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TMI Tax Updates - e-Newsletter August 19, 2023 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST: Confiscation of goods alongwith conveyance - expired E-way bill - since the petitioner has submitted its reply taking the stand that there was break down of the vehicle and the driver fell ill but no reason has been assigned by any of the authorities in the impugned orders for disbelieving the same - Matter restored back for fresh adjudication - HC Visit to Get Source GST: Validity of determination of Tax / GST when the Confiscation of goods u/s 130 was set aside - While proceedings u/s 67 and Section 74 are distinct in scope and purpose, at the same time, the essential facts found non-existent in the proceedings under Section 67 would have a material bearing on proceedings under Section 74 of the Act drawn up on the same basis. - HC Visit to Get Source GST: Non-service of SCN - violation of principles of natural justice - Cancellation of GST registration - It was the bounden duty of the petitioner to have verified its common portal that is made available as per the provision. - The contentions raised in the writ petition that Ext P1 assessment order was not served as per the provisions of the Act is untenable. - HC Visit to Get Source GST: Input tax credit - ITC of GST paid on the inward supply for fixing of plant and machinery to earth by foundation or structural support which is used for making outward supply of goods/ services is admissible up to this extent only. - AAR Visit to Get Source Income Tax: Nature of expenses - payment made for premature termination of Advertising Sale Agreement - revenue or capital expenditure - by paying the compensation under ASTA, assessee not only saved the expense that it would have had to incur in the relevant previous year but also for few more years to come. - Claim allowed as revenue expenditure - HC Visit to Get Source Income Tax: Validity of reopening of assessment u/s 147 - A copy of the audit objection reveals that because for the subsequent year, i.e., AY 2014- 15, the Department had not accepted assessee’s contention and added back the foreign exchange gain after treating it as revenue receipt, to take a consistent stand on the same issue, the Assessment has to be reopened. From this communication also, it is quiet clear that there has not been non-disclosure of any material fact but only change of opinion. - HC Visit to Get Source Income Tax: Assessment u/s 144C - It is not in dispute that if no directions are issued, AO need not wait u/s 144C (13). However, the fact remains that once objections are filed before the DRP and till directions are issued, the assessing officer cannot proceed further. This is in light of mandate u/s 144C (13). - HC Visit to Get Source Income Tax: Taxability of global income - sale of shares - taxability of long term capital gain - Undisputedly, the shares sold by the assessee in the year under consideration were acquired in the year 2009, much prior to 01.04.2017. Therefore, the provisions of Article 13(3A) of the tax treaty would not be applicable. Capital gain derived by the assessee from sale of shares would fall within the ambit of article 13(4) of the tax treaty. - AT Visit to Get Source Income Tax: Rectification u/s 154 - Period of limitation - Late fee u/s. 234E - as per sub-section (7) of Section 154 of the Act, as no amendment under the said section shall be made after expiry of four years from the end of the financial year in which the order sought to be rectified was passed, therefore, the applications filed by the assessee seeking rectification of the orders passed by the DCIT, CPC-TDS u/s. 200A of the Act on 06.09.2014 by filing rectification letters dated 02.02.2022 for the aforementioned respective years were in itself not maintainable. - AT Visit to Get Source Income Tax: TP Adjustment - Redemption of Deferred Shares - The deferred shares carried rights as they would automatically be converted into ordinary shares when the holdings of the assessee in East Ltd. falls below 25.1%. Keeping in view, the fact that the deferred shares can be converted into ordinary shares without any encumbrances, we decline to interfere with the order of the ld. CIT(A). - AT Visit to Get Source Income Tax: Disallowance of interest expenditure - interest expenditure is wholly and exclusively for the purpose of earning interest income. - AO directed to grant the deduction of interest expenditure paid by the assessee, while computing the income under the head “income from other sources”- AT Visit to Get Source Income Tax: TP Adjustment - ALP of the services provided by the AE (China) to the assessee - eligibility of benefit test - the adjustment made by the TPO on the basis that no services were received becomes erroneous. Hence, TPO is directed to delete the adjustment - AT Visit to Get Source Customs: Duty drawback - Classification of goods exported - sanitary ware - Ultimately, it is the end use of the product that is decisive and in the instant case, the items are meant for use in the kitchen, toilets or bathroom and although it may portray some art work in its designs, it is not ‘artwork’ or ‘handicraft’ item. Therefore, duty drawback could only be claimed in category of goods falling Chapter 74 vide item No. 741802. - HC Visit to Get Source Customs: Refusal to clear the goods in question imported by the petitioner - Pigeon Peas - Soya bean - a clear stand of the FSSAI is on record that the Soyabean sought to be cleared by the petitioner and subject matter of the present proceedings, in no manner whatever would be harmful for human consumption/health in whatever form - Goods allowed to be cleared subject to conditions - HC Visit to Get Source Customs: Demand of bank guarantee for re-export of the goods - although in the earlier writ petitions and appeals the petitioners had requested for a provisional release of the goods, after the disposal of the writ appeals the petitioners have requested to re-export the goods. Therefore, the direction to consider the provisional release in terms of Section 110A of the Customs Act now stands converted to the issue as to whether 're-export' can be granted by just receiving a bond. - Pray allowed on simple bond - HC Visit to Get Source Customs: Violation of initial mandate of status quo - Refund of pre-deposit - The issue of the appropriation of the amount of Rs. 2.5 crores, the refund whereof has been in question in the impugned appeal is still not decided. Resultantly, the present appeal is held to be pre-mature and accordingly is dismissed is being pre-mature. - AT Visit to Get Source Indian Laws: Disciplinary proceedings against the Chartered Accountant (CA) - Engagement in Business activities without approval from ICAI - Allegation of evasion of Sales Tax - opening an account in the bank in the name of fictitious firm - there is no evidence against respondent (CA) that he had opened these bank accounts or did what he was accused of. - The Council was not correct in not accepting the acquittal by the Court of Metropolitan Magistrate - HC Visit to Get Source IBC: Approval of the Resolution Plan - CIRP - The submission of the Appellant that there is a discrimination between the payment of assenting unsecured financial creditor and dissenting unsecured financial creditor cannot be accepted and on the ground, as urged by the Appellant in this Appeal, the Resolution Plan approved by the Adjudicating Authority cannot be held to be discriminatory. - AT Visit to Get Source Service Tax: Extended period of limitation - misdeclaration or not - the appellant has made no effort to provide any documents to evidence the return of the advance amount - The contention that an earlier show cause notice was issued and the information was in the knowledge of the department is also not evidenced by the records - extended period rightly invoked. - AT Visit to Get Source Service Tax: Levy of Service Tax - Brokerage/Commission received towards the services relating to public issue of Equity Shares/Bonds - The issue is no longer res-Integra as the identical issue related to the demand on commission received towards public issue of Equity Shares/Bonds has been decided in the favour of the assessee in various Judgments. - AT Visit to Get Source Central Excise: Irregular availment and utilization of Cenvat Credit - input services for personal purpose or not - The employees who are not covered under ESI Scheme are well covered under the insurance policy for any untoward eventuality, therefore, it is also a moral obligation on the part of the employer to look after the welfare of the employees who are working inside or outside of the premises. - Credit allowed - AT Visit to Get Source Central Excise: CENVAT Credit - input services - service fees paid to principals namely Honda Motor Company Ltd., Japan for development of Part Manual and Service Manual - credit of service tax paid under RCM - The denial of CENVAT credit in respect of services of development of “Part Catalogue” and “Maintenance, Repair and Construction Manual” cannot be upheld. - AT Visit to Get Source VAT: Validity of Re-assessment order - Based on Audit objections, without recording proper reasons - If the assessing authority is allowed to initiate repeated re-assessment proceeding against an Assessee merely on the dictate of Audit Party, there would be no finality of assessment and the Assessee would be having domical sword hanging over in it in perpetuity, which is not the scheme of the Act. - HC Visit to Get Source Articles WRIT JURISDICTION TO LIFT BANK ATTACHMENT - MAINTAINABLE? RECENT DEVELOPMENTS IN GST Service Tax not leviable on reimbursement charges Refund application cannot be rejected without giving a proper opportunity Notifications Customs 61/2023 - dated 17-8-2023 - Cus (NT) Rate of exchange of one unit of foreign currency equivalent to Indian rupees - Supersession Notification No. 57/2023-Customs(N.T.), dated 3rd August, 2023 GST 40/2023 - dated 17-8-2023 - CGST Seeks to appoint common adjudicating authority in respect of show cause notice issued in favour of M/s United Spirits Ltd. 39/2023 - dated 17-8-2023 - CGST Seeks to amend Notification No. 02/2017-Central Tax dated 19.06.2017 GST - States S.O. 59/P.A.5/2017/Ss. 9 and 15/2023 - dated 4-8-2023 - Punjab SGST Seeks to amend Notification No. S.O.16/P.A.5/ 2017/S.9/2017, dated the 30th June, 2017 CORRIGEMDUM - dated 4-8-2023 - Punjab SGST Corrigendum - Notification No. S.O.16/P.A.5/2017/S.9/2017 dated the 30th June, 2017 F.12 (11)FD/Tax/2023- 32 - dated 16-8-2023 - Rajasthan SGST Seeks to notify “Account Aggregator” as the systems with which information may be shared by the common portal under section 158A of the RGST Act, 2017 F.12 (11)FD/Tax/2023- 30 - dated 16-8-2023 - Rajasthan SGST Seeks to notify special procedure to be followed by a registered person pursuant to the directions of the Hon’ble Supreme Court in the case of Union of India v/s Filco Trade Centre Pvt. Ltd., SLP(C) No.32709-32710/2018 with regard to filing an appeal against the order passed by the proper officer under section 73 or 74 of RGST Act, 2017 F.12 (11)FD/Tax/2023- 29 - dated 16-8-2023 - Rajasthan SGST Seeks to notify the provisions of sections 2 to 24 of the Rajasthan Goods and Services (Amendment) Act, 2023 Income Tax 64/2023 - dated 17-8-2023 - IT Income-tax (Seventeenth Amendment) Rules, 2023 SEBI SEBI/LAD-NRO/GN/2023/146 - dated 16-8-2023 - SEBI Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 SEBI/LAD-NRO/GN/2023/145 - dated 16-8-2023 - SEBI Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2023 SEBI/LAD-NRO/GN/2023/144 - dated 16-8-2023 - SEBI Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023 Circulars / Instructions / Orders DGFT - 28/2023 - dated 18-8-2023 Amendment in Appendix 4B of Handbook of Procedures, 2023 DGFT - Trade Notice No. 23/2023 - dated 18-8-2023 Amendment of export policy of Non-basmati white rice (HS Code 1006 30 90) Customs - Public Notice No. 70/2023 - dated 14-8-2023 Public Notice related to Take Care Logistics Park (I) Pvt. Ltd. –reg News Advisory: E-Invoice Glossary and Steps G20 Trade and Investment Ministerial Meeting to begin in Jaipur from August 24, 2023 Number of Jan Dhan Accounts Cross 50 Crore Case Laws: GST 2023 (8) TMI 838 Confiscation of goods alongwith conveyance - expired E-way bill - HELD THAT:- It is admitted that goods of the petitioner transited from the State of Uttar Pradesh to the State of West Bengal and the goods were accompanied by requisite documents such as invoices, E-way bills, GR etc. The E-way bills were valid upto 12.3.2023 whereas the goods have been intercepted on 14.3.2023. Thereafter proceedings were initiated only the ground that the goods were transited after expiry of the E-way bills. No other discripancy has been found either in quality, quantity or goods as disclosed in the invoices, E-way bills or GR. The Division Bench of this Court in M/S GOBIND TOBACCO MANUFACTURING CO. AND ANOTHER VERSUS STATE OF U.P. AND 2 OTHERS [ 2022 (5) TMI 1022 - ALLAHABAD HIGH COURT] has quashed the proceedings on the facts of that case as at the time of movement of the goods Covid-19 was at peak and there was restrictions in the movement, therefore, the Division Bench of this Court had quashed the detention and directed for release of the goods and also imposed costs. The facts of the present case is entirely different as stated above. Therefore the arguments of the petitioner before this court that if the dealer does not come forward for depositing the penalty amount as determined under section 129(3) of the Act the proceedings ought to have been initiated under sections 73, 74 and 75 of the Act read with section 122 of the Act cannot be permitted to be raised at this stage as neither in the reply to the show cause notice nor before the appellate authority any submission was made. Further since the petitioner has submitted its reply taking the stand that there was break down of the vehicle and the driver fell ill but no reason has been assigned by any of the authorities in the impugned orders for disbelieving the same - since the authorities below have not recorded any findings with regard to the submissions made by the petitioner the impugned orders dated 27.3.2023 and 18.4.2023 as well as seizure memo dated 23.7.2023 could not be sustained in the eye of law and are hereby quashed. The matter is remitted back to the respondent no.2 - Petition allowed. 2023 (8) TMI 837 Non-service of notice - ex-parte order - levy of penalty - HELD THAT:- From the tenor of the order that has been passed by the Respondent No. 2, it is more than apparent that the order is an ex-parte order. In such view of the matter, since prima facie, the order impugned is an ex-parte order, the same is set aside and the matter remanded back to the Assistant Commissioner, respondent no. 2 to pass fresh orders after giving due notice and opportunity of hearing to the petitioner. Petition disposed off. 2023 (8) TMI 836 Validity of determination of Tax / GST when the Confiscation of goods u/s 130 was set aside - no surviving jurisdiction to pass order inasmuch as, the adjudication proceedings arose from an earlier proceedings under Section 67 of UPGST Act - HELD THAT:- While proceedings under Section 67 and Section 74 are distinct in scope and purpose, at the same time, the essential facts found non-existent in the proceedings under Section 67 would have a material bearing on proceedings under Section 74 of the Act drawn up on the same basis. In the present case, since the substratum of the charge in the proceedings under Section 74 of the Act stood wiped out in entirety, occasioned by the First Appellate order dated 25.5.2020 passed with reference to proceedings under Section 130 of the Act, there survived no jurisdictional fact as may have given rise to the adjudication proceedings, on the same facts. The impugned order dated 17.8.2021 passed by respondent no.2 and the impugned notices dated 9.4.2021 25.5.2021 issued by respondent no.2 are, hereby, set aside - petition allowed. 2023 (8) TMI 835 Confiscation of goods alongwith conveyance - section 129 and 130 are dependent on each other or not - main contention in the writ petition was that the respondents were obliged to proceed sequentially through the provisions of Section 129 of the CGST Act before confiscating the goods under Section 130 of the Act since the provisions were dependent upon each other - HELD THAT:- The impugned judgment of the learned Single Judge calls for no interference since it is well settled that the provisions under Sections 129 and 130 are independent provisions and there is no requirement in law that the proceedings under Section 130 should be preceded by the proceedings under Section 129. It is noted that, at any rate, Ext.P12 order passed by the first respondent permits the appellant to seek a release of the goods and the conveyance on payment of penalties and fine within a period of fourteen days from the date of the order. This provision should suffice for the appellant to obtain an immediate release of the goods and conveyance, pending final disposal of the appeal that he may prefer against Ext.P12 order before the appellate authority - Appeal dismissed. 2023 (8) TMI 834 Non-service of SCN - violation of principles of natural justice - Cancellation of GST registration of petitioner - petitioner under the bona fide belief that it has no further liability under the CGST/SGST Acts - HELD THAT:- A reading of Clauses (a) to (f) of sub-sec(1) of Section169 of CGST Act clearly shows that any decision, order, summons, notice or communication under the Act and Rules can be served on the assessee through any one of the methods mentioned. The petitioner does not dispute the fact that Ext P1 assessment order was made available on the common portal. The petitioner s only case is that as its GST registration was cancelled by Ext P2 order, the petitioner was under the impression that it has no liability to the respondents. This contention is untenable in view of the alternative modes of service provided under Sec.169 (1) of the CGST Act. It was the bounden duty of the petitioner to have verified its common portal that is made available as per the provision. The contentions raised in the writ petition that Ext P1 assessment order was not served as per the provisions of the Act is untenable. The writ petition is meritless and is consequentially dismissed. 2023 (8) TMI 833 Input tax credit - GST paid on the inward supply of structural support of the plant and machinery that is used for making outward supply of the goods/services - common head office can be used for more than one taxpayer under GST having separate factory addresses or each applicant is required to be registered with separate head office - time period of 60 days provided under section 56 of the CGST Act, 2017 is for the period from the date of filing application for refund to the date of credit of the refund amount in taxpayer's bank account, or not - N/N. 13/2017-Central Tax, dated June 28, 2017. Whether, a common head office can be used for more than one taxpayer under GST having separate factory addresses or each applicant is required to be registered with separate head office? - HELD THAT:- The purpose of Advance ruling is to provide certainty of tax liability in advance in relation to a future activity to be undertaken by the applicant and help the applicant in planning about GST liability on activities well in advance along with proper interpretation and understanding of tax laws thus the question which is related with procedure is out of scope of the ruling for Authority for Advance Ruling (AAR) which also not covered in Sec 97(2). Whether, ITC is eligible on the GST paid on the inward supply of structural support of the plant and machinery that is used for making outward supply of the goods/services? - Whether, as per Notification No. 13/2017-Central Tax, dated June 28, 2017; time period of 60 days provided under section 56 of the CGST Act, 2017 is for the period from the date of filing application for refund to the date of credit of the refund amount in taxpayer's bank account? - HELD THAT:- As per sec 16 (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person applicant is eligible to take ITC on the inward supply used in the course or furtherance of his business but there is certain restrictions under Sec 17 of Act. Section 56 is related to Interest on delayed refunds - Thus, the time period of 60 days provided under Section 56 of the CGST Act, 2017 is from the date of filing of application for refund to the date of credit of the refund amount in taxpayer's bank account. Income Tax 2023 (8) TMI 839 Seeking to recall the order of this Tribunal - assessee appeal dismissed in limine for want of non-prosecution - as submitted assessee has communicated to the particular advocate which was not finally appointed by him and then after he approached another advocate to plead his case before the Tribunal. also assessee did not receive the notice of hearing from the Tribunal and therefore the assessee was not aware that appeal was fixed for hearing on a particular day before the Tribunal - assessee is an agriculturist and does not know about the Income Tax Act and does not know the importance of proceeding before the Tribunal HELD THAT:- We note that because of communication gap between assessee and his advocate, as the assessee was in the process to appoint new advocate to plead his case, so the assessee s matter was not argued. We also note that a few occasions, the assessee took adjournment, hence it is not a case that assessee is gross negligent on his part. We agree with the contention of the Ld. Counsel that there was a reasonable cause for assessee s failure to appear before the ITAT. We note that substantial justice should not be denied on account of technicality, therefore considering the facts of the assessee s case, we recall the order of the Tribunal dated 20.09.2022 for fresh hearing. 2023 (8) TMI 832 Taxation on actual income received - assessee had received only 95% of the invoice price - As decided by HC [ 2017 (8) TMI 728 - KERALA HIGH COURT] Tribunal was justified in coming to the factual conclusion that the assessee could not have been taxed anything more than what it had received - HELD THAT:- We are not inclined to interfere with the impugned judgment(s) and order(s) passed by the High Court. The special leave petitions are, accordingly, dismissed. 2023 (8) TMI 831 Reopening of assessment u/s 147 - Short Term Capital Gain - applicability of Section 45(3) - capital gain arose from transfer of land to the partnership firm by way of capital contribution as the assets was converted to Fixed Capital Asset by the partnership firm on March 31, 2008 - HC decided appeal against revenue - HELD THAT:- There is a gross delay of 403 days in filing this Special Leave Petition. The explanation offered is not to the satisfaction of this Court.Hence, application seeking condonation of delay in filing the Special Leave Petition is dismissed. Consequently, the Special Leave Petition is dismissed on the ground of delay. 2023 (8) TMI 830 Revision u/s 263 - Denial of natural justice - assessee has not submitted any reply in response to the notice u/s 263 - HELD THAT:- The respondent authority is trying to blow hot cold at the same time. Whereas, in paragraph no. 4 of the impugned order, it has been mentioned that no reply has been submitted by the petitioner, to the contrary, in paragraph no. 5 of the impugned order, it has been mentioned that the assessee has submitted its reply. Neither in the impugned order, nor in the counter affidavit filed before this Court, any reference of the reply submitted by the assessee, as alleged in the paragraph no. 5 of the impugned, has been made. On the pointed query as to whether reply, as referred to in paragraph no. 5 of the impugned order, has been submitted, he categorically refers Annexure No. CA 5 to the counter affidavit and submits that the reply has been submitted by the assessee in the proceedings u/s 142(1) which was considered. The said submission, on the face of it, has no legs to stand on, as the instant proceedings and the impugned order have been passed pursuant to the notice u/s 263. Once the respondent authority himself records that no response has been filed in pursuance of the notice u/s 263 of the Income Tax Act dated 27.03.2022, a contrary finding, as recorded in paragraph no. 5 of the impugned order, cannot be accepted in the eyes of law. Notice u/s 263 was prepared and uploaded/sent on 28.03.2022 and the same was received on the date fixed, i.e., 29.03.2022 and the impugned order dated 31.03.2022 has been passed in gross violation of the principles of natural justice. There is an apparent violation of the principles of natural justice, as no opportunity was given to the petitioner for defending or presenting its case, the impugned order cannot be sustained in the eyes of law in view of the law laid down by the Apex Court in Whirlpool Corporation v. Registrar of Trade Marks Mumbai [ 1998 (10) TMI 510 - SUPREME COURT] . The impugned order does not refer any finding as enumerated in Explanation II of section 263 of the Income Tax Act to suggest that the assessment order was prejudicial to the interest of the Revenue in view of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] and therefore, on this count also, the impugned order cannot be sustained in the eyes of law. Decided in favour of assessee. 2023 (8) TMI 829 Delay in filing ITR - delay of 1095 days 730 days for the assessment years of 1994-95 1995-96 respectively - as contented by petitioner that if the delay condonation application had been allowed in the year 1998 itself within 6 months as is provided in various circulars then the record would have been available and the case would have been decided on merits - case was being decided after more than 20 years it did not lie in the mouth of the official who passed the order to say that the record could not be located and, therefore, the case could not be decided. HELD THAT:- As we are of the view that when the delay condonation application was filed on 30.3.1998 then the applications ought to have been decided within the time provided by the Act. The Court is definitely of the view that at that point of time all the records would have been available. However, in view of the submission made by Department, we are of the view that the order dated 24.10.2019, which has been passed after more than 20 years of the filing of the applications on the ground that the records were not available, deserves to be set aside. The order is accordingly quashed. The Principal Commissioner, Income Tax Department -I, Agra shall now decide the applications of the petitioner which were filed on 30.3.1998 afresh. While deciding the application every effort shall be made to get the record re-constructed with the help of the petitioner and all available records. 2023 (8) TMI 828 TCS deduction - collection of toll by lease or the person employed by him on behalf of the Govt. under HP Tolls Act, 1975 - HELD THAT:- As before any liability is imposed on the appellant for payment of tax, it is required to be verified as to whether respective toll lessees of the Himachal Pradesh Government had in fact paid taxes on their income/ sale turn over while collecting tolls at the barriers erected by the State Government or not. In the event such toll lessees had already paid tax on their income, even if the appellant had not deducted the TCS on such income, then the appellant cannot be mulcted with the liability to again pay the tax. In the event of the AO finding that the toll lessees had not paid the tax which ought to have been deducted as TCS by the appellant when it had filed its return, the appellant shall be held liable to pay the same. Therefore, the appellant is directed to share with the respective AO the details of the toll lessees including their PAN number for the respective assessment years in question within four weeks. On receipt of such information, within eight weeks the AO shall verify the return filed by the respective toll lessees , and in the event he comes to the conclusion that the said toll licencee had already paid tax which ought to have been deducted as TCS by the appellant, then he shall not levy any tax on the appellant. If not, he may proceed to collect the same from the appellant Department. The appellant is held liable to pay interest u/s 206C (7) of the Act to the Department for the period between the date of default in deduction of TCS and the date on which the toll licencee had actually paid the income tax on the amount for which there had been a short fall in such deduction, within eight weeks of notification of the same by the Assessing Officer to the appellant. 2023 (8) TMI 827 Nature of expenses - payment made for premature termination of Advertising Sale Agreement - revenue or capital expenditure - HELDT HAT:- Apex Court in Commissioner of Income Tax V/s. Ashok Leyland Ltd. [ 1972 (10) TMI 1 - SUPREME COURT ] held that a payment made for termination of contract by way of compensation would be an allowable deduction in computing the total income of assessee. By terminating the services, assessee not only saved the expense that it would have had to incur in the relevant previous year but also for few more years to come. Therefore, it will not be correct to say that by avoiding certain business expenditure, the company can be said to have acquired enduring benefits or acquired any income yielding asset. In the case at hand also, by paying the compensation under ASTA, assessee not only saved the expense that it would have had to incur in the relevant previous year but also for few more years to come. Therefore, CIT(A) as well as the ITAT, in our view, was correct in allowing this amount paid on account of termination of agreement to SIPL as revenue expenditure. Amount paid under RCA - Tribunal upholding the decision of CIT(A) that the amount being paid under RCA was in the nature of capital expenditure and intangible asset entitling assessee to claim depreciation - HELD THAT:- As decided in Piramal Glass Ltd. [ 2019 (6) TMI 891 - BOMBAY HIGH COURT ] rights acquired by the assessee under the said agreement not only give enduring benefit, protected the assessee's business against competence, that too from a person who had closely worked with the assessee in the same business. The expression or any other business or commercial rights of similar nature used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include the present situation Thus by paying the amount as non-compete fees under the RCA, the rights acquired by assessee was not only giving it enduring benefit but also protected assessee's business against competition, that too from a person who had closely worked with assessee. Tribunal has not committed any perversity or applied incorrect principles to the given facts. We do not think that the questions as proposed raised any substantial question of law. 2023 (8) TMI 826 Validity of reopening of assessment u/s 147 - reasons to believe - reliance on dictates on audit department - non independent application of mind by AO - proposed re-opening is after expiry of four years from the end of relevant Assessment Year - gain on foreign exchange fluctuation - HELD THAT:- If one considers the reasons recorded, there is not even a whisper that there was failure on the part of Petitioner to disclose fully and truly all material facts. In our view, on this ground alone, the notice issued u/s 148 has to be quashed. Moreover, in the computation of income that Petitioner filed along with Profit Loss Account, Petitioner has disclosed the business income and has deducted from the business income gain on Foreign Exchange Fluctuation. As during the course of assessment proceedings, Petitioner was called upon by a notice issued u/s 142(1) to furnish various details, one of which was copy of computation of income and annual accounts with annexures, if any, and copy of the E-return (Acknowledgment) filed for the year under consideration. Petitioner replied vide its letter and provided the computation of income with annual accounts with annexures. Subsequently, Petitioner received another notice issued u/s 142(1) when the scrutiny proceedings commenced, calling upon Petitioner to furnish in writing the 21 separate heads of information called for in the notice - Petitioner replied vide its letter again in which Petitioner has recorded about the hearing held on 16th November 2015 and various details that were submitted. Annexure 2 is a copy of an opinion from an Advocate in which Petitioner has been advised to treat gain on foreign exchange fluctuation as capital gain and, therefore the gain would not be taxable under the Income Tax Act. Thereafter, the Assessment Order came to be passed in which there is no discussion about gain on foreign exchange fluctuation. It is settled law that once a query is raised during assessment proceedings and the assessee has replied to it, it follows that the query raised was subject matter of consideration while computing the Assessment and it is not necessary that an Assessment Order should contain reference and/or discussion to disclose satisfaction in respect of query raised. Therefore, on this ground also, the notice impugned in the Petition is required to be quashed and set aside. Also notice to re-open came to be issued in view of the audit objection raised. A copy of the audit objection reveals that because for the subsequent year, i.e., AY 2014- 15, the Department had not accepted assessee s contention and added back the foreign exchange gain after treating it as revenue receipt, to take a consistent stand on the same issue, the Assessment has to be reopened. From this communication also, it is quiet clear that there has not been non-disclosure of any material fact but only change of opinion. Thus reasons for re-opening Assessment was not that of the AO alone issuing notice but he has acted merely on the dictates of another person for issuing the notice, i.e., audit department. Decided in favour of assessee. 2023 (8) TMI 825 Assessment u/s 144C - lapse in not filing the objections under Section 144C (2)(b)(ii) before the AO - HELD THAT:- DRP in terms of Section 144C (5) may issue directions for guidance of the assessing officer to enable him to complete the assessment. The power of the DRP is provided for u/s 144C (6) to 144C (10) of the Act. After the DRP exercises power vested u/s 144C as noticed above and directions are issued, the assessing officer has no discretion except to act in conformity with the directions. It is not in dispute that if no directions are issued, AO need not wait u/s 144C (13). However, the fact remains that once objections are filed before the DRP and till directions are issued, the assessing officer cannot proceed further. This is in light of mandate u/s 144C (13). Accordingly, non intimation to the assessing officer u/s 144C (2)(b)(ii) though is a lapse on the part of the petitioner, the only way of meaningfully and harmoniously interpreting the obligation of filing objections u/s 144C (2)(b)(ii) is to construe the procedure that once such objections are filed before the DRP and till the decision is taken by the DRP regarding directions to be passed, the assessing officer ought not to proceed further. This is the procedure to be followed. In the present case where objections no doubt have been filed before the DRP and directions passed though at a later point of time, in light of the manner of construing the procedure the assessing officer ought not to have proceeded and ought to have waited till directions were passed by the DRP, as the directions have though been subsequently passed on 15.05.2023. Accordingly, the assessment order is required to be set aside. In light of the above, the assessment order at Annexure-A1 is set aside. Consequently, the computation sheet at Annexure-A2 and the demand notice at Annexure-A3 are set aside. Insofar as the communication at Annexure-A4 is concerned, once the DRP issues directions, it is not concerned with the action of the Assessing Officer. The passing of directions by the DRP confirms right on the petitioner to have such directions adhered to and even otherwise, in terms of Section 144C(13), the assessing officer has no discretion. If that were to be so, the question of the DRP withdrawing its directions does not arise and accordingly, the communication at Annexure-A4 is set aside in terms of the above discussion. Petition is disposed off. The matter is restored to the stage of 144C(13) and the assessing officer shall proceed further in terms of the procedure under Section 144C(13) and the time contemplated under Section 144C(13) is deemed to commence from the date of receipt of certified copy of this order by the assessing officer.The assessing officer is to follow the directions issued by the DRP at Annexure-N. 2023 (8) TMI 824 Penalty u/s. 271(1)(c) - amount received from Hindustan Unilever Ltd. which as per the AO has not been included in the return of income filed by the assessee and second being admittedly is an estimated addition - HELD THAT:- It is an accepted fact that on an estimated addition, no penalty is leviable. It must also be mentioned here that the estimated disallowance as made by the AO is not on account of non-availability of evidences but because the expenses appear to be excessive. Clearly, the addition is nothing but an addition on presumption. Thus, no penalty in respect of addition is leviable and penalty as levied and confirmed by the ld CIT(A) in respect of above addition stands deleted. Coming to addition, a perusal of order of the AO in the penalty proceedings shows that the assessee has categorically made the submission that this amount has been reflected in the profit and loss account and TDS has been given effect in the return of income. Admittedly, penalty proceedings are separate and independent proceedings. AO had a duty to examine the same. AO has not dislodged the submission of the assessee. This being so, on this ground itself, the penalty as levied in respect of addition is liable to be cancelled and I do so. Further coming to the arguments of ld Sr DR that there has been concealment in respect of immovable property sold at Jeypore, it must be mentioned that there is no mention of such an addition in the assessment order. Next, coming to the submission of AR that show cause notice it has not been struck off, the relevant portion, whether it is for concealment of income or furnishing of inaccurate particulars - The penalty as levied by the AO and confirmed by the ld CIT(A) stands deleted. Decided in favour of assessee. 2023 (8) TMI 823 Taxability of global income - residential status of assessee - taxability of long term capital gain derived from sale of shares in an Indian company to be exempt u/Article 13(4) of India Mauritius DTAA - assessee is a non-resident corporate entity incorporated in Mauritius holding a valid Tax Residency Certificate (TRC) issued by Mauritius Tax Authorities - as per AO assessee operates as an investment holding company for undertaking various investments - assessee claimed the dividend income as exempt u/s 10(34) - whether the assessee can be treated as a tax resident of Mauritius? - HELD THAT:- It is a fact on record that the assessee is holding the shares in NSE for more than a decade, since the year 2009, and even as on date, is still holding 3.5% shares in NSE. Thus, holding period of shares by the assessee demonstrates the status of the assessee as a genuine entity carrying on the business in holding investment. TRC issued by an authority in the other tax jurisdiction is the most credible evidence to prove the residential status of an entity and the TRC cannot be doubted. In fact, the CBDT, specifically in the context of India Mauritius treaty, has issued Circular No. 682, dated 30th March, 1994 and 789, dated 14th April, 2000 clarifying that TRC issued by Mauritius Tax Authorities proves the residential status of a resident of Mauritius and no other evidence is required. In case of UOI Vs. Azadi Bachao Andolan [ 2003 (10) TMI 5 - SUPREME COURT ] held that liable to taxation as used in Article 4 of India-Mauritius DTAA does not mean that merely because tax exemption under certain specified head of income including capital gain from sale of shares has been granted under the domestic tax laws of Mauritius, it can lead to the conclusion that the entities availing such exemption are not liable to taxation. The Hon ble Supreme Court categorically rejected Revenue s contention that avoidance of double taxation can arise only when tax is actually paid in one of the contracting States. Hon ble Court held that liable to taxation and actual payment of tax are two different aspects - As for economic development, initially, many developing countries allowed some amount of treaty shopping to attract FDI. Thus materials available on record clearly establish that not only the assessee is a resident of Mauritius, but being a beneficial owner of the income derived from sale of shares, is entitled to the treaty benefits . Undisputedly, the shares sold by the assessee in the year under consideration were acquired in the year 2009, much prior to 01.04.2017. Therefore, the provisions of Article 13(3A) of the tax treaty would not be applicable. Capital gain derived by the assessee from sale of shares would fall within the ambit of article 13(4) of the tax treaty. Capital gain, being exempt under the treaty provisions, cannot be brought to tax in India. Therefore, we direct the AO to delete the addition - Decided in favour of assessee. 2023 (8) TMI 822 Reopening of assessment u/s 147 - Reason to believe - basis of information received from the investigation wing - HELD THAT:- It is evident from the record that the Assessing Officer received the information from DGIT (Investigation) Wing, Mumbai about having vital information initially received from the Sales Tax Department of Maharashtra indicating that the assessee is a beneficiary of accommodation entries by way of bogus sales/purchase bills. On the basis of the aforesaid information, AO initiated proceedings u/s 147 of the Act and issued a notice u/s 148 correctly. If there is relevant material on the basis of which a reasonable person can form a requisite belief that income chargeable to tax has escaped assessment, then proceedings u/s 147 of the Act can be validly initiated. In the present case, on the basis of information received from the investigation wing, reassessment proceedings in the case of the assessee were initiated. It is also well settled that sufficiency or correctness of the material is not a thing to be considered at the stage of recording of reasons. As a result, we find no infirmity in the reassessment proceedings initiated by the AO u/s 147 of the Act and upheld by the CIT(A). Thus, the grounds raised by the assessee challenging the reopening of the assessment are dismissed. 2023 (8) TMI 821 Rectification u/s 154 - Period of limitation - Late fee u/s. 234E - delay in filing quarterly E-TDS return - HELD THAT:- We find that the observation of the CIT(Appeals), NFAC that as per the provisions of Section 154 rectification of a mistake can be made only upto four years from the end of the financial year in which the order sought to be rectified was passed, has not been assailed by the assessee before us. We find that as observed by the CIT(Appeals), NFAC and, rightly so, as per sub-section (7) of Section 154 of the Act, as no amendment under the said section shall be made after expiry of four years from the end of the financial year in which the order sought to be rectified was passed, therefore, the applications filed by the assessee seeking rectification of the orders passed by the DCIT, CPC-TDS u/s. 200A of the Act on 06.09.2014 by filing rectification letters dated 02.02.2022 for the aforementioned respective years were in itself not maintainable. No infirmity in the view taken by the CIT(Appeals), NFAC that as the applications filed by the assessee after expiry of more than seven years from the end of the financial year in which the order was sought to be rectified u/s. 154 of the Act were in itself barred by limitation, therefore, the same were not maintainable. 2023 (8) TMI 820 Penalty u/s. 271D and 271E - period of limitation - mandation to dispose/complete the proceedings within the limitation prescribed u/s. 275(1)(c) - HELD THAT:- We note that section 275 prescribes bar of limitation for imposing penalties. Sub-section (1) explains no order imposing a penalty under this chapter shall be passed. Clause (c) of sub-section (1) prescribes bar of limitation, in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed , which means, the Addl. CIT barred from initiating penalty proceedings after the expiry of the financial year in which assessment was completed. In the present case, the first para of the penalty order clearly shows the assessment was completed on 30-11-2007, thereby, the Addl. CIT cannot impose penalty after the financial year in which the assessment was completed i.e. the relevant financial year is F.Y. 2007 and end of such financial year is 31-03-2008, which means the Addl. CIT barred from imposing penalty after the end of financial year in which assessment was completed, i.e. admittedly after 31-03-2008. As it is evident from penalty order that the ACIT initiated penalty proceedings by issuing notice u/s. 274 r.w.s. 271D and 271E of the Act on 11-03-2010 and imposed penalty vide order dated 24-09-2010. It is clear from the above that the Addl. CIT initiated penalty proceedings on 11-03-2010 i.e. after the expiry of financial year in which the proceedings, in the course of which action for the imposition of penalty to be initiated, therefore, the very initiation is barred by limitation as the Addl. CIT did not initiate penalty proceedings in the course of assessment proceedings. Decided against revenue. 2023 (8) TMI 819 LTCG on sale of listed share - increase in sale consideration of Shares - HELD THAT:- The share price of M/s Axis IT T Limited was Rs. 11.21/- per share on the date of signing the term sheet on 30.11.2007 showing share price from the website moneycontrol.com. Payments were made as per agreement to sell and the same is verifiable from the bank statements. It is crystal clear that the transaction was an off market transaction of listed shares held by the assessee as an investment in its balance sheet and assessee has entered into a share purchase agreement on 11.01.2008 and the transfer of shares actually took place on 28.4.2008 and consideration of the shares was taken Rs. 13.50 per share i.e. the price prevailing on the date of share purchase agreement. As per clause B of the aforesaid agreement the sellers are inter alia the owners of 12,113,184 fully paid up equity shares, representing 60.69% of the issued, subscribed and paid up equity shares capital of the company as more fully specified in Annexure-A. They have an absolute right to sell the shares, free from all liens, charges and encumbrances. Therefore, it is established that the adoption of value by the AO as on the date of transfer was only a hypothetical value i.e. the price as on 28.4.2008. Hence, the resulting addition is not tenable. It is settled law that full value of consideration used in section 48 does not have any reference to market value but only to consideration referred to in sale deeds as sale price of assets which have been transferred, as laid down in the case of CIT vs. Gillanders Arbuthnot Co. ( 1972 (9) TMI 13 - SUPREME COURT ) It is settled law that an agreement always has to be taken to be correct if the assessee has acted in bonafide manner, unless AO has brought evidence on record that it is fraudulent. In this case the Revenue has not been able to establish malafide on the part of the assessee. We note that decision of SA Builders Ltd. [ 2006 (12) TMI 82 - SUPREME COURT ] wherein, it has been held that AO cannot step in the shoes of the businessman and decide as to how affairs of business were to be run and wasteful or excessive expenditure was to be curtailed is very much applicable in the case of the assessee, as the lower authorities have ignored the principle as laid down above. Lower authorities have been completely wrong in making and sustaining the addition on account of increase in sale consideration of shares, which needs to be deleted. Decided in favour of assessee. 2023 (8) TMI 818 Reopening of assessment u/s 147 - Disallowance u/s 43B - payment of interest on conversion of loan into equity shares - addition made as it is not an expense which has been actually paid and therefore same is not allowable u/s 43B - HELD THAT:- It is an admitted fact as per the Return of Income filed by the assessee for the AY 2011-12 resulting in a loss under the normal provisions of the Act and Book Profit u/s. 115JB and the assessee paid the MAT tax. Pursuant to the Ld. CIT(A) order, against the above assessment order which has resulted in a revised loss and no change in the computation of Book Profit u/s. 115JB of the Act. When the re-assessment was done by the Assessing Officer there is no tax liability in the hands of the assessee since the MAT tax was higher than the normal computation of tax, thereby it appears the reassessment itself is invalid, since there is no income chargeable to tax has escaped assessment. This view of ours is supported by case of M/s. Motto Tiles (P.) Ltd. [ 2016 (6) TMI 381 - GUJARAT HIGH COURT] which has followed M/s. India Gelatine and Chemicals Ltd. [ 2015 (2) TMI 808 - GUJARAT HIGH COURT] Thus we are of the considered view that income chargeable to tax has not escaped assessment and the reopening of assessment by issuing notice u/s. 148 is not sustainable in law. Disallowance u/s. 43B deleted by CIT(A) by following case of Rathi Graphics Technologies Ltd [ 2015 (8) TMI 376 - DELHI HIGH COURT] and held that it is not a case where the interest liability has been converted into a loan or borrowing or debenture, where the liability to pay is deferred to a future date. This is a case of complete extinguishment of liability. Therefore the said conversion of interest into shares should be taken as actual payment u/s. 43B and thereby Ld. CIT(A) deleted the additions correctly - Decided against revenue. 2023 (8) TMI 817 Salary earned for services rendered in China - taxation on salary income as accrued to the assessee for work performed in a foreign jurisdiction - Disallowance of claim of exemption u/s 15(1) of the Double Taxation Avoidance Agreement between India and China - HELD THAT:- The proportionate salary for services rendered in India has already been offered to tax in India whereas the balance salary has been offered to tax in China. The salary reconciliation statement has been placed by Ld. AR on record. The assessee has not claimed any foreign tax credit in any of the jurisdiction. The China tax has been paid by the foreign entity i.e., M/s Ford Motor (China) Co. Ltd. and the assessee has offered salary income on gross basis. DR has relied on the decision of SMC bench in the case of Dennis Rozario [ 2017 (1) TMI 1816 - ITAT CHENNAI] as well as another decision of SMC bench in Shri M. Ramesh Kumar [ 2017 (11) TMI 2030 - ITAT CHENNAI] which has taken a view against the assessee. However, both these decisions have been rendered by SMC bench and therefore, we are inclined to follow our own decision as cited above which has been rendered by coordinate bench. The Ld. AO is directed to re-compute the income of the assessee. Grounds raised by the assessee stand allowed which render additional grounds of appeal as infructuous. In the result, the appeal of the assessee is allowed in terms of our above order. 2023 (8) TMI 816 Capital gains - Addition u/s 50C - reference to the DVO to make valuation of the property - DLC rate valuation - assessee appellant had sold an agricultural land situated at Gram Kukas, Tehsil Amer, Jaipur - conditions on account of passing of IOCL gas pipeline in the middle part of his land and that pipeline is protected under the provision of section 9 of Petroleum and Mineral Pipelines Act, 1962 - State Government placed restrictions on the assessee on the impugned land of the assessee and assessee was directed spare the 5 sq.ft. on both the side of pipe line and assessee directed to maintain that nothing long is growing on that part of the land - assessee submitted that the valuation report submitted by the assessee from registered valuer who is approved from the Income Tax Department wherein he has given 20% lesser amount prevailing DLC rate, therefore, the DVO s report is to the extent of not granting and rebate of 25% on the DLC rate contending that P MP Act do not put restrictions regarding use of land is contrary to the fact on record of the State Government produced by the assessee. HELD THAT:- As in this case, the assessee has before entering into a sale agreement obtained valuation report and therefore, claimed by the assessee to the extent of 25% of the DLC rate is justified. The provision of section 50(2)(iii) of section 50C provide that where assessee claim before the ld. AO that the value adopted by the stamp authority, u/s 50C(1) exceed fair market value of the property as on date of proceeding and unless such valuation is subject the matter of litigation before any authority or court. AO may refer the matter of determination of fair market value of property in question to DVO herein. We note that the ld. CIT(A) has already referred the matter to the DVO and DVO has also confirmed the DLC rate without considering the plea of the assessee. The assessee is at disadvantage on account of passing of gas pipeline restrictions put by provision of section 9 of P MP Act which the DVO has commented upon and the assessee in his affidavit submitted that due to disadvantage, he was unable to find suitable buyer at the DLC rate and therefore, as he was in need has sold property at Rs. 1,25,00,000/-. He has obtained the valuation report before entering the transaction and sold the land at rate which in agreement with the valuation report obtained by the assessee. This conduct of the assessee itself shows that the assessee has acted with due care and concern for which the revenue cannot take undue benefit of the contentions placed on record by the assessee. The valuer while considering the relief @ 25 in the DLC rate noted that the assessee s land is suffering on account of the restrictions put forth by P M P Act and even by the State Government. This is more supported by an affidavit stating that the assessee was at disadvantage which the ld. CIT(A) has not considered though he referred the matter to DVO but DVO and ld. CIT(A) failed to consider the specific disadvantage and thereby the claim of 25% relief in that DLC rate considering overall fact placed before us stands justified Considering the restrictions placed in the middle part of the land and accordingly 25% deduction in DLC rate claimed by the assessee is found fair market and reasonable and does not require any adjustment to the return of income filed by the assessee. Appeal of the assessee is allowed. 2023 (8) TMI 815 Capital gain on sale of flat - LTCG or STCG - period of holding - asset/flat holded for a period of more than 36 months or not? - AO rejected the contention of the assessee of the LTCG and held the gain on transfer of the rights of the flat as STCG and also rejected the claim of interest as part of cost of acquisition - CIT(A) deleted addition made by assessee - HELD THAT:- The rights of the assessee arise in the said flat only on the allotment and not by way of filing application. The confirmation letter filed from the developer as well as from the bank also shows that the flat was not allotted initially to the assessee through the developer has submitted a letter that assessee has not held two units in the said building at any point of time. On appreciation of the factual evidences produced before us, we are of the view that the flat has been allotted to the assessee on 31.10.2015 as mentioned in the MOU dated 14.12.2016, which is a document signed by the buyer as well as seller of the rights, therefore, the holding period of the rights is less than 36 months and thus gain arising from transfer of said rights is short term capital gain (STCG) only. Claim of the interest paid on loan for purchase of the property as part of cost of acquisition - Assessee submitted that since right in flat were acquired by way of funds borrowed from the Bank/financial institution, therefore, the interest paid towards such loan should be included in the total cost of acquisition of right - HELD THAT:- We find that the issue of interest paid on housing loan whether eligible for deduction as cost of acquisition while computing long-term capital gain hasn t decided in the case of ACIT Vs Sunil Batra [ 2015 (11) TMI 1274 - ITAT DELHI] as relied on the decision of Tata Iron and steel Co Ltd. [ 1997 (12) TMI 5 - SUPREME COURT] as held that cost of the asset and cost of raising money for purchase of the asset, are two different transactions. Though in above case, the issue was impact of fluctuation of foreign currency loan borrowed for purchase of the asset, but the same analogy apply for interest for money borrowed purposes of capital asset , which in the case of the assessee is right in the flat. Thus following the decision of the Hon ble Supreme Court (supra), the interest claimed as cost of acquisition is not allowable. Also we note that the loan sanction letter filed by the assessee is in respect of another flat and not in respect of the flat in relation to which capital gain has been declared by the assessee. The clarification letter issued subsequently by the banker or financial institution does not seem to be part of a regular practice of the bank or financial institution. In the case of the assessee the developer and the financial institution both being part of the same group, of which the assessee is part, otherwise in normal course no bank can give loan against the property which was not owned by the assessee and also will not transfer loan against one property to another property without making changes in the loan sanction letter or issuing revised sanction letter. In the case, the documents produced do not give confidence of authenticity. Unexplained investment u/s 69B - HELD THAT:- As taking all the amount we find that figure are not reconciling with claims made before the lower authorities for claim of payments towards property. Thus left with no alternative except to restore this issue back to the file of the AO with a direction to the assessee to produce all the documentary evidence in support of that payment which was made by the assessee to Indiabulls Infra Estate Ltd., alongwith ledger account of the assessee appearing in the books of account of developer and banker/financial institution. AO is at liberty to make any inquiry required in the matter but shall provide opportunity of being heard to the assessee. The ground of appeal of Revenue is accordingly allowed for statistical purposes. Addition u/s 56(2)(vii) - immovable property has been received by the assessee for amount less than the market value of the property - According to AO against consideration of the flat i.e. agreement value which was to be paid by the assessee to the developer a part amount has only been paid and the balance amount has been neither shown to have paid nor shown as liability in its books of accounts - HELD THAT:- Deemed income u/s 56(2)(vii) of the Act can be considered at the time of the receipt of the property in the hand of the assessee since in the year under consideration the property has not been received and therefore, provisions of section 56(2)(vii) are not applicable in the case of the assessee in the instant assessment year. The ground of the Revenue is accordingly dismissed. Addition in respect of cash as found from the residence of the assessee - AO made the addition for the reason that no explanation regarding source of cash was made - HELD THAT:- DR could not controvert availability of cash in hand on more than Rs. 53,00,000/- in the hands of the assessee which was supported by way of income-tax return for assessment year 2016-17. Therefore, we do not find any error in the order of the Ld. CIT(A) in deleting addition. Appeal filed by the Revenue is partly allowed for statistical purposes. 2023 (8) TMI 814 Depreciation on trademark u/s 32 - HELD THAT:- The issue stands adjudicated in the case of the assessee for the A.Y. 2007-08 and A.Y. 2009-10 [ 2016 (8) TMI 869 - ITAT DELHI ] Since, the matter stands adjudicated by the Co-ordinate Bench of Tribunal, in the absence of any material change in the factual matrix and legal proposition, we hold that the same ratio applies for the instant year. Non deduction of TDS on Credit Card Charges - addition u/s 40(a)(ia) - HELD THAT:- CIT(A) has not erred in deleting the disallowance made by the Assessing Officer u/s 40(a)(ia) of the IT Act on account of non-deduction of tax on credit card charges as relying on NOTIFICATION NO. 56/2012 [F. NO. 275/53/2012-IT(B)], DATED 31-12-2012 stating no deduction of tax under Chapter XVII of the said Act shall be made on the payments of the nature specified below, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), excluding a foreign bank, namely bank guarantee commission;cash management service charges;depository charges on maintenance of DEMAT accounts;charges for warehousing services for commodities;underwriting service charges;clearing charges (MICR charges) and credit card or debit card commission for transaction between the merchant establishment and acquirer bank. TP Adjustment - Redemption of Deferred Shares - TPO held that though in Form 3CB the assessee has reported that it has applied other method but no method was applied to benchmark the transaction of redeeming of shares - as per CIT(A) TPO had correctly benchmarked them on the basis of valuation report of the Ordinary Shares - HELD THAT:- As gone through the approval proposal to make investment addressed to Standard Chartered Bank at page no. 210. We have also gone through the notification letter exercising share options in the capital of East Ltd. at page no. 278. We have also gone through the letter of the Chartered Accountant indicating the number of shares consisting of 48573 ordinary shares and 20,000 deferred shares at page no. 226. As gone through the reasons given with regard to the valuation shares @ 1 each against the value of the ordinary shares. The main contention of the assessee was the shares are non-marketable, do not have voting rights and do not receive dividends. At the same time, we have also observed that the deferred shares are converted into ordinary shares and once converted as ordinary shares they acquire all the benefits and characters attributable to ordinary shares. The deferred shares carried rights as they would automatically be converted into ordinary shares when the holdings of the assessee in East Ltd. falls below 25.1%. Keeping in view, the fact that the deferred shares can be converted into ordinary shares without any encumbrances, we decline to interfere with the order of the ld. CIT(A). Notional Interest - assessee stated that it had advanced interest free loan to its wholly owned subsidiary out of its own funds - assessee has also charged interest on the same loan in the subsequent year owing to the provisions of Companies Act, 2013 - CIT(A) confirmed the addition relying on the judgment of Hon ble Apex Court in the case of SA Builders [ 2006 (12) TMI 82 - SUPREME COURT ] - HELD THAT:- It is a settled position of law that if the assessee has sufficient interest free own funds to lend monies interest free, no addition is called for. Since, it is contested that the assessee has own interest free funds, the matter is being referred back to the file of the AO to examine the availability of interest free own funds and compute the disallowance accordingly. 2023 (8) TMI 813 Validity of order of NFAC[CIT(A)] u/s 250 - Deduction u/s. 10AA - disallowance of claim as Form- 56F had no name and signature - HELD THAT:- The issue of claiming exemption u/s. 10AA was never in dispute neither in this year nor in the previous years. Above this, this issue was not a subject matter of the grounds of appeal taken by the assessee still the Ld. CIT(A) out of his own whims and fancies disallowed the amount of exemption claimed u/s. 10AA. It s a gross violation of the principle of natural justice and the procedure defined to decide the appeal u/s 246(A) (1). While doing so Ld. CIT (A) ignored his jurisdiction to do so and moreover on merits also this action of Ld. CIT (A) is vitiated by law. This action of Ld. CIT (A) will fall in the category of enhancement of income without assuming jurisdiction hence, void ab initio. Reversal of exemption claimed u/s. 10A/10AA can only be done from the very first year itself once the claim of the assessee is allowed in the previous years, no rejection of the claim can be done in the balance succeeding years. In view of this we found the order of Ld. CIT (A) on this issue highly arbitrary, against law and bad on count of merits also. In the result ground no.1 along with its sub grounds is allowed. Wrong application of tax rate - HELD THAT:- As in the relevant A.Y. assessee company was entitled to pay tax @ 25% instead of 30% as provided in the Act, if the turnover of the company in A.Y. 2016-17 is less than 50 cr. There is no new claim for contention raised by assessee rather assessee claim the same in its return of income and both CPC Bangalore and AO ignored this claim of CPC Bangalore. We found the claim of the assessee to be correct. In its submission, assessee categorically mentioned the figure of turnover in the relevant AY i.e. 46.95 crores which makes assessee eligible for lower rate of tax. As w.e.f. A.Y. 2018-19 as a measure to boost the industry the Hon ble Finance Minister reduce the tax rate for the companies having turnover less than 50 crore in A.Y. 2016-17. We found the contentions raised by the assessee as correct as there is no challenge to this figure at any stage by the department as the matter of the assessee already 3 barriers i.e. CPC Bangalore u/s 143(1), assessment order u/s. 143(3) and order passed by Ld. CIT (A) u/s 250. No adjudication on this issue has been done by the Ld. CIT (A) despite the fact that assessee has taken this ground before him also. We allow the claim of the assessee for statistical purposes by restoring the matter back to the file of Jurisdictional AO for verification of the claim of the assessee considering the figure of turnover at Rs. 46.95 crore for this purpose, which is not under challenge by the department including hearing before us. Ground no. 2 raised by the assessee is allowed for statistical purpose. 2023 (8) TMI 812 Undisclosed income - Mismatch between the income reported under form number 26AS and income recorded in the books of accounts - Form no 26 AS showed huge Rental income on which TDS is made and claimed as tax Credit by assessee and Assessee s financial statements did not show any rental income - HELD THAT:- Naturally when lease rents are paid, tax is required to be deducted by the customer. If lease rent is paid after deducting tax at source, assessee is supposed to reimburse to the extent of tax deduction at source to the financer. The customer issues tax deduction at source certificate in the name of the assessee because master rent agreement was between assessee and the customer. On completion of the tenure of the lease, assets are returned. Those assets are sold at the end of the tenure to the respective purchaser of those assets. The assessee offers investment in unguaranteed residuary account upfront. Therefore naturally, the income of the assessee is not the rental income but the income earned in the business of acquiring and dealing in unguaranteed residuary interest in assets rented to the customers. Thus, the income offered by the assessee is such income and not the rental income appearing in form number 26AS. This AY is the only year in which LD AO has taken such a view and made addition. On Similar facts in earlier years and subsequent years, the LD AO has not made such addition. Perhaps for this year the addition has been made on account of failure on the part of him to understand the business model of the assessee. Therefore, we confirm the order of the LD CIT (A) deleting the addition for this year. Appeal of revenue is dismissed. 2023 (8) TMI 811 Disallowance of interest expenditure - deduction of interest paid against the interest received denied - assessee has not proved the nexus between the interest income and interest expenditure - HELD THAT:- As assessee has furnished the ledger confirmation of the loan creditors as well as the loan debtor, assessee has also furnished its bank statement and bank ledger in order to substantiate the nexus between the interest income and interest expenditure. From the perusal of aforesaid documents, we find merit in the submissions of the assessee that the funds received on which interest was paid were used for the purpose of granting the loan to its group concern on which interest was earned. Accordingly, interest expenditure is wholly and exclusively for the purpose of earning interest income. We direct the AO to grant the deduction of interest expenditure paid by the assessee, while computing the income under the head income from other sources . Decided in favour of assessee. 2023 (8) TMI 810 Revision u/s 263 by CIT - two views on this impugned issue - Annual Letting Value of completed stock of Project Elmwood should have been added to the income of the assessee - AO took a view of not taxing it under the head Income from House property - HELD THAT:- When two views are legally possible and AO adopts one view the Assessment Order cannot be said to be erroneous for the CIT to invoke jurisdiction u/s. 263 of the Act. See Amitabh Bachchan [ 2016 (5) TMI 493 - SUPREME COURT] , Mepco Industries Ltd. [ 2006 (11) TMI 164 - MADRAS HIGH COURT] and Future Corporate Resources Ltd [ 2021 (10) TMI 175 - BOMBAY HIGH COURT] In the case under consideration the AO has adopted one of the legally possible view qua Unsold Flats shown as closing stock. Therefore, the Assessment Order is not erroneous qua unsold flats shown as Stock. TDS and Interest on TDS - AR accepted that there was no inquiry by the AO on the issue of TDS and interest on TDS. Accordingly we hold that the Assessment Order is erroneous and prejudicial to the interest of the revenue with reference to the issue of TDS as AO failed to carry out necessary verification and on the issue of Interest on TDS. Accordingly the, order u/s. 263 is upheld qua TDS claim and Interest on TDS. Decided partly in favour of assessee. 2023 (8) TMI 809 TP Adjustment - ALP of the services provided by the AE (China) to the assessee - eligibility of benefit test - TPO deciding the value of the services at Rs. Nil. - TPO held that assessee has not furnished any evidence regarding the services availed - AR pleaded that assessee has established receipt of services and also established that it was benchmarked using TNMM. Once TPO has accepted assessee s TNMM result, TPO cannot take out one single transaction and separately benchmarked. HELD THAT:- The entire thrust of TPO was that assessee failed to provide necessary evidence that assessee had received intra group services. However, once the ACIT(IT), Circle-1, Pune has held that Benteler Automotive (China) Investment Ltd., had provided services, the finding of TPO that no services were received becomes erroneous. Therefore, the adjustment made by the TPO on the basis that no services were received becomes erroneous. Hence, TPO is directed to delete the adjustment - Decided in favour of assessee. Short credit of MAT - Assessee has submitted that he has already filed rectification application before the AO but AO has not acted on it - HELD THAT:- We direct the AO to verify the assessee s claim of short credit of MAT. The AO shall give opportunity to the assessee before deciding the same. 2023 (8) TMI 808 Revision u/s 263 - as per CIT assessee had belatedly filed requisite form for claiming foreign tax credit against foreign income returned i.e. form no.67, AO had wrongly allowed foreign tax credit to the assessee - mandatory requirement for claiming exemption - HELD THAT:- As we hold that there was no error in the order of the AO accepting the assessee s claim of foreign tax credit, even though form no. 67 was filed belatedly beyond date prescribed u/s 139(1) of the Act, since it was allowed by the AO following the decision in the case of M/s. Brinda Rama Krishna [ 2022 (2) TMI 752 - ITAT BANGALORE] and several other judgments have also affirmed the proposition of law laid down in the said decision. AO by doing so, had taken a possible view on the matter and therefore his order cannot under any circumstances be said to be in error. Appeal of the assessee is allowed. 2023 (8) TMI 807 Set off of brought forward unabsorbed depreciation - Claim denied as assessee s acceptance of rejection of set off of brought forward depreciation in Asst. Year 2004-05 - HELD THAT:- As one of the reasons for CIT(A) for denying benefit of set off of unabsorbed depreciation was the assessee s acceptance of rejection of set off of brought forward depreciation in Asst. Year 2004-05 but assessee has now demonstrated before us, that it was allowed this claim in Asst. Year 2004-05 by the ITAT in its order passed [ 2019 (11) TMI 1342 - ITAT AHMEDABAD] . This basis for the Revenue rejecting the assessee s claim to set off of unabsorbed depreciation in the present year therefore does not survive. Rejection of the claim of set off on the ground that there is no brought forward unabsorbed depreciation at all - The details submitted by the assessee pertained to the unabsorbed depreciation of each year. As per the details there was no unabsorbed depreciation pertaining to Asst. Year 2002-03 to 2005-06 and that does not mean that earlier year depreciation had all being absorbed. The ld. CIT(A) has mis-appreciated facts of the case, and in view of the same, we hold that the assessee is entitled to claim of unabsorbed brought-forward depreciation to be set off against income from other sources as available during the year. Appeals of the assessee are allowed. Customs 2023 (8) TMI 806 Maintainability of SLP - huge delay of 418 days in filing the Special Leave Petition - Benefit of concessional rate of duty - Scope of expression for use in specified Plantation sector as actual use in specified Plantation sector - HELD THAT:- The delay has not been explained to the satisfaction of this Court. Neither, there is any merit in the petition. Hence, the special leave petition is dismissed both on the ground of delay as well as on merits. 2023 (8) TMI 805 Seeking permission to withdraw this Special Leave Petition with liberty to seek alternative remedies - Refund of confiscated brass scrap's sale proceeds with interest - HELD THAT:- The special leave petition is dismissed as withdrawn with liberty to seek alternative remedies. 2023 (8) TMI 804 Duty drawback - Classification of goods exported - sanitary ware - classifiable under Chapter heading 8481 of the CTA or not - rejection of claim of duty drawback under a different category - HELD THAT:- A careful perusal of the clause in Rule 1(d) of Chapter 84 manifests that there is specific exclusion of the category of goods dealt with under original heading of 7321 or 7321 or similar articles of other base material in chapter 74 to 76 or 78 to 81. Reverting back to the instant matter, the consignment was duly inspected vide panchanama dated 12 September 2011, and the same was verified to be sanitary wares . The stand of the respondent that the details of the item brochures/catalogues, which were submitted by the petitioner at the earliest point of time, belies common sense and logic. There is no gainsaying that sanitary wares or fixtures are those equipments, which in isolation or combined with other objects or appliances may be used to achieve a high standard of cleanliness from germs and bacteria - The use of brass in sanitary wares for taps or knobs is by all means a well known phenomena in context of the business of kitchen and bathroom wares since such wares invariably come in contact with moisture or water, which has a high erosive value and brass is thus used in order to prevent rusting of the wares or fixtures for longer lasting durability and use. There is no denial of the fact that the consignment of goods that was exported was containing sanitary wares albeit few parts made of brass elements but nonetheless not in any manner pertaining to use or application in nuclear reactors, boilers, machineries and appliances . The respondent has clearly overlooked even the brochures pertaining to the items that amply demonstrates the essential features of the sanitary wares and use of brass so as to make the articles more elegant and durable for the use of end consumers. It is apparent that the respondent in a mindless manner has failed to even consider the common parlance and manner in which the articles are known, bought and sold in the marketing world. In the cited case of O.K. Play (India) Pvt. Ltd. [ 2005 (2) TMI 114 - SUPREME COURT ], the assessee was engaged in the manufacture of toys and he cleared certain items viz., Activity Desks and Chairs, Fun Fliers, Play Table, Play Pool, Rockers, Slides and Swings without payment of duty claiming exemption from payment of excise duty under chapter Heading 95.03. The claim of the petitioner that the duty drawback should be classified vide heading No. 741903A ( A signifies a matter where CENVAT has not been claimed), as claimed in the prayer clause, is also misconceived since a bare perusal of the aforesaid tabulated tariff details would show that item No. 741902 in Chapter 74 pertains to artware/handicraft - Ultimately, it is the end use of the product that is decisive and in the instant case, the items are meant for use in the kitchen, toilets or bathroom and although it may portray some art work in its designs, it is not artwork or handicraft item. Therefore, duty drawback could only be claimed in category of goods falling Chapter 74 vide item No. 741802. The impugned order dated 08 July 2022 passed by the Revisionary Authority thereby approving the order-in-original No. 101/2013 dated 10 April 2013 by the by the ACC(E) cannot be sustained in law - the respondent shall consider the claim for duty drawback of the subject goods in terms of classification vide item No. 741802 as per tariff applicable for the year 2011-12. The instant Writ Petition is allowed. 2023 (8) TMI 803 Refusal to clear the goods in question imported by the petitioner - Pigeon Peas - Soya bean - clearance denied on the ground that the goods are genetically modified and which if they exceed the permissible parameters cannot be permitted to be cleared and / or they would be required to be re-exported - HELD THAT:- When the Court was about to pass an order, the concern of the Court was primarily on stand taken on behalf of respondent nos. 1, 8 and 10 coupled with the fact that the FSSAI had taken a clear position that the import in question was permissible for home consumption, as the same was within the norms and fulfillment of standards of FSSAI under the provisions of the Act and the rules made thereunder. In such context, the Court had intended to verify the compliance of the observations as made by the Court in MAKE INDEX IMPEX, A PROPRIETORSHIP CONCERN OF PROPRIETOR RAJESH NAKHUA VERSUS UNION OF INDIA ORS. [ 2023 (7) TMI 923 - BOMBAY HIGH COURT] , which was to the effect that the goods being imported were safe for human consumption. It is in such context, the Court noted that the affidavit filed on behalf of the FSSAI was not in compliance on what was observed by the Court in above order, and in such context, as a clear affidavit to that effect was not placed by the FSSAI, the Court expressing its dissatisfaction, had adjourned the proceedings for today, to enable FSSAI to place on record clear affidavit in terms of what the Court expected in paragraph 4 of above-mentioned order. Accordingly, a clear stand of the FSSAI is on record that the Soyabean sought to be cleared by the petitioner and subject matter of the present proceedings, in no manner whatever would be harmful for human consumption/health in whatever form, in the light of the requirements and parameters of the FSSAI Act, 2006 and the Rules framed thereunder, if the goods are permitted to be cleared. Thus, the approach as now sought to be adopted by the Customs Department and more particularly in the light of the position taken by respondent no.1-Union of India, respondent No. 8-Genetic Engineering Appraising Committee as also respondent no. 10-Ministry of Environment, Forest Climate Change and most significantly by respondent No. 7-Food Safety Standards Authority of India, it is opined that the approach ought to be accepted, and the proceedings, without prejudice to the rights and contentions of the parties on any of the issues, which may arise, be disposed of by permitting provisional release of goods subject to conditions imposed. Petition disposed off. 2023 (8) TMI 802 Demand of bank guarantee for re-export of the goods - seeking issuance of detention certificate for demurrage and container detention charges in terms of Regulation 6(1)(l) of Handling of Cargo in Customs Areas Regulation, 2009 r/w Regulation 10 (1)(l) of Sea Cargo Manifest Transhipment Regulations, 2018. Classification of goods - Betelnuts/Areca Nuts - to be classified under Tariff Heading 0802 or under Tariff Heading 2106 9030? - HELD THAT:- If the classification is as contemplated by the Department, then the import of this product with CIF value of less than Rs.251/- per kg is prohibited as per Notification 20/2015-2020. The pricing is so fixed in order to protect our farmers. However, it has to be borne in mind that the above referred Notification which forms the basis for the show cause has been stayed by the Karnataka High Court and the same has not been varied or set aside. The issue of confiscation would arise only if the goods are prohibited and the issue of classification is still pending adjudication. Another factor that engages the attention of this Court is the fact that in all the earlier imports the Department had not raised this issue of classification. The records would further show that although in the earlier writ petitions and appeals the petitioners had requested for a provisional release of the goods, after the disposal of the writ appeals the petitioners have requested to re-export the goods. Therefore, the direction to consider the provisional release in terms of Section 110A of the Customs Act now stands converted to the issue as to whether 're-export' can be granted by just receiving a bond. On reading of the impugned order would show that no reason has been given for imposing the condition for furnishing the bank guarantee. The petitioners have set out in detail in their application the fact that earlier imports of the similar product has not been questioned the Authority has not dealt with this submission. Since the detention is on the orders of the Department applying the ratio laid in Balaji Dekors Vs. Commissioner of Customs, Commissionerate-III, Chennai [ 2017 (8) TMI 686 - MADRAS HIGH COURT ], detention certificate should be issued to the petitioners - The argument of the Department against its issue is the Central Government Notification No.20/2015-2020 dated 25.07.2018. This notification, as already stated, is stayed by the Karnataka High Court. The 2nd issue is therefore to be answered in favour of the above referred petitioners. Petitions disposed off. 2023 (8) TMI 801 Improper rejection of the transaction value - adequacy and the relevance of NIDB data as well as other contemporaneous materials, relied upon by the department - HELD THAT:- The decision in the matter of M/S. GIRA ENTERPRISES ANOTHER VERSUS COMMISSIONER OF CUSTOMS, AHMEDABAD [ 2014 (9) TMI 24 - SUPREME COURT] relied upon by the Commissioner (Appeals) was in relation to an import which took place in 1994 and had discussed in detail, the Customs Valuation Rules, 1988. It is pertinent to note that in Customs Valuation Rules, 1988, Rule 10A which pertains to manner of rejection of declared value and which is quite akin to present Rule 12 was introduced only in the year 1998 vide Ministry of Finance (DR) Notification No. 10/98-Cus (NT) dated 19.02.1998, therefore, the judgment relied upon by the learned Commissioner (Appeals) for the impugned imports was irrelevant for the impugned import. It is found that while order-in-original had reproduced Rule 12 in the course of discussion but there is hardly emerging any material on record indicating why the rejection of transaction value of the importer was justified and whether any invoices or any other documents given by them, as were called upon from them were found to be unacceptable, if so the reasons thereon. The approach of rejecting transaction value, itself was incorrect and needed affording materials to the party - all other arguments relating to rejection of transaction value or NIDB data assumed insignificance at this stage, as rejection of transaction value itself by the department was requiring disclosure of material and reasons to the party. Matter remanded to the original adjudicating authority to decide rejection of transaction value afresh without being influenced by decision of Gira Enterprises, which was incorrectly relied upon by the learned Commissioner (Appeals) - appeal on remand. 2023 (8) TMI 800 Violation of initial mandate of status quo - Refund of pre-deposit - HELD THAT:- It is observed that in M/S SHREE KRISHNA PAPER MILLS IND. LTD. VERSUS CC, JODHPUR [ 2017 (8) TMI 1522 - CESTAT NEW DELHI] , the issue about the proposal of duty demand along with penalty in show cause notice dated 4.9.2006 was remanded back to the original adjudicating authority, but only for the purpose of jurisdiction of the officer issuing the show cause notice. There are no findings found as far as the merits of the proposed demand are concerned in the said final order. The parties were directed to maintain the status quo. Though the said order stands set aside, in view of the order of this Tribunal in SHREE KRISHNA PAPER MILLS INDUS. LIMITED VERSUS COMMISSIONER OF CUSTOMS (PREV.) , JODHPUR [ 2019 (3) TMI 829 - CESTAT NEW DELHI] , it is observed that the impugned application seeking refund of Rs. 2.5 crores was filed prior to filing the said miscellaneous application seeking rectification. Hence the application is observed to be in violation of the directions of status quo of order dated 11.8.2017 as were live on 17.9.2017, the date of the application for refund. It is also observed from the order in SHREE KRISHNA PAPER MILLS INDUS. LIMITED VERSUS COMMISSIONER OF CUSTOMS (PREV.) , JODHPUR itself that the amount of deposit at the investigation stage cannot be considered as pre-deposit. The issue of the appropriation of the amount of Rs. 2.5 crores, the refund whereof has been in question in the impugned appeal is still not decided. Resultantly, the present appeal is held to be pre-mature and accordingly is dismissed is being pre-mature. 2023 (8) TMI 783 Proceedings adjourned for today to enable the FSSAI to place on record a short clarificatory affidavit - HELD THAT:- Though it was to be only one paragraph affidavit, however, even to place on record such an affidavit, such a long time has been taken and that too on the backdrop of series of earlier orders passed. In these circumstances, we although quite unwillingly grant one more day s time to FSSAI to place on record such affidavit by adjourning the proceedings for tomorrow. If such affidavit is not fled by the FSSAI, we shall be constrained to pass further appropriate orders and there shall be no other alternative. Stand over to 10th August 2023 at 10.30 a.m. High on Board . 2023 (8) TMI 782 Clearance of the soyabean as imported - HELD THAT:- Petitioner has brought to our notice a Tabulation of Imports, which is sought to be obtained from the Ministry of Commerce Industry that soyabean (HS Code 12019000) was imported in the quantity of 6,55,895.50MT in the year 2021-2022 and in the quantity of 5,22,553.22MT in the year 2022- 23 - It is requested to keep ready whatever material in this regard before the Court and, more particularly, the details of the laboratory certificates on the basis of which clearance was granted to the imports of the year 2021-22 and 2022-23. It is opined that the affidavit dated 24th July 2023, filed on behalf of the FSSAI, in pursuance of our order dated 18th July 2023, is not satisfactory. The proceedings adjourned to 9th August 2023. High on Board . 2023 (8) TMI 781 Examination process of the samples by the laboratory - HELD THAT:- The consignment of the petitioner has got stuck on issues concerning the laboratory clearance. If this was the fate of the goods to be imported, the Petitioner would have certainly had a second thought to import such cargo. It would be not out of place to observe that a bonafide businessman is not interested in litigation, and more particularly, on such issues. The Mumbai Port Authority has addressed a letter dated 11th May 2023 to the Petitioner setting out the storage/demurrage charges. As seen from the said letter, the Petitioner is required to pay the balance amount of Rs,3,63,75,668/- upto 7th June 2023 - as soyabean cargo is now the subject matter of clearance which is lying with the Mumbai Port Authority, and as there is no issue in regard to the clearance of the Pigeon peas, such goods need to be permitted to be cleared. The Pigeon peas be permitted to be cleared by the Mumbai Port Trust for which the petitioner shall pay storage / demurrage charges proportionate to the quantity of the Pigeon peas being cleared. The petitioner shall accordingly make payment of such charges to the Mumbai Port Trust, which shall be without prejudice to the rights and contentions of the parties. Stand over to 3rd July 2023. High on Board. Insolvency & Bankruptcy 2023 (8) TMI 799 Maintainability of petition - initiation of CIRP - amount exceeding Rs.1 crore was due for payment to the Operational Creditor - undisputed debt which had become due and payable - operational debt was barred by Section 10A of IBC or not - HELD THAT:- From a plain reading of the communications, there arises no doubt that the Corporate Debtor had acknowledged the outstanding amount which was due and payable to the Operational Creditor. Not only was the outstanding amount acknowledged but an assurance had also been given by Corporate Debtor to clear the said amount and make extra payment towards old outstanding dues. Pre-existing disputes - HELD THAT:- The rider subject to the claims lodged is a very generic statement without any specific reference to past disputes and thus devoid of plausibility. Objections in terms of claims lodged , if relatable to existing disputes, should have been brought to the pointed notice of the Operational Creditor which has clearly not happened in the present case - when the Corporate Debtor had admitted the outstanding debt and agreed to pay the same, it amounts to clear acknowledgment of debt being due and payable and belies the existence of any dispute. Whether the debt arising out of the invoices fell during the period which attracts the bar of Section 10A of IBC? - HELD THAT:- There are no hesitation in observing that in the present case, all requisite conditions necessary to trigger CIRP under Section 9 stands fulfilled with operational debt having been acknowledged and default committed thereto and there being no real pre-existing disputes discernible from given facts. The Adjudicating Authority has rightly admitted the application of the Operational Creditor filed under Section 9 of IBC - at the impugned order does not warrant any interference. There is no merit in the Appeal. The Appeal is dismissed. 2023 (8) TMI 798 Approval of the Resolution Plan - dissenting Financial Creditor - discrimination with the payment to unsecured financial creditors or not - HELD THAT:- The Form-H clearly indicate that there are two different categories one who did not vote in favour of the resolution plan and other those who voted in favour of the resolution plan. Form-H also clearly indicate that there can be different payment to the two categories. Thus, the submission of the Appellant that there cannot be any discrimination with the payment to unsecured financial creditors who did not vote in favour of the plan and those who voted in favour of the plan cannot be accepted. The assenting financial creditors entitled for payment as proposed in the plan and dissenting financial creditor is entitled as per the minimum entitlement as per Section 30(2)(b). There is no dispute that liquidation value of the Appellant in the present case is nil. The submission of the Appellant that there is a discrimination between the payment of assenting unsecured financial creditor and dissenting unsecured financial creditor cannot be accepted and on the ground, as urged by the Appellant in this Appeal, the Resolution Plan approved by the Adjudicating Authority cannot be held to be discriminatory. There is no error in the order of the Adjudicating Authority approving the Resolution Plan - there is no merit in the Appeal - appeal dismissed. Service Tax 2023 (8) TMI 797 Non-payment of Service tax - non-inclusion of service tax in respect of the advance received from M/s Areans and M/s A.K.M (MBD) - non-inclusion value of free supply material while calculating the tax liability - HELD THAT:- It is not in dispute in the impugned case that the contracts entered into by the appellants involve material as well as service component. As such, the service rendered by the appellants is taxable only from 01.06.2007. Moreover, in view of the decision in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [ 2018 (2) TMI 1325 - SUPREME COURT] , the value of free supply items cannot be included in the assessable value for the purpose of calculation of service tax. Merits apart, it is found that the show-cause notice and thus, the impugned order are not sustainable on the question of limitation. It is not disputed that repeated show-cause notices have been issued to the appellants on the very same issue and on the basis of very same objections raised by the Audit. It is not permissible in view of the Hon ble Supreme Court judgment in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [ 2006 (4) TMI 127 - SUPREME COURT] . It was followed in a number of decisions by the Hon ble High Courts and the Tribunal. The impugned order is not sustainable and is liable to be set aside - Appeal allowed. 2023 (8) TMI 796 Levy of Service tax - Convention service - Sponsorship Service - Grants/Contribution received from the Government, which were taxable under the category of Event Management Service or not - extended period of limitation. HELD THAT:- It appears that the argument was not taken by the appellant before the Adjudicating Authority, as it appears from the impugned order. Extended period of limitation - HELD THAT:- The Adjudicating Authority observed that the appellant have not contested the same and though the 'Convention Services' and 'Sponsorship Services' were made taxable with effect from 16.07.2001 and 01.05.2006 respectively but the appellant failed to get these services included in their Registration Certificate and also failed to declare them in the ST-3 Returns. On that basis, he concluded that the appellant willfully suppressed the information with an intent to evade service tax liability and, therefore, imposed the penalty under Section 77 and 78 of the Act - The order is completely silent as to any findings of fact on fraud, collusion or wilful misstatement or suppression of facts or violation of provisions of the Act or the Rules. The impugned order is unsustainable and deserves to be set aside - matter remanded back to the Adjudicating Authority to decide the issues on merits as well as on extended period of limitation and on interest and penalty afresh after recording reasons in support thereof - appeal allowed by way of remand. 2023 (8) TMI 795 Levy of service tax - Construction of Residential Complex Service - amount received against booking - allottees had stopped the payment and requested for cancellation of bookings and return of advance - revenue neutrality - extended period of limitation - HELD THAT:- There is no dispute that the appellant was providing construction of residential complex service which is taxable. There is also no dispute that the appellant had collected advances from his customers towards sale of flats during the period October 2013 to March 2015. There is no doubt that such advances were liable to service tax. It was submitted by the appellant that they had returned the advances as allottees had stopped the payment and requested for cancellation of bookings - it is noted that no evidence has been provided by the appellant that establishes that these advances were returned. Extended period of limitation - misdeclaration or not - HELD THAT:- A perusal of impugned order shows that the appellant had taken the same argument before the Commissioner (Appeals), who has noted that the appellant has simply argued that they have refunded the entire amount of advances to the various buyers without producing any evidence which seemed to be an afterthought. It is seen that the appellant has made no effort to provide any documents to evidence the return of the advance amount - The contention that an earlier show cause notice was issued and the information was in the knowledge of the department is also not evidenced by the records - extended period rightly invoked. Appeal dismissed. 2023 (8) TMI 794 Condonation of delay in filing appeal - sufficient cause for delay or not - power to condone the delay beyond the period of three months as provided under Section 85 (3) of the Finance Act, 1994 - HELD THAT:- Admittedly the impugned order dated 29.02.2012 received on 06.03.2012 and appeal was required to be filed on or before 05.06.2012 and if sufficient reasons preventing the appellant from filing the appeal are given and the Ld. Commissioner (Appeals) is satisfied with those reasons then the Ld. Commissioner (Appeals) has power to condone the delay upto maximum period of three months whereas in the present case, the appeal was filed on 29.05.2014 after the delay of more than one and half years. This issue has been considered by the Hon ble Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] wherein the Hon ble Supreme Court after discussing the power of the Commissioner (Appeals) to condone the delay and held that Plea that , because of lack of experience in business there was delay, is not a adequate reason. Thus, there is no infirmity in the impugned order passed by the Ld. Commissioner (Appeals) - appeal of appellant dismissed. 2023 (8) TMI 793 Levy of Service Tax - Brokerage/Commission received towards the services relating to public issue of Equity Shares/Bonds - HELD THAT:- The issue is no longer res-Integra as the identical issue related to the demand on commission received towards public issue of Equity Shares/Bonds has been decided in the favour of the assessee in various Judgments. Reliance can be placed in the case of EDELWEISS FINANCIAL ADVISORS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, AHMEDABAD [ 2022 (12) TMI 975 - CESTAT AHMEDABAD] , where In the light of decision of this Tribunal in M/S ANAGRAM STOCK BROKING LTD VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2018 (10) TMI 641 - CESTAT AHMEDABAD] wherein the present appellant is also one of the appellants, has decided the same issue in their favour - It was held in the case that the allegation of the department that the demat charges collected by the brokers are banking and financial service, hence taxable, also devoid of merit in as much such charges are collected by the Appellant and paid to the depository participants viz. CDSL/NSDL who are authorised to levy such charges under the Depositories Act, 1996. In view of the above decision of this Tribunal, the issue that whether the consideration received towards the service relating to Initial Public Offering (IPO) of Shares/Bond is not liable to Service Tax under Business Auxiliary Services . The impugned order is not sustainable - Appeal allowed. 2023 (8) TMI 792 Classification of services - management, maintenance and repair service/mining service or works contract services ? - period April, 2007 to May, 2007 - reverse charge mechanism - HELD THAT:- The activity in question with regard to exploration of oil by making horizontal drilling from existing/dead wells, there is no activity in the work order with regard to management, maintenance and repair services of the existing wells. It is held that the merits classification of the above services is mining service , which came under the Statute w.e.f. 01.06.2007 and in the case of ATWOOD OCEANICS PACIFIC LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2012 (12) TMI 425 - CESTAT, AHMEDABAD ], this Tribunal held that the drilling, testing and completion of exploratory oil wells will be taxable only w.e.f. 01.06.2007 as services in relation to mining of mineral, oil or gas. Again, in the case of M/s Quippo Oil and Gas Infrastructure Limited Vs. Commissioner of Service Tax [ 020 (11) TMI 437 - CESTAT NEW DELHI ], the activity of drilling of core holes and test wells was held to be taxable only w.e.f. 01.06.2007 as services in relation to mining of mineral, oil or gas - thus, the activities in question, do qualify as mining services , which came into taxable list w.e.f. 01.06.2007. Thus, for the prior period, no service tax is payable under management, maintenance and repair services - the impugned demand against the appellant under reverse charge mechanism, is set aside. Appeal allowed. Central Excise 2023 (8) TMI 791 Extended period of limitation - penalty - items supplied are finished goods or not - correctness of remanding the case - HELD THAT:- The issue, as to whether the items being supplied by the assessee to KEL are fully finished goods or not, does not appear to have been specifically dealt with by the Commissioner in his order, which was challenged before the Tribunal - there are no error in the decision of the Tribunal in remitting the matter back to the Commissioner to examine this aspect. The view of the Tribunal also agreed upon that the longer period of limitation under proviso to Section 11A(1) cannot be invoked nor can the department invoke penalty under Section 11AC, when there is a doubt as to whether the items being supplied by the assessee to KEL are semi-finished or fully finished products. This is because, if such a doubt exists, then the assessee cannot be accused of committing any fraud, collusion or making any willful misstatement or suppression of facts or can it be accused of contravention of any of the provisions of this Act, in which situations only the extended period of limitation can be applied - When there is no intention to evade payment of duty by the assessee because of a doubt entertained by the assessee, the extended period of limitation under the proviso to Section 11A(1) cannot be invoked. There are no merit in the appeal and the same is accordingly dismissed. 2023 (8) TMI 790 Irregular availment and utilization of Cenvat Credit attributable to certain input services - Employees Health Insurance and Group Accidental Insurance Policy - rent a cab , Motor Vehicles Insurance - extended period of limitation - suppression of facts or not - HELD THAT:- It is the case of the Appellant that their manufacturing unit is manned by a number number of workers/employees, who are either discharging their duties inside or outside the factory premises in relation to the manufacture and clearance of their dutiable final products. Amongst them some are covered under Employees State Insurance Schemes as per norms laid down in the scheme. Rest remain uncovered from any insurance scheme though they are engaged in various jobs as assigned to them. The company as employer cannot shirk their responsibilities so far the safety and security of the employees is concerned specially if any untoward happening occurs. The employees who are not covered under ESI Scheme are well covered under the insurance policy for any untoward eventuality, therefore, it is also a moral obligation on the part of the employer to look after the welfare of the employees who are working inside or outside of the premises. Moreover, insurance coverage to the employees is mandatorily required as per the Factories Act - it is found that Rule 2(l)(ii)(BA) (C) of the Cenvat Credit Rules, inter alia excludes life insurance and health insurance from the purview/ambit of the definition of input service when such service is used primarily for personal use and consumption. Extended period of limitation - suppression of facts or not - HELD THAT:- The Department was at liberty to call for any information, put in query, undertook any verification, if felt necessary. All the factors taken together nullified Department s allegation of willful suppression of facts with intent to evade payment of duty. Accordingly, invocation of extended period is uncalled for - Tribunal in the case of BCH ELECTRIC LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-IV [ 2013 (9) TMI 551 - CESTAT NEW DELHI ] has observed the appellant cannot be accused of suppression of the relevant information as it is not the allegation of the department that the appellant in terms of legal requirements were required to give invoice-wise and item-wise details of Cenvat credit which they have not given. Therefore, only normal limitation period would be available to the department for recovery of ineligible Cenvat credit. The impugned order cannot be sustained and is accordingly set aside. The Appeal filed by the Appellant is allowed on limitation with consequential relief, as per law. 2023 (8) TMI 789 Extended period of limitation - concessional rate of duty on the scrap cleared - HELD THAT:- The appellant s case is squarely covered by the decision of the Tribunal in their own case for the past period M/S MENETA AUTOMOTIVE COMPONENTS PVT. LTD., SHRI PRAVEEN GARG, AUTHORISED SIGNATORY VERSUS CCE ST, ROHTAK [ 2015 (4) TMI 733 - CESTAT NEW DELHI] and by the decision of the Commissioner in the subsequent period. Learned Commissioner vide OIO dated 23.11.2016 had categorically mentioned that the aforesaid decision of the Hon ble Tribunal has attained its finality as the worthy Chief Commissioner, Central Excise, Delhi vide their office letter C.No. CCO(OZ)CXJ116/Meneta/CESTAT/ Review/ 2015 dated 03.11.2015 has accorded concurrence on the proposal of acceptance of Hon ble CESTAT Final Order in M/S MENETA AUTOMOTIVE COMPONENTS PVT. LTD., SHRI PRAVEEN GARG, AUTHORISED SIGNATORY VERSUS CCE ST, ROHTAK [ 2015 (4) TMI 733 - CESTAT NEW DELHI] . The impugned order is not sustainable and is liable to be set aside - Appeal allowed. 2023 (8) TMI 788 CENVAT Credit - input services - service fees paid to principals namely Honda Motor Company Ltd., Japan for development of Part Manual and Service Manual - reverse charge mechanism. HELD THAT:- Part Catalogue is nothing but a part of the inventory management system for the appellant in respect of the parts procured and supplied by them through their dealers to the ultimate customers. It is a well established fact that every automobile - four wheeler vehicle comprises of hundreds of small parts which need to be identified for the effective and comprehensive repair and maintenance of the vehicle. Part catalogue is the document created for codification of all the parts for proper understanding and management of inventory. This codification is used not only for inventory management but also for placing the orders on the suppliers and receiving the orders from the dealers/customers. Even the storage bins are to be identified as per these part catalogue - this part catalogue is essentially the part inventory management, procurement and supply system of the parts to the dealers and through them to the ultimate customers. The maintenance repairs and construction manual, is like an idiot guide to the dealers for undertaking the work of repairs and maintenance of the vehicles ensuring compliance with the high safety standards set by Honda Motors, by use of the genuine parts supplied by the appellant. It provides how to further maintain and repair the vehicles brought to the dealers by their customers. Such standardization is absolutely essential to ensure that standard set by the manufacturer are achieved irrespective of the person or the dealer servicing the vehicle. This standardization will promote the sale of genuine parts which are supplied or sold by the appellants. Thus this manual is essential to the activities undertaken by the appellant through supply of genuine spare parts. The denial of CENVAT credit in respect of services of development of Part Catalogue and Maintenance, Repair and Construction Manual cannot be upheld. Since it is held that the credit is admissible to the appellant we are not recording any separate finding on the issue of limitation, interest and penalties imposed. As no demand survives the demand for interest and penalties imposed also are set aside. There are no merits in the impugned order - appeal allowed. CST, VAT & Sales Tax 2023 (8) TMI 787 Date of commencement of production of the unit - initial date of production of the commencement of service of the petitioner s unit has been recorded as 12.06.2012 instead of actual date of production, i.e., 28.03.2012 - Grievance projected by the writ petitioner is that the petitioner has although submitted the documentary evidence of having commenced the production of the unit on 28.03.2012, the final decision for grant of DOP (date of production) has not been taken by the Director Industries and Commerce HELD THAT:- As on account of inaction on part of the respondents by not taking the decision timely regarding the date of production, the benefits which have been availed by the petitioner under the provision of Section 80IB of the Income Tax Act which have been duly accepted by the department at the relevant point of time by accepting the returns are being withdrawn. The record reveals that although the petitioner continued to carry out the production of biscuits with effect from 28.03.2012 and have been filing the returns with the Income Tax Department and the assessment proceedings u/s 153(A)/143(3) of the Income Tax Act for the annual years, 2014-15, 2015-16 and 2016-17 were initiated because of the date of production shown as 12.06.2012 and the deductions claimed by the petitioner were being withdrawn. Since the respondents have failed to take a decision for grant of date of production as on 28.03.2012 in conformity with the interim direction passed by this Court coupled with the observation of the Director Industries and Commerce, the learned senior counsel appearing on behalf of the petitioner-unit submitted that he would be satisfied at this stage in case if a direction is issued to the respondents to accord consideration to the unit of the petitioner within some reasonable time in the light of the observations of the concerned Director, i.e., respondent No. 2 and to the aforesaid preposition, the learned counsel appearing on behalf of the respondents have no objection. The present petition is disposed of with the direction to the respondents to accord consideration to the case of the petitioner to have commenced the production of the unit on 28.03.2012 instead of 12.06.2012 by granting final DOP in conformity with the observations of the Director Industries and Commerce, which find mention in communication dated 14.06.2012 addressed to the General Manager District Centre, Jammu within a period of six weeks from the date copy of the order along with writ petition and the annexures appended thereto, are made available to the respondents. 2023 (8) TMI 786 Maintainability of writ petition - availability of alternative remedy - Validity of Re-assessment order - statutory period of limitation prescribed under the JVAT Act not followed - Section 42(3) of the JVAT Act. Existence of alternative remedy - HELD THAT:- It is trite law that existence of alternative remedy is not an absolute bar to the maintainability of writ petition under Article 226 of the Constitution of India. There are circumstances under which writ petition can be entertained namely; breach of fundamental right; violation of principles of natural justice; and excess of jurisdiction or a challenge to vires of a statute or delegated legislation. In the present case, writ petitioner has raised the issue of limitation which is a jurisdictional question and, thus, writ petition is maintainable. Interpretation of statute - Whether Section 42(3) is in itself the substantive provision provided under the JVAT Act for initiation of re-assessment proceeding or it merely enumerates additional circumstances/grounds under which re-assessment proceeding can be initiated under the substantive provision of re-assessment contained under Section 40 of the JVAT Act? - HELD THAT:- The Hon ble Supreme Court, in Mafatlal Industries [ 1996 (12) TMI 50 - SUPREME COURT] , has clearly laid down that the phrase levy and collection indicates that all the steps in making a man liable to pay a tax and exaction of tax from him must be in accordance with law. All steps must be taken according to statutory provisions and no one can be subjected to levy and collection of tax without authority of law. Completion of assessment of an Assessee confers valuable right upon the said assessee and the said assessment proceeding can be subjected to re-assessment strictly in accordance with the statutory provisions contained under the Act - under the scheme of the Act, there is provision for assessment, self-assessment, audit assessment, assessment of dealers not registered, and, specific provisions have also been incorporated for carrying out re-assessment proceedings under Section 40(1) of the JVAT Act. Even earlier, prior to insertion of Section 42(3), the Assessing Authority, could have treated audit objection as an information and could have initiated re-assessment proceeding. However, Section 42(3) provides that when information is received by way of observation/objection from the Comptroller and Auditor General of India, the Assessing Authority has to proceed to re-assess the dealer. Thus, what is dispensed with under Section 42(3) is recording of reasons to believe by the Assessing Authority for initiation of re-assessment proceeding. In the Judgment rendered by Hon ble Apex Court, in the case of Larsen and Toubro [ 2017 (3) TMI 1064 - SUPREME COURT] , Hon ble Apex Court, after examining almost all earlier Judgments, although held that an audit objection would be well within the parameters of being construed as information, but at the same time, it was held that merely because audit objection has been raised, the same would not authorize the Assessing Authority to proceed with re-assessment and the Assessing Authority has to record his satisfaction on the audit objection. In the said Judgment, Hon ble Supreme Court noticed that the Assessing Authority was not agreeing with the audit observation, but, despite the same, proceeded to issue Notice on the ground of direction issued by Audit Party and not on its personal satisfaction and it was clearly held by Hon ble Apex Court that same was not permissible under law; and the very initiation of re-assessment proceeding was declared as without jurisdiction. It is trite law that a quasi-judicial authority cannot abdicate its jurisdiction on the dictate of an external authority and proceed to pass order on such external dictate. In the present case, it has been argued by learned Advocate General that Section 42(3) mandates the assessing authority to initiate re-assessment proceeding on the dictate of the Audit Party which, on the face of discussions held above, would amount to abdication of jurisdiction of the assessing authority being a quasi-judicial body to external dictates, which would be contrary to the ratio laid down by the Judgment of Hon ble Apex Court in the case of Indian Eastern Newspaper Society, New Delhi [ 1979 (8) TMI 1 - SUPREME COURT] and in the case of Larsen and Toubro. Whether Section 42(3) is an independent provision conferring power of re-assessment or is merely as additional ground conferred under the Act upon the assessing authority for carrying out re-assessment proceedings? - HELD THAT:- What has been dispensed with in Section 42(3) is the requirement of recording reasons to believe only. It is under the said circumstances, non-obstante clause was not inserted in Section 42(3) extending the period of limitation from the date of receipt of audit objection, and, thus, the period of limitation would be governed by Section 40(1) read with 40(4) of the JVAT Act - If the assessing authority is allowed to initiate repeated re-assessment proceeding against an Assessee merely on the dictate of Audit Party, there would be no finality of assessment and the Assessee would be having domical sword hanging over in it in perpetuity, which is not the scheme of the Act. Since it is already declared that Section 42(3) is to be read with Section 40(4) of JVAT Act and limitation period for carrying out re-assessment proceeding is five years, we are not deliberating further over the said issue. However, it would be appropriate to also refer to the Judgment rendered by Hon ble Supreme Court in the case of STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. [ 2007 (10) TMI 300 - SUPREME COURT] wherein Hon ble Supreme Court, while examining the provisions contained under the Punjab General Sales Tax Act conferring power of suo-motu revision upon the Commissioner, held that although said Section prescribed no period of limitation but the same would not mean that suo-motu power can be exercised at any time. Hon ble Supreme Court, in the said Judgment, held that if no period of limitation is prescribed, statutory authority must exercise jurisdiction within reasonable time and the reasonable period would depend upon the nature of the statute, liabilities and other relevant factors. Thus, under the scheme of JVAT Act also, provisions of limitation for carrying out assessment, audit assessment, scrutiny assessment, re-assessment proceedings, etc. have been prescribed to be three years to five years. It is for the said reason also, in our opinion, while incorporating provision of Section 42(3), the Legislature, in its wisdom, had not sought to extend the period of limitation by inserting non-obstante clause. Whether suo-motu extension orders extending the period of limitation passed by Hon ble Supreme Court would apply to original adjudication proceedings? - HELD THAT:- A bare perusal of the said Circular would reveal that CBIC, in exercise of its power under Section 168A of CGST Act, has issued the said guidelines which was deliberated in 43rd meeting of the GST Council and in the said guidelines, it was clearly noted that the orders of Hon ble Supreme Court only apply to quasi-judicial and judicial matters relating to petitions/ applications/suits/appeals/all other proceedings and not to original adjudication proceedings. In fact, the Parliament has enacted the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and, under the said Act, provisions were incorporated extending the period of limitation specifically for passing of adjudication orders. A careful reading of the Judgment of Hon ble Apex Court in S. Kasi [ 2020 (6) TMI 727 - SUPREME COURT] would leave no iota of doubt in our mind that the purpose of extending the period of limitation was for the benefit of litigants who have to take remedy in law as per the applicable statute for a right, as the law of limitation bars the remedy but not the right. Thus, in view of the ratio of the Judgment of Hon ble Apex Court, in the case of S. Kasi read with the amendments carried out by the Parliament and the State Legislature extending the period of limitation by amending Acts, it is opined that the benefit of suo-motu extension orders of Hon ble Apex Court would not be available to original adjudication proceedings which is to be governed by applicable Statutes including its amendments. The suo-motu orders extending the period of limitation passed by Hon ble Apex Court is not applicable to original adjudication proceedings and re-assessment proceedings would be governed by provisions of JVAT Act read with the Amendment Act of 2020. Application disposed off. Indian Laws 2023 (8) TMI 785 Dishonour of Cheque - legally enforceable debt at the time of encashment or not - applicability of section 138 of Negotiable Instrument Act - HELD THAT:- It appears that the Learned Magistrate has conducted the proceeding acording to the provisions of law and during the course of examination of the accused/ petitioner u/s 313 Cr.P.C. Petitioner stated some of the amount of the cheques has already been paid to the opposite parties and he possessed those receipts. It appears from the LCR that the present petitioner intends to adduce evidences for defence accordingly the date was posted for DWs thereafter the, petitioner was not turned up thus, finding no other alternative Learned Magistrate has closed the DWs. Thereafter the date was fixed for the argument and the petitioner/accused took part of the proceeding and the Learned Advocate for the petitioner argued the matter at length. So it proves that the petitioner was allowed to adduce DWs but he has not availed the same. In the present case the petitioner cannot be awarded to suffer simple Imprisonment for more than 06 months in default of payment of compensation. Consequently the portion of the order of the sentence passed by the Learned Magistrate affirmed by the Learned Additional Sessions Judge is appeared to me improper and illegal. The present petitioner is aged about 80 years; he has already suffered simple imprisonment during the pendency of the instant revision. Some amount has already been deposited by the direction of this court before the Learned Magistrate. Considering the entire facts and circumstances and considering the observation made above the impugned order of default of payment by the petitioner/accused to suffer simple imprisonment for nonpayment of the compensation amount within stipulated period is set aside. Application disposed off. 2023 (8) TMI 784 Disciplinary proceedings against the Chartered Accountant (CA) - Engagement in Business activities without approval from ICAI - Allegation of evasion of Sales Tax - opening an account in the bank in the name of fictitious firm and used the bank account for making the payment of transaction entered into between the fictitious firm and another company - HELD THAT:- The entire basis is that the bank account opening forms were signed by respondent in respect of the concerns and based on the deposition made by the witnesses, the Committee was of the opinion that respondent was actively involved in business activities without obtaining prior permission of the Council. The Magistrate Court has acquitted respondent on the basis that there is no evidence that respondent had even opened those bank accounts. It is required to note that the acquittal is not on the basis of benefit of doubt being given to respondent but it is a clear case of acquittal on the basis that there is no evidence against respondent that he had opened these bank accounts or did what he was accused of. The Council was not correct in not accepting the acquittal by the Court of Metropolitan Magistrate, 25th Court, Mazgaon - Reference dismissed.
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