to rebut the adverse materials brought on record by the department. Even before me, the factual position remains unaltered as the assessee neither appeared nor placed contrary materials for enabling me to disturb the finding of the departmental authorities. - Decided against assessee. 2022 (6) TMI 564 On money receipts - additions based on the disclosure made before the Settlement Commission, however, the application was rejected by the commission - CIT(A) deleted the additions in excess of gross profit @30% on the On-money receipt - Allegation that the assessee miserably failed to produce documents w.r.t. expenses incurred against the above receipts of On-money - HELD THAT:- Assessee has failed to point out the deficiency of Revenue and the working of undisclosed income. Neither it was claimed to be excessive as because the assessee was also not been able to give any proper working of undisclosed/excess income earned by it from various projects undertaken by it. The assessee has further failed to give any factual details so as to substantiate that on-money was not charged and received by it on booking/sale of units in its various project. Neither the actual figure of on-money receipt during the year under consideration from customers has been placed before the authorities below by the appellant. On this premise we do not find any irregularities and/or wrong in not interfering by the CIT(A) with the computation as on-money receipt by the appellant during the year under consideration on booking to sale of units in the project Narayan Shrushti made by the Ld. AO. So far as the other aspect of addition on gross amount of on-money receipt or gross/net profit related to such on-money receipt to be treated as unaccounted/undisclosed income of the appellant is concerned we find that the assessee made a request before the First Appellate Authority for restricting addition to 15% of the alleged on-money being the rate of net profit. As a settled principle of law that where it is found that the assessee is charging on-money/premium in respect of booking of flats, the entire receipts on account of on-money/premium charged would not to be treated as the undisclosed income of the assessee but only net profit rate could be applied on unaccounted sales/receipt for the purpose of making addition. It is also the ratio decided by the Jurisdictional High Court in the case of CIT vs. President Industries [ 1999 (4) TMI 8 - GUJARAT HIGH COURT] as also relied upon by the Ld. A.R. before us. It is a practice of the real estate market that cash over and above the consideration in cheques are collected from the customers but the developers have to incur various unaccounted expenses in regard to the procurement of land and approval of the projects by various authorities too and therefore, the estimated profit of on-money/premium amount collected from the customers is to be brought to tax instead of adding the gross amount of on-money/premium to the total income. In fact, the Ld. CIT(A) also carefully took into consideration this particular aspect of the matter and profit at 30% of the gross amount of on-money receipt has been treated as unaccounted income by him and the same was rightly added in the computation of total income of the assessee which in our considered opinion is just and proper and also at par with the ratio laid down by the Jurisdictional High Court as discussed hereinabove. We do not find any ambiguity in such order passed by the CIT(A) so as to warrant interference. Hence, the order passed by the Ld. CIT(A) is hereby upheld. The appeal filed by the Revenue is, therefore, found to be devoid of any merit and thus, dismissed. 2022 (6) TMI 563 Penalty imposed u/s 271AAA - cash found in search as well as the unexplained jewellery - search and seizure operation un/s 132 was conducted on the assessee, wherein, information was found that the assessee was operating a foreign bank account at HSBC Geneva - cash found in search seized - as per revenue the assessee would not have surrendered the cash found had search and seizure operation not taken place - HELD THAT:- Penalty under section 271AAA(1) cannot be imposed in a case where the assessee has offered the undisclosed income in the statement recorded under section 132(4) of the Act, specifying the manner in which such income has been derived and if the assessee pays the tax along with interest of such income. In the facts of the present case, undisputedly, the assessee has offered the cash found as income in the statement recorded under section 132(4) of the Act. It is also a fact that the assessee has paid the tax on such income. The only condition, according to the department, which has not been fulfilled is the assessee has not specified the manner in which such income has been derived. On a perusal of the statement recorded under section 132(4) of the Act, we have observed that in response to a question asked by the authority concerned, the assessee came forward to offer the money found in the bank account as well as in cash as income. It is observed, the authority recording statement did not pose any specific query to the assessee to explain the mode and manner in which such undisclosed income was derived. Thus, in course of search and seizure operation when the assessee came forward and offered certain income to show his bonafide and ultimately followed it up by actually offering such income to tax, in our view, the assessee should be given the benefit of the exceptions provided under sub-section (2) of section 271AAA. In any case of the matter, it is a fact on record that the assessee is no more and has been substituted by his legal heir, in course of proceeding before us. Thus we delete the penalty imposed under section 271AAA of the Act. Grounds of assessee are allowed. 2022 (6) TMI 562 Deduction u/s 80P(2)(a)(iii) with respect to gross commission receipts - Denial of deduction assessee is not engaged in marketing of agricultural produce grown by its members, and is merely a facilitator / agent for ensuring timely payments to the farmers for the purchase of sugar cane by sugar mills for which it is entitled to receive commission at a specified rate on every purchase made by the sugar mills - CIT(A) allowed the appeal filed by the assessee and held that the assessee is into marketing of sugar cane grown by farmers who are its member, and the assessee is entitled for deduction u/s 80P(2)(a)(iii) - HELD THAT:- As observed that there are completely contrary finding recorded by ld. CIT(A) in its appellate order, as opposed to finding of fact recorded by AO, firstly that payments to farmers are made by the assessee society, while the fact as recorded by AO in its assessement order is that the sugar mills are making direct payments to farmers for sugar cane procured from the farmers, while the assessee is getting commission payments from sugar mill. The second contrary finding recorded by ld. CIT(A) as opposed to finding of fact recorded by AO, is that it is engaged in the aspect of marketing of sugar cane right from sowing of the crop and until payment is realized by its member, but the facts recorded by AO clearly stipulates in para 4.1 (i) that the farmers who grow sugar cane , obtain membership of the assessee when the season comes for crushing of the sugar cane, the members , who desires to sell. The third contrary finding of fact recorded by ld. CIT(A) in its appellate order as opposed to finding of fact recorded by AO, is that the assessee supplies sugar cane grown by its member to the sugar mills and also realizes sugarcane prices from sugar mills, but the finding of fact recorded by AO in para 4.1(ii) is that the farmers who are its members take their sugar cane to the sugar mills named in parchi where weight of the sugar cane is taken by sugar mills authorities but under inspection supervision of the assessee s staff and then the delivery of the sugar cane is accepted by sugar mill as also the AO has recoded finding of fact at page 7 that farmers sell their produce directly to the sugar mills, and for that the assessee is paid commission. Thus, it could be seen that completely contrary findings of fact are recorded by ld. CIT(A) while adjudicating appeal in favour of the appellant, which findings of fact is totally opposite/contrary to what was recorded by AO in its assessment order , thus the conclusion arrived at by ld. CIT(A) cannot be relied upon as there are no supportive evidences referred to by ld. CIT(A) in arriving at totally contrary/opposite findings of facts as opposed to finding of facts recorded by AO in its assessment. These are factual matters and correct finding of fact based on evidence is required to adjudicate this appeal,as it goes to the root of the matter for adjudicating this appeal. We are inclined to set aside appellate order passed by ld. CIT(A) and restore this issue to the file of ld. CIT(A) for denovo adjudication of the assessee appeal. Needless to say that powers of ld. CIT(A) are co-terminus with powers of the AO. The ld. CIT(A) is directed to record complete and correct facts based on evidence, of the complete chain of activities / processes undertaken by assessee with respect of sale of sugarcane to sugar mills by farmers, including chain of activities/ processes undertaken by farmers/ sugarmills in this entire process , from beginning to end, before arriving at its decision in set aside proceedings . This appeal filed by Revenue is allowed for statistical purposes 2022 (6) TMI 561 Disallowance of deduction claimed u/s 80P - assessee is a primary Cooperative Bank / Credit Society established under Indian Railway Establishment Manual with the object to increase habit of thrift among its member who are employees of Indian Railways - AO observed that the assessee is neither a primary agriculture cooperative society nor a primary cooperative agriculture and rural development bank but only a Cooperative Bank as per meaning assigned in para v of the Banking Regulation Act, 1949 as such the deduction under section 80P of the Act is not available to the assessee - assessee contended that the assessee Cooperative Bank was formed only for the employees of the Indian Railway and it is being run by the employees of N.E. E.C. Railway employees. HELD THAT:- A Cooperative Society qualifies for exemption under section 80P(1) subject to the income from the activity or business activity as provided under sub section (2) of section 80P. The eligibility of the society to claim the exemption under section 80P does not mean that if entire income is exempted as the income from the business activities as provided under various Clause of sub section (2) are only exempted from tax. Therefore, if a society satisfy the condition as provided under sub section (2) under any Clause or sub Clause of Sub Section (2) the deduction is available to it in respect to the income which falls under any of the head provided under this sub section and other income which does not fall in the ambit of sub section (2) would effect the eligibility of the assessee society to claim the deduction so far as the it falls in the ambit of sub section (2). After the insertion of sub section (4) by Finance Act, 2006, deduction under section 80P(1) and (2) shall not be admissible to a Cooperative Bank other than a primary agriculture credit society or a primary Cooperative Agriculture and Rural Development Bank. Deduction u/s 80P shall not be allowable to a Cooperative Bank other than the primary agricultural credit society or a primary co-operative agricultural and rural development bank. The definition of Cooperative Bank is adopted as provided in part V of Banking Regulation Act, 1949 therefore, there is no ambiguity on the point that a Cooperative Bank which is functioning at par with commercial Bank as per the license issued by the Reserve Bank of India it is not eligible for deduction under section 80P of the Income Tax Act because it falls in the mischief of sub section 4 of section 80P. If the definition of Cooperative Bank as provided in Part (V) of Banking Regulation Act, 1949 is taken into consideration then the assessee being a Multi-State Primary Cooperative Bank and not a primary agricultural credit society or a primary co-operative agricultural and rural development bank will fall within the mischief of sub section 4 of section 80P. As it is clear from the byelaws and particularly primary objects and principle business of the assessee that the assessee is not doing any activity falling in the purview of primary agricultural credit society or a primary cooperative agricultural and rural development bank. The assessee is neither providing any agriculture credit facility nor providing any service of rural development bank. The other conditions as provided under Banking Regulation Act, 1949 for the primary Cooperative Bank are also satisfied in case of the assessee and hence, once the assessee falls in the definition of Cooperative Bank, the benefit of deduction under section 80P is not available to the assessee. The decisions relied upon by the assessee are not on the point of Cooperative Bank not eligible for deduction under section 80P but the issue and dispute in those cases were either regarding exemption of interest income under section 80P(2)(a)(i) or the dispute of eligibility of the Cooperative Society for deduction under section 80P but prior to the insertion of sub section (4) by Finance Act, 2006 w.e.f. assessment year 2007-08. Those decisions would not help the case of the assessee. Section 80P is a benevolent provision enacted by the Parliament to increase and promote the growth of cooperative sector in the country. Once a cooperative society is entitled to avail the deduction under section 80P, the amount of profit and gain of business that are attributable to anyone or more activities mentioned in sub section (2) of section 80P shall not be part of the total income of the society. Sub Section 4 is in the nature of proviso to the main provisions contained in section 80P (1) and (2) which specifically excludes cooperative banks; which means a cooperative society having a license from RBI to do a banking business would fall within the mischief of Sub Section (4) section 80(4) and consequently the deduction under section 80P (1) and (2) is not available. Hence, in the facts and circumstances of the case when the assessee is a cooperative society bank as defined as per part V of the Banking Regulation Act, 1949, it is not eligible for deduction under section 80P. - Decided against assessee. 2022 (6) TMI 560 Delayed Employees' share towards contribution to ESI and PF - amount which the assessee had deposited beyond the due date as prescribed under the relevant acts but admittedly before the due date of filing of returns under the Income Tax Act for AY 2018-19 - HELD THAT:- The issue involved in these files is duly covered in favour of the assessee by the order S.K. Shoes and Boots Private Limited [ 2022 (3) TMI 476 - ITAT LUCKNOW] and in the case of Sangrila Nutri Food Products [ 2022 (3) TMI 473 - ITAT LUCKNOW] - Decided in favour of assessee. 2022 (6) TMI 559 Interest expenses u/s 36(1)(iii) - Addition of interest component considering that there is no commercial expediency in lending to sister concerns - as per AO assessee has obtained loans at higher rate of interest and the same was provided to the sister concerns at lower rates - HELD THAT:- The main objects of the assessee s business is real estate development and construction activities. The assessee has obtained these loans for the purpose of providing advances to the sister concerns, where the construction projects are in progress and the assessee is able to substantiate the commercial expediency as the main objects of the assessee is not to earn interest, but to engage in real estate and construction activities. Therefore the action of the CIT(A) that there is no commercial expediency is not tenable and is not supported with any findings except relying on the facts that the higher rate of interest has been paid on loans borrowed. AR explained the accounting concept on the weighted average rate of interest considering the variability of interest rate range from @8.75% to 16% though this approach cannot be incorporated in the audited financial statements but the reasonableness and explanations to provide the loans to sister concerns cannot be over looked and the group transfers between one sister concern to another sister concern as per requirement of funds. The Ld.AR submissions are realistic and duly supported by the material information and is appreciated. Accordingly, we do not find merits in the findings of the CIT(A) and we rely on the judicial decisions and commercial expediency explained by the Ld.AR that the assessee s business activities as a going concern and the construction projects are in progress. Any delay in project construction activities due to financial crunch will increase the overheads of the projects. Accordingly, we set aside the order of CIT(A) on this disputed issue and direct the Assessing officer to delete the addition and allow the grounds of appeal of the assessee. 2022 (6) TMI 551 Validity of Faceless Assessment Order - breach of principles of natural justice - request for personal hearing denied - HELD THAT:- As in response to the show cause notice dated 22.04.2021, the petitioner had on 23.04.2021 sought an opportunity for grant of personal hearing. Despite receipt of this request by the respondent no.3, the impugned order has been passed after a period of almost two months but without granting any such opportunity. The impugned order does not indicate the reason for not granting such opportunity despite request for the same having been made within time and received by the respondent no.3. We find from the facts of the present case that failure to grant such opportunity to the petitioner has definitely caused prejudice to the petitioner. On the ground that the principles of natural justice have been violated, the impugned order of assessment is liable to be set aside. Accordingly for the aforesaid reasons, the assessment order dated 19.06.2021 is set aside. Considering the facts of the present case, the respondent no.3 shall grant an opportunity of personal hearing to the petitioner through video conferencing before it proceeds further in terms of the show cause notice. 2022 (6) TMI 550 Addition of commission income for providing accommodation entries - Double addition - HELD THAT:- We find that the very same sum has been already added in the hands of Shri Bhanwarlal Jain on substantive basis, on which fact, there is absolutely no dispute. We find that in the assessments framed in the hands of the assessee herein pursuant to search for Asst Years 2008-09 to 2014-15, similar protective addition on account of commission income for providing accommodation entries was deleted by the ld. CIT(A) in the hands of the assessee and the revenue did not even challenge the same further before this tribunal. We further find that the ld. AO had emphatically mentioned that all the activities during the previous year relevant to the block period are identical to that of the assessee s activities during the previous year under consideration. While this is so, there is no reason for the ld. CIT(A) to take a divergent stand of confirming the protective addition of commission income in the hands of the assessee herein for the Asst Year 2015-16. Moreover, for the same block period pertaining to Asst Years 2008-09 to 2014-15, we find that this tribunal in ITA No. 2669/Mum/2018 dated 6.8.2021 had estimated the commission income in the hands of Shri Bhanwarlal Jain on substantive basis. Hence consistently, the substantive addition has always been made only in the hands of Shri Bhanwarlal Jain for this commission income. Hence there could be no confusion that would lie in the mind of the revenue, as to in whose hands this commission income should be assessed, in order to justify its protective addition. Hence we direct the ld. AO to delete the protective addition of commission income made in the hands of the assessee herein for the Asst Year 2015-16. Addition of Gross profit made on account of alleged low gross profit declared by the assessee - HELD THAT:- AO had estimated the gross profit of the assessee by taking a view without prejudice to the addition of alleged undisclosed commission income. This addition was solely made on the basis that the assessee had shown less gross profit as compared to the other alleged concerns of Shri Bhanwarlal Jain. We find that the very same issue was subject matter of adjudication by this tribunal in the case of Rose Impex [ 2022 (3) TMI 1384 - ITAT MUMBAI] - Thus we delete the addition made on account of Gross profit of Rs 4,01,58,089/- in the hands of the assessee herein for the Asst Year 2015-16. Addition towards commission income being 0.075% of total sales turnover was converted from protective to substantive basis by the ld. CIT(A) - HELD THAT:- We find that the ld. AO had sought to add commission income @ 0.075% on this turnover on the premise that no addition of commission income has been made for accommodation entry of sales. We find from the perusal of the assessment order that the ld. AO had already estimated the commission income on this sales figure also which is very much evident from the table prepared by the ld. AO in para 12 of his order. Commission on bogus sales is already added by the ld. AO and the said figure is duly included in the total commission income figure made by the ld. AO on protective basis. Hence adding the very same sum again would only result in double addition and hence directed to be deleted herein. CIT(A) had sought to make this addition on substantive basis. In our considered opinion, conversion of protective addition into substantive addition would tantamount to enhancement of income made by the ld. CIT(A), which could be done only after issuance of enhancement notice to the assessee. Admittedly, no such enhancement notice in terms of section 251(2) of the Act has been given to the assessee by the ld. CIT(A). On this count itself, this addition made on substantive basis in the sum towards commission on bogus sales is deleted. In any case, the substantive addition of commission income has already been made in the hands of Shri Bhanwarlal Jain and the similar addition was also confirmed in his hands during the block period also. Hence there cannot be any further addition in the hands of the assessee herein even on protective basis. Accordingly, the same is deleted. 2022 (6) TMI 549 Addition u/s 37 (1) - expenditure on business promotion, car expenses - expenses paid to the partners for expenses - expenditure on lunch and entertainment of the clients - HELD THAT:- Facts are apparent that a sum of ₹ 334,403/ was made to the partners for expenses but only a sum of ₹ 187,042/ has been claimed in expenses in the account of the partnership and therefore the disallowance at the most could be restricted to ₹ 187,042/ . Further, the fact also shows that the assessee has incurred these expenditure on lunch and entertainment of the clients. Some of the expenditure is also in the nature of personal expenditure. Therefore to meet the interest of justice the disallowances restricted to the 50% of the sum of ₹ 187,042/ and the balance disallowances deleted. Thus, assessing officer is directed to restrict the disallowance to ₹ 93,600/ . Accordingly, ground number 1 of the appeal is partly allowed. Addition on account of undisclosed contract receipt for the work undertaken of club link Ballard - HELD THAT:- There is no evidence that such work has been carried out by the assessee. There is no confirmation from Club Link, client of the assessee. It may not be the concern of the assessee that who has done the work but the documents seized clearly shows that it is merely a quotation. Based on the quotation, it cannot be said that assessee has executed this work and has received the consideration, which has not been accounted for in the books of assessee, without any corroborative evidence. Further, there is a letter dated 21/2/2003, which clearly says that the above assessee firm has been dissolved due to some personal reasons and now a new entity, Orion Enterprise will carry out the work if allotted. The assessee also requested for a new purchase order in the name of new entity. In the same letter, it was also stated that sketch is also sent for approval. Therefore, it is apparent that the work has not been done by the assessee. There is no inquiry whether any such new quotation was given to new entity or not. Both these letter and quotation were also seized during the course of search. When both the documents are seized during the course of search they could not be interpreted in the divergent manner, that assessee has earned unaccounted income by ignoring the other communication. In view of this, we do not find any reason to sustain the addition hence deleted. With respect to the other sums, no explanation is forthcoming which convinces us to deviate from the orders of the lower authorities, hence the same are confirmed. Accordingly, ground number 2 of the appeal is partly allowed Addition based on one document seized being the profit and loss account of the assessee for the relevant year - actual profit of the assessee is more as against the income declared in the return of income - HELD THAT:- Searched to place on 30/05/2008 and the profit and loss account is related to year ended on 31st of March 2003. The seized paper also does not have any date. Therefore, it cannot be asserted that the seized documents as well as the audited accounts are prepared on the same date. There may be certain expenditure, which are not incorporated in the seized profit and loss account however they have been incurred subsequently. In view of this, there is no reason to put more credence on the seized document. Further the findings of the learned and CIT A that assessee firm was dissolved during the year and therefore the profits would have been higher. Had that been the fact then higher expenditure would have been taken into account at the time of resolution of the firm and that should have been found place in the seized profit and loss account, more particularly when there is no dispute on the gross receipts. Therefore, the learned and CIT A confirmed the addition only on his guesswork. In view of this we reverse the orders of the lower authorities and direct the learned assessing officer to delete the addition on account of difference in profit i.e. which is only difference in expenditure being on higher side in the audited accounts then in the seized paper. Accordingly, ground number 3 of the appeal is allowed. 2022 (6) TMI 548 Penalty u/s 271B - non-compliance of the provisions of sec. 44AB - delay in filing the tax audit report - Scope of reasonable cause of delay - HELD THAT:- As stated that the accountant who was looking into the records of accounts was admitted in the hospital and even the Doctor‟s certificate was also enclosed and submitted as evidence - also explained that practically it was difficult to get an experienced accountant within the short period of time in a place like Akkalkot, Dist. Solapur. Therefore, the entire events and circumstances were beyond the control of the assessee and he was helpless and for such reasons delay occurred which was never deliberate nor intentional. The ld. CIT(A) however, as per the reasons appearing at para 6 of his order did not support the submissions of the assessee and upheld the levy of penalty imposed by the A.O u/s 271B of the Act. On going through the entire case records, we find that the assessee has reasonably well explained before the ld. CIT(A) the reasons why there was delay in filing the tax audit report and non-compliance as per the provisions of sec. 44AB of the Act. The reasons are definitely such that they were beyond the control of the assessee and since the Income-tax Act is a welfare legislation the practical difficulties of the tax payers assessee and the bonafide nature has to be considered. In this case, the assessee had even submitted the Doctor's Certificate under whose treatment the accountant was admitted in the hospital. The ld. CIT(A) should have considered all these facts in its proper perspective. Section 273B of the Act provides that the penalty u/s 271B need not be imposed if there is a reasonable cause for the said failure. In our considered view, the assessee in this case through documentary evidence has explained the reasonable cause and accordingly we set aside the order of the CIT(A) and direct the A.O to delete the penalty from the hands of the assessee. Appeal of assessee allowed. 2022 (6) TMI 547 Addition relating to income estimated by the AO - A.O. took the view that the assessee has estimated the income on presumptive basis at 8% of the gross receipts declared by it - CIT(A) accepted the availability of cash balance in the books of the assessee as on 09-11-2016 and accordingly directed the A.O. to give credit for cash balance of Rs.6,62,852/- and estimate the income on the remaining amount of cash deposited by the assessee - HELD THAT:- On perusal of profit and loss account of the assessee would show that the income of the assessee consisted of interest income and other receipts. A perusal of the Balance sheet would show that the pigmy deposit collections have been shown as liability. Hence there is merit in the contentions of Ld A.R that there was no reason for the tax authorities to treat the amounts deposited into the bank account as revenue receipts in the hands of the assessee. When the deposits have been made out of book balances, there is no reason to estimate income there from. Accordingly, I set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition relating to income estimated out of deposits made into the bank account, which was sustained by Ld CIT(A). Appeal of assessee allowed. Customs 2022 (6) TMI 558 Demand of Interest and penalty on amount already recovered towards duty foregone - advance licence scheme - import of sodium cyanide and dimethyl urea - non-qualified licence - N/N. 31/97-Cus dated 1st April 1997 and N/N. 96/93-Cus dated 2nd March 1993 - HELD THAT:- The interest liability on duty recovered subsequently may be under the authority of Customs Act, 1962, the relevant notification issued under section 25 of Customs Act, 1962 for implementing exemption or concession scheme in Foreign Trade Policy or by reference to such authorizing provision of the Foreign Trade Policy in the said notification; the essence is an authority, direct or remote, attributable to an empowering statute. There can be no doubt that such condition was not in existence at the time of import and the show cause notice is also conspicuously silent on the availability of section 28AB of Customs Act, 1962 for such charging. The licence and the exemption notification are silent on such contingent charging; the sole provision cited by lower authorities is paragraph 128 of Handbook of Procedures which can hardly be claimed as a statutory prescription of the Foreign Trade Policy. It is a beneficial provision that enables a licence-holder to lay claim to regularization for breach of fulfilment of target of export obligation subject to compliance with the conditions therein. That is an internal disposal by the competent authority under the Foreign Trade (Development Regulation) Act, 1992 a far cry from the proceedings leading to the order impugned and not applicable to the present circumstances. It is clear that the appellant was not contracted, either directly or directly, to be liable for recovery of interest as laid down in COMMISSIONER OF CUSTOM VERSUS WIPRO LTD. [ 2011 (11) TMI 334 - KARNATAKA HIGH COURT] by the Hon ble High Court of Karnataka. The charging of interest and imposition of penalty is set aside - Appeal is allowed. 2022 (6) TMI 546 Confiscation of improperly imported consignment - import of natural rubber RSS3 - restriction on import or not - N/N. 32/2015-2020 - transitional arrangement - Penalty u/s 112 of Customs Act - HELD THAT:- The factual matrix of this case clearly shows that not only the goods have reached ICD Garhi, Harsaru after the issue of DGFT notification restricting the import of natural rubber through Nhava Sheva and Chennai only on 20.01.2016, but the goods were also dispatched after this date on 03.02.2016 by the overseas supplier. The Commercial invoice was also issued on 25.01.2016, five days after issue of DGFT notification. The contract, however, was signed with the overseas supplier by the appellant on 12.01.2016 before the issue of DGFT notification. It is a well settled legal principle that any contract between parties is subject to law and public policies. If the laws change making it impossible to fulfil the contracts as per the original terms, it is open for the parties to either cancel or modify the contract to bring it in conformity with the laws of their respective countries. Framing laws is the sovereign right of the state and this is not subservient to any contract between two businesses - The appellant did nothing but went ahead with inflicting the goods under a bill of lading with the port of discharge as Nhava Sheva and final destination as ICD Garhi, Harsaru. This only establishes that either the appellant was negligent or otherwise decided to import the goods in violation of the law. Whether the Nhava Sheva can be considered the port of import in this case or the ICD Garhi, Harsaru? - HELD THAT:- The port of import is the port where the Bill of Entry is filed to clear the goods. It is a well settled matter that until the goods cross the customs frontiers they are supposed to be in the course of international trade. In this case, the port of import is ICD Garhi, Harsaru, through which the impugned goods could not have been imported in terms of the DGFT notification. The appellant imported in violation of the notification. Private contracts are always subject to public policy and laws and if in terms of the changed law the performance under the contract becomes impossible, the contract becomes void. Further, in this case, although the contract was signed on 12.01.2016, subsequent actions in pursuance of the contract viz., issue of the commercial invoice on 25.01.2016 and dispatch of the goods by bill of lading dated 03.02.2016 took place well after the DGFT notification. Therefore, the appellant was clearly violated the law. Penalty - HELD THAT:- Ignorance of law is not an excuse and the DGFT notification was issued on 20.01.2016 and thereafter the appellant proceeded to import goods in clear violation of the notification. There are nothing bonafide in the conduct of the appellant. On the contrary, it is found that a brazen violation of law. Consequently, the penalty has been correctly imposed. The impugned order is correct and proper and calls for no interference - Appeal dismissed. Corporate Laws 2022 (6) TMI 545 Punishment for contempt of orders of this Tribunal - direction to jointly and severally compensate the Petitioners for the wrongful loss caused to the Petitioners as result of non-compliance of orders of this Tribunal - Section 424(3) read with Section 425 read with Section 241 of the Companies Act, 2013 read with Rule 11 of National Company Law Tribunal Rules, 2016 - HELD THAT:- It is seen that the Corporate Insolvency Resolution Process in respect of the Corporate Debtor was ordered by this Tribunal vide order dated 13.11.2018 and IRP was appointed. In relation to the non-compliance of the order passed by this Tribunal it was submitted by the Respondents that the Petitioners have failed to pay the Sales Tax dues and hence they have also violated the terms of the Joint memo of compromise. In this regard, it was submitted that the Sale Tax Department has not lodged any claim for any period prior to 31.03.2020 and has lodged a total claim of only Rs. 18 lakh, that too pertaining to the subsequent period, with the RP in respect of the 1st Respondent Company. Therefore, the claim of the sale tax dues upto 31.03.2010 having become an impediment is a bogus claim. Further, as per clause 6 of the joint memo, if there is any sales tax claim pertaining to period prior to 31.03.2010, even if it was not resolved by the Petitioner, the right of the Respondents was only to discharge the same and recover it as a charge on the property of the Petitioner. Therefore, the Respondents had no right under the compromise memo not to comply with the undertaking to discharge its dues to ARCIL, or disregard the orders passed by this Tribunal. In any case, the Respondents are bound to comply with the directions/orders of this Tribunal. The Respondent Nos. 2 to 5 have willfully and deliberately disobeyed the orders passed by this Tribunal - The Respondent Nos. 2 to 5 are directed to jointly and severally pay a sum of Rs. 5.5 Crore to the Petitioner together with interest at the rate of 18% p.a. till the date of payment, within a period of 30 days from the date of this order - the Contempt Application stands disposed of. Insolvency & Bankruptcy 2022 (6) TMI 557 Maintainability of application - initiation of CIRP - personal guarantors of the Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of its debt and dispute or not - HELD THAT:- It can be seen that the deeds of guarantee dated 25.02.2013 and 12.10.2015, have been executed between the Applicant and Nathella Sampath Chetty Co., Respondent herein who is a partnership firm. It is clear that the Respondent who is a guarantor of the Corporate Debtor is a partnership firm and this application is not under the purview of this Adjudicating Authority. Further, the provisions relating to partnership firm is yet to come into force. Hence, the present is application filed by the Applicant is misconceived. The application stands dismissed. 2022 (6) TMI 544 Recovery of outstanding amounts - NPA - Forum Shopping - Section 13(2) of the SARFAESI Act, 2002 - HELD THAT:- It is undisputed fact that the impugned order of Adjudicating Authority dated 04.10.2019 was passed ex parte - This Tribunal has observed that loan facility has been granted to the Trust which is engaged in Educational Services @25% p.a by the R1/Bank which itself seems to be very high. It is difficult to predict about the bargaining power of the Trust/CD with the banks to borrow at such a high rate of interest. Although, not much details are provided but as it looks that sanctioned amount is Rs. 3 Crore to M/s. Camellia Educare Services Ltd., and Rs. 8.5 Crore each to M/s. Multiple Educational and Manpower Development Trust and Camellia Educare Trust sanctioned in the year 2012 for the furtherance of the objective of the trust for Development of Education Services and the Corporate Guarantee Agreement was executed apart from offering its properties in mortgage for Rs. 20.80 Crore - It is also evident from the pleadings that the Corporate Debtor/Guarantor has executed a Corporate Guarantee Agreement , in lieu of the said loans apart from offering its property in mortgage. It is also observed that the R1/Bank also issued demand notice on 29.12.2016 under the provisions of SARFAESI Act, 2002 to the Appellant demanding further Rs. 14 Crore from the Appellant being the Corporate Guarantor. It is also observed from the pleadings that the Appellant has given reply of the said demand notice as per provisions laid in SARFAESI Act, 2002 vide their letter dated 13.02.2017 denying and disputing the said demand notice and the quantum. It has also been mentioned in the pleadings that the borrower was continuously making payment inspite of receiving demand notice under the relevant provisions of SARFAESI Act, 2002. As per the pleadings, it is also mentioned that the original borrower has paid an amount of Rs. 92 lakhs during the time of pendency of the said application. It is a settled law that the practice of Forum Shopping be condemned as it is an abuse of law. This case is beyond doubt falls under the category of Forum Shopping as it is a classic example of Forum Shopping when the Respondent Bank has approached one Court for relief but does not get the desired relief and then approached another court for the same or similar relief. It is deemed fit and proper to remand back the matter to the Adjudicating Authority to give a patience hearing also to the Appellant and the Respondents including the RP and then to decide the matter considering the fact of the case as well as the provisions of applicable laws on the issue and then to finally pass appropriate order in accordance with law - appeal allowed by way of remand. 2022 (6) TMI 543 Violation of principles of natural justice - suppression of material facts - Suspension of initiation of Corporate Insolvency Resolution Process - time limitation - Section 10A of the IBC, 2016 - HELD THAT:- The parties both the Financial Creditors/Respondent No. 1 and Corporate Debtor/Appellant is not denying that an OTS was not sanctioned on 28.01.2019 and the same was rescinded by the Bank on 17.06.2019. The Corporate Debtor failed to pay balance Rs. 83.18 Crore out of OTS sanctioned of Rs. 93.18 Crore and hence only Rs. 10 Crore was paid by the Corporate Debtor/ Appellant to the Bank - What it is observed that the Respondent No.1/Bank sanctioned 2nd OTS on 13.03.2020 for an amount of Rs. 40 Crore and out of which only Rs. 4 crore was paid by the Corporate Debtor/Appellant to the Respondent No.1/Bank. It is very much clear that the debt is neither barred by the limitation nor it is barred by the provision of Section 10(A) of the IBC, 2016 as the bank has filed the petition on 13.08.2019. The record also revealed that the Respondent No.1/CBI/FC has filed the Petition for initiation of CIRP originally on 22.10.2018 but before the admission of the said application, the Corporate Debtor has approached the Respondent No.1/Bank for settlement of their dues and accordingly, the compromise proposal submitted by the Corporate Debtor/Appellant was accepted by the Applicant Bank vide sanction letter dated 28.01.2019 - OTS is a mechanism available with the banks for years together to allow survival of Debtors and maintain cash flow for banks. However, repeated failure reflects either the intention of the Corporate Debtor/Appellant is not fair as in every OTS the settlement amount is going down and thereby reflecting that delay in CIRP will make the organization weaker and the object of the code for maximization of the value of assets of such persons shall not happen. The are no infirmity in the impugned order and the order deserves to be sustained - Appeal fails and is dismissed. 2022 (6) TMI 542 Levy of Interest - quantification of interest from the date it became due and payable as per the Resolution Plan or not - seeking direction to Respondent to take immediate steps and expedite removal of all attachments, liens, charges, encumbrances etc. from the assets of the Corporate Debtor - fastening the liability to remove the attachment, lien, charge, encumbrance etc. over the assets of the Corporate Debtor upon the Appellant - permission to Appellant to make payment of the balance amount under the Resolution Plan within a period of 2 months from lifting/removing all the attachment, charges, encumbrances and lien from the assets of the Corporate Debtor - taking urgent steps to get all attachment, charges, encumbrances, lien on the assets of the Corporate Debtor lifted and removed expeditiously - HELD THAT:- CIRP shall mandatorily be completed within a period of 330 days from the insolvency commencement date. Including the extension of CIRP Period and time taken in legal proceedings - Liability for prior offences etc. particularly removing/lifting attachments/liens/charges/encumbrances existing prior to CIRP needs to be dealt with in accordance with the provisions of Section 32(A) of the Code. It is very much clear that the Resolution Applicant has got the Corporate Debtor in less than 10% of the value of the admitted claim practically 90% is the waiver. However, this issue cannot be reckoned now but it can have a leverage impact on levy of interest @ 12% p.a. for delay in releasing the balance payment. The interest is to be paid for the period from 27.01.2020 to 15.11.2021. As it looks from the Written Submissions of the SBI submitted to the Registry of this tribunal vide diary no. 33701 dated 21.02.2022. This period also comprises the period resulting from global pandemic covid-19 - Since the Successful Resolution Applicant/Appellant has paid the full amount so now there is no question of going back and hence, perhaps this is the area where the question involved is now as far as whether the interest rate be reduced to be made at par of RBI base rate for lending to banks with additional 2% margin subject to a limit of 12% p.a. or otherwise. The Resolution Professional and the representative of the CoC who are the Chairman/Members of the Monitoring Committee should assist the Resolution Applicant in sorting out the issues pending at various forums be it Excise Authority, Enforcement Directorate etc. As reflected by the Appellant and at the same time the Resolution Applicant will have to bear certain interest burden which should be the rate of interest of RBI Base rate for lending to banks + 2% margin as per the rate of interest applicable between 27.01.2020 to 15.11.2021 subject to a limit of 12% p.a. The Appeal is partially allowed. 2022 (6) TMI 541 Violation of principles of natural justice - tangible / substantial reasons were assigned by the Tribunal or not - homo sapien - HELD THAT:- No wonder, an impugned order, bereft of reasons, may be a valid one from the point of view of an Authority / Tribunal, who had passed the same but to the affected, the same is not a valid one, as it infringes the right, thereby causing hardship and prejudice to him - the principles of Natural Justice are not the edicts of a Statute. It is to be remembered that absence of furnishing reasons will give an individual a sense of feeling of injustice, whether it be an Administrative/ Judicial / Quasi-Judicial Forum which passes it as opined by this Tribunal. The Respondent Company shall not conduct statutory meeting etc., were passed by the Tribunal in a non-speaking manner and without assigning qualitative and quantitative reasons - the matter is remitted to the National Company Law Tribunal, Division Bench II, Chennai to pass a de novo orders in so far as it relates to the aspect of appointing an independent forensic auditor to conduct the forensic audit on the affairs of the 1st Respondent Company from 01.02.2018 and for issuance of directions in regard to the conduct of statutory meeting, by providing adequate opportunities to both sides to argue the matter and after Hearing the parties, the Tribunal (National Company Law Tribunal, Division Bench II, Chennai), also following the Principles of Natural Justice, is to assign reasons for arriving at its just fair conclusion in granting the reliefs or otherwise in the subject matter in issue. Application closed. Service Tax 2022 (6) TMI 540 Initiation of recovery proceedings - one of the principal grievances of the petitioner was that even while the remand direction was to be given effect to, proceedings had been initiated for recovery via the impugned show-cause notice dated 03.03.2022 - HELD THAT:- Mr. Akshay Amritanshu, who appears on behalf of the respondents/revenue, says he has obtained instructions in the matter - It is Mr. Amritanshu s submission that no recovery will be made, till such time the refund claim of the petitioner is examined, as indicated in the remand order dated 13.05.2022. Petition disposed off. 2022 (6) TMI 539 CENVAT Credit - Service Tax paid on deposit insurance service provided by Deposit Insurance and Credit Guarantee Corporation (DICGC) - HELD THAT:- The said issue was considered by the Larger Bench of the Tribunal in the case of M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [ 2020 (6) TMI 278 - CESTAT BANGALORE] wherein it was held that insurance service provided by DICGC to the banks is an input service and the credit of Service Tax is eligible - In the appellant s own case M/S. INDIAN OVERSEAS BANK VERSUS COMMISSIONER OF CCE AND ST, CHENNAI [ 2021 (1) TMI 754 - CESTAT CHENNAI] , the Tribunal, for a different period, has followed the decision of the Larger Bench and held that the credit is eligible. There are no hesitation to hold that the credit of the Service Tax paid on the basis of premium paid to DICGC is eligible. The impugned order disallowing the credit and confirming the demand, interest and penalty is set aside. Appeal allowed - decided in favor of appellant. Central Excise 2022 (6) TMI 556 CENVAT Credit - input - whether the appellant is justified in availing suo moto credit of excess duty paid in previous month on account of clearance of input effected under Rule 3(5) of Cenvat Credit Rules, 2004? - extended period of limitation - HELD THAT:- The perusal of a case records shows for the identical issue, for the period August, 2011 to February, 2012 and April 2012 to July, 2017; August, 2012 to April, 2012, April 2013 to May, 2013 to June, 2014, three Show cause notices were issued to the appellants and those were adjudicated on 9th July, 2015 by a common adjudication order. Therefore, it is not correct to say that there is any suppression on the part of the appellant as the procedure adopted by the appellant was well within the knowledge of the Revenue way back since the year 2011 and accordingly extended period of limitation is not invocable on the facts of the present case - Otherwise also it is settled legal principle as laid down by the Hon ble Supreme Court in catena of decisions that something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before the assessee is saddled with any duty liability. Therefore, mere short payment of duty by the appellant is not sufficient in order to invoke the extended period. In the matter of SOUTH ASIAN PETROCHEM LTD. VERSUS CC. (AIRPORT ADMN.), KOLKATA [ 2007 (4) TMI 245 - CESTAT, KOLKATA] , a Co-ordinate Bench of the Tribunal had even permitted the adjustment of excess payment towards education cess against the short payment of Central Excise duty. In the case laws cited by learned Chartered Accountant, it is found that repeatedly it has been held by Tribunal that excess payment of duty can be adjusted against tax liability. The procedure adopted by the appellant may not be proper but that itself cannot make it illegal per se. This procedure admittedly has been discontinued by the appellant w.e.f May, 2016. On the ground of limitation as well as on merits the appeal filed by the appellant deserves to be allowed and the same is accordingly allowed. 2022 (6) TMI 555 CENVAT Credit - common inputs used in taxable as well as exempt goods - non-maintenance of separate records - pollution control equipment - production of steam - exempt goods - requirement to reverse 10% of the Cenvat credit availed - Rule 6 (3) (b) and Rule 6 (3) (i) of CCR - HELD THAT:- Hon ble Apex court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING WEAVING MILLS LTD. [ 2010 (7) TMI 12 - SUPREME COURT] has held that It is not the case of the Revenue that both these items are not required to be used in the fabrication of chimney, which is an integral part of the diesel generating set, particularly when the Pollution Control laws make it mandatory that all plants which emit effluents should be so equipped with apparatus which can reduce or get rid of the effluent gases. Therefore, any equipment used for the said purpose has to be treated as an accessory in terms of Serial No. 5 of the goods described in column (2) of the Table below Rule 57Q. Whether the appellants are required to reverse 10% of the credit availed in view of the fact that the steam generated is exempt? - HELD THAT:- In the case of M/S BALRAMPUR CHINI MILLS LTD. THROUGH ITS GENERAL MANAGER VERSUS UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (5) TMI 972 - ALLAHABAD HIGH COURT] , it was enunciated that Bagasse/ Press mud produced during the course of manufacture of sugar cannot be treated as exempted products and the provision of Rule 6 of Central Excise Rule, 2004 cannot be applied - In the instant case steam is generated in the course of manufacture and it cannot be said that the appellants have manufactured steam which is an exempt product. Hon ble Gujarat High Court in the case of COMMISSIONER OF C. EX. CUSTOMS, VADODARA-I VERSUS STERLING GELATIN [ 2010 (9) TMI 857 - GUJARAT HIGH COURT] held that a bye product emerging in the course of manufacture cannot be treated as a manufactured product for the purposes of Rule 6 of Cenvat credit Rules. Nothing survives in the impugned order and the same cannot be sustained - Appeal allowed - decided in favor of appellant. 2022 (6) TMI 538 Entitlement of interest on refund amount - relevant time for calculation of interest - calculation of interest after the expiry of 3 months from the date of filing of the refund claim or not - Section 11BB of Central Excise Act, 1944 - HELD THAT:- As per the facts of the present case, it is found that there is no dispute about the fact that the refund claim had been filed on 19.05.2005 and the same was sanctioned only vide order-in-original both dated 04.04.2016. It is also noticed in the present matter that both the adjudicating authority considered the letter dated 23.11.2015 as refund claim application, whereas vide letter dated 23.11.2015 appellant only informed the Jurisdictional Deputy Commissioner that CESTAT has passed order in their favour and accordingly to sanction the refund amount along with interest. As per the statutory mandate of Section 11BB of the Act the department is under legal obligation to sanction the refund claim along with interest after the expiry of 3 months from the date of filing of the refund claim. In the present matter the time limit for payment of the refund amount to the Appellant by the Central Excise authorities (without interest) expired on 19-08-2005. Since, claimed amount was finally paid to the Appellant on 04.04.2016, the Appellant is entitled for the statutory interest from 20-8-2005 to the date when the refund was eventually paid, i.e., 04-4-2016. Appeal allowed - decided in favor of appellant. 2022 (6) TMI 537 Valuation of Excisable Goods - scrap generated during the course of manufacture of tractor parts on job work basis - whether the value of scrap arising during the process of manufacture and retained by the job worker is includible in the value of the goods cleared by the job worker to the principal manufacturer? - HELD THAT:- The said issue was considered in detail in the case of PR. ROLLING MILLS PVT. LTD. VERSUS COMMISSIONER OF C. EX., TIRUPATHI [ 2009 (3) TMI 444 - CESTAT, BANGALORE] . The issue was held in favour of the assessee therein. In the present case, it has to be noted that while estimating the value of the goods cleared to the principal manufacturer, the appellant has taken the value of the entire raw materials received by them. The scrap generated during the process of manufacture has been cleared by them on payment of appropriate duty. The scrap is generated after the process of manufacture and the same is not includible in the assessable value of the goods cleared by the job worker to the principal manufacturer. The demand cannot sustain - Appeal allowed. 2022 (6) TMI 536 Reversal of CENVAT Credit - input services - generation of electricity which was captively used but some part thereof was also sold by them/exempt goods - common input - Coal - Rule 6(1), 6(2), 6(3A), 6(3D) of CCR, 2004 - Whether for the electricity generated by the appellants for captive consumption, some part whereof has been sold to state electricity body, the appellants are not liable to take the credit on such amount of electricity as has been sold out? HELD THAT:- In light of these admitted facts foremost it is required to adjudicate as to whether the electricity is an exempted good to cover the case of the appellants within the scope of Rule 6 of CCR, 2004. The law in this case has been settled - Hon ble High Court, Allahabad in the case of GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2013 (7) TMI 159 - ALLAHABAD HIGH COURT] has held that The electrical energy generated from Bagasse is not covered under Chapter 27. Similarly, Chapter 27 does not cover electrical energy produced by solar power, hydro power, wind power or from bagasse. Therefore, we are of the view that electrical energy is not an excisable goods nor it is exempted goods as defined in Rule 2 (d) of the 2004 Rules. In the present case, Cenvat credit has been taken on the inputs used, however, suo moto proportionately reversed for the electricity which has been sold out. Further, it is observed that the Rule 6 of CCR, 2004 gives three separate options to the assessee as mentioned under sub rule (1), (2) and (3) thereof and to exercise any one of these options is the prerogative of assessee. The department cannot compel the assessee to opt for a particular option. Further, w.e.f. 01.04.2008 Rule 6 (3A) has been introduced, according to which the assessee is eligible to reverse proportionate credit on inputs and input services used in manufacture of exempted goods. Invocation of Extended period of Limitation - HELD THAT:- There is no denial for the fact that similar show cause notices have already been served upon the appellants for the previous years. Suppression of facts in those circumstances cannot be alleged - it is held that invocation of extended period of limitation has also been wrongly confirmed. Once there was no suppression question of imposition of penalty does not at all arise. Appeal allowed - decided in favor of appellant. Indian Laws 2022 (6) TMI 554 Dishonor of Cheque - compounding of its dues - compromise arrived inter-se parties - acquittal of the accused - heinous and serious offences - section 138 of NI Act - Section 320 of Cr.P.C. - HELD THAT:- Since the petition has been filed under Section 482 Cr.P.C., this Court deems it fit to consider the present petition in the light of the judgment passed by Hon'ble Apex Court in NARINDER SINGH ORS. VERSUS STATE OF PUNJAB ANR [ 2015 (2) TMI 1042 - SUPREME COURT ], whereby Hon'ble Apex Court has formulated guidelines for accepting the settlement and quashing the proceedings or refusing to accept the settlement with direction to continue with the criminal proceedings. Hon'ble Apex Court has returned the findings that power conferred under Section 482 of the Code is to be distinguished from the power which lies in the Court to compound the offences under section 320 of the Code. No doubt, under section 482 of the Code, the High Court has inherent power to quash the criminal proceedings even in those cases which are not compoundable, where the parties have settled the matter between themselves. The Hon'ble Apex Court in case GIAN SINGH VERSUS STATE OF PUNJAB ANOTHER [ 2012 (9) TMI 1112 - SUPREME COURT ] has held that power of the High Court in quashing of the criminal proceedings or FIR or complaint in exercise of its inherent power is distinct and different from the power of a Criminal Court for compounding offences under Section 320 Cr.P.C. Even in the judgment passed in Narinder Singh's case, the Hon'ble Apex Court has held that while exercising inherent power under Section 482 Cr.P.C. the Court must have due regard to the nature and gravity of the crime and its social impact and it cautioned the Courts not to exercise the power for quashing proceedings in heinous and serious offences of mental depravity, murder, rape, dacoity etc. Since the matter stands compromised between the parties, prayer made in the petition at hand can be accepted. In DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [ 2010 (5) TMI 380 - SUPREME COURT ], the Hon'ble Apex Court has categorically held that court, while exercising power under Section 147 of the Act, can proceed to compound the offence even after recording of conviction by the courts below. The present matter is ordered to be compounded and impugned judgments of conviction and sentence dated 7/14.6.2019 and 11.3.2022, passed by the courts below are quashed and set-aside and the petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act - petition allowed. 2022 (6) TMI 535 Dishonor of Cheque - insufficiency of funds - acquittal of the accused - existence of debt and liability or not - service of demand notice - cross-examination of witnesses - HELD THAT:- The opposite party did not raise a probable defence that there was no existing liability. However the appellant in its affidavit of evidence showed the transactions made in favour of the opposite party. The appellant provided an amount of Rs.75,00,000/- to the opposite party on the request of Sidharth Rai who is one of the partner of the appellant and also husband of the opposite party to run a business of tea purchase. Assurance was given to repay the amount in installment by 2016 and in the mean time would pay the profit from tea trading. The opposite party refunded an amount of Rs.13,00,000/- in 2013 and Rs.5,00,000/- in 2015. A total of Rs.18,00,000/- out of Rs.75,00,000/- has been paid and Rs.3,53,480/- as commission from profit has been paid. In cross examination not a single question was put to the opposite party to rebut the liability. In examination under Section 313 Cr.P.C the opposite party stated that I have not issued any cheque. I do not know how they have got the cheque. May be with fraudulence and I don t have any liabilities to them. The opposite party did not challenge the issuance of such fraudulent cheque. No defence has been taken nor any documents placed challenging the impugned cheque. The proviso to Section 138 of the Act affords clear indication that giving notice in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer at his correct address - this Court has no hesitation to hold that in connection with complaint case, demand notice was duly served upon the accused. The order of acquittal passed in favour of the accused/respondent is liable to be set aside - appeal allowed.
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