TMI Tax Updates - e-Newsletter
August 2, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Bail application - Input Tax Credit - availment of input tax credit - fake firms/non-existent firms - Taking into consideration the provisions of law and the fact that the Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant - The applicant is in jail since 18.2.2022 and has no criminal history. - Bail application allowed. - HC
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GST:
Input Tax Credit - Disallowance of debit of IGST from the electronic credit ledger - Rule 86A - The appellant has used the expression “negative blocking”. We find no such expression in Rule 86 A. It appears that such expression is used in common parlance among dealers. If the statute does not use the expression negative balance, such theory cannot be imported to justify the contention that there should be a positive balance to invoke Rule 86 A. Such interpretation would render the rule redundant and it can be also rewarding the assessee at times. Thus, the Rule 86A (1) read in its entirety will clearly shows that there is no requirement under the Rule that the electronic credit ledger should contain sufficient balance for the purpose of blocking the credit by invoking the said rule. - HC
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GST:
Seizure of goods alongwith vehicle - concluded proceedings in terms of Section 129(5) on payment of amount as per section 129(3) - The contention of the petitioner that a copy of the order under Section 129(3) of the CGST/UPGST/IGST, Act be provided to him, is wholly misconceived inasmuch as the proceedings stood concluded in terms of sub-section (5) of Section 129 read with Rule 142 (3) of the Rules and, therefore, no mandamus contrary to law can be issued in exercise of powers conferred under Article 226 of the Constitution of India. - HC
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GST:
Levy of GST - Pure services provided by the applicant in the manner of Implementation Support Agency (ISA) Services under JAL JEEVAN MISSION (JJM) for PHE Department - the supply being provided by the supplier from its principle business place i.e. Bhopal to Union Territory of Ladakh is covered under under S.No. 3 of notification 12/2017-Central Tax Rate 28.06.17 and hence it is NIL rated. - AAR
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GST:
Profiteering - purchase of flat - The Authority takes cognizance, based on the DGAP’s verification, that the Respondent No. 2 has passed on benefit as per Table-N above by credit notes of the amount profiteered by him. The Authority directs the Respondent No. 2 to pass on the benefit of Rs. 3,61,621/-along with interest as prescribed under Rule 133 (3)(b) of the CGST Rules, 2017. - NAPA
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Income Tax:
TDS u/s 195 - withholding of tax - PE in India - obligation to deduct TDS - As rightly held by the High Court, since the Appellant requested issuance of Certificate for deduction of TDS at 4% of taxable value it is not for the Appellant to challenge the certificate. Moreover, it appears that in the final assessment for one or two preceding Assessment Years it was found that the Appellant did have PE in India. Appeals are pending. In any event, Tax deducted at source is adjustable against the tax, if any, ultimately assessed as payable by the Assessee and any excess tax deducted is refundable with interest. Interference is not warranted at this stage. - SC
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Income Tax:
Rate of deduction of tax in the case of a non-resident who does not have a PAN - DTAA between India and Netherlands - It is not in dispute that assessee has not deducted this TDS from the payment but has deposited from their own account and has absorbed it as cost. It is also not in dispute that since payee, ELFC, being a foreign company having no PAN, the assessee reported the transaction without PAN in the quarterly TDS statements. - , the rate of taxation would be as dictated by the provisions of the treaty - no substantial question of law arises. - HC
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Income Tax:
Reopening of assessment u/s 147 - denial of natural justice - order passed under Section 148A(d) - The legal principle that can be culled out from the aforementioned decisions is that the opportunity which is provided for under the scheme of the Act should be a meaningful and effective opportunity as such opportunity is not an empty formality. The assessee is entitled to be heard and such hearing should be a purposeful and effective hearing and not for the sake of showing as if a hearing was conducted. - HC
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Income Tax:
Levy of penalty u/s 271D V/S 271E - alleged violation of section 269SS having received Rs.15.50 lacs, in cash from wife - allegation of default specified u/s. 269-T - wrong mention of a section (provision of law) - the penalty u/s. 271D, though not time barred, is not maintainable in the absence of the necessary jurisdiction - the penalty levied is for the default specified u/s. 269-T, and though merited on the whole sum and, in any case, part thereof, is not sustainable in the absence of any penalty having been initiated or levied u/s. 271-E - AT
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Income Tax:
Rental income - Deduction u/s 24(b) - interest paid on the amount borrowed - the loan was not borrowed for the impugned Flat No.11. Assessee had claimed that the loan was used for making payment to the Tenants of Flat No.11, but mere oral recital does not hold good against the written document of loan which mentions Flat No.12 and garage 12G. - loan was not for the impugned Flat No.11, hence the assessee is not eligible for deduction u/s.24(b) of the Act for the interest paid on the amount borrowed - AT
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Income Tax:
Unexplained expenditure - The whole name of this price rigging mechanism was given as “screen management charges”. We are not concerned with the mechanism as well as the people involved in that. It is for the other regulator to look into this. We are just supposed to know whether assessee has incurred any expenditure or not and consequently addition is sustainable or not. The learned AO has not brought on record any with dense that assessee has incurred this expenditure. - CIT(A) rightly deleted the additions - AT
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Income Tax:
Revision u/s 263 - issue of shares at a premium - As in present case, the valuation made by the assessee is not in accordance with Rule 11UA , as assessee tried to increase the valuation by inclusion of share application money in net worth or consequently not increasing the total issued capital. Thus, it did not satisfy Clause (i) of above explanation. Further clause (ii) was not at all looked by AO with respect to other valuation, so there is no question of reaching at any satisfaction by LD AO. - ld PCIT has correctly held that order passed u/s 143 (3) of The Act by the ld AO is erroneous so far as prejudicial to the interest of revenue - AT
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Income Tax:
Revision u/s 263 - Revenue recognition against advances received - It is the other party who makes the payment, who has not objected or had not made any claim against the misuse of the advance of funds other than the intended purpose. As long as the contracting parties are in agreement with the certification of the progress of the project, the revenue has very little role to play in the revenue recognition and investment activities. We do agree that revenue can always make enquiries and once the assessing authority is satisfied with the submissions on the revenue recognition, which the assessee is following consistently then the matter has to rest at that stage. The Ld.Pr.CIT cannot impose of his another possible view in this circumstances even after detailed enquiry by the Assessing Officer. - AT
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Income Tax:
Bogus LTCG - Addition u/s 68 - bogus penny stock transaction - suspicion v/s facts - disallowing the exemption u/s 10(38) - The assessee has demonstrated with substantial evidences before the AO that the actual purchase and sale of the shares took place, such shares had distinctive numbers, the transactions were routed through the normal banking channels and the shares had been allotted to the assessee subsequently under an order of amalgamation/merger by the judgment of Hon’ble High Court of Kolkata and, therefore, mere reliance on the report of Investigation Wing and statement of a Person which do not even mention the name of the assessee, in our considered opinion cannot be upheld. - AT
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Customs:
Project Import - De-registration of the contracts registered by petitioner - Delayed adjudication and new objection raised by the revenue after 30 years of re-export - Though there is no time limit prescribed, that would not mean that the department could commence adjudication proceedings after 20 or 25 or 30 years by calling upon parties to comply with alleged obligations which they had. That would also amount to violating the principles of natural justice, in as much as, long delay will deprive a party from marshaling the documents or witnesses as there is always a possibility of documents or the witnesses disappearing or ceasing to exist after such a long gap. - HC
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Customs:
Validity of SCN - delivery of notices beyond the time limitation - the notice was served on them by hand on 03.04.2001. In such circumstances, the service of notice effected on the petitioner at the first instance itself, would be deemed to be completed service and hence, the question of affixing the notice in the notice board of the customs house, will not arise. Therefore, this court is of the view that if the date of despatch of notices is taken into consideration, the notices served on the petitioner are within the period of limitation. - HC
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Customs:
Cancellation of the IEC - EPCG Scheme - levy of penalty - the learned Judge while disposing the writ petition filed by the appellant, challenging the order of cancellation of IEC passed by the third respondent, has correctly directed the jurisdictional officer under the Act, to issue appropriate show cause notice to the appellant, within a period of 30 days from the date of receipt of a copy of the order; further directed the appellant to file a reply within a period of 30 days; and thereafter, directed the jurisdictional officer to pass appropriate order, in accordance with law, within a period of 90 days, after giving adequate opportunity of hearing to the appellant. Further, the interest of the appellant was rightly protected by extending the status quo order for a period of 90 days. - HC
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Customs:
Rectification of mistake - Calculation of correct Fe content - Iron Ore Fines - The correct Fe content was required to be determined on the basis of the guidelines contained in the judgement of the Hon’ble Apex Court in the case of Gangadhar Narsingdas Aggarwal - It is the settled position of law that not following the order of the Hon’ble High Court or the Hon’ble Apex Court would amount to mistake/error which is rectifiable under the provisions of Section 154 ibid. It is strange that in the second round and in the impugned order, the First Appellate Authority has ignored its own earlier order which has attained finality and thereby sustained a tangential order of lower authority. - AT
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Service Tax:
Validity of order quashing the show cause notice (SCN) by the writ court - Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded - The learned single Bench in the earlier order, which we have quoted above, has stated that the department has an obligation to determine whether the writ petitioner is receiving support service from the Government and it is only thereafter a show cause notice can be issued. This finding rendered by the learned Writ Court is contrary to section 73 of the Act and therefore, the same does not reflect the correct legal position. - SCN restored - HC
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VAT:
Liability of tax - movement of capital goods from the petitioner’s unit in SEZ to DTA unit - the plea of lease arrangement under which capital goods are transferred from Cochin to Udaipur is not convincing and acceptable. - from the documents relied on by the petitioner, the subject movement is an inter-state transfer and attracts Central Sales Tax - the case of the petitioner for exemption from payment of central sales tax on the ground that, movement of goods is in the course of import is also unsustainable and accordingly rejected. - HC
Articles
Notifications
DGFT-
23/2015-2020 - dated
1-8-2022
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FTP
Import of Malonylurea (Barbituric Acid) and its salts - Amendment in import policy condition of HS Code 29335200 under Chapter 29 of ITC (HS) 2022, Schedule - I (Import Policy)
GST - States-
7/2022-State Tax (Rate) - dated
18-7-2022
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Himachal Pradesh SGST
Seeks to amend Notification No. 2/2017-State Tax (Rate), dated the 30th June, 2017
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6/2022-State Tax (Rate) - dated
18-7-2022
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Himachal Pradesh SGST
Seeks to amend Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017
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5/2022-State Tax (Rate) - dated
18-7-2022
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Himachal Pradesh SGST
Seeks to amend Notification No. 13/2017-State Tax (Rate), dated the 30th June, 2017
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4/2022-State Tax (Rate) - dated
18-7-2022
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Himachal Pradesh SGST
Seeks to amend Notification No. 12/2017-State Tax (Rate), dated the 30th June, 2017
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3/2022-State Tax (Rate) - dated
18-7-2022
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Himachal Pradesh SGST
Seeks to amend Notification No. 11/2017-State Tax (Rate), dated the 30th June, 2017
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03/2022–C.T./GST - dated
26-7-2022
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West Bengal SGST
Seeks to exempt taxpayers having AATO up to 2 crores from the requirement of furnishing Annual return for F.Y. 2021-22
Income Tax-
05/2022 - dated
29-7-2022
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IT
Reduction of time limit for verification of Income Tax Return (ITR) from within 120 days to 30 days of transmitting the data of ITR electronically
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2022 (8) TMI 52
Bail application - Input Tax Credit - availment of input tax credit - fake firms/non-existent firms - Section 132 (1)(b) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- This Court finds that there is no dispute that the applicant is involved in an economic offence of considerable magnitude and gravity. The department has already filed complaint against the applicant, wherein list of witnesses has been furnished. The proprietor of two firms, namely, Sri Shyam International, Delhi and M/s Balaji Enterprises have also been made witnesses in the complaint, who were also the beneficiary of the allegedly illegal conduct of the applicant. The evidence collected against the applicant has been described in the complaint. The applicant is to be tried by the court of Special Chief Judicial Magistrate, Meerut. The alleged 75 non-existent firms could not be located till the filing of the complaint and if located the evidence collected from those firms could be led before the trial court. The applicant is in jail since 18.2.2022 and there is no allegation that he had any prior criminal history of any economic offence or otherwise against him. The Hon'ble Supreme Court in case of SANJAY CHANDRA VERSUS CBI [ 2011 (11) TMI 537 - SUPREME COURT ], has observed that in deciding the bail applications an important factor which should certainly be taken into consideration by the court is the delay in concluding the trial. Here, taking into consideration the course of investigation adopted by the Department, the evidence, so collected, the trial will take considerable time and it may happen, if denied bail, the judicial custody of applicant can be prolonged beyond the statutory period of punishment which is five years. Taking into consideration the provisions of law and the fact that the Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant - The applicant is in jail since 18.2.2022 and has no criminal history. Keeping in view the nature of the offence, argument advanced on behalf of the parties, evidence on record regarding complicity of the accused, larger mandate of the Article 21 of the Constitution of India and the dictum of Apex Court in the case of DATARAM SINGH VERSUS STATE OF UTTAR PRADESH AND ANR. [ 2018 (2) TMI 410 - SUPREME COURT ] and without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail - Bail application allowed.
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2022 (8) TMI 51
Seeking grant of Bail - illegal availment of CENVAT Credit - allegation against the applicant that he is involved in GST registration of fake firms by using pan card, adhaar card and other information of other persons procured fraudulently and by showing fraudulent transaction of such firms for availing fake / bogus Input Tax Credit (ITC) - HELD THAT:- This court finds that there is no firm registered in the name of the applicant and he claims that he has no concern with 11 firms registered on pan number of the applicant. From the bank accounts of the applicant, no monetary benefit from illegal availment of ITC were found. The complaint has already been filed against the applicant. The investigation has been conducted and necessary statements have been recorded the details of manipulation by the applicant have been found during the investigation. The details of the alleged shell companies have also been gathered. The facts in the complaint are required to be proved by the prosecution before the special court. The Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant. The applicant is in jail since 10.3.2022 and has no criminal history - Keeping in view the nature of the offence, argument advanced on behalf of the parties, evidence on record regarding complicity of the accused, larger mandate of the Article 21 of the Constitution of India and the dictum of Apex Court in the case of DATARAM SINGH VERSUS STATE OF UTTAR PRADESH AND ANR. [ 2018 (2) TMI 410 - SUPREME COURT ] and without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail. Let the applicant be released on bail on his furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned subject to following conditions. Further, before issuing the release order, the sureties be verified - Application allowed.
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2022 (8) TMI 50
Input Tax Credit - Disallowance of debit of IGST from the electronic credit ledger in exercise of the power conferred under Rule 86A of the Central Goods and Services Tax Rules, 2017 (CGST Rules) and the West Bengal Goods and Services Tax Rules, 2017 - HELD THAT:- Rule 86A deals with conditions of use of amount available in electronic credit ledger. In terms of sub Rule 1, the Commissioner or the officer authorized by him in that behalf, (the first respondent herein), having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible on account of contingencies mentioned in clauses (a) to (d) may for reasons to be recorded in writing, not allowed debit of any amount equivalent to such credit in electronic credit ledger for discharge of any liability under Section 49 or for claim of any refund of any unutilized amount. In terms of sub Rule 3, such restrictions shall cease to have effect after the expiry of a period of one year from the date of imposing such restrictions. The key word which falls for interpretation is the word available - The word available occurring in Rule 86 (1) cannot be read in isolation and it has to be read along with the remaining words which is in the electronic credit ledger has been fraudulently availed or is ineligible , has been fraudulently availed would undoubtedly denote a situation which has occurred in the past. What is the duty of the Court? It is to examine the true intention of the legislature. It is the domain of the legislature to determine what is best for the public good and to provide for it by proper legislation, it is the domain of a Court to expound the law not to legislate. Rule 86A falls in Chapter IX of the Rules which deals with payment of tax. Rule 85 deals with Electronic Liability Register. In terms of Sub-rule (7) of Rule 85, a registered person shall, upon noticing any discrepancy in his electronic liability ledger, communicate the same to the officer exercising jurisdiction in the manner, through common portal in FORM GST PMT- 04 - The appellant has used the expression negative blocking . We find no such expression in Rule 86 A. It appears that such expression is used in common parlance among dealers. If the statute does not use the expression negative balance, such theory cannot be imported to justify the contention that there should be a positive balance to invoke Rule 86 A. Such interpretation would render the rule redundant and it can be also rewarding the assessee at times. Thus, the Rule 86A (1) read in its entirety will clearly shows that there is no requirement under the Rule that the electronic credit ledger should contain sufficient balance for the purpose of blocking the credit by invoking the said rule. The appellant has not been prevented from carrying on his business activities, all that has been done is to prevent him from operating the electronic credit ledger. Thus, the appellant would be free to carry on his business activities by effecting payment of the requisite amount of tax into his account and all that has been prevented is that the appellant would not be entitle to adjust the tax by availing the credit, if available in his electronic credit ledger. Appeal dismissed.
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2022 (8) TMI 49
Release of seized goods, subject to payment of deposit with penalty - reason as recorded for passing the seizure order was that the E-way bill system, as introduced by the Central Government under the C.G.S.T., was replaced by the State E-way bills, which had been suspended by the Central Government w.e.f. 02.02.2018 - HELD THAT:- The whole basis based upon which the order has been passed that the petitioner was not carrying the E-way bill as are required under the U.P. G.S.T. Rules, looses significance as the petitioner were not liable to be taxed under the U.P. G.S.T. Act being an inter-state supply and further the requirement of E-way bill was recommended to be not enforced till 31st March, 2018, in view of the recommendation of the G.S.T. Council. The demand as raised in the order dated 19.03.2018 and as affirmed vide order dated 06.11.2018 are clearly not sustainable and are hereby set aside - Petition allowed.
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2022 (8) TMI 48
Transitional Credit - filing of form TRAN 1 and TRAN 2 - HELD THAT:- The Hon ble Supreme Court in a recent decision in the case of UNION OF INDIA ANR. VERSUS FILCO TRADE CENTRE PVT. LTD. ANR. [ 2022 (7) TMI 1232 - SC ORDER] has issued comprehensive direction with regard to availing of transitional credit through TRAN 1 and TRAN 2, where it was held that Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN 1 and TRAN 2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022. In the light of the above direction issued by the Hon ble Supreme Court, no orders are required in this appeal - appeal disposed off.
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2022 (8) TMI 47
Seizure of goods alongwith vehicle - seeking direction to respondent no. 3 to make available the copy of the order passed under Section 129(3) in due compliance of Section 129(4) of the U.P. Goods and Services Tax Act pertaining to the seizure of goods covered by notice dated 21.01.2022 issued under Section 129(3) of the U.P. Goods and Services Tax Act - seeking consequential orders under Section 129(3) of the U.P. Goods and Services Tax Act after affording an opportunity of hearing to the petitioner - HELD THAT:- Admittedly a notice under Section 129(3) of the CGST Act was issued by the respondent no. 3 to the petitioner. Pursuant thereto the petitioner deposited the amount on his own in form GST DRC-03 and intimated it to the respondent no. 3. Therefore, the respondent no. 3 has issued an order in form GST DRC-05. Thus, proceedings in respect of the aforesaid notice under Section 129(3) of the CGST Act stood concluded in terms of mandate of sub-section (5) of Section 129. Hence, relief sought by the petitioner cannot be granted since the matter is concluded as per legislative mandate. Once the proceedings in respect of notice under Section 129(3) of the Act stood concluded in terms of Section 129(5) of the Act read with Rule 142(3) of the Rules, no mandamus can be issued to the respondent no. 3 to pass an order under Section 129(3) of the CGST/UPGST/IGST Act. The contention of the petitioner that a copy of the order under Section 129(3) of the CGST/UPGST/IGST, Act be provided to him, is wholly misconceived inasmuch as the proceedings stood concluded in terms of sub-section (5) of Section 129 read with Rule 142 (3) of the Rules and, therefore, no mandamus contrary to law can be issued in exercise of powers conferred under Article 226 of the Constitution of India. Petition dismissed.
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2022 (8) TMI 46
Seeking grant of anticipatory bail - mere accident or wilful firing - Petitioner contends that earlier to the registration of the present FIR the complainant gave in writing on 12.12.2021 that it was a mere accident and he does not want to take action against any person - HELD THAT:- As per the allegations in the FIR, one of the celebratory gun shot fired by the petitioner during the Gurchari ceremony on 12.12.2021, hit the lower limb of complainant-Abhishek and immediately thereafter the complainant was taken to hospital for his treatment and during the said treatment, some portion of his lower limb was amputated by the doctors and as a result of the said amputation the entire life of the complainant has been spoiled. So even if the petitioner has borne some of the medical expenses of the complainant, the same is not going to dilute the gravity of the offence stated to have been committed by him. At this stage, it is not appropriate to express any opinion regarding the delay in lodging of the FIR. The fire arm used by the petitioner at the time of occurrence is yet to be recovered. This Court is of the view that the custodial interrogation of the petitioner is necessary for the purpose of effective investigation in the present case. The present petition is hereby dismissed being devoid of merits.
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2022 (8) TMI 45
Scope of Advance Ruling application - Levy of GST - services provided by the supplier to the Board of Secondary Education in relation to conduction of examination - Services of providing printing of Answer sheets, Question papers, OMR sheets, Graphs, Certificates, Mark sheets etc. - Services provided by way of online examination form filling - Service provided by way of annual maintenance to the computers exclusively used for examination purposes - Service of operator provided by supplier for operating computer system - Services provided by way of processing of result through marks allotted in examination - exemption as per N/N.12/2017-CT(Rate) read with explanation in paragraph 3 clause (iv), and read with Circular No. 151/07/2021-GST dated 17 th June, 2021 or not? HELD THAT:- The applicant is the recipient of various services namely Services of providing printing of Answer Sheets', Question papers, OMR sheets, Graphs, Certificates, Mark-sheets etc., Services provided by way of online examination form filling, Services provided by way of annual maintenance to the computers exclusively used for examination purposes, Services of operator provided by suppliers for operating computer system, Services provided by way of processing of result through marks allotted in examination from various suppliers in relation to conduction of examination. As per Section 95 of CGST Act, 2017; this authority shall decide on matters or on questions specified in sub-section (2) of Section 97, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken, by the applicant and Authority means the Authority for Advance Ruling, constituted under Section 96. Thus Section 95 allows this authority only to decide on matters or on questions in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant i.e. in the subject case this application can be entertained only if the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant itself In this case, the supplies of Services are being undertaken or proposed to be undertaken not by the applicant but by the various supplier(s) to the applicant. These suppliers are distinct persons as per the provisions of the GST Act. This authority is constituted to decide on matters or questions specified in sub-section (2) of Section 97, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant - the applicant is not a supplier in the present case, the applicant as per the contracts is a receiver of services supplied by the various suppliers. This authority can only pass rulings on supplies being undertaken or proposed to be undertaken by the supplier-applicant only. Therefore, this authority cannot entertain the subject application as the applicant is not a supplier of goods or services or both, rather is a recipient of services in the present case. The subject application for advance ruling made by the applicant is not maintainable and hereby rejected under the provisions of the GST Act, 2017.
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2022 (8) TMI 44
Levy of GST - Pure services provided by the applicant in the manner of Implementation Support Agency (ISA) Services under JAL JEEVAN MISSION (JJM) for PHE Department in Kargil District under the Administration of Union Territory of Ladakh on behalf of State Water and Sanitation Mission (SWSM) - such activity is covered under SI.No.3, Chapter 99 of Notification No. 12/2017-Central Tax(Rate) dated 28.06.2017 and such services are thus NIL rated without applicability of GST being by way of activity in relation to any function entrusted to a Panchayat under article 243 G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution, or not? HELD THAT:- The first condition or the entry given in column 3 is that the services provided should be pure services (Excluding work contract service or other composite supplies involving supply of any goods). On carefully going through the notice issued by the recipient for expression of interest (EOI) and the agreement signed between applicant and recipient of the service. The introductory part of EOI and Para 5.0 of EOI and also Para 5.3 of the agreement. From plain reading of these clauses reflects that the supplier has to supply pure services like manpower, technical experts etc and no supply of goods is involved in the said work. The second condition of the said entry is that the pure services(Excluding work contract service or other composite supplies involving supply of any goods) provided to the central government, state government or union territory or local authority or government entity. The copy of EOI and the agreement provided by the applicant along with the application indicates that the recipient of the supply is Public Health Engineering (PHE) department of the Administration of Union Tertiary of Ladakh which is a department of Union Tertiary. The third condition of the said entry is by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution The EOI and agreement provided along with the application shows that the supplier has to perform their activities in 15 administrative blocks (names are given in the EOI and the agreement). The work entrusted to the supplier is covered under in relation to entry number 11 of article 243G and entry number 5 of article 243W of the constitution. Thus, the supply being provided by the supplier from its principle business place i.e. Bhopal to Union Territory of Ladakh is covered under under S.No. 3 of notification 12/2017-Central Tax Rate 28.06.17 and hence it is NIL rated.
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2022 (8) TMI 43
Profiteering - purchase of flat - allegation is that the benefit of GST not passed on by way of commensurate reduction in the price - contravention of section 171 of GST Act - HELD THAT:- As per the findings, the Authority determines the amount profiteered by the Respondent No. 1, during the period 1.07.2017 to 30.12.2019, as Rs, 67,18,426/- and the Respondent No. 2 as Rs. 4,59,286/-. The Authority takes cognizance, based on the DGAP s verification, that the Respondent No. 1 has passed on benefit as per Table M above by credit notes/ on tax invoices of the amount profiteered by him. The Authority takes cognizance, based on the DGAP s verification, that the Respondent No. 2 has passed on benefit as per Table-N above by credit notes of the amount profiteered by him. The Authority directs the Respondent No. 2 to pass on the benefit of Rs. 3,61,621/-along with interest as prescribed under Rule 133 (3)(b) of the CGST Rules, 2017. The details of the homebuyers to whom the profiteered amount was required to be passed on by the Respondent No. 1 and Respondent No. 2 along with the details of such amounts claimed to be passed on by the said Respondents (and so verified by the DGAP) is attached herewith as Annexure A to this order. The details of the four homebuyers to whom profiteered amount is required to be passed on by the Respondent No. 2 along with details of such amounts (as reported by the DGAP) are attached herewith as Annexure B to this order. Levy of Interest - HELD THAT:- The Authority finds that, the Applicant No. 1 has made a claim to interest on the amount of benefit of ITC accruing to him. It is his submission that, any return of benefit, by whatever means, must be along with interest due. The Authority finds that, as per the provision of Section 171 of the CGST Act, 2017 and Rule 133 of the CGST Rules, 2017, it is incumbent on the registered supplier to commensurately reduce the price of his supply to the recipient as soon as there is a reduction in the rate of tax or availability of ITC. Hence, in the present case too, it was incumbent on the Respondents to have complied with such mandate of the law. In case of non-compliance, there would be contravention of the provisions of Section 171 (1) of the CGST Act, 2017. Hence, The Authority directs that, Respondent No. 1 and Respondent No. 2 shall comply with the said provisions and mandate of law. The Authority directs that Respondent No. 1 and Respondent no. 2 shall pay interest @ 18% per annum on the additional amounts collected from each recipient of supply. from the date such amounts were collected by them upto the actual date of passing on/ return of such amount to each recipient as prescribed by Rule 133(3)(b) of the CGST Rues, 2017. This Order having been passed today falls within the limitation prescribed under Rule 1.33(1) of the CGST Rules, 2017.
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Income Tax
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2022 (8) TMI 41
TDS u/s 195 - withholding of tax - PE in India - obligation to deduct TDS - issuance of Certificate under Section 197(1) - non-resident entity to be taxed in India - Seeking fresh Certificate u/s 197 for deduction of Nil tax on payments received from ONGC for activities carried on outside India - Earlier appellant requested issuance of Certificate for deduction of TDS at 4% of taxable value - Appellant contends that a certificate of Nil TDS, for payments received in respect of activities outside India, should have been issued to the Appellant. INDIRA BANERJEE, J. HELD THAT:- It is well settled that the obligation to deduct TDS is limited to appropriate proportion of income chargeable to tax under the IT Act that forms part of the gross sum of money payable to the non-resident. A person paying any sum to a non-resident is not liable to deduct any tax at source if such sum is not chargeable to tax under the IT Act, as held by this Court in G E India Technology Centre Pvt. Ltd.[ 2010 (9) TMI 7 - SUPREME COURT ] High Court rightly held that the question of whether the Appellant had PE, could not possibly be undertaken in an enquiry for issuance of Certificate under Section 197 having regard to the time-frame permissible in law for deciding an application, more so, when regular assessment had been completed in respect of the immediate preceding year and the Appellant found to be taxable under the IT Act at 10% of the contractual receipts. The Assessing Authority found that the Appellant had PE in India in the concerned Assessment Years. The appeal of the Appellant is possibly pending disposal. As held by the High Court, it is well settled that the principle that res judicata is not applicable to income tax proceedings because assessment for each year is final only for that year and does not cover later years. Whether the Appellant had PE or not, during the Assessment Year in question, is a disputed factual issue, which has to be determined on the basis of the scope, extent, nature and duration of activities in India. Whether project activity in India continued for a period of more than nine months, for taxability in India in terms of the AADT, is a question of fact, that has to be determined separately for each Assessment Year. The scope of enquiry and investigation in proceedings for grant of Certificate under Section 197 of the IT Act is different from the scope of assessment proceedings. The High Court rightly declined to direct the Revenue to hold that the Appellant did not have PE in India. By its letter dated 22nd June 2019, referred to above, the Appellant made a request to the Revenue for issuance of Certificate under Section 197(1) of the IT Act permitting deduction of TDS at the rate of 4% plus applicable surcharge and cess, for all contractual receipts, in line with assessment proceedings for the Assessment Year 2016-2017 without prejudice to its legal position, since the Appellant had been facing financial hardship and urgently required funds. On 26th June 2019, the Respondent No.1 issued the impugned Certificate directing ONGC to deduct TDS at the rate of 4% for all sums receivable in respect of activities both outside and inside India. The impugned Certificate being as per the request of the Appellant, it is not open to the Appellant to make a volte-face and challenge the impugned Certificate. Letter of request dated 22nd June 2019, of the Appellant, referred to above, for issuance of a Certificate under Section 197 of the IT Act, for TDS at the rate of 4% on all receipts was without prejudice to the rights in law and contentions of the Appellant. Such a request without prejudice to the rights and contentions of the Appellant would not operate as estoppel against the Appellant in any Assessment Proceedings, Appellate proceedings or any other proceedings. However, the impugned Certificate having been issued as per the Appellant s own request, the Appellant is estopped from questioning the impugned Certificate by initiation of proceedings under Article 226 of the Constitution of India. The Appellant itself made a request for Certificate for TDS at the rate of 4% on all receipts. There is no such infirmity in the reasoning of the High Court which calls for interference of this Court under Article 136 of the Constitution of India. As rightly held by the High Court, since the Appellant requested issuance of Certificate for deduction of TDS at 4% of taxable value it is not for the Appellant to challenge the certificate. Moreover, it appears that in the final assessment for one or two preceding Assessment Years it was found that the Appellant did have PE in India. Appeals are pending. In any event, Tax deducted at source is adjustable against the tax, if any, ultimately assessed as payable by the Assessee and any excess tax deducted is refundable with interest. Interference is not warranted at this stage. In course of hearing, Counsel for the Revenue handed us a Draft Assessment Order, issued in respect of the Assessment Year in question, that is 2020-21, holding that the Appellant had PE in India and was liable to tax in India under the IT Act. In the event, it is found that the Appellant is not liable to tax, the Appellant will be entitled to refund of TDS with interest. Appeal dismissed. J.K. MAHESHWARI, J. HELD THAT:- As issuance of a certificate under Section 197 of the IT Act, an application shall be made to assessing officer under subrule (1) of Rule 28. The assessing officer after recording satisfaction that existing and estimated tax liability justifies the deduction of tax at lower rate or no deduction of tax as the case may be shall issue certificate. While exercising the power to issue a certificate, the assessing officer is required to follow the procedure as per subrule (2). The assessing officer shall consider the existing and estimated liability that what may be tax payable on estimated income of the previous year; tax payable on the assessed or returned income of the last four years from previous year; existing liability under the IT Act; advance tax payment i.e. tax deducted and collected at source for the assessment year relevant to the previous year till the date of making application under subrule (1) of Rule 28. Thus, for the purpose of issuance of certificate under Chapter XVII of Section 197 of the IT Act, the procedure for determination has been prescribed to the assessing officer on which satisfaction may be recorded by him. Order passed by the High Court is without considering the perspective and scope of issuance of the certificate for deduction of tax at lower rate or no deduction at tax and also without following the prescribed procedure. The High Court has wrongly distinguished the previous judgement [ 2017 (5) TMI 1054 - DELHI HIGH COURT] on the premises which is not tenable, and relied upon undertaking dated 22.06.2019 of appellant submitted perforce. After due consideration view High Court has committed error in dismissing the writ petition; therefore, we am unable to concur the opinion of the esteemed sister Judge. During hearing, it is said that against the previous judgment of Delhi High Court [ 2016 (2) TMI 47 - DELHI HIGH COURT] is pending, which relates to assessment orders pertaining to financial years 2007-2008 to 2009-2010, but it cannot be connected to the issue of certificate under Section 197(1) of the IT Act for the year 2019-2020. The other judgment of Delhi High Court [ 2017 (5) TMI 1054 - DELHI HIGH COURT] directly deals the issuance of the certificate under Section 197(1) of the IT Act. For the reasons mentioned in detail I endorse the view taken by Delhi High Court as correct and plausible view. Thus, it is made clear here that the TDS certificate granted under Section 197 (1) shall be provisional subject to the assessment of the returned income. The appeal filed by the appellant is hereby allowed setting aside the order of the High Court with a direction to the respondent to reconsider the application of the appellant and issue certificate following the prescribed procedure.
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2022 (8) TMI 40
Rate of deduction of tax in the case of a non-resident who does not have a PAN - provisions of Section 206AA overrides the provisions of the Double Tax Avoidance Agreement or not? - DTAA between India and Netherlands - Whether case does not lie in the exceptions laid down in Sub-Section 7 of Section 206AA of the Act shall be the rate prescribed in the DTAA if such rate is lower than the rate specified in the relevant provisions of the Act and not as per the provisions of Section 206AA? - HELD THAT:- A perusal of the paper book reveals that in the present case the ITAT has held that it is not in dispute that the engine is a part of aircraft and cannot be said to be an aircraft and the payment being made for rent of engine can be covered under equipment as per Article 12(4) of the DTAA between India and Netherlands. The ITAT has also held that the ELFC, the lessor, is a foreign company having no permanent establishment and was a tax resident of Netherland. It is not in dispute that assessee has not deducted this TDS from the payment but has deposited from their own account and has absorbed it as cost. It is also not in dispute that since payee, ELFC, being a foreign company having no PAN, the assessee reported the transaction without PAN in the quarterly TDS statements. This Court is in agreement with the view of the Tribunal that the issues of law sought to be raised in the present appeal are squarely covered by the judgment of this Court in Danisco India (P.) Ltd. [ 2018 (2) TMI 1289 - DELHI HIGH COURT] . as held Double Taxation Avoidance Agreement acquires primacy in such cases, where reciprocating states mutually agree upon acceptable principles for tax treatment, the provision in Section 206AA (as it existed) has to be read down to mean that where the deductee i.e the overseas resident business concern conducts its operation from a territory, whose Government has entered into a Double Taxation Avoidance Agreement with India, the rate of taxation would be as dictated by the provisions of the treaty - no substantial question of law arises.
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2022 (8) TMI 39
Reopening of assessment u/s 147 - denial of natural justice - order passed under Section 148A(d) - as argued non - compliance of the request to provide the complete information about the insight portal report based on which the notice under Section 148A(b) - HELD THAT:- On going through the order dated 13th April, 2022 impugned in the writ petition, we find that none of the aspects have been adhered to by the assessing officer. The assessing officer no doubt has referred to the assessee s reply dated 9th April, 2022 but there is no discussion as to the objection raised by the assessee in their reply. There is no discussion on the documents, which were placed by the assessee along with the reply with soft copies uploaded in the e-proceeding. Though the assessing officer states that in the light of the discussion and material available on record he was of the opinion that income chargeable to tax has escaped assessment , there is no discussion on any of the materials, which were placed by the assessee along with the reply dated 9th April, 2022. Thus, it can be safely held that the order dated 13th April, 2022 passed under Section 148A(d) of the Act is not sustainable and liable to be set aside. The legal principle that can be culled out from the aforementioned decisions is that the opportunity which is provided for under the scheme of the Act should be a meaningful and effective opportunity as such opportunity is not an empty formality. The assessee is entitled to be heard and such hearing should be a purposeful and effective hearing and not for the sake of showing as if a hearing was conducted. All the aforementioned decisions and the law which has been pointed out therein will fully enure in favour of the appellant consequently to hold that the order passed by the assessing officer dated 13th April, 2022 under Section 148A(d) of the Act would call for an interference. The appeal is allowed and the connected application (I.A. No. CAN 2 of 2022) is disposed of. The order passed in the writ petition is set aside. Consequently, the writ petition is allowed and the order dated 13th April, 2022 passed under Section 148A(d) of the Act is quashed and the matter is remanded to the assessing officer for fresh consideration.
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2022 (8) TMI 38
Deduction u/s 80HHC with respect to sale of DEPB license - AO while computing the deduction reduced 90% of the sale proceeds of DEPB - HELD THAT:- Following the aforesaid decision of the Hon'ble Supreme Court, in and by which, the issue involved herein, has attained finality, the order impugned in these appeals is set aside and the matter is remanded to the assessing officer for computation of the deduction under section 80HHC, in accordance with the afore-referred decision of the Hon'ble Supreme Court in Topman Exports [ 2012 (2) TMI 100 - SUPREME COURT] and after providing an opportunity of hearing to the assessee and passing orders afresh. Such an exercise shall be completed by the assessing officer within a period of three months from the date of receipt of a copy of this judgment
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2022 (8) TMI 37
Revision u/s 263 - Addition u/s 68 - unexplained cash credits - HELD THAT:- As the principle which emerges is that the phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the revenue, for example, when an AO adopts one of the course permissible in law and it has resulted in loss of revenue; or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the AO is unsustainable in law, or the AO has completely omitted to make any enquiry altogether or the order demonstrates non-application of mind. In the present case of the assessee was selected through CASS selection for Limited Scrutiny, where the purpose of assessment was to scrutinize the substantial increase in share capital in the captioned year. During the course of assessment proceedings, AO made detailed enquiries on this issue and after consideration of time-to-time written submissions filed by the assessee and documents / evidence placed on record, AO made additions (inclusive of the cash deposits) by treating the same as unexplained cash credits. Pr. CIT initiated 263 proceedings on the ground that the AO has not made enquiries or verification which should have been made in respect of share capital introduced during the year under consideration. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether. In the instant set of facts, the Ld. AO had made detailed enquiries and after consideration of material placed on record, made an addition - We thus find no error in the order of AO so as to justify initiation of 263 proceedings by the CIT. The Ground of appeal raised by the assessee is thus allowed.
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2022 (8) TMI 36
Revision u/s 263 - as per CIT AO had wrongly accepted its section 80P(2)(a) deduction claim regarding interest income derived from deposits made in the co-operative banks - HELD THAT:- We find no merit in Revenue s arguments supporting the learned PCIT s revision directions as this tribunal s recent co-ordinate bench s order in Rena Sahakari Sakhar Karkhana Ltd [ 2022 (1) TMI 419 - ITAT PUNE] wherein as held - A.O while framing the assessment had taken a possible view, and allowed the assessee‟s claim for deduction u/s 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 for dislodging the same. Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under Sec. 263 had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set-aside his order and restore the order passed by the A.O under Sec. 143(3) - Decided in favour of assessee.
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2022 (8) TMI 35
TP Adjustment - international transactions at Arm s-length - as per CIT-A operating margin earned by the assessee company is higher than the arithmetic mean of the margins of the comparable company and therefore the international transactions are at Arm s-length - HELD THAT:- CIT- A has categorically, after including/excluded certain comparables computed the arithmetic mean of the comparable companies at 18.30%, compared with the margin of the assessee as computed by the TPO at 20.34% and as the margin of the assessee is higher than the margin of the comparables, he deleted the transfer pricing adjustment. Here, the learned assessing officer is not aggrieved with any of the comparables included or excluded by the learned CIT A. Therefore, we do not find any merit in any of the 2 grounds raised by AO, thus dismissed. Deduction u/s 10A - Whether loss of one eligible unit was required to be set off against the profit of the other eligible unit, and that the said loss could not be set off against the income computed under the head Profits Gains of Business or Profession ? - HELD THAT:- As decided in M/S YOKOGAWA INDIA LTD. [ 2016 (12) TMI 881 - SUPREME COURT] from reading provisions of section 10A it is more than clear that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. Thus, it was held that though section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV and not at the stage of computation of the total income under Chapter VI. - Decided in favour of assessee. Correct head of income - treatment of lease rent received - whether chargeable to tax as income from house property as per AO or under the head business profit as per assessee - HELD THAT:- As decided in the case of CIT Vs Shambu Investment Pvt. Ltd. [ 2001 (3) TMI 77 - CALCUTTA HIGH COURT] has held as under Where prime object of the assessee under the agreement was to let out the portion of the said property to various occupants by giving them additional right of using the furniture and fixtures and other common facilities for which rent was being paid month by month. Income derived from the said property is an income from property and should be assessed as such.. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- AO has disallowed under Section 14A of the Act invoking the provisions of rule 8D which is not in existence for A.Y. 2005-06. Therefore, disallowance cannot be upheld, hence deleted. However, though the disallowance as per Rule 8D of the Rules is deleted but section 14A cannot be ignored. In earlier years for A.Y. 2002-03, 2004-05 and 2006-07 in assessee‟s own case [ 2015 (3) TMI 933 - ITAT MUMBAI] the disallowance of ₹1 lacs upheld by the co-ordinate bench. Therefore, respectfully following the same, for this year also we uphold the disallowance of ₹1 lacs. Disallowance u/s 14A added while computing the book profit under Section 115JB - HELD THAT:- We find that there is no relation of disallowance under Section 14A of the Act while computing the book profit u/s 115 JB of the Act. The reason being that explanation (1) of Section 115JB of the Act adjustment is to be worked out as clause (f) where the amount of expenditure in relation to any exempt income other than specified income is required to be added to the book profit. Therefore, there is a separate mechanism provided for adjustment to the book profit of this kind of expenditure. Identical issue has been decided by Special bench in case of ACIT vs. Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] -Therefore, we hold that the lower authorities are not correct in adding notional expenditure as computed u/s 14A and increasing the book profit by that sum under Section 115JB of the Act. In the result, ground are allowed.
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2022 (8) TMI 34
Penalty u/s 271C - Non deduction of TDS on receipt of amounts received by HUDA being deposited in Consolidated Fund of State - HELD THAT:- As in case of TDI Infrastructure Ltd [ 2022 (7) TMI 388 - ITAT DELHI] to which one of us was in quorum, had taken into consideration a clarification memo issued by the Directorate of Town and Country Planning, Haryana which made it very obvious that receipts on account of EDC are being deposited in the Consolidated Fund of the State, accordingly directions were issued to colonizer like present assessee, to not deduct TDS. Once the fact of receipt of amounts received by HUDA being deposited in Consolidated Fund of State is established, there can be no second opinion that Assessee was rightly directed by DTCP, Haryana to not deduct the TDS. Even otherwise no intentional default is attributed to assessee and the default, if any, was on account of ambiguity which had arisen out of a direction contained in a statutory document, so no penalty can be justified u/s 271C of the Act, which is meant to address contumacious conduct. Ground is allowed in favour of assessee/appellant. Receipt of subscription fee to Clubs - The nature of business activity of the assessee company is such that for procurement of business the Managing Director may have to attend the clients and entertain them occasionally at clubs. However, the four clubs to which the payments have been made are all Golf Clubs and how only their membership would benefit the company is not ascertainable. Thus, there is every possibility that the expenditure incurred on subscription or food and beverage, with these Golf Clubs, have traits of personal benefits to the Managing Director, as well. Thus, there is justification to restrict, the disallowance proportionally to Rs. 50,000/-on total disallowance of Rs. 1,90,529/-. Accordingly the ground is decided partly in favour of the assessee/appellant.
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2022 (8) TMI 33
Levy of penalty u/s 271D V/S 271E - alleged violation of section 269SS having received Rs.15.50 lacs, in cash from his wife - allegation of default specified u/s. 269-T - wrong mention of a section (provision of law) - HELD THAT:- Penalty as levied is unsustainable in law in the absence of the jurisdictional fact, i.e., the acceptance of money in the sum of Rs. 15.50 lacs (or for that matter in any sum) in cash by the assessee from his wife Sangeeta Rawat on 25/08/2009 (or at any time during the relevant year), which could be said to be violative of s. 269SS, for which the law provides for levy of penalty u/s. 271D in absence of a reasonable cause being proved. As the ledger accounts of the assessee and his wife, forming part of the assessment order as annexures thereto, reveal, the assessee has in fact paid Rs. 15.50 lacs in cash to his wife and, further, is the only cash transaction between the two. We are conscious that a mere wrong mention of a section (provision of law), as long as the authority has the power in exercise of which the relevant judicial action has been taken, would not defeat the same. This, however, is not the case here. That, for instance, would be the case where the assessee had indeed received cash from or on behalf of his wife, attracting a penalty u/s. 271D, while the authority had, stating the facts constituting the default correctly, mentioned s. 271E instead. Order - Though the penalty u/s. 271D, though not time barred, is not maintainable in the absence of the necessary jurisdiction (see: Pr. CIT v. Maruti Suzuki Ltd. [ 2019 (7) TMI 1449 - SUPREME COURT] ; Deep Chand Kothari [ 1987 (9) TMI 27 - RAJASTHAN HIGH COURT] The penalty levied is for the default specified u/s. 269-T, and though merited on the whole sum and, in any case, part thereof, is not sustainable in the absence of any penalty having been initiated or levied u/s. 271-E.
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2022 (8) TMI 32
Deduction claimed u/s 80IAB - AO disallowed the deduction u/s 80IAB on the reasoning that the sale of bare shell and cold shell to the co-developer was not permitted as per SEZ Act - HELD THAT:- As decided in favour of the assessee by the Tribunal in assessment year 2008-09 [ 2019 (6) TMI 1288 - ITAT DELHI] - The aforesaid decision of the Coordinate Bench has been subsequently followed by the Bench while deciding assessee s appeal in ay 2011-12 [ 2020 (9) TMI 1239 - ITAT DELHI] . Decided in favour of assessee.
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2022 (8) TMI 31
Revision u/s 263 - Bogus purchases - HELD THAT:- AO has done a thorough examination of the facts and has given an elaborate finding on bogus purchases declared. AO has confronted each of the submissions of the assessee and has listed out his conclusions as can be seen from the order. With regard to the PCIT s contention that the details of previous assessment was not brought to the notice of the AO, we find that in the assessment order the AO has tabulated the list of names against whose names bogus purchases were recorded from assessment years 2016-17 to 2018-19. Further the AO in assessment order has given a specific finding that the purchases booked in the name Syed Ibrahim has been offered to tax as bogus purchase in assessment year 2018-19. In view of these facts which is clearly coming out of the AO s order, we see no merit in the conclusion of the PCIT that the AO has not examined the facts and not done proper verification. Issue that Explanation (2) to Section 263 of the Act could be invoked only in a very gross case of inadequacy in enquiring or where the mandatory enquiries are not conducted has reached finality. AO in the given case has conducted enquiry and perused the details submitted and has taken decision to make addition of bogus purchases recorded in the books accounts with proper application of mind. Therefore in our considered view, that the PCIT is not justified in revising the order of the AO. Accordingly, the impugned order of the PCIT is quashed. Appeal of assessee allowed.
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2022 (8) TMI 30
Unexplained expenditure u/s 69 - HELD THAT:- The assessee has sold the shares of GCM securities Ltd, which were the shares of the same company in respect of which the above decisions have been rendered in favour of the assessee on similar set of facts. No specific allegation has been made by any of the entry operators alleging that the assessee has engaged in sham/bogus transaction on sale of the above shares. Nothing has been brought on record to substantiate that the assessee s own unaccounted money was used to purchase the shares on which capital gains has been earned by the assessee. The entire case of the Revenue is based on the report of the Investigation Wing, however, no specific material/information has been found specifically implicating the assessee and the addition is based on the general modus operandi in connection with sale of shares to earn bogus capital gains. The assessee, admittedly has carried out or transactions through banking channels/DMAT account. The only allegation of the Revenue is that the scrip which the assessee sold was identified by the Directorate of Income Tax (Investigation), Kolkata in which large scale rigging was done to allow benefit of bogus LTCG entities to several beneficiaries. Therefore, respectfully following the decision in the case of Smt. Aparna Misra [ 2019 (7) TMI 179 - ITAT KOLKATA] and Smt. Rachna Agarwal [ 2022 (5) TMI 1000 - ITAT KOLKATA] which have been rendered on similar set of facts, we are of the considered view that Ld. CIT(A) has erred in facts and in law in in allowing the assessee s appeal.
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2022 (8) TMI 29
Revision u/s 263 - Deduction under section 80P disallowed - HELD THAT:- As in this case, it is observed from the assessment order that the AO had called for details regarding deduction u/s 80P of the Act. After verification of the said details, the AO came to the conclusion that the interest earned by the assessee from Axis bank was not eligible for deduction u/s 80P and accordingly he disallowed it. This exercise of the AO of disallowing the interest earned from Axis Bank explains that he had called for the details and applied his mind to decide eligibility of the income for deduction u/s 80P. The Ld.Pr.CIT in the revision order has not pointed out any specific income which the AO has failed to verify. Therefore, on the facts of the case, we are of the opinion that the assessment order is not erroneous. The assessee is a Cooperative Credit Society and it claimed deduction u/s 80P which has been allowed by the AO after verification. Hence the order u/s.263 is not sustainable. Hence, grounds of appeal raised by assessee are allowed.
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2022 (8) TMI 28
Deduction u/s 80P - interest income derived from deposits made in the co-operative banks - HELD THAT:- As decided in RENA SAHAKARI SAKHAR KARKHANA LTD [ 2022 (1) TMI 419 - ITAT PUNE] interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d). Assessee appeal allowed.
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2022 (8) TMI 27
Rental income - Deduction u/s 24(b) - interest paid on the amount borrowed - HELD THAT:- In this case it is a fact that as per the Loan document (sanction letter dated 07/03/2011) the loan has been borrowed for Flat No.12 and garage 12G which are different from the Flat No.11 for which the assessee has claimed deduction u/s.24(b) of the Act. The deduction u/s.24(b) is available for the property which has been acquired by borrowed capital and for the said property assessee has offered income from house property. In this case the impugned property is Flat No.11 but the Loan is for the Flat No.12 Garage No.12G which are different. Thus, the loan was not borrowed for the impugned Flat No.11. Assessee had claimed that the loan was used for making payment to the Tenants of Flat No.11, but mere oral recital does not hold good against the written document of loan which mentions Flat No.12 and garage 12G. - loan was not for the impugned Flat No.11, hence the assessee is not eligible for deduction u/s.24(b) of the Act for the interest paid on the amount borrowed from Reliance Home Finance. Also, the Flat No.11 was acquired in September 2001 by the assessee. The impugned loan was availed in 2011. Therefore, on this ground also the assessee is not eligible for deduction u/s.24(b) of the Act. Therefore, it is held that the assessee is not eligible for deduction u/s 24(b) of the Act. The Ld.Co-ordinate bench has held in the said order [ 2022 (7) TMI 1277 - ITAT PUNE] that amount paid to the tenant was for bettering title. Hence the interest paid on it is not eligible for deduction u/s 24(b) of the Act. Respectfully following the said decision we hold that the assessee is not eligible for deduction u/s 24(b) of the act for the interest paid on the amount borrowed from Reliance Home Finance. Accordingly, grounds of appeal raised by the assessee are dismissed.
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2022 (8) TMI 26
Bogus purchases - estimation of gross profit of whole of the business of the assessee - HELD THAT:- We hold that the learned CIT A has erred in adopting the gross profit ratio for the whole business of the assessee for the purpose of making/sustaining the addition in the hands of the assessee with respect to the circular trading transactions entered into by it. There is no dispute with respect to sanctity of the other parts of the business of the assessee, such as manufacturing or any other segment of the business of the assessee. Therefore there is no reason why the profitability with respect to the genuine business of the assessee should be disturbed. By adopting the gross profit of whole business, ld CIT has done violence to the genuine business of the assessee, which is not permitted. He is only required to estimate profit embedded in the circular trading transaction of bogus purchases only. The bogus purchases were to the extent of ₹ 164,830,000/ . This has been accepted to be the circular trading purchases made by the assessee along with other parties. Therefore, the profit is required to be imputed only with respect to the bogus purchases - Therefore, the approach of the learned CIT A of estimating the gross profit of whole of the business of the assessee instead of taking profit element embedded in the bogus purchases is not correct, hence same is rejected. GP stimation @ 8.75% - what is the amount of income earned by the assessee out of the bogus purchases arising out of the circular trading? - HELD THAT:- As case involved in impugned appeal is of a listed limited company at the stock exchange, where 85.41% shares are held by non-promoters, i.e. Public and Director of the company, who is a trustee of the company, is engaged in circular trading. Further, the lower gross profit as has been depicted in the above two decisions of the coordinate benches were not at all justified looking at the gross profit ratio earned by the assessee in its regular business. Further, in those cases the bills were issued which were discounted by the purchaser for financing and in the another case it was the employee who was used for the purpose of issue of the bogus bills. Here, in this case the assessee himself is engaged in this activity. Therefore we reject the argument of the learned authorised representative for adopting such a low gross profit. As we have the guidance available of the honourable High Court as well as the other coordinate benches that how much profit should be imputed to bogus purchases transactions, we deem it fit and proper that profit is required to be estimated only on the amount of bogus purchases. The quantum of the profit as generally estimated in the cases of bogus purchases should be at the rate of 12.5% of such purchases. Accordingly we reverse the order of the learned CIT A and direct the learned assessing officer to compute the unaccounted profit earned by the assessee at the rate of 12.5% on bogus purchases. Unexplained expenditure - HELD THAT:- We find that in the present case there existed some agreement between the director of the company with some other party where the other party would help raise the funds to the assessee to preferential allotment or write issue over the period of 12 months. In order to achieve the above object, the other party will move the stock market prices to make it a breach ₹ 60 ₹ 80 within six months. The modus operandi was to acquire 12 15 lakh shares from the market and promoter would be providing funds to the tune of Rs 1 Cr to manipulate market prices. The whole name of this price rigging mechanism was given as screen management charges . We are not concerned with the mechanism as well as the people involved in that. It is for the other regulator to look into this. We are just supposed to know whether assessee has incurred any expenditure or not and consequently addition is sustainable or not. The learned AO has not brought on record any with dense that assessee has incurred this expenditure. Therefore the learned CIT A deleted the same correctly.
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2022 (8) TMI 25
Revision u/s 263 - issue of shares at a premium - valuation report placed on record by the assessee has not been examined and consequently whether valuation of share is in accordance with provisions of Section 56 (2)(viib) - HELD THAT:- There is no communication between 28/11/2016 to 19/12/2016 made by the AO or by the assessee with respect to the above issue. Further, the valuation of the share was not at all discussed. It is also important to note that all the proceedings noted by the AO are mentioned in paragraph number 2 and 3 of the assessment order the AO mentioned that the details were furnished by the authorised representative per order sheet noting dated 20/10/2016. The cumulative reading of the above two paragraphs of the assessment order clearly shows that the learned assessing officer has not at all applied his mind that there is an issue of shares during the year at a premium. It is a complete lack of enquiry. Therefore, we do not find any infirmity in the order of the learned PCIT in assuming the jurisdiction u/s 263 of the act when they learned assessing officer has not looked into a critical aspect of the assessment that assessee has issued shares at a premium and whether such premium is in accordance with the law or not. Share application money is also required to be considered in the net worth of the assessee - Valuation of shares would not be Rs 402.86 as at 31/12/2013. Thus, there is basic fallacy in the argument of the assessee as well as valuation report prepared by M/s A K Anand co CAs [ the ld valuer]. Even in the valuation working also LD Valuer has put a footnote that the net book value included share application money. Thus valuation made by the CA by Net assets method is flawed. As in present case, the valuation made by the assessee is not in accordance with Rule 11UA , as assessee tried to increase the valuation by inclusion of share application money in net worth or consequently not increasing the total issued capital. Thus, it did not satisfy Clause (i) of above explanation. Further clause (ii) was not at all looked by AO with respect to other valuation, so there is no question of reaching at any satisfaction by LD AO. Nothing was shown to us that on the issue of inclusion of share application money in net worth of the assessee and not increasing the number of shares or equity share capital by that amount while preparing valuation of shares can have two opinions. Therefore, even on that count argument of Assessee fails. The argument of the assessee that in subsequent years assessment proceedings , the ld AO has accepted the valuation of Rs 400/- per share, cannot hold water as , assessment order of this year is required to be tested on the parameters of ingredients of section 263 of the Act i.e. Whether order is erroneous so far as prejudicial to the interest of revenue or not. The ld PCIT has merely set aside the issue to the file of ld AO to verify determination of FMV of shares. It may possibly happen that LD AO may accept the valuation by the assessee in fresh assessment proceedings, but this does not mean that the impugned assessment order, which is passed without inquiry, is not erroneous and prejudicial to the interest of revenue. Therefore, we find the ld PCIT has correctly held that order passed u/s 143 (3) of The Act by the ld AO is erroneous so far as prejudicial to the interest of revenue in [1] not at all examining the issue of share premium , [2] even otherwise, accepting share valuation report as it is without examining it [3] even otherwise, accepting flawed valuation of share by net asset method by allowing inclusion of share application money pending allotment in net worth . Thus, we up hold the order of LD PCIT passed u/s 263 of the Act dismissing all grounds of appeal of assessee.
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2022 (8) TMI 24
Revision u/s 263 - Revenue recognition against advances received - As per CIT AO has not carried out requisite enquiries and also not applied his mind with respect to revenue recognition in respect of the advances received by the assessee and with respect to and utilisation of these advances - excess advance beyond 5% under current liabilities which should have taken to the profit and loss account - PCIT observed that the advance received for the purpose of the projects was diverted and used for illiquid investments in private limited companies which cannot be liquidated - HELD THAT:- Given the accepted past history of the case, and given the fact that there were no material factual or legal developments in the relevant financial period, it was not at all unreasonable on the part of the Assessing Officer not to question the revenue recognition policy followed by the assessee. There were no reasons to provoke such an inquiry. The revenue recognition policy followed by the assessee is in accordance with the Accounting Standard 7 Construction Contracts to recognise revenue on project completion basis which is a generally acceptable accounting policy and is undisputed. Investment made by the assessee in the illiquid funds, in our view, this is the decision of the board to decide how the funds of the company to be utilised in its best interest and it is the affected party i.e., Lalitpur Power Generation Co Ltd, who had paid the contract price more than the certified work completion, can object the diversion of funds other than intended purpose. The revenue has no role to play how the funds are being utilized by the assessee, it can only analyse the method of accounting adopted consistently and offered the proper income for taxation. Beyond that they don t have any role to play and they are not expected to enter the shoes of the assessee how their affairs have to be carried out. In the given case, the Assessing Officer had verified the method of accounting in detail and the assessment was also selected (limited scrutiny- to verify contract receipt and current liabilities are genuine) for specifically to verify the recognition of revenue adopted by the assessee. It is fact on record that assessee is following recognised method accounting standard, AS-7 published by ICAI and Assessing Officer has not found any mistake in the revenue recognition and moreover, the revenue can be recognised only on the agreement of both parties by critically evaluating the progress of the project, it merely cannot be based on the receipt of funds. It is the other party who makes the payment, who has not objected or had not made any claim against the misuse of the advance of funds other than the intended purpose. As long as the contracting parties are in agreement with the certification of the progress of the project, the revenue has very little role to play in the revenue recognition and investment activities. We do agree that revenue can always make enquiries and once the assessing authority is satisfied with the submissions on the revenue recognition, which the assessee is following consistently then the matter has to rest at that stage. The Ld.Pr.CIT cannot impose of his another possible view in this circumstances even after detailed enquiry by the Assessing Officer. Thus assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the revenue as the issue of advances received by the assessee has been thoroughly examined by the AO as is evident in the light of evidence filed by the assessee during the course of assessment proceedings. Pr.CIT was incorrect in setting aside the assessment order passed by the Assessing Officer u/s 143(3) of the Act. Hence, we set aside the order passed by the Ld. Pr.CIT u/s 263 restore the assessment order passed by the Assessing Officer u/s 143(3) of the Act. - Decided in favour of assessee.
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2022 (8) TMI 23
Disallowance of depreciation on the crane purchased by the assessee by holding that purchase of crane is not genuine - HELD THAT:- AO deputed Inspector to verify as to whether the crane is in existence as contended by the assessee that the crane is used in the business operations of the assessee and works in factory and the AO based on inspectors report found that the crane is in existence and working for Companies operations allowed depreciation on crane while completing the assessment for the AY 2017-18. Since the assessee proved that the crane is in existence and used for its business operations which fact was also accepted by the AO that the said crane is used for business operations of the assessee the AO should not have disallowed depreciation for the assessment years 2013-14, 2014-15 2015-16 for want of confirmation from the supplier and other documents especially when the crane was purchased through broker and there is no dispute on payment of purchase consideration by the assessee. Thus, the disallowance of depreciation on crane made by AO is deleted. Ground no. 1 is allowed. Disallowance of employees contribution to PF by invoking provisions of Section 2(24)(x) r.w.s. 36(1)(va) - HELD THAT:- We observe that the assessee deposited Employees Contribution to Provident Fund before due date for filing return of income. We find that in the case of CIT Vs. AIMIL Limited [ 2009 (12) TMI 38 - DELHI HIGH COURT] has held that no disallowance of PF/ESI contribution is called for when the amounts are deposited before filing the return of income. Thus, we delete the disallowance made towards employees contribution towards Provident Fund. Disallowance of depreciation on trucks purchased - trucks were not put to use - assessee submits that assessee purchased trucks on 31.03.2014 and claimed depreciation as the asset was ready to put to use - AO denied depreciation on the ground that trucks are not complete and they cannot be put to use - HELD THAT:- We direct the AO to consider the entire cost of trucks including body for the purpose of allowing depreciation in the AY 2014-15 and not on the reduced WDV as furnished by the assessee after assessee claiming the depreciation in the AY 2013-14. Addition of interest payment on the ground that advance given to Kamal Steel Fabricators and Aggarwal Enterprises is not for commercial expediency - HELD THAT:- We find force in the submissions of the assessee that when the assessee is having interest free funds and they are sufficient to meet its investments/advances it can be presumed that funds were given to subsidiaries/sister concerns are out of interest free funds and no notional interest can be disallowed. On perusal of the balance sheet of the assessee, we find that the assessee has share capital, reserve and surplus to the extent of 17.19 crores and the outstanding balance as on 31.03.2014 in the case of Kamal Steel Fabricators stood at 2,45,36,627/- and in the case of Aggarwal Enterprises at Rs.3,93,40,000/-. Therefore, since the share capital and reserves and surplus are much more than the advances given by the assessee to Kamal Steel Fabricator and Aggarwal Enterprises there is a presumption that the advances were given out of share capital, reserve and surplus. Thus, the ratio of the decisions relied on supports the assessee s contention. Thus, respectfully following the said decisions the disallowance made by the AO towards interest is deleted.
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2022 (8) TMI 22
Revision u/s 263 - non-service of notice on the assessee - assessee was is in judicial custody - non-granting the assessee an opportunity of being heard - HELD THAT:- As notice u/s.263 was sent on the address of the assessee and the correct address. The fact remains that at that point of time, the assessee was under judicial custody but one Sri Uttam Kumar, claiming to be an employee of the assessee has responded to the notice. CIT himself categorically held that the said Sri Uttam Kumar does not hold the power of attorney to represent the assessee. Ld Pr. CIT has been communicated by a letter that the assessee is in judicial custody. When an individual is in judicial custody, any notice on such individual can be served on him only through the Superintendent of the Jail, wherein, the individual is lodged. One should keep in mind that once the individual is taken under judicial custody, many of his constitutional rights stands curtailed. Nothing stopped the Pr. CIT from communicating the notice to the individual in jail. Once he was intimated that the assessee is in jail, the Pr. CIT was aware that the assessee is in judicial custody as on 20.3.2019. He had adequate time for serving the notice on the assessee in Jail through Superintendent of the Jail. Instead of this, the Pr. CIT proceeded to issue order u/s.263. He failed to serve notice on the assessee even though he was informed of the judicial custody of the assessee. One must also keep in mind that when the assessee is in judicial custody, his address during the period of judicial custody does not change and it cannot be said that the assessee is absconding. The second condition that the assessee should be given an opportunity of being heard also stood violated insofar as the assessee has not been heard. In the circumstances, order passed u/s.263 got vitiated and is liable to be annulled and we do so. Thus non-service of notice on the assessee, who is in judicial custody and on account of non-granting the assessee an opportunity of being heard, the additional ground filed by the assessee stands allowed and orders passed u/s.263 stand quashed. Decided in favour of assessee.
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2022 (8) TMI 21
Bogus LTCG - Addition u/s 68 - bogus penny stock transaction - suspicion v/s facts - disallowing the exemption u/s 10(38) - HELD THAT:- As name of the assessee does not appear anywhere and the AO has simply proceeded to assume that since Shri Ashok Kumar Kayan s name was in the list of entry operators providing entries relating to Long Term Capital Gain/Loss and, further, since the name of M/s. Access Global Limited figured in the list of scrips traded on platform C-Star of Kolkata Stock Exchange and, further, since the assessee had dealings with Shri Ashok Kumar Kayan and the assessee had sold shares of M/s. Access Global Limited, it was indicative that the assessee had earned bogus Long Term Capital Gains. However, in our considered view, suspicion howsoever strong cannot take substitute of facts. The assessee has demonstrated with substantial evidences before the AO that the actual purchase and sale of the shares took place, such shares had distinctive numbers, the transactions were routed through the normal banking channels and the shares had been allotted to the assessee subsequently under an order of amalgamation/merger by the judgment of Hon ble High Court of Kolkata and, therefore, mere reliance on the report of Investigation Wing and statement of Shri Harshvardhan Kayan which do not even mention the name of the assessee, in our considered opinion cannot be upheld. Lower authorities have failed to bring on record any evidence to prove that the transactions carried out by the assessee were not genuine or that these documents furnished in support of the claim of the assessee were not authenticate. It would also not out of place to mention that no specific enquiry or investigation was conducted by the Department in the case of Shri Ashok Kumar Kayan which would lend some credence to the theory which has been advanced by the Department. Therefore, in our considered opinion, the lower authorities had merely acted on surmises and conjectures and had delved on the theory of preponderance of probability even in the face of documentary evidences which were not negated as being false. Therefore, considering the evidences furnished by the assessee, which the AO did not negate with any counter evidence, we are of the considered opinion that the assessee has successfully discharged the onus cast upon him in terms of provisions of section 68 and this discharge of onus is a pure question of fact and, therefore, the various decisions relied upon by the Department on the question of law would not be of any assistance to the Department. Since, in our considered view, on the facts of the case, the assessee has been able to successfully discharge the onus cast upon him, the impugned addition has no feet to stand. - Decided in favour of assessee.
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2022 (8) TMI 20
Exemption claimed u/s 10(34) on the dividend income received by the assessee trust - HELD THAT:- Respectfully following the ratio of the decision of this Tribunal in Group Trust case i.e. M/s. Navajbhai Ratan Trust [ 2022 (3) TMI 565 - ITAT MUMBAI ] we are inclined to follow it since the department could not point out any change in facts or law. So on the same reasoning mutandis mutandis, we concur with the action of the Ld. CIT(A) allowing the claim of exemption u/s 10(34) of the Act and dismiss the ground nos. 1, 2 4 of the revenue appeal. Exemption u/s 11 - interest income and other income - main purpose of the trust is defeated as there is violation to the provision of section 13(1)(d) and 13(2)(h) - HELD THAT:- As we note that the Ld. CIT(A) s impugned action is in conformity with para no. 6.8 (supra) wherein the Tribunal has directed the AO to grant the exemption u/s 11 of the Act on interest income and other income earned from non-prohibited investments by the assessee trust. Therefore, we are inclined to dismiss the appeal of the revenue on the same reasoning mutatis mutandis. Therefore, the revenue stands dismissed.
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2022 (8) TMI 19
Exemption u/s 11 - Voluntay contributions by Deendayal Memorial Hospital ( DMH ) as a contributory within the meaning of section 13(3)(b) - HELD THAT:- Admittedly, the assessee received donation from prohibited person in terms of section 13(3)(b) of the Act, that being so, the arguments of ld. AR is not accepted. We find the CIT(A) discussed the same in Para No. 16 of the impugned order and rightly held that the said explanation could have been accepted, that if the donation could have been received from a person other than prohibited person. Further, there is no dispute about the fact that DMH had made a substantial contribution to the assessee and the said contribution so made up to the end of the previous year relevant to the assessment year under consideration being Rs.65,00,000/- far exceeding Rs.50,000/-. There is also not disputed about the fact that DMH applied the said sum for the benefit of assessee. Therefore, the provisions under Sub-section (3) of section 13 is attracted as rightly held by the AO by placing reliance on the decision of Hon ble High Court of Bombay in the case of Champa Charitable Trust [ 1994 (12) TMI 56 - BOMBAY HIGH COURT] Therefore, taking into consideration the submissions of ld. AR and ld. DR and our discussion made hereinabove paras, we find no infirmity in the order of CIT(A) in holding the DMH is a prohibited person u/s. 13(3)(b) and consequently denying exemption u/s. 11 of the Act for violation of provision u/s. 13(1)(c) of the Act to the assessee. Thus, ground Nos. 1 to 6 raised by the assessee are dismissed. Denying exemption u/s. 11 of the Act in the light of provisions u/s. 13(6) - As decided in AUDYOGIK SHIKSHAN MANDAL, PUNE [ 2018 (12) TMI 1344 - BOMBAY HIGH COURT] observed that the law laid down by the Hon ble High Court of Karnataka FR MULLERS CHARITABLE INSTITUTIONS [ 2014 (2) TMI 1033 - KARNATAKA HIGH COURT] in holding the benefit of section 11 of the Act will not be available to diverted income and also observed that in order to come to such conclusion, the Hon ble High Court of Karnataka placed reliance on the decisions of High Courts of Bombay and Delhi in the cases of Sheth Mafatlal Gagalbahai Foundation Trust [ 2000 (10) TMI 26 - BOMBAY HIGH COURT] and Agrim Charan Foundation [ 2001 (8) TMI 78 - DELHI HIGH COURT] respectively. Therefore, respectfully following the law laid down by the Hon ble High Court of Bombay, we hold, that the denial of exemption u/s. 11 of the Act is restricted only to Rs.65,00,000/- which was received from prohibited person. Thus, ground No. 7 raised by the assessee is allowed.
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2022 (8) TMI 18
Disallowance u/s 14A r.w.r. 8D - assessee submits at the outset that his sole substantive argument is that both the lower authorities have wrongly computed the impugned disallowance thereby taking into consideration assessee s entire investments than only those yielding exempt income(s) in the corresponding assessment year - HELD THAT:- We adopt judicial consistency to uphold the impugned disallowance in principle and direct the assessing authority to adjudicate the same as per law after considering only the dividend yielding investments in the relevant previous year(s). The assessee s instant identical first substantive ground in all these cases is partly accepted in very terms. Disallowance of section 35(2AB) weighted deduction - HELD THAT:- We adopt judicial consistency [ 2020 (1) TMI 917 - ITAT PUNE] on the instant latter issue as well and accept the impugned section 32(2AB) weighted deduction claim. This latter substantive ground raised by the assessee succeeds.
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2022 (8) TMI 17
Revision u/s 263 by CIT - deduction u/s 80P(2) - whether interest earned on deposits with banks is eligible for deduction u/s 80P(2)(a)(i)? - HELD THAT:- In the year under consideration, it is noted that the facts under consideration are pari-materia with that of A.Y 2012-13 where there is no surplus from the activity of providing premises on hire and assessee has reported a loss of Rs 105,899/- under the mandap keeper s head and which has been reduced from income in respect of which deduction has been claimed u/s 80P(2)(a)(i) of the Act and in effect, no deduction has been claimed in respect of such activity of providing premises on hire. It is an admitted and undisputed fact that the AO has considered the aforesaid decision of the ld CIT(A) for A.Y 2012-13 while allowing the claim of deduction u/s 80P(2)(a)(i) of the Act as apparent from the findings of the ld PCIT in the impugned order. PCIT has however held that in two Coordinate Bench decisions which have been relied upon by the ld CIT(A) in A.Y 2012-13, the Coordinate Benches have not correctly appreciated the decision of the Hon ble Supreme Court in case of Totjars Co-operative Sales Society Ltd vs ITO (supra) and reasoning so adopted by the Coordinate Benches are not acceptable to him. It is therefore a case where the Coordinate Benches have taken a view in the matter taking into consideration the decision of the Hon ble Supreme Court and which has been followed in case of the assessee by the ld CIT(A) in assessee s own case for A.Y 2012-13 and for the year under consideration, the AO follows the same however, the ld PCIT on identical set of facts reaches a different conclusion on appreciating the same set of decisions/authorities on the subject. AO has taken a plausible view in the matter and it may be that the ld PCIT holds a different point of view, thus, a view taken by the AO, being a plausible view taken by a quasi-judicial authority cannot be held as erroneous in nature unless it is unsustainable in eyes of law. Appeal of assessee allowed.
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Customs
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2022 (8) TMI 16
Valuation - whether the demurrage charges can form part of the assessable value? - HELD THAT:- The issue raised in these appeals is squarely covered by the order in C.C.E., MANGALORE VERSUS MANGALORE REFINERY PETROCHEMICALS LTD. [ 2016 (1) TMI 325 - SUPREME COURT] , whereby the issue that whether the demurrage charges can form part of the assessable value, has been decided in favour of the assessee, thereby confirming the order of the Tribunal. Appeal dismissed - decided against Revenue.
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2022 (8) TMI 15
Project Import - De-registration of the contracts registered by petitioner - Delayed adjudication and new objection raised by the revenue after 30 years of re-export - seeking direction that the goods imported by petitioner be assessed on merit without the benefit of Project Import Regulations 1986 under the Heading 98.01 (erstwhile 84.06) of the Customs Tariff Act 1975 - HELD THAT:- If at all respondents had any issue of petitioner not strictly complying with Regulation 7 of the Project Import Regulations 1986, it is respondents case that petitioner should have submitted the details of goods imported together with necessary documents within three months from the date of clearance for home consumption of last consignment. The three months period appears to have expired sometime in 1984 and in any case before the Writ Petition No.116 of 1988 was filed. Respondents have not raised any such grievance before this court in that writ petition. Respondents had another opportunity to raise this grievance when petitioner filed Notice of Motion No.149 of 2012 for return of bank guarantees. Even at that stage, respondents were silent and in fact respondents made statement to the court that they shall return the bank guarantees which had expired and they shall not invoke the remaining bank guarantees and within two weeks will return the same duly discharged upon expiry or the validity thereof, without insisting for renewal. Respondents could have told the court that the file has not been closed and these are the problems that petitioner has not fulfilled the requirements of Regulation 7 of the Project Import Regulations 1986 and, therefore, the question of returning any bank guarantee would not arise. Even when petitioner returned the bank guarantees or the remaining 4 bank guarantees, even at that stage, respondents do not raise the issue of the file being open. On 19th December 2012, respondent no.2 addressed a communication to petitioner, as noted earlier that out of the 65 bank guarantees that had expired, only 46 could be traced out and returned those 46 bank guarantees. As regards remaining 19 bank guarantees, respondent no.2 informed petitioner that original bank guarantees could not be traced out / are not available but the same are cancelled and discharged with immediate effect. If petitioner had not complied with the Regulation No.7 of the Project Import Regulations 1986, we fail to understand, why none of these points were ever raised before the court when earlier writ petition was argued or when the notice of motion was heard or even while returning the bank guarantees duly cancelled. If according to respondents requirements had to be complied with within three months from the date of clearance for home consumption, respondents could have even refused permission to petitioner to re-export the equipments because by then anyway those three months period had expired. It is not respondents case that the said period had been ever extended by any proper officer - the order passed by respondent no.2 only amounts to an attempt to over reach and circumvent the orders passed by this court on 12th August 2008 and 10th December 2012. Not having raised any of these points before despite having ample opportunities, respondents cannot after a belated period of almost 30 years, raise the requisition upon petitioner to meet alleged post import requirements. Though there is no time limit prescribed, that would not mean that the department could commence adjudication proceedings after 20 or 25 or 30 years by calling upon parties to comply with alleged obligations which they had. That would also amount to violating the principles of natural justice, in as much as, long delay will deprive a party from marshaling the documents or witnesses as there is always a possibility of documents or the witnesses disappearing or ceasing to exist after such a long gap. Petition allowed.
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2022 (8) TMI 14
Validity of SCN - delivery of notices beyond the time limitation - short collection of duty due to non-levy of anti-dumping duty - whether the show cause notices dated 06.11.2000 and 08.02.2001 for short collection of duty due to non-levy of anti-dumping duty, in respect to two bill of entries bearing nos.12032 and 25633 dated 04.05.2000 and 28.08.2000 respectively, issued by the fourth respondent in terms of section 28(1) of the Customs Act, 1962, are barred by limitation? HELD THAT:- In the present case, there is no dispute with regard to the date of payment of duty and the date of expiry of limitation in respect of the aforesaid two bill of entries. It is also not in dispute that the notices under section 28(1) of the Act were issued/despatched within the limitation period. What was disputed is that the delivery of notices to the petitioner, was beyond the period of limitation. On a perusal of the documents enclosed in the typed set of papers, it could be seen that the notice dated 06.11.2000 in respect of bill of entry no.12032 dated 04.05.2000, was sent to the wrong address of the petitioner, but it was delivered to them, on 10.11.2000 i.e., one day after the expiry of the limitation period and hence, the service of notice on the petitioner was completed. Similarly, in respect of bill of entry no.25633 dated 28.08.2000, the notice was initially issued on 13.02.2001 and the same was returned on 28.02.2001 as the party was not in station, which is well within the limitation period and the same fact was also fairly conceded by the petitioner. Subsequently, the petitioner was called to appear in person before the customs authorities and the notice was served on them by hand on 03.04.2001. In such circumstances, the service of notice effected on the petitioner at the first instance itself, would be deemed to be completed service and hence, the question of affixing the notice in the notice board of the customs house, will not arise. Therefore, this court is of the view that if the date of despatch of notices is taken into consideration, the notices served on the petitioner are within the period of limitation. This court is of the opinion that the notices issued by the fourth respondent are not hit by limitation. Thus, there is no reason to interfere with the findings so rendered by the CESTAT. Petition dismissed.
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2022 (8) TMI 13
Cancellation of the IEC - EPCG Scheme - levy of penalty - suspension of import export code as per section 11(7) of the Foreign Trade (Development and Regulation) Act, 1992 - no such show cause notice or personal hearing has been granted to the appellant prior to suspension of the license - violation of principles of natural justice - HELD THAT:- It is not in dispute that the appellant was issued with import export licence bearing code no.0492020779, besides they had obtained four EPCG authorizations. Since they failed to comply with the export obligation, during the month of November, 2013, they were issued with show cause notice, proposing to levy penalty. In the very same show cause notice issued by the third respondent, there was a proposal made as to why the Import Export Code issued to the appellant should not be suspended under Section 11(7) of the FTDR Act, 1992 as amended during 2010. However, no show cause notice as contemplated under the Act, was issued and no opportunity was provided to the appellant, before suspending the IEC, by the third respondent. Taking note of the fact that the said show cause notice issued in November, 2013, culminated in an order dated 16.01.2014 passed by the first respondent and thereafter, no further proceedings were initiated against the appellant prior to cancellation of the IEC, the learned Judge while disposing the writ petition filed by the appellant, challenging the order of cancellation of IEC passed by the third respondent, has correctly directed the jurisdictional officer under the Act, to issue appropriate show cause notice to the appellant, within a period of 30 days from the date of receipt of a copy of the order; further directed the appellant to file a reply within a period of 30 days; and thereafter, directed the jurisdictional officer to pass appropriate order, in accordance with law, within a period of 90 days, after giving adequate opportunity of hearing to the appellant. Further, the interest of the appellant was rightly protected by extending the status quo order for a period of 90 days. Writ appeal dismissed.
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2022 (8) TMI 12
Smuggling - illegal export or not - turmeric in 87 bags estimated to weigh qua 2500 kgs - two wheelers and packing bags - Confiscation - violation of principles of natural justice - HELD THAT:- The law in this regard is well settled (in a long line of authorities) and it is only in cases where SCN has been issued without jurisdiction or where there is violation of NJP (Natural Justice Principles) besides some other grounds such as well settled position of law of a higher Court being disregarded, an SCN can be interfered with. A careful perusal of the writ affidavit and the arguments advanced at the bar making it clear that they turn only on facts and there is nothing to demonstrate that there is violation of NJP or that the said impugned SCN has been issued without jurisdiction. There is nothing to demonstrate that said impugned SCN has been issued in disregard of settled provisions of law; that the respondent has powers to issue SCN under Section 124 of Customs Act calling upon the noticees to show cause as to why there should be no confiscation is beyond any pale of doubt. Absent grounds for challenge to an SCN, the captioned main writ petition cannot but fail. However, it is open to writ petitioner to respond to impugned SCN and it is open to the respondent to proceed with the impugned SCN, the writ petitioner shall co-operate with the proceedings and the same can be carried to its logical end on its own merits and in accordance with law as expeditiously as the business of the respondent would permit. Petition dismissed.
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2022 (8) TMI 11
Rectification of mistake - Calculation of correct Fe content - Iron Ore Fines - rejection of request for rectification by upholding that there was no clerical/arithmetical mistake or any accidental slip or omission on the assessing officer - HELD THAT:- From the observations of the Commissioner (Appeals), it emerges that the rejection of the rectification application by the Assistant Commissioner was not in order and that the decision of the Hon ble Apex Court in the case of UNION OF INDIA VERSUS GANGADHAR NARSINGDAS AGGARWAL [ 1995 (8) TMI 73 - SUPREME COURT] was to be applied to determine Fe content on the basis of exported weight of Iron Ore Fines, which would include the weight of the moisture in it. The Commissioner (Appeals) had categorically observed that the assessing officer had assessed the duty not on the basis of gross weight (including the weight of the moisture), but had determined the Fe content on dry wet basis. This itself clearly indicates that the order of Assistant Commissioner was not in order and that the same was rectifiable within the meaning of Section 154 ibid. The correct Fe content was required to be determined on the basis of the guidelines contained in the judgement of the Hon ble Apex Court in the case of Gangadhar Narsingdas Aggarwal - The same having not been done here, in the case on hand, it is clear that the order of First Appellate Authority dated 06.10.2010 is correct. It is the settled position of law that not following the order of the Hon ble High Court or the Hon ble Apex Court would amount to mistake/error which is rectifiable under the provisions of Section 154 ibid. It is strange that in the second round and in the impugned order, the First Appellate Authority has ignored its own earlier order which has attained finality and thereby sustained a tangential order of lower authority. The appeal is allowed by way of remand to the original authority with a direction to pass a speaking order, finalizing the assessments.
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Service Tax
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2022 (8) TMI 10
Validity of order quashing the show cause notice (SCN) by the writ court - Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded - Writ Court has allowed the writ petition and quashed the show cause notice not on the merit of the matter but on account of earlier order passed by the Learned Single Bench of this Court in a writ petition filed by the respondent in MCLEOD RUSSEL (INDIA) LTD., KOLKATA VERSUS UNION OF INDIA ANR. [ 2014 (11) TMI 927 - CALCUTTA HIGH COURT] - HELD THAT:- The finding rendered by the learned Writ Court in the earlier writ petition in W.P. No.48 of 2014 dated 20th November, 2014 does not reflect the correct legal position as it was held that The department has the jurisdiction and obligation to determine whether the writ petitioner is receiving support services from the government. Therefore, before it could demand or even show cause under Section 73 of the Finance Act, 1995, for Service Tax, it was incumbent upon the department to make the determination whether the subject service could be classified as a support service and the writ petitioner exigible to service tax. If the department s answer was in the affirmative, only then, a show cause notice and thereafter a demand for service tax could have been issued. Section 73 of the Finance Act, 1994 deals with recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. Sub-Section (1) of Section 73 states that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within thirty months from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amounts specified in the notice. The crucial words in the said provisions are pay the amounts specified in the notice . Therefore, at the very first instance when the show cause notice was issued, it was incumbent upon the Central Excise Officer to compute the amount, which is being demanded from the assessee giving the assessee an opportunity to submit its objections to the show cause notice. The order passed by the learned single Bench quashing the show cause notice is not tenable and accordingly, the appeal stands allowed - the writ petition is dismissed with a direction to the respondent/assessee to submit its reply to the show cause notice within three weeks from the date of receipt of a server copy of this judgment and order.
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2022 (8) TMI 9
Seeking direction to respondent authorities to accept payment of tax dues as per the Statement in Form SVLDR-3 issue discharge certificate settling the disputes - HELD THAT:- The Court was satisfied that the appellant had made out a prima facie case and precisely for such reason affidavit-in-opposition was directed to be filed by the respondent and the writ petition was directed to be listed on 10th December, 2021 at the top of the list. Further, the learned writ Court had granted permission to file supplementary affidavit, which has also been complied with. Subsequently the matter was heard on 14.12.2021 and on the said date the learned writ Court had directed the matter to be listed for hearing after Christmas Vacation and the respondents were directed to maintain status quo till 11 th January, 2022 and/or until further order, whichever is earlier. Thereafter, the matter was not listed. After affidavit-in-opposition has been filed and the reply has also been filed to the said affidavit-in-opposition, it would be better if decision is taken on merits of the matter since the learned writ Court had recorded in its order dated 25.11.2021 that the allegation of technical glitches made by the appellant was not wrong and they have denied it. In such circumstances, by directing disposal of the representation may not yield any result because already the respondents have filed their affidavit-in-opposition and have made their stand clear. Therefore, the writ petition should be decided on merits. The writ petition is restored to its original file and number to be heard and decided by the learned Single Judge on merits and in accordance with law - Appeal allowed.
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2022 (8) TMI 8
Levy of penalty under Section 78 of FA - non-compliance in depositing the tax under the RCM - It is alleged that the appellant have not discharged service tax on three invoices - revenue neutrality - HELD THAT:- There is no deliberate non-compliance and further the situation is wholly revenue neutral. Thus, there is no incentive for the appellant to evade payment of service tax under the RCM. The penalty under Section 78 is set aside - appeal allowed - decided in favor of appellant.
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Central Excise
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2022 (8) TMI 7
CENVAT Credit - manufacture of dutiable and exempted goods (Bagasse and Bio Compost) by using common inputs - period May 2011 to September 2015 - applicability of Rule 6(1) of the Cenvat Credit Rules, 2002 - HELD THAT:- Reliance placed in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT ] where it was held that In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. In respect of observations made on the basis of CBEC Circular dated 25.04.2015 (referred in Order of Ld.Commissioner(Appeals), the Hon ble Allahabad High Court in the case of M/S BALRAMPUR CHINI MILLS LTD. THROUGH ITS GENERAL MANAGER VERSUS UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (5) TMI 972 - ALLAHABAD HIGH COURT ] has held that That the Circular dated 25-4-2016 interpreting Explanation 1 to Rule 6 has provided that consequently, Bagasse, dross and skimmings of non-ferrous metal or any such by-product of waste, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for purpose of reversal of credit of input and input services, in terms of Rule 6 of the Cenvat Credit Rules, 2004. The circular therefore treating Bagasse to be a non-excisable goods, is clearly erroneous, and for this reason also the Circular dated 25-4-2016 is liable to be quashed with regard to Bagasse. The issue is squarely covered in the favour of the Appellant by the referred decisions - Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 6
Violation of principles of natural justice - Documents seized in the process of search and seizure and which were not relied upon, were not returned - the cross-examination has not been allowed on the statements of persons, which were relied upon - HELD THAT:- There was indeed violation of principles of natural justice in the matter. The matter is remanded back to the original authority with following directions: (i) All documents which were seized from the appellant and which were not relied upon must be returned to it; (ii) If any statement made by any person before a Central Excise officer was relied upon in the show cause notice the procedure required under Section 9D of the Central Excise Act must be followed. If the appellant seeks the cross-examination of the persons who made such statements the same must also be allowed. The assessee should be allowed cross-examination of any expert whose opinion was relied upon in the show cause notice. Appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2022 (8) TMI 5
Levy of Sales Tax - whether tin containers sold by the Petitioner were exigible to sales tax not under Entry 129 of List-C of the rate chart appended to the Orissa Sales Tax Act, 1947 (OST Act) but under the residual entry where the rate of the tax was 12%? - Application of principles of consistency - HELD THAT:- From the copy of the assessment order for 2004-05, it is evident that the tin containers have been taxed at 4% and not 12%. That order has not been further questioned by the Revenue. Since for the subsequent year the plea of the assessee in the above regard has been accepted there is no reason why even on the principles of consistency it should not govern the earlier AY i.e. 2003-04. There is merit of the contention of the counsel for the Assessee that the expression tin containers is to be understood the in the normal commercial and trade parlance and it would be erroneous for the Department to insist that only containers manufactured entirely out of tin should be considered to be tin containers. The essential character of the product being that of a metal container, as understood in trade and common parlance, metal containers with a coating of tin would satisfy the description of tin containers . There is, therefore, merit in the contention that it is classifiable under Entry 129 of List-C of the rate chart appended to the OST Act. Decided in favor of assessee - revision petition is disposed of.
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2022 (8) TMI 4
Liability of tax - movement of capital goods from the petitioner s unit in CSEZ to the 6th respondent s unit at Udaipur, Rajasthan - whether the theory of lease from CSEZ to 100% EOU at Udaipur, Rajasthan is made out by the petitioner? - HELD THAT:- The application refers to the transfer of machines to the 6th respondent unit definitely all details are not stated. At best it could be said that the correspondence taken up with the competent authorities under the Customs Act are bereft of details, however, the permission by accepting the request for transfer was granted on 24.05.2004. The 6th respondent is stated to be a 100% EOU. Invoices dated 15.06.2004 followed the permission dated 24.05.2004. The invoices are raised in favour of the 6th respondent. The alleged lease under which the capital goods are moved from Cochin from Udaipur, for the limited verification we can undertake, we are convinced to hold that the plea of lease arrangement under which capital goods are transferred from Cochin to Udaipur is not convincing and acceptable. Whether the EXIM policy 2002-07 permits inter-unit transfer? - HELD THAT:- On perusal of Ext.P7-permission, and Ext.P9-Bill of Entry, and by adopting the analogy or Spares Corporation case and in the peculiar circumstances of the case, it can be opined that these documents would not determine the character and incidence of tax under the CST Act, 1956. The exigibility or otherwise is under Section 3 and 5 of the CST Act, 1956. Movement of goods is in the course of import or not? - HELD THAT:- It is relevant to point out that the movement of capital goods from Cochin to Udaipur could not be under both the arrangements viz. firstly, lease in favour of the 6th respondent, secondly, transfer of goods in the course of import. The writ petitioner though has inconsistent pleas, still we would like to examine whether, from the documents now placed before the authorities and this Court, the movement of goods could be treated as in the course of import. Claim of the petitioner for exemption from payment of sales tax - HELD THAT:- The record discloses that the capital goods were kept in a bonded warehouse and moved out of the bonded warehouse of SEZ, State of Kerala, to Udaipur in Rajasthan. The 6th respondent transferee is not located or established in SEZ but 100% EOU. The movement of goods from one SEZ to another SEZ may have different connotations and in the case, on hand, since the movement is to a 100% EOU, all the inferences available in the transfer of goods from one SEZ to another SEZ are not attracted. Pursuant to the permission granted in Ext.P7, bill of entry is raised, invoices are booked and goods transported, pursuant to the permission granted by the Development Commissioner. The invoices raised describe 6th respondent as a consignee. The 6th respondent is not asserting his status in the transfer or movement of goods. To us, from the documents relied on by the petitioner, the subject movement is an inter-state transfer and attracts Central Sales Tax - the case of the petitioner for exemption from payment of central sales tax on the ground that, movement of goods is in the course of import is also unsustainable and accordingly rejected. Appeal allowed - decided in favor of appellant.
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2022 (8) TMI 3
Validity of assessment order - reversal of Input Tax Credit (ITC) in terms of Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- In light of the categoric findings and conclusion of the Division Bench of this Court in THE STATE OF TAMIL NADU REPRESENTED BY ITS SECRETARY COMMERCIAL TAXES DEPARTMENT, THE DEPUTY COMMISSIONER (CT) (FAC) VERSUS M/S. EVEREST INDUSTRIES LIMITED [ 2022 (4) TMI 1204 - MADRAS HIGH COURT] to the effect that the amendment to Section 19(2)(v) is curative and declaratory, the petitioner is entitled to the relief as sought and the impugned assessment order is set aside. Petition allowed.
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Indian Laws
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2022 (8) TMI 2
Validity of Notification dated 23.6.2005 - Constitutional Validity of Section 20 of Karnataka Slum Areas (Improvement and Clearance) Act, 1973 - challenge to the Notification on the ground that the impugned notification was issued without adequately considering the objections taken by the writ petitioners and in excess of the power vested in the authority - lapsing of the acquisition which was in furtherance of the show cause notice issued under the 1973 Act on 14.10.1982 - HELD THAT:- The High Court has dealt with the question of validity of Section 20 in a casual manner. That cannot be countenanced inasmuch as the Constitutional Court for answering the assail on this count, in the first place, need to examine the scheme of the 1973 Act, its objects and purposes as also the question: whether the payment of amount specified as three hundred times the property tax payable in respect of such land on the date of publication would be a permissible method of determination of the amount or is per se unjust, unfair or unreasonable? Concededly, there can be different methods for valuation of property, including the method of capitalisation value. Further, it has to be considered as to whether it is an objective method and not illusory (as it is the case of the State that the amount determined under Section 20 is quite substantial, i.e., Rs.3.52 crore), in the present case. Additionally, if the 1973 Act and the provisions are ascribable to the objective predicated in Article 39(b) of the Constitution, then it would get protection or immunity from challenge in terms of Article 14, 19 or 31 of the Constitution. Furthermore, even if the High Court was right in observing that the 1973 Act came into force prior to coming into force of 44th Amendment to the Constitution on 20.6.1979, it would make no difference as Article 31C was already in force with effect from 20.4.1972 to the extent it has been validated by this Court in His Holiness Kesavananda Bharati Sripadagalvaru [ 1973 (4) TMI 114 - SUPREME COURT ]. The High Court had held that in absence of an express provision regarding lapsing of acquisition in the 1973 Act unlike the 1894 or 2013 Act, it is not open to grant relief of setting aside impugned notification dated 23.6.2005 on account of efflux of time. In that, show cause notice (preliminary notification) is ordinarily issued when the competent authority is satisfied that for the purpose of executing any work of improvement in relation to any slum area or any building in such area or for the purpose of redeveloping any slum clearance area , or for the purpose of rehabilitating slum dwellers, it is necessary to acquire any land and it has been so decided in pursuance of the said provision. It is deemed appropriate to relegate the parties before the learned Single Judge of the High Court for reconsideration of the writ petitions afresh on its own merits and in accordance with law with liberty to both parties to amend the writ petition or file further better affidavit to defend the provisions in question and the action of acquisition, as the case may be - The appeals are disposed of.
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2022 (8) TMI 1
Dishonor of Cheque - Funds insufficient - vicarious liability of Directors - grounds urged by the applicants is that they are independent non executive Directors or that there are no averments to satisfy the requirements of Section 141 of NI Act is required to be appreciated during the trial - HELD THAT:- The documents on record indicate that the the applicants are independent non executive Directors. In the light of the averments made in the complaint, role of independent Directors, documents on record, petitioners cannot be prosecuted for the offences punishable under Section 138 of NI Act by invoking Section 141 of the said Act. The applicants were independent non executive Directors of accused no.1 company. Considering the facts of this case, in exercise of inherent powers of this Court under Section 482 of Cr.P.C., the proceedings against them are required to be quashed. Learned counsel for the respondent complainant submitted that the trial as against the other accused may be expedited. Application allowed.
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