TMI Tax Updates - e-Newsletter
September 17, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Securities / SEBI
Insolvency & Bankruptcy
Service Tax
Central Excise
Wealth tax
Indian Laws
Highlights / Catch Notes
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GST:
Benefit of exemption from GST - monthly license fee paid by the petitioner - work contract of maintenance of toilets at 4th Respondent Bus Station - As per the notification, the Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets” and the rate of tax against the said heading is shown as “nil” - Petition allowed - HC
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GST:
Classification of goods - roof mounted Air-conditioning unit especially for use in railway coaches (manufactured as per railway design) - The goods cannot be classified as a part in Chapter 86 since the all the tree conditions are not satisfied - it can be inferred that Roof Mounted Air Conditioning unit manufactured and supplied by the applicant is squarely covered under HSN 84.15 irrespective of field of industry in which they are used. - AAR
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Income Tax:
Reopening of assessment u/s 147 - cash deposits during demonetization period - in view of the allegation of cash deposits during demonetization period, this Court is of the opinion that even if the reply now sought to be relied upon by the petitioner was taken into account, notice u/s 148 of the Act was called for – as a prima facie case of escapement of income was made out. - HC
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Income Tax:
Adjustment in the intimation specified u/s 143(1) - debatable issues - benefit of accumulation - deemed income u/s Section 11(3) - the issues which are of debatable nature cannot be made subject to adjustment in the intimation specified under Section 143(1) of the Act. - AT
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Income Tax:
Penalty u/s 271B - assessee failed to get the accounts audited - AO after due application of mind and carrying out the necessary verification has accepted the income declared by the assessee. As such we are of the view that there was no leakage of the revenue to the government exchequer on account of failure on the part of the assessee for not getting the accounts audited under the provisions of section 44AB - No penalty- AT
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Income Tax:
Penalty u/s 272A(1)(d) - non-compliance of the notice issued u/s 142 - when this is the year of changing the mode of assessment proceedings from physical to digital /electronically then the delay in compliance due to change in the mode of communication and proceedings is a bonafide reasons and not deliberate. - No penalty - AT
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Income Tax:
Addition being amount of unreconciled TDS and income not offered for taxation - the assessee company is a mere step through entity, which collected royalties and licence fees on behalf of its members and distributed the said amount to the concerned member after duly deducting the related expenses on actuals. - method of accounting followed by the assessee is relevant - AT
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Income Tax:
Sale of Plant and machinery within short span of acquisition - Revenue treated the same as Scrap - denying adjustment of cost of acquisition against the consideration - The fact of the asset being sold within a very short period of acquiring is not relevant for determining its character as scrap. - AT
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Income Tax:
Applicability of section 73 - share trading loss treated as non-speculative loss - it is not in dispute that the income from other sources which is much more than income from business. Hence the assessee's case squarely falls under the exception clause provided in Explanation to Section 73 of the Act. - AT
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Income Tax:
Disallowance of tour and travel expenses - no details were forthcoming from the assessee to substantiate these travel and conveyance expenses and justify that these expenses were incurred wholly and exclusively for the purposes of business - Merely Rs. 10 lac of expenses were disallowed by the AO out of total travel and conveyance expenses of Rs. 1.90 crores incurred by the assessee during the year under consideration, as against total travelling and conveyance expenses of Rs. 1.20 crores incurred in the immediately preceding year - Additions confirmed - AT
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Customs:
Classification of imported goods - Benefit of exemption from duty (BCD) - import of data projectors - The addition of multiple ports in the goods will not take away the basic nature of the goods, which is to work in conjunction with ADPS. This would continue to remain the principal function of the goods. The presence of such ports is only to ensure their use with laptops and ADPS. Therefore, even post 01.07.2017, goods would be classifiable under CTI 8528 62 00 - AT
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SEBI:
Offence under SEBI - Petitioner seeking documents relied upon by the Respondent-SEBI - Inquiry is in process - The documents relied upon for formation of opinion under Rule 3, are not required to be disclosed to the noticee unless relied upon in the inquiry. In the event, the Petitioner is prejudiced by reason of any adverse order, based on any materials not supplied to the Petitioner, or any prejudice is demonstrated to have been caused to the Petitioner, it would be open to the Petitioner to approach the appropriate forum. - Petition dismissed - SC
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Service Tax:
Levy of service tax - advertising agency service or not - activity of wide format printing - assessee has no role at all in the conceptualization or in the making or creation of design. In fact, the respondent has no authority at all to even make any changes in the advertisement content provided by the customers and the respondent merely prints that on the PVC material procured from the market. This activity would not fall within the scope of the activity contemplated under section 65(3) of the Finance Act. - AT
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Service Tax:
Levy of service tax - Mailing list compilation and Mailing services - It is seen that the appellants are not compiling any list or providing list of names addresses etc. The appellants are merely providing scores in respect of names of candidates supplied by the clients (Non-IIM Institutes). Moreover, the activity of ‘Mailing list compilation and mailing’ is done for or on behalf of the client. In this case the appellants are only dealing with the clients and not with any third party. - Demand set aside - AT
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Central Excise:
Refund of interest deposited by the appellant (under protest) - denial on the ground of being time barred - The period of one year as per Section 11B(B)(ec) ibid is the date of decision of Hon’ble High Court and not the date of Final Order of CESTAT, as the appeal before Hon’ble High Court of Rajasthan being the one filed by the Department. Hence, the findings of authority below rejecting the refund as time barred are totally misplaced - AT
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Central Excise:
Power to issue SCN - Recovery of erroneous refund with interest - It is more than apparent that section 11A of the Excise Act cannot be resorted to by the Department for recovery of duty which it believes was erroneously refunded if the order passed for refund of duty under section 11B of the Excise Act on an application filed for refund of duty attained finality for the simple reason that it cannot fall in the category of ‘duty erroneously refunded’ - The show cause notice dated 30.08.2017 seeking recovery of the duty refunded to the appellant is without jurisdiction. - AT
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Central Excise:
Classification of goods - Roller Bearing and Ball Bearing - parts or components of other engine or vehicles - Process amounting to manufacture or not - Packing or repacking of such goods in a unit container or labeling or re-labelling of containers including the declaration or alteration of retail sale price - Cannot be classified as parts or accessories of vehicles - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2022 (9) TMI 726
Profiteering - purchase of flat - it is alleged that the Respondent had not passed on the commensurate benefit of input tax credit (ITC) to him by way of commensurate reduction in price against payments due to him - contravention of section 171 of CGST Act - Penalty - HELD THAT:- The Authority determines that the Respondent has realized an additional amount of Rs. 1,56,77,149/- which includes both the profiteered amount @ 2.44% of the taxable amount (base price) and GST @ 12% on the said profiteered amount from the 71 home buyers/shop buyers/ recipients of supply including Applicant No. 1 during the period from 01.07.2017 to 30.09.2019 which was required to be passed on the eligible home buyers of his impugned project. The details of eligible home buyers/shop buyers/ recipients of supply to whom supply has been made by Respondent in the impugned Project and from whom additional amount on account of benefit of ITC had been realized by the Respondent during the aforesaid period along with details of such additional amount is given in Annexure- A to this Order. Since, all the home buyers/shop buyers/ recipients of supply are identifiable as per the documents placed on record and therefore, the Respondent is directed to pass on the profiteered amount along with the interest @ 18% per annum (from the dates from which the said profiteered amount was collected by him from each of them till the date such amount is passed on/returned/refunded), if not already passed on / returned / refunded, within a period of 3 months from the date of passing of this Order as per the details mentioned in Annexure- A , failing which the said amounts shall be recovered as per the provisions of the CGST Act, 2017 - this Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondents shall reduce the prices to be realized from the home buyers/shop buyers/ recipients of supply in the above Project commensurate with the benefit of ITC received by him. Penalty - HELD THAT:- The Respondent has denied the benefit of ITC to the buyers of his flats/customers/recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017. The Authority holds that the Respondent has committed an offence by violating the provisions of Section 171 (1) during the period from 01.07.2017 to 30.09.2019, and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of the said Section 171 (3A) shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.07.2017 to 30.09.2019. Hence, the said penalty under Section 171 (3A) cannot be imposed on the Respondent retrospectively i.e. with respect to the period to which this Order relates. The Authority has a reason to believe that since the Respondent has been found to have contravened the provisions of Section 171 of the CGST Act 2017 in respect of the subject project Bhagwati Eminence and hence there is every possibility that similar contravention may has taken place with his other projects. This Authority in terms of Rule 133 (5)(a) of the CGST Rules 2017 also directs the DGAP to investigate profiteering in relation to other Projects executed by the Respondent if any, under the provision of section 171 of the CGST Act 2017. This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
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2022 (9) TMI 729
Cancellation of petitioner-consortium s registration - SCN does not set out any reason, as to why the registration was cancelled - violation of principles of natural justice - HELD THAT:- There are two aspects to be noticed at this stage. Firstly, when the earlier SCN was issued, which was on 08.07.2021, nothing of this kind was adverted to in the said SCN i.e., that an inspection had been conducted on 05.07.2021, which revealed that the petitioner-consortium s unit was not in existence at the registered premises. Secondly, in the reply dated 23.11.2021, the petitioner-consortium had furnished information that it had shifted its place of business to another location. Documents in support of this plea were also appended to the reply. As is evident from the record, the explanation given by the petitioner consortium, that it had shifted its place of business, was not dealt with in the order dated 08.12.2021. List the matter on 15.09.2022.
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2022 (9) TMI 728
Benefit of exemption from GST - monthly license fee paid by the petitioner - work contract of maintenance of toilets at 4th Respondent Bus Station - eligibility for exemption under N/N. 12/2017-Central Tax (Rate), dated 28.06.2017 - HELD THAT:- A perusal of the Notification, dated 28.06.2017, (Notification No.12/2017-Central Tax (Rate), would show that Heading 9994 relates to Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets and the rate of tax against the said heading is shown as nil . Similarly, the Government of Andhra Pradesh, vide G.O.Ms.No.588, dated 12.12.2017, issued similar notification exempting payment of tax for the services rendered by such Agency. As these two notifications are still in force and no notification is issued modifying or overriding the same, the writ petition deserves to be allowed. This Writ Petition is allowed, declaring the action of the respondents in demanding C.G.S.T. and A.P.G.S.T. at the rate of 9% each on the monthly license fee paid by the petitioner for the work contract of maintenance of toilets at respondent No.4 bus station as illegal and improper.
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2022 (9) TMI 727
Classification of goods - roof mounted Air-conditioning unit especially for use in railway coaches (manufactured as per railway design) - classifiable under HSN- 8415 1090- IGST @ 28% or under HSN 8607 99 - IGST @ 18% as parts of Railway Coaches; Locomotives? - HELD THAT:- It can be inferred that Roof Mounted Air Conditioning unit manufactured and supplied by the applicant is squarely covered under HSN 84.15 irrespective of field of industry in which they are used. On perusal of chapter note 2 of chapter 86, it can be observed that Roof Mounted Air-conditioning units are not covered specifically under HSN 8607. As the word inter alia. is mentioned in chapter note 2, it is necessary to go through the Explanatory Notes to HSN 8607 - it is evident that for a part to be covered under HSN 8607, the above-said two conditions need to be fulfilled in toto. The second condition prescribed is that the parts will get classified under HSN 8607 only if they are not excluded by the provisions of the Notes to Section XVII. Note 2 read with Explanatory Notes specifically excludes Air Conditioning Machines (heading 84. 15) from falling under HSN of Section XVII and more so, from HSN 8607. Therefore, by virtue of Note 2 (e) to Section XVII read with Explanatory Notes, Air Conditioning Machines (heading 84.15) are excluded from this Section . Therefore, the very first condition is not satisfied in the case of applicant. Further, the three conditions, as enumerated above. show that any parts made specifically for railways and not covered under headings 84:01 to 84.79 - Moreover, three conditions prescribed for any Item to be classified as a part in Chapter 86 are also not Fulfilled in the instant case. The Roof Mourned Air-Conditioning unit manufactured by the applicant are classifiable under HSN Heading 8415 and the classification of the goods shall not after on account of supply by them to Railways.
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Income Tax
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2022 (9) TMI 722
Adjustment in the intimation specified u/s 143(1) - debatable issues - Assessment of trust - Deemed income u/s 11(3) - assessee is public charitable trust and duly registered under Section 12A - HELD THAT:- In the present case, the assessee has accumulated a sum representing the deemed income under Section 11(3) of the Act, in pursuance to the provisions of Section 11(2) of the Act. The first question arises whether the assessee can again accumulate the deemed income under the provisions of Section 11(3) of the Act in the manner as provided under Section 11(2) of the Act. Assuming the answer stands in negative, the next question arises whether such adjustment/denial of accumulation of the deemed income, can be made in the intimation generated under Section 143(1) of the Act. Undoubtedly, the scope of adjustments under the provisions of Section 143(1) of the Act is limited to the extent of the items as described above. In the case of CIT vs. Natwarlal Chowdhury Trust [ 1989 (8) TMI 19 - CALCUTTA HIGH COURT] held that the assessee is entitled to accumulate 15% of the total income which is inclusive of the deemed income specified under Section 11 (3) of the Act. Thus, from the above judgment, it is transpired that the assessee can claim the benefit of accumulation even on the deemed income specified under the provisions of Section 11(3) of the Act. However, the Ld. CIT-A in his order has not pointed out any distinguishing features in the case on hand viz-a-viz in the judgment of Hon ble Calcutta High Court as discussed above. Thus the issues which are of debatable nature cannot be made subject to adjustment in the intimation specified under Section 143(1) of the Act. Accordingly, we set aside the finding of the Ld. CIT-A and direct the AO to allow the claim of the assessee.
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2022 (9) TMI 721
Unexplained Cash Credit u/s. 68 - cash deposits in the bank as unexplained - as about the source of cash deposit assessee failed to offer any explanation - HELD THAT:- The provisions of Section 68 of the Act fastens the liability on the assessee to provide the identity of the lenders, establish the genuineness of the transactions and creditworthiness of the parties. These liabilities on the assessee were imposed to justify the cash credit entries u/s 68 in the case of CIT Vs. Precision Finance (P) Ltd[ 1993 (6) TMI 17 - CALCUTTA HIGH COURT] . Undoubtedly, there were cash deposits in the bank account of the assessee and the onus lies upon the assessee to justify the source of such cash deposits in her bank account. From the preceding discussion, we find that the assessee during the appellate proceedings has justified the source of cash deposits in her bank account. Pattern of withdrawing the cash from the bank from the accounts of different companies as well as from her own account and re-deposit the same in the bank appears to be very of unusual/ abnormal and the same is not free from the doubts. But no adverse inference can be drawn based on the doubts and surmise. The inference of the AO, how strong it is, but is of no consequence until and unless it is based on some concrete materials. In the present case, the necessary bank statements and explanation were furnished by the assessee to justify the source of cash and no iota of doubt was pointed out in such documents. To our understanding, such documents are primary documents which cannot be ignored while deciding the issue on hand. Thus, the assessee cannot be penalized if he was prevented from filing the secondary documents due to unavoidable reason such as cash book and other details. Thus as assessee has duly discharged her onus imposed under the provisions of Section 68 of the Act by furnishing the necessary details with respect to the identity, creditworthiness of the parties and genuineness of the transactions. Accordingly, we hold that no addition is warranted in the given facts and circumstances - Decided in favour of assessee.
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2022 (9) TMI 720
Revision u/s 263 by CIT - Deduction u/s 80P(2)(d) - whether AO made sufficient enquiries at the time of original assessment and whether the view taken by the AO on appreciation of facts of the case is a legally sustainable view? - HELD THAT:- Aassessee filed reply before the AO, in which the assessee gave a detailed explanation regarding the claim of deduction under section 80-P of the Act. Therefore, from the perusal of records, it is evident that the AO had made sufficient enquiry into the aspect of claim of deduction under section 80-P of the Act. Regarding the disallowance of dividend income earned on shares held by the assessee in RDC District Cooperative Bank, we observe that the Hon ble Gujarat High Court in the case of State Bank of India [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] held that the 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) . In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] the Karnataka High Court has held that the 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) of the Act. We are of the considered view that AO had made sufficient enquiries at time of passing of original assessment order. The assessee had given to the replies in response to the queries raised by the AO. Before us, the assessee has also duly explained that in that no interest was earned by the assessee from any bank, but such interest received from its members only. Further, the assessee had earned dividend income on account of shares held in Rajkot District Cooperative Bank, on which deduction has been claimed under section 80P of the Act, which is eligible in view of the plain language of section 80P(d). Therefore, we are of the view that in the instant set of facts, there is no infirmity in the order assessment passed by the AO. Accordingly, order passed under section 263 of the Act is liable to be set aside - Appeal of assessee allowed.
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2022 (9) TMI 719
Penalty u/s 271B - assessee failed to get the accounts audited - whether the accounts were subject to audit under the provisions of section 44AB of the Act? - whether there was a reasonable cause for failure on the part of the assessee to get his accounts audited? - HELD THAT:- Under section 271B if a person required to get the accounts audited under the provisions of section 44 AB of the Act, fails to do so, AO may impose on him a penalty for a sum of Rs. 1,50,000.00 or .5% of the turnover whichever is less. The use of the word may in this section also indicates that it is not mandatory but discretionary. It cannot be imposed in each and every case of default but the AO shall issue a notice to the assessee for affording the opportunity of hearing. Penalty under the provisions of section 271B of the Act is not automatic. Likewise, the provisions of section 273B of the Act provides that there shall not be any penalty if the assessee fails to get its accounts audited under the provisions of section 44 AB of the Act if he proves that there was reasonable cause for the said failure. Admittedly, in the given case the income declared by the assessee in the return of income has been admitted by the revenue without any variation though the assessee has furnished necessary documents in support of the return filed by him. This fact can be verified from the observations of the AO contained in the assessment order. There remains no ambiguity to the fact that all the necessary details were available before the AO during the assessment proceedings in support of the return of income filed by the assessee and no infirmity of whatsoever was pointed out by the AO during the assessment proceedings. AO after due application of mind and carrying out the necessary verification has accepted the income declared by the assessee. As such we are of the view that there was no leakage of the revenue to the government exchequer on account of failure on the part of the assessee for not getting the accounts audited under the provisions of section 44AB of the Act. On this count, we are of the view that the assessee should not be visited with the penalty under the provisions of section 271B - Decided in favour of assessee.
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2022 (9) TMI 718
Levy of late fees u/s 234E - belated submission of Tax Deducted at Source statements for F.Y. 2012-13 - levying such late fee prior to 01-06-2015 - HELD THAT:- It is with effect from 01-06-2015 that an amendment was made to section 200A of the Act providing that fees u/s 234E could be computed at the time of processing of return of income and an intimation could be issued specifying the same payable by the deductor as fees u/s 234E of the Act. Hon'ble Karnataka High Court in the case Fatheraj Singhvi Vs. Union of India [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT] has held that the provisions of section 234E of the Act are substantive in nature and the mechanism for computing the late fee was provided by the Parliament only w.e.f. 01-06-2015. Therefore, late fees u/s 234E of the Act can be levied only prospectively w.e.f. 01-06-2015 and not prior to that . Admittedly in all the above three cases, the Revenue has levied such late fee u/s 234E for F.Y. 2012-13 prior to 01-06-2015 and hence, we set aside the concerned orders of the National Faceless Appeal Centre and direct the A.O to delete the late fee levied u/s 234E of the Act from the hands of the assessee.
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2022 (9) TMI 717
Addition on account of cessation of liability u/s 41 - HELD THAT:- For the application of section 41(1) it is necessary that the assessee must have obtained some benefit in respect of such trading liability by way of remission or cessation thereof. As per provision of section 41 such remission or cessation of liability also includes unilateral act of writing off such liability in the books of accounts by the assessee. Revenue without bringing anything on record that the assessee has received some benefit in respect of said trading liability, during the year under consideration, treated the same to be ceased and considered it to be income of the assessee. As in absence of any material to establish that the assessee has obtained any benefit in respect of the liability on account of sundry creditors, merely on surmises and assumptions it cannot be assumed that there is remission or cessation of liability in the year under consideration - when there is no unilateral act by the assessee in writing off of liability in its books of accounts. In order to attract the provisions of section 41(1) there should have been an irrevocable cessation of liability without any possibility of the same been revived, which has not so been established by the Revenue. Addition on account of sundry creditors is not sustainable in the year under consideration and therefore, is directed to be deleted. As a result, grounds raised by the assessee are allowed. Addition on account of advances received by the assessee - HELD THAT:- AO did not agree with the plea of the assessee on the basis that some of the loans received from family members were in respect of the film produced by the assessee and therefore the said advances should have been adjusted against the loss incurred on the release of said film - in absence of details of shows not being held, the AO added the advances in respect of such shows. CIT(A) vide impugned order agreed with the submission of the assessee on the basis that loans/advances cannot be considered as the income irrespective of the operations of the company resulting into profit or loss. In the present case, it has not been denied that these loans/advances were taken by the assessee in earlier assessment years and no fresh advances were received in the current year - We deem it appropriate to remand this issue to the file of Assessing Officer for de novo adjudication after necessary verification in respect of the claim of the assessee. If upon verification, it is found that the creditor has shown the loan as refundable/receivable and the said position has been accepted by the Revenue in the case of creditor, AO is directed to grant relief to the assessee in respect of the said amount. As regards the advances in respect of various shows, the AO is directed to examine whether such shows/events have taken place. We further direct that such advances can only be taxed in the year in which respective shows have taken place. With the above directions, grounds raised by the Revenue are allowed for statistical purpose.
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2022 (9) TMI 716
Revision u/s 263 - period of limitation - Validity of reopening of assessment u/s 147- statutory time period for passing the order giving effect to the order passed under section 263 - AO failed to make verification/investigation in respect of the transaction in bogus long term capital gains/short term capital gains - HELD THAT:- From the copy of assessment order dated passed under section 147 r.w.s.144B furnished during the course of hearing, we find that the AO accepted the return income declared by the assessee and made no addition on the ground on which the reassessment proceedings u/s 147 of the Act were initiated. Since, only the validity of the order passed u/s 263 of the Act is under challenge in the present case and in view of the current position of fact that no order has been passed by the AO, pursuant to the directions issued vide impugned order, within the time limit provided u/s 153(3) read along with the proviso and as extended by various notifications issued by the CBDT, as referred to hereinabove, the present appeal is rendered academic in nature, in the present case, and therefore, is dismissed as infructuous. However, liberty is granted to both the parties to seek recall of this order, if, at a later point of time, it is found that the order was, in fact, passed by the Assessing Officer pursuant to the directions issued vide impugned order dated 05/03/2020 passed under section 263. Appeal of assessee dismissed.
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2022 (9) TMI 715
A ssessment u/s 143(3) - disallowing an amount being the provisions towards additional interest on CTDs and disallowing being provision towards additional interest on RID of CTDs - assessee had filed revised return of income by offering the provisions made on additional interest on CTDs and provision towards additional interest on RID of CTDs - HELD THAT:- We find the AO in the instant case completed the assessment u/s 143(3) on 16.3.2015 for the A.Y 2012-13. We find the Assessing Officer completed the assessment for the A.Y 2010-11 on 21.3.2016 and while deciding identical issues, the assessee had filed revised return of income by offering the provisions made on additional interest on CTDs and provision towards additional interest on RID of CTDs. Under these circumstances, we do not find any infirmity in the order of the CIT (A) in confirming the additions made by the AO. Deduction u/s 80P - Assessee has not taken this claim before the AO and has taken this ground for the first time and this amounts to a new claim in additional ground - HELD THAT:- Hon'ble Bombay High Court in the case of CIT vs. Pruthvi Brokers Shareholders Pvt. Ltd [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] held that the assessee can always make a new claim not made in return of income before the appellate authorities. Since in the instant case, the assessee was all along been granted deduction of section 80P benefit and a ground was also taken before the learned CIT (A), therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to consider the claim of deduction u/s 80P - AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. Appeal filed by the assessee is partly allowed for statistical purposes.
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2022 (9) TMI 714
Best judgment assessments u/s. 144 - NP estimation - quantification of the estimated net profit - AO to estimate net profit @ 5% of gross receipts - assessee was a truck union not having any trucks of its own but which was formed for the purpose of bringing together the various truck owners with an aim to reduce competition and price cutting between them - HELD THAT:- Best judgment assessment is quasi judicial in nature and the estimation made by the Assessing Officer has to be based on the principles of natural justice, equity and a good conscience. Thus, in common parlance, the words best judgment assessment would mean making assessment which is without prejudice or bias and which does not smack of arbitrariness on the part of the AO. It is settled law that even while making best judgment assessment, the past history of the assessee is to be duly considered. To this extent, we are agreeable to the contention raised by the Ld. AR. Applying the profit rate of 12% - AO has ignored the past trends and even the Ld. NFAC, although after having duly reproduced the earlier year data, has not considered this aspect. In our considered opinion, the lower authorities would not have ignored the past trends of the assessee. In the case of Shri Gurunanak Truck Operators Union, Sunam [ 2021 (3) TMI 826 - ITAT CHANDIGARH] also held the issue in favour of the assessee by directing that instead of estimated net profit rate of 1.5%, the net profit rate of 1% should be applied. In the present case we note that although the AO has applied the rate of 12% and the Ld. NFAC has reduced it to 5%, no cogent reason has been given for such estimation. The past history/trend of the assessee has not been considered by the lower authorities which makes their orders unsustainable. In our considered view, the application of net profit rate of 2.5% of the gross receipts would meet to the ends of justice in as much as any leakage of revenue would be covered as also the assessee s non production of books of account and vouchers would also be taken care of. Appeal of the assessee is partly allowed.
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2022 (9) TMI 713
Disallowance u/s 40A(3) - payment in excess of 20,000/- - HELD THAT:- Gross Profit ratio and the Net Profit ratio after taking into account the impugned expenditure shown by the assessee during the year under consideration as compared to that of immediate preceding year shows that there is substantial increase in those margins. It is not the case of the Revenue that the expenses are not genuine or are bogus and have been booked for the purpose of inflating expenditure and thereby reducing the profits. We further find that Hon ble Apex Court in the case of Attar Singh Gurmukh Singh [ 1991 (8) TMI 5 - SUPREME COURT] has held that provision of Section 40A(3) are not intended to restrict the business activities and insistence of payment by crossed cheque or crossed bank draft is insisted so as to enable the assessing authority to ascertain whether the payment is genuine or whether it is out of the income from disclosed sources. As further held that the terms of Section 40A(3) are not absolute. Consideration of business expediency and other relevant factors are not excluded. The genuine and bona fide transactions are not taken out of the sweep of the Section and it is open to the assessee to furnish to the satisfaction of AO the circumstances under which the payment in the manner prescribed u/s 40A(3) was not practicable or would have caused genuine difficulty to the payee. Disallowance u/s 40A(3) of the Act is not justified in present case. We therefore direct the deletion of addition made by AO and upheld by CIT(A). Thus, the ground of assessee is allowed.
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2022 (9) TMI 712
Penalty u/s 272A(1)(d) - non-compliance of the notice issued u/s 142 - Assessee argued that due to initial year of shifting towards digital and electronic mode, the mistake for not responding to the same is a bonafide mistake - HELD THAT:- Once the assessee has made the compliance though after some delay but it was well before the assessment order was framed and the penalty order dated 10.1.2022. Therefore, it is not a case of non-compliance on the part of the assessee to the notice issued under section 142(1) dated 18.11.2019 but the compliance was made belatedly. Assessee made the compliance and the assessment was framed after considering the reply and document filed by the assessee then it does not fall in the category of non-compliance by the assessee at all. Hence when the assessee finally complied with the notice and the AO has duly considered the reply and the documents filed by the assessee while framing the assessment, then the subsequent penalty levied by the AO is not justified. Even otherwise, when this is the year of changing the mode of assessment proceedings from physical to digital /electronically then the delay in compliance due to change in the mode of communication and proceedings is a bonafide reasons and not deliberate. Accordingly, the penalty levied by the Assessing Officer under section 272A(1)(d) is deleted. Appeal of the assessee is allowed.
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2022 (9) TMI 711
Ex-parte orders by CIT-A u/s 250 - Assessment u/s 144 - GP estimation - Whether CIT-A as grossly erred in law in disposing off the appeal of the appellant ex-parte without providing the appellant a proper and meaningful opportunity of being heard which is in violation of the principles of natural justice and hence unsustainable in law ? - HELD THAT:- We find that before the lower authorities the assessee did not appear and, therefore, the authorities had no option, except to pass ex-parte orders under section 144 of the I.T. Act, 1961 basing on the material available with them. However, when the appeal is filed before the Tribunal by the assessee himself against the orders of the lower authorities, it is expected that the assessee may put forth some documentary evidences in support of his contentions to decide the appeal as it is the duty of the assessee to lead evidence in support of its claim and for the adjudicating authority to decide upon the sustainability of the claim on the basis of the evidence led by the parties before it. Assessee did not appear before the Tribunal despite numerous adjournments allowed and notices issued through RPAD. In case of any change of address, it is for the assessee to file revised Form No.36 duly mentioning the new address as the notice issued by the Registry was returned unserved with the postal remark Incomplete address . No material has been placed by assessee to controvert the findings of lower authorities. In this view of the matter and in absence of any contrary material brought on record to rebut the findings of lower authorities, we find no reason to interfere with the order of CIT(A) and thus we dismiss the grounds of the assessee.
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2022 (9) TMI 710
Deductibility of deduction u/s 36(1)(viia) w.r.t. deduction on account of 10% of aggregate average advances made by rural branches - disallowance of deduction under second limb of Section 36(1)(viia)(a) with respect to 10 % of the aggregate average advances made by rural branches - HELD THAT:- The assessee is a Co-operative society engaged in banking business. It is observed that the aforesaid effective issue in these two appeals is covered by decision of Zila Sahkari Bank Limited [ 2021 (11) TMI 522 - ITAT ALLAHABAD ] which shall be applicable to the effective issue of disallowance of deduction under second limb of Section 36(1)(viia)(a) of the 1961 Act concerning disallowance of 10% of the aggregate average advances made by rural branches , arising in these two appeals filed by the assesssee for ay: 2009-10 and 2010-11, and we hold that the assessee shall be eligible for deduction u/s 36(1)(viia)(a) @ 10 % of the aggregate average advances made by rural branches subject to following issues to be verified by AO before granting deduction under second limb of Section 36(1)(viia)(a):- AO shall verify that the assessee holds banking license granted by RBI during the relevant year(s) under consideration , as is mandated u/s 22 of the 1949 Act - AO shall verify that the assessee satisfies the conditions of being a primary co-operative bank as are stipulated u/s 5(ccv) of the 1949 Act, as incorporated by virtue of Section 56 of the 1949 Act - The assessee will file computation for claiming deduction under second limb of Section 36(1)(viia)(a) , which computation shall be verified by AO before granting aforesaid deduction. The assessee is directed to appear before AO and file relevant evidences in support of its claim , so that the AO can verify the above facts concerning (a) to (c) above, before granting deduction.We order accordingly.
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2022 (9) TMI 709
Income deemed to accrue or arise in India - Permanent establishment - Indo-Spain Treaty - computers installed at the premises of the subscribers constitutes a PE of the taxpayer in India in terms of Article 5(1) of India Spain Tax Treaty - HELD THAT:- AR for the taxpayer fairly submitted that this issue has been decided by Hon'ble High Court against the taxpayer in its own case for AYs 1996-97 to 2006-07 [ 2007 (11) TMI 330 - ITAT DELHI-B] and held that computers installed at the premises of the subscriber constitute a PE of the assessee in India in terms of Article 5 (1) of Indo-Spain Treaty . It is also held that since the Amadeus India is functionally dependent upon the assessee, it also constitutes an agency PE in India in terms of Article 5 (iv) of the Indo-Spain Treaty . Aforesaid appeals bearing the identical facts of the taxpayer's case decided in which it is held that the assessee constitutes an agency PE . By following the consistency, the additions made by the AO/DRP in the present Appeals are hereby confirmed. Computing the profit attribution to the PE of the assessee in India - By following the orders passed by the coordinate Bench of the Tribunal in earlier years and the Judgment of the jurisdiction High Court [ 2011 (5) TMI 1114 - DELHI HIGH COURT] , we are of the considered view that since there is no change in the business model and facts of the cases at hand and the extent nature of the activities of the PE in India and abroad, and the assets employed and risk assumed is same as in the earlier years, distribution fee paid in those years approximately of the booking fee per segment, no further addition can be made during the year under assessment. Disallowance of expenditure under the head of Development fees and under the heads of Central Operating cost while computing the income attributed to the tax payers PE in India - HELD THAT:- The very same issue has also been decided in favour of the taxpayer by the Tribunal [ 2020 (11) TMI 206 - ITAT DELHI] for AYs 2007-08 to 2012-13. It is also not in dispute that facts of the present case and business model of the taxpayer and its PE in India are identical to the earlier years. As gone through the history of such expenditure and find that the addition is being made owing to confusion in the description of the services as export of processed data/software or distribution fee - we hereby allow the claim of distribution expenses. Royalty receipts - Booking fee received by the assessee held to be taxable in India as royalty both u/s 9 (1)(vi) of the Act and Article 13(3) of the Treaty - HELD THAT:- The Coordinate Bench of the Tribunal in Assessee s own case for AYs 2007- 08 to 2012-13, which was affirmed by the Hon'ble Delhi High Court [ 2011 (5) TMI 1114 - DELHI HIGH COURT] , held that booking fee received by the taxpayer is taxable as business income and not under the head 'royalty'. Payments received by the assessee from various airlines in relation to the use of Altea System Taxable in India as royalty both u/s 9(1)(vi) of the Act and Article 13(3) of the Treaty - HELD THAT:- Following the order passed by the coordinate Bench of the Tribunal in AYs 2007-08 to 2012-13, we are of the considered view that payment received by the taxpayer from British Airways in relation to alleged use of 'Altea system' cannot be characterized as 'royalty' either under the Act or under the Indo- Spain Treaty because Altea system was installed at the airport and was accessed only by the airlines and not by the Amadeus's agents viz. Resbird, Amadeus India and that during the year, the said system was available to British Airways for the aforesaid purpose and that too only at the airport counter and the said software was not available outside the Indian airport or to any of the agents of the taxpayer since the agents were booking the tickets only through the CRS of the taxpayer. Interest u/s 234A - contention of the assessee that the return was filed well within the due date, if that is the fact, the question of levying interest u/s 234A does not arise - HELD THAT:- We deem it fit to restore the said issue to the file of the A.O to verify the date of return and also the due date for filing the income tax return for the year under consideration and decide the matter afresh in accordance with law. Interest u/s 234B - We are of the considered opinion that since the income has been received by the assessee after deduction of tax at source the proviso is not applicable to the case of the assessee. Non granting of credit of the TDS claimed by the assessee - On hearing both the sides we deem it fit to restore the said issue to the file of the A.O with a direction to grant credit of the TDS in accordance with law after verifying the materials available on record.
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2022 (9) TMI 708
Nature of receipts - Taxability of the compensation received by the land owners for the land acquired under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ('RFCTLAAR Act') - HELD THAT:- It is seen that the Government had compulsorily acquired the land of the assessee vide Award dated 15.01.2014 whereas the compensation cheque was dated 20.03.2015. It is also not in dispute that this land was acquired by the National Highways Authority of India in terms of section 3(A)(1) of the National Highway Act, 1956 for the purpose of widening of National Highway No. 64 on the stretch of land from KM 5.700 to KM 209.55 on Patiala Sangrur Bhatinda Section in District Sangrur in the state of Punjab. It is also not in dispute that vide Notification No. SO1138 (E) dated 03.05.2013, the Central Government had duly published the Notification regarding the acquisition and had also specified that the said land was to vest absolutely in the Central Government free from all encumbrances. The facts in this case are identical to the facts in the case of DCIT Vs. Shri Ram Gopal [ 2022 (7) TMI 256 - ITAT CHANDIGARH ] held that the compensation on such compulsorily acquired land was exempt from taxation. In this case, the Division Bench had duly taken note of the fact that land had been acquired from about 3000 land owners and only 636 land owners had been disbursed compensation till 31.12.2014 and the majority of land owners were given payments after 31.11.2014 i.e. after the date of coming into operation of the RFCTLARR Act. CIT(A) was not justified in confirming the action of the A.O. in not accepting the claim of the assessee for exemption of the compensation received on compulsory acquisition of land acquired by the Land Acquisition Officer from Income Tax In the present case also, although the date of award is prior to 31.12.2014, the cheque for compensation was received after first January 2015 and, therefore, the order of the Division Bench of the ITAT in the case of DCIT Vs. Ram Gopal (supra) would squarely cover the case of this assessee as well. Also see another case i.e. of Shri Satish Kumar, Sangrur and Other [ 2021 (12) TMI 161 - ITAT CHANDIGARH ] - Thus allow the appeal of the assessee.
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2022 (9) TMI 707
Disallowance of commission paid to the directors - Issue recurring in nature - principle of res-judicata - Scope of principle of consistency - directors to whom the said commission is paid are having substantial shareholding and they have been paid dividend in the garb of commission which is not allowable - HELD THAT:- The Hon ble High Court [ 2019 (11) TMI 1008 - GUJARAT HIGH COURT] after considering the contention of both the parties, dismissed the appeal of revenue by holding that payment of commission was made by the assessee company to its director have been allowed for five continuous assessment years. Nothing has been pointed out to show that the position has changed in the year under consideration. Under such circumstances, the Tribunal was wholly justified in allowing the grounds of appeal. The grounds of appeal, therefore, does not rise to any question of law, much less, a substantial question of law, warranting interference - Hon ble Supreme Court Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT] wherein held that, where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and the parties have been allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in subsequent year. We find that no change in fact for the year under consideration is brought to our notice to take the other view, therefore, respectfully following the decision of Coordinate bench, which has been affirmed by the Hon ble Jurisdictional High court, we do not find any merit in the grounds of appeal raised by revenue. All the submissions or the objections raised by the ld. CIT-DR for the revenue has already been considered by our predecessor while deciding the similar issue in appeal for A.Y. 2011-12, 2013-14 and 2014-15. In the result, ground No. 1 of appeal is dismissed. Unexplained cash credit u/s 68 - HELD THAT:- Hon ble Supreme Court in PCIT Vs Montage Enterprises P Limited [ 2018 (10) TMI 1452 - SC ORDER] held that where the High Court upheld the order of Tribunal in deleting the addition made under Section 68 in respect of trade advances on the ground of that the said advances were adjusted against sales made in the subsequent assessment years, the special leave filed against the said decision was to be dismissed. We find that in Ayachi Chandrashekhar Narsangji [ 2013 (12) TMI 372 - GUJARAT HIGH COURT] though, on the context of repayment of loan in subsequent year, also held that when the department had accepted repayment of loan in subsequent years, no addition was to be made in the current year on account of cash credit. At the cost of repetition, we may mention that once the Assessing Officer has accepted the sale against the advances of previous year and the assessee has offered due tax thereon, no addition against the trade advance was liable to be added. With the aforesaid additional observation, we affirm the order of ld. CIT(A). In the result, ground No. 2 of appeal raised by revenue is also dismissed.
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2022 (9) TMI 706
Estimation of income - Unproved purchases - Addition on account of purchases by way of bogus bills - Addition is restricted to 12.5% of disputed purchases - HELD THAT:- It is evident that the AO has not raised any doubt regarding the above claim of the assessee. Further, it cannot be doubted that without the purchase of construction material the construction activity as claimed to be restarted by the assessee cannot be carried out. It appears to be a case of bogus bills arranged from aforesaid entity and construction material purchase from somewhere else at low cost. Entire bogus purchases cannot be added in such a suggestion. Considering the business activities of the assessee and the nature of material purchased from the hawala dealers, we are of the view that a reasonable disallowance of the purchases would meet the possibility of revenue leakage. Addition as restricted to 12.5% of disputed purchases - We find that the same is in line with the judgment of Hon‟ble jurisdictional High Court in PCIT vs Paramshakti Distributors Ltd. [ 2019 (7) TMI 838 - BOMBAY HIGH COURT] . Apart from the ledger account of M/s Sai International Impex in books of assessee, no other evidence is brought on record to support the assessee s claim that purchases were only to an extent from the said entity and accordingly, plea of the assessee is rejected in this regard. Therefore, we direct the AO to restrict the addition to 12.5% of alleged bogus purchases. As a result, the sole ground raised in present appeal is partly allowed. Addition on account of insurance payment on the policy of the Directors - CIT(A) held that such payment is the personal liability of the Director and therefore, cannot be said to have been incurred wholly and exclusively for the purpose of the construction business of the assessee and thus not allowable under section 37(1) - HELD THAT:- - Considering the material available on record, we find no infirmity in the impugned order passed by the CIT(A) on this issue. As a result, ground no.2, raised in assessee s appeal, is dismissed.
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2022 (9) TMI 705
Addition being amount of unreconciled TDS and income not offered for taxation - real or hypothetical Income - method of accounting for revenue recognition - As argued deductors have accounted the same in its books of account and have also subjected it to TDS, which has been remitted to the Government Treasury - CIT-A deleted the addition - assessee enforces that the income distributed to the concerned members has to be taxed in the hands of the members only and not on the assessee - HELD THAT:- It is observed that the assessee company is a mere step through entity, which collected royalties and licence fees on behalf of its members and distributed the said amount to the concerned member after duly deducting the related expenses on actuals. It is pertinent to consider the submission of the assessee with regard to the method of accounting followed by the assessee company and how the receipts are accounted for. Assessee has also tried to reconcile the TDS amount which were not taken credit. it is essential to consider whether any income is real or hypothetical and that whether there is a corresponding liability of the other party to pay the amount to the assessee and that the probability of realization of income by the assessee are the factors that are to be considered to determine whether an income has accrued or not. We would also like to place reliance on the decision of CIT vs Neon Solutions Pvt Ltd [ 2016 (4) TMI 1162 - BOMBAY HIGH COURT] which was also relied on by the Ld.CIT(A) for the fact that even in accrual method of accounting, income which cannot be realized and the collection of the same is uncertain, the same cannot be accounted. No infirmity in the decision of the Ld.CIT(A) and we hereby uphold the order of the Ld.CIT(A). Resultantly, the appeal filed by the Revenue is dismissed.
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2022 (9) TMI 704
Capital gain computation - FMV determination - reference to district valuation officer (DVO) u/s 55A - HELD THAT:- We find that there is no dispute that the assessee has transferred the impugned land prior to 01/7/2012. The assessee while computing the capital gain adopted the fair market value then the value adopted by AO. As relying on similar ground of appeal in Kantilal Manilal Patel [ 2019 (7) TMI 1948 - ITAT AHMEDABAD] almost all similar fact while following the decision in CIT Vs Gauranginiben S. Shodhan, Indl. [ 2014 (2) TMI 78 - GUJARAT HIGH COURT] we hold that the assessee has transferred his land prior to 01/7/2012 and the amended provision of Section 55A is not applicable on the facts of assessee, thus, the reduction in the cost of acquisition on the basis of report of DVO cannot be made applicable on the assessee. Thus, the assessing officer is directed to delete the additions of long term capital - Decided in favour of assessee. Additional ground for deduction u/s 54B - As in our view the facts necessary for consideration of additional claim was available on record. Considering the fact that the assessee has raised this ground first time before the ld. CIT(A), therefore, we find merit in the submissions of ld AR for the assessee that the appellate authorities have jurisdiction to admit the additional grounds/ claim, thus, we admit the additional grounds of appeal. Our view gets support from the decision of Hon ble Apex Court in Goetz India Ltd [ 2006 (3) TMI 75 - SUPREME COURT] Prithivi Brokers Share Holders (P) Ltd. [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] also held that Tribunal have jurisdiction to consider the additional claim and discretion to permit additional ground by way of additional claims. Such claims need not to be those which became available on account of change of circumstances of law but which was even available when return was filed - we admit the additional ground of appeal of the assessee for just decision of the case under section 54B and direct the assessing officer to examine the fact and grant the benefit to the assessee under section 54B, as per law. Ground of appeal is allowed for statistical purpose.
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2022 (9) TMI 725
Reopening of assessment u/s 147 - cash deposits during demonetization period - notice issued u/s 148A(b) the reassessment proceedings were initiated on the basis of suspicious transactions flagged by the FIU [Financial Intelligence Unit] - HELD THAT:- The petitioner is registered as a non-scheduled Urban Cooperative bank who maintained current accounts with Chandni Chowk, Shakarpur and Karkardooma Branches, New Delhi had deposited huge cash during the period from 01st April, 2016 to 31st December, 2016 . From the Search Assessment order under Section 153A it is not clear whether these deposits were verified by the Assessing Officer or not. In fact, the Assessment Order passed under Section 153A read with Section 143(3) is an order passed pursuant to the search, wherein it seems only the documents seized during the search were considered. The said order does not reveal that the aspect of cash deposits was specifically examined by the Assessing Officer. As far as non-consideration of petitioner s reply is considered, it is settled law that principle of natural justice is no unruly horse and no lurking land mine as held by Mr.Justice Krishna Iyer in Chairman, Board of Mining Examination and Chief Inspector of Mines Vs. Ramjee [ 1977 (2) TMI 140 - SUPREME COURT] . In fact, in M/s. S. Tikara Vs. State of M.P. Ors, [ 1977 (3) TMI 178 - SUPREME COURT] it has been held that the principles of natural justice cannot be petrified or fitted into rigid moulds. They are flexible and turn on the facts and circumstances of each case. Consequently, the questions that arise are whether there has been any unfair deal by the respondent? In the present instance, in view of the allegation of cash deposits during demonetization period, this Court is of the opinion that even if the reply now sought to be relied upon by the petitioner was taken into account, notice under Section 148 of the Act was called for as a prima facie case of escapement of income was made out. Consequently, no ground for interdicting the reassessment is made out at this stage. Accordingly, the present writ petition along with pending applications is dismissed.
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2022 (9) TMI 703
Sale of Plant and machinery within short span of acquisition - Revenue treated the same as Scrap - denying adjustment of cost of acquisition against the consideration received on sale of these assets as claimed by the assessee - whether the assets which were acquired by the assessee on the acquisition of MIL were of any value or not ? - HELD THAT:- Being old does not necessarily imply that it is scrap. And an asset qualifies as scrap when it is of no use to the assessee and incapable of fetching any value commensurate with its character. It is basically waste material - Surely the director has at no point stated that the machinery was of no use to the assessee at all and of no value also as machinery. Also the mere fact that the assets were sold within two months of acquiring them also is not relevant, we hold, for deciding its character as scrap .The asset may have been disposed for any reason as being surplus and not required by the assessee - Therefore this fact of the asset being sold within a very short period of acquiring is not relevant for determining its character as scrap. Further it is not that all machine was disposed off by the assessee which would have been the case if it were merely scrap. Assessee has sufficiently demonstrated the assets as not being scrap but of value. It has been pointed out that the acquisition of these assets alongwith the plant of MIL was negotiated by the assessee eight years back in 2003 but due to delay in getting sanction from BIFR by almost five years and the subsequent act of Board of both the companies being empowered for entering into the agreement, pushed off the actual acquisition of the business of MIL by the assessee by eight years and the same could be acquired in the impugned year only. The business acquisition agreement mentions plant and machinery being acquired by the assessee alongwith other assets . These facts are not disputed by the Revenue. If these machineries acquired by the assessee from MIL were of no use and were only scrap there was no reason to mention them as part of assets being acquired in terms of the agreement. Scrap surely could not have fetched such high proportion of amount out of total value of assets acquired. Further the assesses valuation of these assets is backed by a valuation report of a valuer. The Revenue has not pointed any infirmity in this report . The Revenue therefore could not have brushed aside and ignored this report on its own whims and fancies Appeal of the assessee are allowed.
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2022 (9) TMI 702
Revision u/s 263 - Disallowance of PF ESI contribution - HELD THAT:- The issue regarding allowance and disallowance of PF ESI contribution has been settled by the Hon'ble Jurisdictional High Court and if such contribution has been made before the due date of filing of the return, then no disallowance has to be made. We have recently decided a large number of appeals on this issue. Recently we have considered this aspect in [ 2022 (3) TMI 961 - ITAT KOLKATA] wherein we took note of the earlier order of ITAT, Kolkata dated 09.03.2022 whereby the Tribunal considered the impact of amendment brought into section 36(1) as well as 43B by Finance Act, 2021. Thus once a fact was brought to the notice to the ld. CIT, he should have got it verified from the ld. Assessing Officer before recording a finding that assessment order is erroneous as much as prejudicial to the interest of revenue. The order of the ld. CIT is totally silent on this aspect. We allow this appeal for statistical purposes and remit this issue to the ld. CIT with a direction that a remand report be called from the ld. Assessing Officer and if it is proved that all these payments have been made before the due date of filing of the return, then proceedings under section 263 will be dropped - Appeal of the assessee is allowed for statistical purposes.
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2022 (9) TMI 701
Unexplained Cash Deposits in Bank - application seeking admission of additional evidence under Rule 29 of Income Tax (Appellate Tribunal) Rules, 1963 - HELD THAT:- It is evident from the record that, in the present case, the documents, now furnish before us by way of additional evidence, could not be filed by the assessee before the lower authorities and the impugned addition was made in absence of these details. Further the learned CIT(A) also dismissed assessee s appeal rejecting the admission of additional evidence filed by the assessee. In view of the above, in the larger interest of justice, we deem it appropriate to remand this issue to the file of Assessing Officer for de novo adjudication after consideration of all details, as submitted by the assessee. Assessing Officer shall also have the liberty to call for or examine any other documents/detail as may be necessary for complete adjudication of this issue. As a result, the sole ground raised in present appeal is allowed for statistical purpose.
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2022 (9) TMI 700
Applicability of section 73 - share trading loss treated as non-speculative loss - assessee is engaged in the business of share broking as well as share trading - Whether loss incurred on shares and derivatives cannot be treated as speculation loss? - as per AO as a share broker, the assessee is not liable for any profit earned or loss incurred out of the transactions in purchase and sale of shares on behalf of the clients and only benefit which accrues to the assessee company from such transactions is the brokerage income earned by it from its clients for executing the transactions on behalf of them - CIT(A) had granted relief to the assessee as assessee's case falls under the exception clause provided in Explanation to Section 73 HELD THAT:- One of the exception provided therein is if the composition of gross total income comprises mainly of income other than the business income. In the instant case, it is not in dispute that the income from other sources which is much more than income from business. Hence the assessee's case squarely falls under the exception clause provided in Explanation to Section 73 of the Act. Also the issue is also squarely covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Darshan Securities (P) Ltd. [ 2012 (2) TMI 117 - BOMBAY HIGH COURT] . Accordingly, we hold that the loss incurred on shares and derivatives cannot be treated as speculation loss in the instant case. Consequently, there is no need to apportion any expenses to the speculation activity - Appeal of the revenue is dismissed.
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2022 (9) TMI 699
Disallowance of overdraft interest - addition u/s 43B - CIT-A deleted the addition - as per DR assessee has failed to comply with the provisions of section 43B(e) and Explanation 3D thereto and that the said interest was paid after the due date of filing of return of income under section 139(1) and also that the assessee is not entitled to the claim on the ground that the said interest expense towards OD account pertains to scheduled bank which is not admissible as per section 43B. - Whether CIT(A) failed to seed that debiting of interest and increase in debit balance in account is not actual payment as defined in explanation 3d to section 43 B ? - HELD THAT:- From the submission of the assessee, it is seen that the assessee had filed additional evidence before the Ld.CIT(A), which includes copies of bank statements reflecting interest debited in assessee s account for each month. Banks mentioned have categorically certified that interest has been paid before 30/04/2011 in case of Axis Bank and Saraswat Bank and before 31/03/2011 in case of Yes Bank which shows that there is no outstanding interest payment as on these dates, respectively. As interest for the OD account is debited by the bank month to month and that in case of Axis Bank and Yes Bank, the OD accounts were converted into deposit account from January, 2011 and November,2010, respectively which shows that the interest upto the said date was paid much before the deposits. Similarly, in the case of Saraswat Bank interest paid on OD account whereas the interest received on fixed deposits for Rs.8,71,00,000/- was Rs.25,95,463/- which is evident that the receipt of interest is much higher than the interest paid. The assessee has also contended that the overdraft balance never exceeded the sanctioned limit at any point of time and that the assessee further contends that the assessee could have very well withdrawn the amount from the bank but whereas the assessee s deposits was subsequent to the debit of interest from the OD account. Thus we are of the considered view that the disallowance made by the AO under section 43B(e) of section on interest payment to the banks does not warrant merit and we find no infirmity in the decision of the Ld.CIT(A) on this issue. Ground 1 of the Revenue is dismissed. Disallowance made towards discount pertaining to the discount allowed / passed on to the customers on sale of air tickets - HELD THAT:- AO had not denied the authenticity of the vouchers or invoices filed by the assessee during the assessment proceedings, but has stated that the said invoices does not bear the signature of the recipient who is benefitted from the said discount. Assessee has substantiated his claim that the computer generated bills will not contain the signature of neither the assessee nor the customers. AO has also failed to establish the fact that the assessee has received any sum over and above the net amount billed to the clients. Apart from the fact that these vouchers are unsigned, the Assessing Officer has failed to justify the disallowance - Decided against revenue.
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2022 (9) TMI 698
Disallowance of entertainment expenses and discount allowed by the assessee - Expenditure for personal use of director - HELD THAT:- We are of the view that at the most some proportion of these expenses can be attributed to the personal use of the director. Keeping in view of this fact we deem it fit to make an ad hoc disallowance of 5% of these expenses towards personal expenditure. Consequently we modify the order of CIT(A) and direct the AO to delete the addition to the extent and thus addition is sustained. Further in respect of discount, we note that the assessee is in the business of selling mobile recharge in which the discounts are allowed to the customer in the ordinary course of business which has been accounted for by the assessee in the books of account which were produced before us. We note that the number of entries of discount allowed ran into 7,327/-. We note that discounts were allowed during the mobile recharge for which there was no separate voucher available in the business of assessee. The authorities below have failed to justify and reason disallowance of 40% of the total expenditure and the conclusions of both the authorities are based upon the surmises and conjectures which is not permissible under the Act. Accordingly we set aside the order of CIT(A) on this issue and direct the AO to delete the addition. Appeal of the assessee is partly allowed.
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2022 (9) TMI 697
Addition of bogus sundry creditors - difference so far as purchases and payments of the current years - admission of additional evidences by CIT - revenue is against the order of Ld. CIT(A) violating the provisions of Rule 46A of the I.T. Rules ,1962 by accepting ledger accounts of the assessee which were never produced by the assessee during the assessment proceeding - CIT(A) allowed the appeal of the assessee by noting that the differences in the accounts of the sundry creditors were only in the opening balances which did not pertain the assessment year under appeal and coming from earlier years - HELD THAT:- As addition was made in respect of two parties who were sundry creditors the details whereof are given hereinabove and there were difference in the opening balances as per the assessee s books of account vis a vis the details as supplied by the sundry creditors in response to notices issued u/s 133(6) of the Act. CIT(A) has not admitted any additional evidences but only the ledger copies which were part of books of accounts and were produced before the AO. CIT(A) has deleted the addition on the ground that earlier years differences can not be added in the current year which appeared to be correct position of law considering the various case laws relied by the Ld. CIT(A). - Decided against revenue.
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2022 (9) TMI 696
Addition u/s 56 (2)(viia) - applicability of Rule 11 UA - FMV determined by the AO - assessee has received 90,000 shares of Bhawani Portfolio Limited @ rate of Rs. 1000/- per share which was found to be less than fair market value by the AO on the basis of NAV as per Audited Financial Filed - HELD THAT:- FMV of shares as worked out, applying the Rule 11UA is as per the approved method and book value is as per the cost to the appellant, both cannot be considered simultaneously, Further, the working of shares cannot to be said to the incorrect and nothing has been brought on record by appellant to justify that the working is not as per Rules, therefore, the AO has taken the FMV, correctly, as per Rules and this argument is not tenable. BPPL has gone Into winding up - Scope of Subsequent development - Subsequent development that value of such shares become nil, cannot be considered nor this was stated in assessment proceedings. Further, if there was no real value of these shares, the receiving of 90,000 shares of BPPL against allotment of shares of other companies is not justified, Therefore, this argument of the appellant has no force and deserves to be rejected. Shares have been allotted at a premium, therefore the provisions of section 56(2)(viib) will be applicable and not the provisions of section 56(2)(vila) - This argument of appellant is also not tenable due to the reason that the shares have been transferred for inadequate consideration and FMV, as worked out In accordance with Rule 11UA is higher than the consideration received. Therefore, the provisions of section 56(2)(viia) is duly applicable In the case of appellant. As contention of the appellant is not found acceptable and no interference is made in the decision by AG and addition is confirmed herewith. - Decided against assessee.
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2022 (9) TMI 724
Accrual of liability - Liability to pay bonus - principles for ascertaining as to when a liability does not metamorphosize into a contingent liability - HELD THAT:- Having regard to the facts, the Revenue's contention, that since the respondent/assessee had the option to defray the liability towards bonus against future amount due from GE International Ltd. to the respondent/assessee, it would morph the liability which accrues from yearto-year into one which is contingent, in our view, is a submission which is unsustainable in law - The other argument of the Revenue, that GE International Ltd. could waive the receipt of bonus amount, and hence would convert the subsisting liability into a contingent liability is also an argument which, according to us, is misconceived. A careful perusal of the principles enunciated by the Supreme Court in BHARAT EARTH MOVERS VERSUS COMMISSIONER OF INCOME-TAX [ 2000 (8) TMI 4 - SUPREME COURT] would show that both the arguments advanced by Mr Agarwal (Revenue) are answered. - The reliance by Mr Agarwal on Excel Industries Limited [ 2013 (10) TMI 324 - SUPREME COURT] is equally misconceived. Decided against the Revenue.
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2022 (9) TMI 695
Estimation of commission income on the receipts debited in bank account of the assessee - rate of commission applied on accommodation entry bills - AO applied commission income @ 2% on the deposits found in the bank accounts - contention of the assessee is that Hon ble Bombay High Court for assessment year 2003-04 has restricted the commission income @ 0.15% of the turnover - HELD THAT:- We find that no stay has been obtained by the Department on the operation of the order of the Tribunals in other cases including the finding of Hon ble High Court in the case of the assessee for assessment year 2003-04 [ 2016 (11) TMI 1668 - ITAT MUMBAI] and [ 2020 (6) TMI 304 - BOMBAY HIGH COURT] wherein @ 0.15% of the commission income has been upheld. We respectfully following the finding of the Hon ble Bombay High Court, the Assessing Officer is directed to restrict the commission income @ 0.15% of the total turnover of the assessee. Reducing the transfer entries amount in bank account out of gross receipts for estimating the commission income - We find that during the assessment proceedings, the Assessing Officer asked the assessee to provide necessary evidence in support of the claim that no commission was charged in case of said transfer entries. However, the assessee failed to provide any such evidence before the Assessing Officer. The assessee has neither filed any such evidence before the Ld. First Appellate Authority nor before us and therefore in such circumstances, the claim of the assessee cannot be accepted the ground raised by the assessee is accordingly dismissed. Allowance of 50% of the expenses claimed by the assessee in the return of income - assessee has also filed Nil return of income and claimed expenses against the revenue shown from the business income - Since, the facts and circumstances of the assessee are identical in the other group cases wherein also addition for commission income from accommodation entry income has been assessed therefore, respectfully following the finding of the Tribunal [ 2016 (11) TMI 1668 - ITAT MUMBAI] we direct the AO to allow 50% of the expenses against the commission income. The ground of the appeal of the assessee is accordingly allowed.
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2022 (9) TMI 694
Disallowance of Foreign tax credit u/s. 90 - CIT(A) taken view that belated filing Form no. 67 was violation of Rule 128(9) of the Act and disallowed the claim for tax credit to the assessee - as alleged that FTC had not been paid by the assessee but by his employer and therefore, no credit of the same would be granted to the assessee - HELD THAT:- We after going through the facts of the cases find that FTC has been offered by the assessee(s) as perquisites in the gross total income and tax has been paid thereon. Once this income has been offered to tax, the corresponding credit of the same would be available to the assessee(s). Therefore, once the payments has been included by the assessee(s) in the income and tax have been paid thereon then this credit would certainly be available to the assessee(s). So far as filing of Form 67 is concerned the same has been held to be mere directory requirement by the SMC Bangalore Tribunal [ 2022 (2) TMI 752 - ITAT BANGALORE] This decision has been followed by co-ordinate bench of Bangalore Tribunal in M/s 42 Hertz Software India Pvt. Ltd. [ 2022 (3) TMI 834 - ITAT BANGALORE] and also before the Madras bench in the case of Shri. Govindarajan Roopkumar [ 2022 (9) TMI 557 - ITAT CHENNAI] - We also concur with the same. It is the findings of Ld. CIT(A) that the assessee(s) has already filed Form No.67 although belatedly. Therefore, we direct Ld. CIT(A) to verify the forms and allow tax credit to the assessee(s), if found in order. Appeals filed by assessee(s) are partly allowed in terms of our above order.
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2022 (9) TMI 723
Assessment order in the hands of the amalgamated Company - Validity of Proceeding against a non-existing company - HELD THAT:- As information about amalgamation was brought to the notice of the AO by communication and it has been acknowledged - The draft order has been passed by the Assessing Officer 11 months after the intimation. The amalgamated Company has filed objection before the DRP. The ITAT allowing the appeal in part has directed to frame the assessment order in the name of amalgamated company. Thus, the fact remains that despite being brought to the notice, the Assessing Officer has passed the order in the name of amalgamating Company. In Maruti Suzuki India Ltd. [ 2019 (7) TMI 1449 - SUPREME COURT] it is held that there is a value which the Court must abide by in promoting the interest of certainty in the tax litigation. We may record that the decision in M/s Spice Enfotainment Ltd. [ 2017 (12) TMI 754 - SC ORDER] has been upheld dismissing the Civil Appeal filed by CIT. Similarly, the order passed by this Court in Intel Technology India (P) Ltd.[ 2015 (5) TMI 614 - KARNATAKA HIGH COURT] was also challenged before the Hon'ble Apex Court and the same has also been dismissed [ 2017 (12) TMI 754 - SC ORDER ] - Decided in favour of assessee.
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2022 (9) TMI 693
Deduction u/s. 80IA(4) - business of operating the Container Freight Station (CFS) - HELD THAT:- Similar issue basing on same identical facts came up before this Tribunal in assessee s own case for A.Y. 2013-14 [ 2022 (2) TMI 579 - ITAT PUNE ] and by placing reliance on the decision of Hon ble Supreme Court [ 2018 (5) TMI 359 - SUPREME COURT ] the Tribunal decided the issue in favour of the assessee by holding that the assessee is entitled to claim deduction u/s. 80IA(4) of the Act in respect of Container Freight Station. Assessee is entitled to claim deduction u/s. 80IA(4) in respect of Container Freight Station. Thus, the ground raised by the Revenue is dismissed.
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2022 (9) TMI 692
Deemed income u/s 69A - unexplained cash deposited in bank account - nexus, purpose, character of the receipts and payments - payments received from the students - assessee had explained consistently by way of documentary evidences that the payments were received by her on behalf of M/s Ram Narain Institute of Education and these had been deposited in the bank accounts - HELD THAT:- Assessee was appointed as a Lecturer at Ram Narain School of Education on 01.10.2007 and the Employer Certificate that she was working as Principal in the Institute dated 09.09.2009 is also available on record. The Cash Book of the assessee mentioning the voucher numbers and the deposit in the bank account for the specific periods is available on record. It has been made available to the AO also as noticed that reference to the Cash Book has been made by him in his queries raised to the assessee as per ordersheet referred to by him - It is also seen that the Receipt Book of Ram Narain Society of Education qua these deposits for B.Ed/Courses is available - None of these documents, it is seen have been faulted with by the Revenue. Considering the reply made before the AO as well as the CIT(A) on merits, it is seen that the occasion to make the addition or sustain it in appeal did not arise. The consistent evidence on record remains unrebutted. In the absence of any inconsistency in the assessee's claim and non rebuttal of supporting documents, the addition cannot be sustained arbitrarily. The addition is directed to be deleted. It is also seen that the assessee has raised jurisdictional challenge. On going through the facts available in the assessment order itself which have been extracted in the earlier part of this order it is seen that on the basis of which it has been pleaded that the notices issued at the incorrect address are non est. These have been elaborated at length while recording submissions advanced on behalf of the assessee, find that the bald finding arrived at by the ld. CIT(A) though does not inspire any confidence in the correctness of the conclusion drawn on assumption of jurisdiction, however, since the addition on merits has been deleted, the jurisdictional issue, accordingly, does not require any specific adjudication. Accordingly, the appeal of the assessee is allowed.
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2022 (9) TMI 691
Disallowance of tour and travel expenses - Addition made as assessee merely submitted ledger account of traveling and conveyance expenses before the AO during the course of assessment proceedings, despite being asked by the AO to submit complete details and justification for the travel and conveyance expenses - HELD THAT:- Assessee has not provided details of expenses and justification of having incurred those expenses wholly and exclusively for the purposes of business of the assessee, satisfying mandate of Section 37(1) and in the absence thereof, the authorities were left with no alternative but to proceed to make disallowance towards personal usage for benefit of Directors /employees being claimed as business expenses, which obviously involves some guess work and in our view more than fair and reasonable guess work was made by the authorities below Merely Rs. 10 lac of expenses were disallowed by the AO out of total travel and conveyance expenses of Rs. 1.90 crores incurred by the assessee during the year under consideration, as against total travelling and conveyance expenses of Rs. 1.20 crores incurred in the immediately preceding year also keeping in view increase in business receipts during the year under consideration, more so no details were forthcoming from the assessee to substantiate these travel and conveyance expenses and justify that these expenses were incurred wholly and exclusively for the purposes of business satisfying the mandate of Section 37(1) - keeping in view entire factual matrix of the case, the appeal filed by the assessee lacks merit - Decided against assessee.
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Customs
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2022 (9) TMI 690
Classification of imported goods - Benefit of exemption from duty (BCD) - import of data projectors - classifiable under Customs Tariff Item 8528 61 00/ 8628 62 00 as claimed by the appellant or under CTI 8528 69 00 as claimed by the Department? - levy of penalty u/s 114A of Customs Act - HELD THAT:- It is seen that prior to 01.01.2017, CTI 8528 61 00 uses the phrase of a kind solely or principally used in an automatic data processing system of heading 8471 . Post 01.01.2017, CTI 8528 62 00 uses the phrase capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471 . For the period prior to 01.01.2017, goods principally used with ADPS are those goods which are inherently capable of connecting with multiple devices but are designed primarily to be used with ADPS. The data projectors imported by the appellant are used with ADPS and merely because they have the capability of use in both ADPS or non-ADPS cannot be a basis for deciding whether the projectors are principally used with ADPS. The correct test is to find out whether the specification and features are designed in such a way that they are generally or primarily meant for use with ADPS. A Division Bench of the Tribunal in Sony India, after referring to the earlier Division Bench decisions of the Tribunal in ACER INDIA (P) LTD. VERSUS CC [ 2009 (11) TMI 931 - CESTAT AHMEDABAD ], COMMR. OF CUS. C. EX., HYDERABAD-II VERSUS AVECO VISCOMM PRIVATE LTD. [ 2010 (9) TMI 436 - CESTAT, BANGALORE ], COMMISSIONER OF CUSTOMS (I), ACC, MUMBAI VERSUS VARDHAMAN TECHNOLOGY P LTD [ 2013 (8) TMI 271 - CESTAT MUMBAI ], held that the colour data projectors imported by the appellant would be classifiable under CTI 8528 61 00. The addition of multiple ports in the goods will not take away the basic nature of the goods, which is to work in conjunction with ADPS. This would continue to remain the principal function of the goods. The presence of such ports is only to ensure their use with laptops and ADPS. Therefore, even post 01.07.2017, goods would be classifiable under CTI 8528 62 00 and the decisions of the Tribunal rendered for the period prior to 01.07.2017 will continue to apply to projectors imported w.e.f. 01.01.2007 - It is also seen that for the period prior to 01.01.2017, all good falling under CTSH 8528 41, 8528 51 or 8528 61 were unconditionally exempt from payment of BCD under Serial No. 17 of the exemption notification. Post 01.01.2017, Serial. No. 17 of the notification exempts all goods falling under CTSH 8528 42, 8528 52 or 8528 62 if they are of a kind solely or principally used in an automatic data processing machine of heading 8471. The goods imported by the appellant satisfy the description of the goods in the exemption notification for both the periods and are, therefore, eligible for exemption. Penalty under section 114A of the Customs Act - HELD THAT:- When there is no mis-declaration, penalty under section 114A of the Customs Act could also not have been imposed - The Department has filed appeals as penalties under section 114AA of the Customs Act have not been imposed. As the appellant has correctly availed the benefit of the exemption notification, the appeals filed by the Department deserve to be dismissed. Appeal allowed.
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2022 (9) TMI 689
Maintainability of appeal - appeal of the appellant rejected for non-compliance with the requirement of pre-deposit as per Section 129E of the Customs Act, 1962 - HELD THAT:- Since the appellant has made the pre-deposit as required for hearing the appeal, I am of the view that the pre-deposit made before the Tribunal can be treated as pre-deposit made before the Commissioner (Appeals). Since the Commissioner (Appeals) has not passed any order in the matter remanded back to him, on merits, ends of justice will be met if this matter is again remanded back to the Commissioner (Appeals) for deciding the issue involved, on merits, as per the earlier remand order of the Tribunal - it is made clear that the appellant would be barred from claiming the refund of the amount pre-deposited for filing of this appeal in Tribunal till the disposal of the appeal by the Commissioner (Appeals) in the remand proceedings. Appeal is allowed and the matter remanded back to the Commissioner (Appeals) for deciding the issue on merits.
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Securities / SEBI
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2022 (9) TMI 688
Offence under SEBI - Petitioner seeking documents relied upon by the Respondent-SEBI - sought orders for supply of a copy of the opinion formed under Rule 3 of the SEBI Adjudication Rules 1995, for constituting an Adjudicating Authority to issue Show Cause Notice dated 17th November 2020 to the Petitioner - allegation of Denial of natural justice as relevant material were not disclosed to the noticee - importance of documents relied upon for formation of opinion under Rule 3 - Petitioner had sought inspection of the opinion under Rule 3 - as submitted Adjudicating Authority has not followed the procedure, and instead fixed the case for final hearing without forming an opinion, as required under Rule 4(3) of the SEBI Adjudication Rules 1995 - HELD THAT:- A reading of Section 4(3) makes it clear that, if after considering the cause, if any shown by the noticee, the Adjudicating Officer is of the opinion that an inquiry should be held, he shall issue a notice fixing a date for appearance of that person either personally or through his lawyer or other authorised representative. The noticee is not required to be heard personally or through lawyer before taking a decision to proceed with an inquiry in respect of the contraventions alleged in the Show Cause Notice. Decision to proceed or not to proceed with the inquiry may be taken on the basis of the reply of the noticee to the Show Cause Notice. Once it is decided to proceed with the inquiry, an opportunity of personal hearing is mandatory. The inquiry has to be conducted in accordance with law, in compliance with the principles of natural justice. Board was of the opinion that there were grounds for adjudication and accordingly appointed Adjudicating Officer. Adjudicating Officer issued Show Cause Notice to the Petitioner to which the Petitioner gave a preliminary reply and thereafter sought documents as observed above. Inspection of some documents was permitted. After considering the reply, the Adjudicating Officer was of the opinion that inquiry should be held. Accordingly, a notice fixing a date for appearance was issued. There was no procedural irregularity, at least till the stage of notice fixing a date of hearing. In Course of argument before the High Court, counsel for the Respondent SEBI made a statement that SEBI would not rely on any document apart from those which had been provided to the Petitioner. It is well settled that the documents which are not relied upon by the Authority need not be supplied as held in Natwar Singh [ 2010 (10) TMI 156 - SUPREME COURT] - High Court rightly did not interfere with the proceedings at the stage of the Show Cause Notice. The Petitioner has apparently been permitted to inspect the opinion formed under Rule 3 of the SEBI Adjudication Rules. There is apparently no rule which requires SEBI to furnish the opinion under Rule 3 to the noticee in its entirety. The documents relied upon for formation of opinion under Rule 3, are not required to be disclosed to the noticee unless relied upon in the inquiry. In the event, the Petitioner is prejudiced by reason of any adverse order, based on any materials not supplied to the Petitioner, or any prejudice is demonstrated to have been caused to the Petitioner, it would be open to the Petitioner to approach the appropriate forum. This Court has by its interim order permitted Respondent SEBI to hold the inquiry, without relying upon any documents, not supplied to the Petitioner. The interim order will govern the inquiry. No infirmity in the impugned judgment and order of the High Court dismissing the writ petition filed by the Petitioner.
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Insolvency & Bankruptcy
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2022 (9) TMI 687
Maintainability of application - appellant contends that the observation recorded in the order that Appellant has withdrawn earlier application under Section 76 is incorrect - HELD THAT:- There is no dispute that matter has been heard thrice by the Adjudicating Authority but Section 9 Application could not be decided. Learned counsel for the Appellant submits that after order was passed on 03.06.2022, the Operational Creditor was directed to file affidavit which has already been filed. Learned counsel for the Appellant submits that it is only thereafter concealment has come which impelled the Corporate Debtor to file applications. It is true that the application under Section 76 was not listed and was laying in defect, as has been submitted by learned counsel for the Appellant, however, the order record the statement of counsel for the Corporate Debtor that they shall withdraw the application. The Adjudicating Authority has heard the parties and has to decide finally. The power of the Adjudicating Authority to take proceeding for prosecution are ample and at any stage the Adjudicating Authority can direct for the prosecution of either of the parties. Filing of applications on 30.08.2022 under Section 76 of I B Code and Section 340 of CRPC were only for the purpose of delaying the proceedings as has been observed by the Adjudicating Authority - the Adjudicating Authority who is at the helm of the affairs and made observations after consideration and conducting the proceeding, due weightage has be given to such observation. When the Adjudicating Authority has observed that the application has been filed for delaying the proceedings, there are no reason to take a different view. Appeal dismissed.
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2022 (9) TMI 686
Validity of ad-interim stay granted to the process of fresh e-auction - e-auction of immovable property - HELD THAT:- No relaxation in respect of time-line would be provided to the successful bidder in the second round of e-auction. Since this order had achieved finality as it had not been appealed against or modified, Pavan Enterprises could not have been given extension of time-line to what was provided in the e-auction document. Moreover, Pavan Enterprises who was the successful bidder in the second e-auction, had committed itself to making full payment by 21.4.2021 and therefore to engage in litigation through IA no. 868/2022 and IA no. 485.2021 was highly improper on the part of Respondent, and obtaining the order of ad-interim stay dated 28.2.2022 when it was precluded from doing so was clearly abuse of the judicial process - the Respondent experienced difficulty in depositing the balance of sale consideration after the first round of e-auction and could not deposit the requisite amount after committing itself to doing so. In view of the order dated 16.3.2021 passed by the Adjudicating Authority which had achieved finality and also the Terms and Conditions of the second round of e-auction process, it is opined that the Respondent caused a serious obstruction in the sale of the property by preferring an application to obtain stay order to the third round of e-auction through order dated 28.2.2022 which was granted - In view of the facts of the case and the conduct of the Respondent in obstructing the process of liquidation, particularly the e auction of the property despite it being fully aware of the order dated 16.3.2021 in IA No.468 of 2021, it is opined that the Respondent has clearly abused the process of law to gain undue advantage and thereby caused a delay in the culmination of the liquidation process. In view of the situation and the conduct of the Respondent as discussed in detail above, we are of the view that a fine of Rs. One Lakh should be imposed on the Respondent for abusing the process of law thereby causing delay in the liquidation process, and seeking to subvert the basic objective of IBC. This fine shall be deposited in Prime Minister s Relief Fund within 30 days of this order - appeal disposed off.
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2022 (9) TMI 685
Maintainability of application - Initiation of CIRP u/s 9 of IBC - default of instalment of Settlement Agreement - Operational debt or not - HELD THAT:- The Adjudicating Authority has considered the Settlement Agreement and rightly come to the conclusion that default of instalment of Settlement Agreement does not come within the definition of operational debt as it does not fall within the definition of additional debt as per Section 5(21) of the IBC and further prayer made by the Corporate Debtor that the matter be referred to the Arbitration under Section 8 of the Arbitration and Conciliation Act, the Adjudicating Authority has also rightly held that the role of National Company Law Tribunal is very limited while exercising its power under Section 7, 9 and 10 of the IBC, 2016, it is beyond the scope of Section 9 of the IBC. The Adjudicating Authority has taken note of the submissions of Corporate Debtor that the Commercial Civil Suit No. 2/2020 is pending for consideration before the Court of competent jurisdiction and rightly rejected the claim of the Appellant. The impugned order passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench Court-V) is hereby affirmed. The Appeal is hereby dismissed.
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2022 (9) TMI 684
Resolution Professional seeking payment of his fees - whether the Appellant Bank, which is the sole Financial Creditor of the reconstituted CoC be made liable to pay the fees of the CIRP Cost and RP, which the earlier CoC had ratified? - HELD THAT:- The Operational Creditor who had initiated the CIRP was initially the sole CoC Member which had ratified the fees and expenses at Rs.1 Lakh per month. The total liability to be paid by the Operational Creditor towards CIRP Cost was Rs.2,07,000/- till 12.10.2019. Subsequently, the Appellant Bank filed its claim and the CoC was reconstituted and the Bank became the sole CoC Member. It is not in dispute that the Appellant participated in all the CoC Meetings and even passed a Resolution seeking Liquidation of the Corporate Debtor in the fourth CoC Meeting dated 10.02.2020. It is also not disputed that the fees and the cost incurred, claimed by the RP is only till the date, the Resolution for the Liquidation was passed. The proviso in this Regulation clearly stipulates that if any decision is taken by the committee, prior to the reconstitution, which in this case is the ratification of the fees and the expenses, its validity will not be affected. Admittedly the CIRP Costs were approved by the COC prior to the inclusion of the Appellant Bank and hence as per the proviso to Regulation 12(3) of CIRP Regulations, 2016, it is the liability of the Appellant Bank to pay the expenses. The quantum of costs and fees was ratified by the earlier CoC and the Appellant has not objected to any such issues having participated in the Meetings and specifically being the sole CoC. The Adjudicating Authority has only very fairly bifurcated the expenses to be paid by the Operational Creditor and Rs.10,20,858/- to be paid by the Appellant Bank for the subsequent period till the Liquidation Resolution was passed. There are no substantial reasons to interfere with the well-considered Order of the Adjudicating Authority - appeal dismissed.
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2022 (9) TMI 683
Resolution Professional (RP) seeking a direction to Bank of India/the Appellant herein to release an amount of Rs.100Lakhs/- held in the no lien account - seeking release for the purpose of CIRP of the Corporate Debtor Company/M/s. Actif Corporation Limited. - whether the amount of Rs. 1 Crore lying in the no lien account belongs to the Appellant Bank? - HELD THAT:- It is relevant to note that this amount was admittedly paid by the Corporate Debtor pursuant to an OTS Proposal on 15.07.2017 to show its bona fide. It is not in dispute that the OTS, as proposed, did not materialise and the amount of Rs.1 Crore was parked in the no lien account maintained with the Bank. CIRP was initiated on 26.11.2019. Despite repeated requests of the RP, the Appellant Bank did not release the said amount. The said amount was to be adjusted/utilised upon approval of the Resolution Plan and was not to be adjusted towards Interest or Principal till then. Prior to the commencement of CIRP, this amount was not adjusted by the Bank towards the loan account of Bank as the OTS Proposal had failed. Once the CIRP was initiated, keeping in view that the OTS had failed, the amount lying in the no lien account belongs to the Corporate Debtor and under Section 18(f) of the Insolvency and Bankruptcy Code, 2016, the IRP/RP is obligated to take control and custody of all the assets and properties of the Corporate Debtor . Further, the Bank could not have appropriated this money once the period of Moratorium has commenced on 26.11.2019. The contention of the Learned Counsel for the Appellant Bank that the Bankers lien over the money held in a customer s account is a Statutory Right, is unable, keeping in view the facts of the attendant case and also that CIRP had commenced on 26.11.2019, and having regard to the fact that the amount was deposited with a specific understanding that the amount shall not be used by the Bank until approval of OTS. Admittedly, the said amount was paid at the behest of the Corporate Debtor by a third party and it was lying with the Bank for more than five years. There is no illegality or infirmity in the Order of the Adjudicating Authority - Appeal dismissed.
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2022 (9) TMI 682
Seeking Voluntary Liquidation of Corporate Debtor - Section 59 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- A bare perusal of the material available on record shows that the Board of Directors of the Company has taken a conscious decision for closing down the company. Thus, the Board of Directors of the company have unanimously proposed to liquidate the company by invoking the provisions of voluntary liquidation under Section 59 of the Code. It has been mentioned in the petition that the liquidator has satisfied the claims received, therefore, no prejudice and loss will be caused to anyone, if the company is dissolved. In support of the same, the company has duly passed the requisite Special Resolution in its Extra Ordinary General Meeting on 27.07.2018 by confirming the decision of its Board of Directors and proposing for its Voluntary Liquidation - From the perusal of the record of the case, it is seen that the Liquidator, after his appointment has duly performed his duties and completed necessary formalities to complete the liquidation process of the applicant company, which has been averred in the present petition and, thus, the liquidator has prayed for an order from this Tribunal to dissolve the applicant company. Since there is no objection received from any angle opposing the proposed voluntary liquidation/dissolution of the company either from the side of the shareholders or from creditors, nor any adverse comment have been received from the public at large against such liquidation/dissolution, despite there being a public announcement by the liquidator and also updation of the same in the website of the Insolvency and Bankruptcy Board of India (IBBI) - Apart, as per record of the present case, it is seen that the company is not found involved in such kind of business activities, which are detrimental to the interest of the public at large. Further, it is not the case that the proposed liquidation may adversely affect its shareholders/members or is contrary to the provisions of law. The present application deserves to be allowed for the proposed Liquidation/Dissolution of the Corporate Person - Application allowed.
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2022 (9) TMI 681
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Hon ble Supreme Court in Mobilox [ 2017 (9) TMI 1270 - SUPREME COURT ] has also observed that all that the Adjudicating Authority has to see at the stage of Admission is whether there is a plausible contention which requires further investigation and that the Dispute is not a patently feeble legal argument or an assertion of fact or a moonshine defence unsupported by tangible materials/evidence. The defence is not spurious or plainly frivolous or vexatious. The dispute very much existed between the parties way before the demand notice was sent by the Operational Creditor i.e., 13 July, 2019. Hence, the Petition is dismissed.
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2022 (9) TMI 680
Approval of resolution plan - whether Mr. Nimit Sangani, the Resolution Applicant can get benefit of Section 240A of IBC? - HELD THAT:- It is not in dispute that the Corporate Debtor is MSME. It is also not in dispute that Mr. Nimit Sangani, one of the Promoters of the Corporate Debtor has submitted the resolution plan in his individual capacity. In view of the statement of law as made by Hon'ble NCLAT, it is held that Mr. Nimit Sangani, one of the Promoters of the Corporate Debtor is not ineligible to submit the resolution plan though he is a related party of the Corporate Debtor in view of the Section 240A of the IBC because he is paying debt of all the stakeholders in equitable manner. The term of the plan is in between 180 days to 720 days. In view of material on record, it is held that the resolution plan as submitted for our approval complies the provisions of Section 30(2),Section 31 and Regulation 30 of IBBI (CIRP of Corporate Person) Regulations 2016. This Resolution Plan is approved - application allowed.
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Service Tax
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2022 (9) TMI 678
Levy of service tax - service or not - advertising agency service or not - activity of wide format printing - supply of advertising material to clients based on the designs provided by the clients - printing activity - HELD THAT:- It is not in dispute that in the present case the customers provide the ready to print advertising content to the respondent and the respondent merely prints the advertisement content on the PVC material procured by the respondent from the open market. The respondent has no role at all in the conceptualization or in the making or creation of design. In fact, the respondent has no authority at all to even make any changes in the advertisement content provided by the customers and the respondent merely prints that on the PVC material procured from the market. This activity would not fall within the scope of the activity contemplated under section 65(3) of the Finance Act. In WILLIAM LEA (INDIA) P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV [ 2019 (2) TMI 1310 - CESTAT CHENNAI] , a division bench of the Tribunal held that where the basic marketing or promotional material as per the approved design layout has been provided by the Reader s Digest to the appellant therein for getting them printed, and the appellant was only required to procure material on which it was to be printed, it would not mean that the service provided by the appellant would fall within the definition of advertisement agency . Levy of service tax on printing activity - HELD THAT:- The Commissioner was justified in holding that it would not be subjected to levy of service tax. In the first instance the activity of printing of advertisement content on PVC material which results into printed PVC flex or PVC board would amount to manufacture and, therefore, would not be leviable to service tax. Secondly, the appellant has not challenged the findings of the adjudicating authority on this aspect - or the post 01.07.2012 period, the Commissioner has held that the activity undertaken by the respondent being merely transfer of title on goods by sale and subjected to Sales Tax/VAT on the full value, would be excluded from the scope of service tax under section 65B (44)(a)(1) of the Finance Act. The sale of the product has not been disputed and even otherwise no grounds have been raised in the present appeal to assail this part of the order of the Commissioner. There is also force in the submission of learned counsel for the respondent that even the show cause notice does not indicate why service tax would be leviable for the period post 01.07.2012. Appeal dismissed.
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2022 (9) TMI 677
Levy of service tax - Mailing list compilation and Mailing services - fee towards providing access to CAT s scores - HELD THAT:- The appellants are a premier institution and are engaged in providing education in the field of management and business. For the purpose of admission into the IIMs, IIM Ahmedabad conducted the CAT (common admission test) of candidates in the year 2009. A large number of candidates took the exam and some candidates were selected by IIMs for the purpose of admission to IIM. A larger number of candidates who took the CAT exam also applied to various other institutes and those institutes sought to use the CAT s scores for the purpose of admission into their schools. To access the CAT scores for themselves, the said Non-IIM Institutes entered into a Memorandum of Understanding with IIM Ahmedabad, the appellant. The Memorandum of Understanding clearly prescribed the eligibility of people who could take the CAT exam. It is seen that the appellants are not compiling any list or providing list of names addresses etc. The appellants are merely providing scores in respect of names of candidates supplied by the clients (Non-IIM Institutes). Moreover, the activity of Mailing list compilation and mailing is done for or on behalf of the client. In this case the appellants are only dealing with the clients and not with any third party. There are no reason to hold that the activity done by the appellant is covered under the head of Mailing list compilation and Mailing service - appeal allowed - decided in favor of appellant.
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2022 (9) TMI 679
Levy of Central Excise Duty - execution of contract of earth work and supply of manpower services to various Public Sector Undertakings situated at Paradeep and also State Government - demand on the basis of third party data received from Central Board of Direct Taxes - applicability of Mega Exemption Notification No.25/2012- Service Tax, dated 20th June, 2012, published in the Gazette of India, Extraordinary, vide GSR No.467(E), dated 20th June, 2012 - HELD THAT:- On the resumed hearing today, Mr. Radheyshyam Chimanka, Senior Standing Counsel (Central Excise, Customs Service Tax) on instruction submitted that the order dated 24th May, 2022 vide Annexure-1 has been passed due to inadvertence which is liable to be quashed. This Court has no other option left but to quash in Order-in-Original pertaining to the Financial Year 2014-15 - Petition allowed.
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Central Excise
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2022 (9) TMI 676
Refund of interest deposited by the appellant (under protest) - denial on the ground of being time barred - it is alleged that refund claim ought to have been filed by the Appellant within one year of Final Order of Tribunal dated 31.3.2012, which is the relevant date and a show cause notice dated 11.8.2017 was issued to the appellant proposing to reject the refund claim of the said interest amount - HELD THAT:- It is apparent that the interest has been paid by the appellant under protest only that too after the issuance of Memorandum-cum-notice of demand dated 1.12.2005 to them for non-payment of interest in terms of adjudicating order dated 21.10.2004. Section 11B of the Act makes it clear that an application for refund of duty of excise has to be made in the prescribed form before the expiry of one year from the relevant date. Explanation (B) to Section 11B ibid states what is meant by relevant date. As per Clause (ec) of Explanation (B) to Section 11B, in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the relevant date is the date of such judgment, decree, order or direction. No doubt, the appellant became entitled to claim the said refund post the final order of CESTAT dated 31.3.2012, however, admittedly the Revenue filed an appeal against that order before Hon ble High Court of Rajasthan who vide order dated 21.4.2017 dismissed that appeal. It is not disputed that the refund claim has been filed, post this dismissal of Revenue s appeal, on 16.5.2017. Time Limitation - HELD THAT:- The period of one year as per Section 11B(B)(ec) ibid is the date of decision of Hon ble High Court and not the date of Final Order of CESTAT, as the appeal before Hon ble High Court of Rajasthan being the one filed by the Department. Hence, the findings of authority below rejecting the refund as time barred are totally misplaced - Otherwise also, admittedly the payment of interest was made pursuant to the direction of Departmental Authorities after the issuance of Memorandum-cum-notice of demand dated 1.12.2005 therefore it cannot be considered as voluntary payment and has to be treated as payment under protest and Section 11B proviso is clear enough to say that the limitation of one year shall not apply where any duty/interest on such duty has been paid under protest. The Appeal filed by the Appellant stands allowed
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2022 (9) TMI 675
Power to issue SCN - Recovery of erroneous refund with interest - direction to credit the amount to the Consumer Welfare Fund under section11A (2) of the Excise Act - provisional assessment was rejected on the ground that excise duty can be paid on the normal transaction value and there was no need for provisional assessment - assessment of quantum of eligible discounts before allowing the refund - doctrine of unjust enrichment. Whether the show cause notice could have been issued by the Department under section 11A of the Excise Act for recovery of the duty refunded to the appellant once the orders granting refund of duty had attained finality? - HELD THAT:- Section 35(1) of the Excise Act deals with Appeals to Commissioner (Appeals) and section 35B deals with Appeal to the Appellate Tribunal. Section 35G of the Excise Act deals with Appeal of the High Court against the order passed by the Appellate Tribunal - In the present case, the amount was refunded to the appellant pursuant to an order dated 04.06.2015 passed by the Tribunal and admittedly this order of the Tribunal has attained finality as an appeal was not filed by the Department before the High Court against the order of the Tribunal. Section 11A of the Excise Act does provide for recovery of duties erroneously refunded, but if duties have been refunded pursuant to orders passed under section 11B of the Excise Act, it is not possible to hold the powers under section 11A of the Act can still be exercised for refund of the amount as this will not fall in the category of duties erroneously refunded . It also needs to be noted that an appeal can be filed to the High Court against the order passed by the Tribunal and if this power has not been invoked, it will not be open to the Department to take recourse to the provisions of section 11A of the Excise Act - The Commissioner, therefore, could not have issued the show cause notice dated 30.08.2017. In the present case, as under section 11A of the Excise Act when the order passed by the Tribunal in proceedings arising out of section 11B of the Excise Act had attained finality. This issue was also examined by the Andhra Pradesh High Court in THE COMMISSIONER CUSTOMS AND CENTRAL EXCISE, TIRUPATI VERSUS M/S. PANYAM CEMENTS AND MINERALS INDUSTRIES LTD., KURNOOL [ 2015 (9) TMI 726 - ANDHRA PRADESH HIGH COURT] and it was held that where an order under section 11B of the Act attains finality, the refund allowed would be outside the scope of an erroneous refund contemplated under section 11A of the Act. The Madras High Court in M/S. EVEREADY INDUSTRIES INDIA LTD. VERSUS THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, THE COMMISSIONER OF CENTRAL EXCISE, [ 2016 (4) TMI 688 - MADRAS HIGH COURT] followed the view taken by Andhra Pradesh High Court and also observed that once an application for refund is allowed under section 11B, the amount refunded will not fall under the category of erroneous refund so as to enable the order of refund to be revoked under section11A of the Excise Act. It is, therefore, more than apparent that section 11A of the Excise Act cannot be resorted to by the Department for recovery of duty which it believes was erroneously refunded if the order passed for refund of duty under section 11B of the Excise Act on an application filed for refund of duty attained finality for the simple reason that it cannot fall in the category of duty erroneously refunded - The show cause notice dated 30.08.2017 seeking recovery of the duty refunded to the appellant is without jurisdiction. The order passed on such a show cause notice, therefore, deserves to be set aside. Incidence of duty - HELD THAT:- Clause (e) of the proviso to section 11B of the Excise Act which relates to a buyer was under consideration and not a manufacturer (like the appellant) who would be covered by clause (d). Section 11B (2)(d) states that when in the case of a manufacturer the duty of excise is paid by the manufacturer and such incidence of duty has not been passed on to any other person, such an amount of duty and interest payable on such duty shall be refunded to the applicant. In the present case, it is not in dispute that the incidence of excise duty was borne by the appellant by the issuance of the credit notes to its dealer. The impugned order dated 16.11.2018 passed by the Commissioner for recovery of the amount earlier refunded to the appellant is set aside - Appeal allowed.
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2022 (9) TMI 674
Classification of goods - Roller Bearing and Ball Bearing - parts or components of other engine or vehicles - Process amounting to manufacture or not - Packing or repacking of such goods in a unit container or labeling or re-labelling of containers including the declaration or alteration of retail sale price - goods listed in the Third Schedule of the Central Excise Act,1944 - HELD THAT:- If the Ball bearing and roller imported by the appellant falls in the description of Sl. No. 100A, then the process of Packing or repacking of such goods in a unit container or labeling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer amounts to manufacture and the goods will needs to be assessed under Section 4 A in terms of Notification No 49/2008(NT) as amended - It is noted that the entry 100 of the Third Schedule corresponds to 108 and Notification No 49/2008-CE (NT). Entry 100A of the Third Schedule corresponds to the entry 109 and Notification No 49/2008-CE (NT). The Revenue has alleged that all the Rollers and Ball bearings imported by the Appellant are either parts or components of vehicles falling under Chapter 87 (excluding vehicles falling under Heading 8712,8713, 8715 and 8716) or parts, components of goods falling under tariff item 84264100, Headings 8427, 8429 and sub-heading 843010 - the bearings falling under Chapter heading 8482 cannot be called Parts and Parts and Accessories even if they constitute integral part of engine or motors of machines or apparatus of heading 8401 to 8479. Articles of heading 8481 or 8482 are excluded from the definition of Parts and Parts and Accessories under Section Note 2 (e) of Section XVII. As far as heading 8483 are concerned the same could be classified as Parts and Parts and Accessories provided they constitute the integral part of engine and motors. In view of above it cannot be held that the goods ordinarily falling under heading 8482 can fall under any classification under Section XVII of the Central Excise Tariff Act, 1985. It is apparent that the goods roller and ball bearings would be classified under heading 8482 as ball and roller bearings and the same cannot be classified as parts or components of other machines or vehicles. The revenue had inquired from some dealers and buyers about the usage of the said bearings purchased by them in an attempt to established that the said bearings are used for vehicles. It is seen that no conclusive evidence has been produced by the Revenue to establish that the said bearings are exclusively or primarily used for the automobile use. Even if revenue is to establish that certain bearings are used exclusively or primarily for the automobiles even then in terms of Section Note 2 and 3 to section XVII, the bearings would remain classifiable under chapter heading 8482 as Ball and Roller Bearing. Appeal allowed.
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Wealth tax
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2022 (9) TMI 673
Wealth tax assessment - land sold by the assessee was an agricultural land or capital asset - HELD THAT:- Respectfully following the decision of the Tribunal in assessee s own case in income tax matter [ 2019 (1) TMI 1989 - ITAT CHENNAI] as well as amendment to sub-clause (b) of Explanation 1 to clause (ea) of the Wealth Tax Act, 1957, we are inclined to uphold the view of the ld. CIT(A) that the land sold by the assessee was an agricultural land and not a capital asset. Therefore, the gain on sale thereof was not exigible to tax. Thus, the ground raised by the Revenue is dismissed for all the assessment years under consideration. Assessing the property at Velachery as Urban land liable to Wealth Tax - CIT(A) has observed that the land at Velachery cannot be construed as an Urban land under section 2(ea)(v) of the Wealth Tax Act for the reason that after obtaining proper planning permission, the building was constructed and the assessee has sold the built-up area from the assessment year 2010-11 to 2014-15. Therefore, the ld. CIT(A) directed the Assessing Officer to delete the addition made to wealth in the assessment year 2010-11. See GIRIDHAR G. YADALAM case [ 2016 (1) TMI 826 - SUPREME COURT] wherein it was held that when the property was given for development, unless the building is completed, it will not be construed as building and have liable for wealth tax as urban land. Charging of interest under section 17B of the Wealth Tax Act - Admittedly, in the present case, the assessee has not filed the wealth tax return under section 14 or 15 or under section 17 and moreover, the assessment was made for the first time. Hence, we reverse the order of the ld. CIT(A) on this issue and allow the ground raised by the Revenue.
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Indian Laws
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2022 (9) TMI 672
Seeking grant of interim relief - direction to deposit an amount of Rs. 35.5 crores with the Prothonotary and Senior Master of the High Court or, in the alternative, to furnish bank guarantee of any nationalised bank for the entire amount along with interest thereon - remove or dispose of whole or part of its property with intent to obstruct or delay the execution - Section 9 of the Arbitration Act - novation of contract or set off is allowed or not - HELD THAT:- Section 9 of the Arbitration Act confers wide power on the Court to pass orders securing the amount in dispute in arbitration, whether before the commencement of the arbitral proceedings, during the arbitral proceedings or at any time after making of the arbitral award, but before its enforcement in accordance with Section 36 of the Arbitration Act. All that the Court is required to see is, whether the applicant for interim measure has a good prima facie case, whether the balance of convenience is in favour of interim relief as prayed for being granted and whether the applicant has approached the court with reasonable expedition. If a strong prima facie case is made out and the balance of convenience is in favour of interim relief being granted, the Court exercising power under Section 9 of the Arbitration Act should not withhold relief on the mere technicality of absence of averments, incorporating the grounds for attachment before judgment under Order 38 Rule 5 of the CPC. Proof of actual attempts to deal with, remove or dispose of the property with a view to defeat or delay the realisation of an impending Arbitral Award is not imperative for grant of relief under Section 9 of the Arbitration Act. A strong possibility of diminution of assets would suffice. To assess the balance of convenience, the Court is required to examine and weigh the consequences of refusal of interim relief to the applicant for interim relief in case of success in the proceedings, against the consequence of grant of the interim relief to the opponent in case the proceedings should ultimately fail. There are no infirmity in the well-reasoned judgment and order of the Division Bench. The appeals are, accordingly, dismissed.
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2022 (9) TMI 671
Dishonor of Cheque - existence of lawful liability or debt towards the petitioner or not - joint or vicarious liability of a person under section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- The petitioner is not the drawer of the cheque in question. The trial court misdirected itself while passing the impugned order. The petitioner is not a joint account holder or vicariously liable with Amrit Sandhu Coster. The cheque in question was not issued by the petitioner but was issued by the sister of the petitioner namely Amrit Sandhu Coster. It was prayed that impugned order be set aside. The legal issue pertaining to joint or vicarious liability of a person under section 138 of the Negotiable Instruments Act, 1881 has been considered by the various High Courts and the Supreme Court. In Gita Berry V Genesis Educational Foundation, [ 2008 (1) TMI 978 - DELHI HIGH COURT ] decided by a Coordinate Bench of this court, the petitioner/wife filed a petition under Section 482 of the Code seeking quashing of the complaint filed under Section 138 of the Negotiable Instrument Act,1881 on the ground that she was a joint account holder along with her husband. She has neither drawn nor issued the cheque in question and, therefore, according to her, the complaint against her was not maintainable. It was observed that the complaint was only under section 138 of the Act and nothing was elicited from the complaint to the effect that the petitioner was responsible for the cheque in question and accordingly proceedings were quashed. The Supreme Court in Aparna A. Shah V M/s Sheth Developers Pvt. Ltd. another, [ 2013 (7) TMI 718 - SUPREME COURT ] endorsed views expressed by the Madras, Delhi and Punjab Haryana High Courts and held that it is only the drawer of the cheque who can be prosecuted under section 138 of the Act. The case of the respondent no 2 is that the petitioner and Amrit Sandhu Coster in discharge of their liability towards the respondent no 2 handed over cheque in question and promised that the said cheque would be obliged on presentation to discharge their legally enforceable debt - The petitioner is not holder of account bearing no 90112010051035 in Syndicate Bank and is not operational in the name of the petitioner but is operational in name of Amrit Sandhu Coster. Amrit Sandhu Coster in notice under section 251 also admitted that she issued the cheque in question to the respondent no 2 in the year 2011 for my food court business vide proceedings dated 06.02.2019. The liability regarding dishonouring of cheque in question cannot be fastened on the petitioner. The impugned order cannot be legally sustained qua the petitioner and as such the petition is allowed and impugned order is set aside qua the petitioner - Petition allowed.
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2022 (9) TMI 670
Dishonor of Cheque - vicarious liability of Director - section 138 of NI Act - HELD THAT:- Similar issue decided in the case of DIPESH J. THACKER S/O JITENDRA V. THACKER VERSUS M/S SMARTSYNC INNOVATIONS PVT. LTD. REP. BY ITS DIRECTOR, MR. ANKIT JAIN. AND M/S QUESS CORP. LIMITED [ 2022 (6) TMI 1303 - KARNATAKA HIGH COURT] has held that In the teeth of the admitted facts, the submission of the learned counsel appearing for the respondent that the petitioner will have to come out clean in a trial, after him producing the documents with regard to resignation is unacceptable, as those documents without doubt are public documents, which would clearly demonstrate that the petitioner has resigned on 4.7.2019. Since the issue remains the same, albeit the crime being different, it is deemed appropriate to obliterate the present proceedings following the order passed by this Court - petition allowed.
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2022 (9) TMI 669
Dishonor of Cheque - legally enforceable liability or not - acknowledgment of debt in terms of Section 18 of Limitation Act 1963 or not - time limitation - rebuttal of presumption u/s 118 and 139 of the Act - HELD THAT:- Since the petitioner has raised an issue as regards his liability in respect of the dishonoured cheque, it needs to be mentioned at the outset that Section 118 and 139 of the Act, embody some presumptions in favour of holder of cheque particularly as regards existance of debt or liability. However, needless to mention such presumptions are rebuttable and which may be rebutted by way of leading some evidence to demolish such presumptions. It would obviously before trial Court that one may be able to lead evidence and not before High Court. A complaint, though expected to state all such facts which attract criminal liability of accused, need not be encyclopaedic so as to include all the finer details and evidence which would be required to substantiate the allegations. It would be at appropriate stage that evidence would be led to substantiate allegations. There can be no dispute that question as regards limitation is a mixed question of law and facts particularly when there could be an issue of extension of limitation. As such, inherent powers of High Court can not be invoked for quashing of complaint at the threshold on grounds which would require evidence to be led. Section 18 of Limitation Act 1963 leaves no manner of doubt that it is only if an acknowledgment of liability or debt is made during subsistence of limitation for filing suit that fresh period of limitation will be computed from date of such acknowledgment - Section 25(3) of the Indian Contract resuscitates a time-barred remedy to enforce payment by way of suit, consequent upon a promise made by debtor to pay off the debt or liablity. In such a case, where the payment could be enforced by a suit, it means that it still has the character of legally enforceable debt as contemplated by 'Explanation' to Section 138 of the Act. While considering acknowledgement or promise, another important aspect would be as regards the quality and kind of evidence required to establish such acknowledgement or promise. Hon'ble the Supreme Court, in Shapoor Freedom Mazda v. Durga Prosad Chamaria, [ 1961 (3) TMI 113 - SUPREME COURT ], while discussing acknowledgement of debt in terms of section 19 of Limitation Act, held that an admission as regards liability may be in any form and may be express or implied, and that acknowledgment requires to be construed liberally. The contentions put forth on behalf of petitioner regarding debt being time-barred and that dishonour of a cheque issued after more than 6 years of advancement of loan would not attract provisions of Section 138 of the Act, having been issued qua a debt not enforceable by law, cannot be accepted. Rather, it can safely be held that as on 6.7.2018 when the cheque was issued by the petitioner for paying off the loan advanced on 14.12.2011, the same was issued in acknowledgment of a debt, and upon its dishonour would make the drawer liable to be proceeded against under Section 138 of the Act. This Court does not find the present case to be such where inherent powers under Section 482 Cr.P.C. should be invoked for quashing the complaint or for setting aside the summoning order. Petition dismissed.
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2022 (9) TMI 668
Dishonor of Cheque - failure to perform her part of the contract - HELD THAT:- Notice of motion for 20.10.2022. Interim order in similar terms as in CRM-M-31440-2022.
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