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TMI Tax Updates - e-Newsletter September 2, 2022 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST: Seeking grant of Regular bail - fraudulent transfer of Input Tax Credit - The authorities shall release the applicant if he is not required in connection with the any other offence. If breach of any above condition is committed, the Sessions Judge concerned shall take appropriate action or issue warrant against the applicant. - HC Visit to Get Source GST: Evasion of GST - the police custody / remand of the petitioner - in the case on hand, the learned Magistrate, while rejecting the demand of remand in police custody, has not even granted remand in judicial custody, in that event, completion of initial period of 15 days, would not be fatal to the Investigating Agency. - The order passed by the learned Sessions Judge, Jamnagar granting seven days remand cannot be said to be illegal and is hereby upheld - HC Visit to Get Source GST: Maintainability of appeal - making pre-deposit under Central Excise by debiting the Electronic Cash Ledger and Electronic Credit Ledger - it has to be held that mandatory deposit under section 35F of Excise Act cannot be made by way of debit in the Electronic Credit Ledger maintained under CGST Act - the defect is not cured. However, four weeks time is granted to the appellant to make the mandatory pre-deposit, so as to remove the defect. - AT Visit to Get Source Income Tax: Reopening of assessment u/s 147 - Though the Counsel has made valiant attempt to contend before this Court that information sought for while issuing notices under sections 143(2) and 142(1) of the Act, details have been produced. The fact remains that the Assessing Officer did not possess this insight portal information which has been relied upon for issuance of the notices under section 148 of the Act. As such, the contention raised by learned counsel appearing for the petitioner requires to be considered for the purpose of outright rejection and it stands rejected. - HC Visit to Get Source Income Tax: Levy of penalty Notice u/s 274 r.w.s. 271D - Cash sale of immovable property - The objective of the amendment proposed in 269SS of the Act is to curb generation of black money. In the instant case the fact is that cash received by the assessee has been recorded in the sale deed and deposited by the assessee into the bank account, hence does not attract the provisions of section 269SS of the Act since there is no suppression of cash receipts by the assessee. The assessee has also offered the capital gains to tax. - AT Visit to Get Source Income Tax: Unexplained investment - Primary onus - The assessee has deposited cash in its ICICI Bank account on various occasions, and onus is very heavy on assessee to explain these cash deposits. It is for the assessee to substantiate its state of affairs and income which is chargeable to tax. If the assessee fails to discharge its primary onus, then Revenue has all the right to bring to tax unexplained credits, money as well investments - AT Visit to Get Source Income Tax: Revision u/s 263 by CIT - AO has noted that details of expenses relating to business promotion, lease rent, commission, petrol, travelling etc. were filed by the assessee and which were checked. Therefore, in view of these facts and circumstances, we find that the Assessing Officer had carried out sufficient examination of the expenses relating to site & wages and therefore, passing of order u/s 263 on this account is also not justified. - AT Visit to Get Source Income Tax: Exemption u/s 11 - deemed grant of registration - The period of six months referred in Section 12AA(2) has to be calculated from the end of the months in which the application u/s 12A was received and not from any other date. - Tribunal was not justified in applying Section 12AA(2) of the Act, 1961 in the facts of the present case and the order of CIT could not have been set aside on this ground. The decision of the Tribunal is based on a misreading and misunderstanding of Section 12AA(2) of the Act, 1961, its purport and scope. - HC Visit to Get Source Income Tax: Undisclosed profit and unaccounted investment in undervalued goods - It was observed by the Tribunal that when the very basis on which the addition was made by the Assessing Officer stands deleted by the CESTAT in appeal preferred by the assessee, the addition based on their information does not survive and hence, the CIT(Appeals) has rightly deleted the addition on account of unaccounted investment and Gross profit. No substantial question of law. - HC Visit to Get Source Income Tax: Penalty u/s 271(1)(c) - During the course of reassessment proceedings when the assessee came to known that the exemption was claimed incorrectly the assessee himself withdrew the claim and paid due taxes along with interest amount - concealment of income is quite different from furnishing of inaccurate particulars of income. - No penalty - AT Visit to Get Source Income Tax: Additions based on mismatch in annual information return - If the assessee can reconcile such difference and even otherwise satisfy the learned assessing officer, that such addition is unwarranted, the addition is not required to be made. As the learned assessing officer as well as the learned DRP has made the addition merely on the basis of the difference between form No 26 As and failure of assessee to reconcile it with the books, matter restored back to AO - AT Visit to Get Source Customs: DFIA Scheme - Conditional provisional release of goods - in-shell walnut - The adjudicating authority has discretion with respect to the security and conditions that he may require while provisionally releasing the seized goods. It is settled law that what power or discretion that is vested in an adjudicating authority can also be exercised by the appellate authority or the Tribunal. - The order of unconditional release of the seized goods passed by the Tribunal cannot be faulted with. - HC Visit to Get Source Customs: Valuation of imported goods - undervaluation - Proforma invoice - When the department conducted market survey and the persons were there witness, it was their duty to mention name of person on such Proforma invoice or to find such person from cross examination as the Appellant were not made present during market survey. The market survey was conducted in absence of Appellant and they could not be expected to name the person who has issued such Proforma invoice. When the revenue itself does not knows as to who has issued such Proforma invoice and there is no statements of makers of such invoice, in that case the Proforma invoices has no evidentiary value. - AT Visit to Get Source Customs: Valuation of imported goods - allegation of over-valuation of the goods - It is true that fraud would vitiate everything, but then fraud has not only to be alleged but also proved. In the present case, the documents that form the basis of the allegation of overvaluation cannot be relied upon by the Department as the same cannot be admitted as evidence under the Customs Act. The allegation of fraud, therefore, has not been proved - the proposition that despite finalization of assessment under section 14 of the Customs Act, the provisions of section 111(m) of the Customs Act can still be invoked cannot be accepted. - AT Visit to Get Source Customs: Who is the importer? - Valuation of imported goods - MEGPTCL did not hold itself out to be the importer. Undisputedly, the Bills of Entry were filed by PMC and right from filing the Bill of Entry to the stage of investigation PMC held itself to be the importer. The document of title, on the basis of which ownership is determined, is the Bill of Lading. It is not the case of the department that the Bill of Lading was not in the name of PMC, for it is on the basis the said Bill of Lading that PMC had filed the Bills of Entry as an importer. Thus, MEGPTCL cannot be termed as an importer or de-facto importer as claimed by the Revenue. - AT Visit to Get Source Indian Laws: Dishonor of Cheque - acquittal of the accused - lower court granted relief to the accused non-appearance of the complainant - Considering the conduct of the appellant/complainant before the Trial Court as also before this Court, (in a case of as old as 24 years), this Court is of the view that it seems that the appellant/complainant has lost interest in the appeal as also before the Trial Court and as such this Court finds no reason to interfere with the said order/judgment of acquittal under appeal - HC Visit to Get Source Indian Laws: Condonation of delay in filing appeal - a prompt decision was taken to prefer an appeal and the communication was sent by the applicant to the advocate making a request to file the appeal against the order of the learned Single Judge but thereafter the appeal was not filed within time and the same was filed with delay of 766 days - It is settled position of law that a party cannot be made to suffer on account of the fault or lapses committed by the advocate. - HC Visit to Get Source IBC: Distribution of liquidation proceedings - waterfall mechanism - After CIRP since it failed, liquidation order was passed by the Adjudicating Authority on an application filed by the Liquidator under Section 33(1) of the IBC. Once corporate debtor went into liquidation and the petition for distribution of accumulated profit was filed wherein representatives of employees as well as representatives of shareholders were arrayed as party there was no reason for third person to file the present appeal. - AT Visit to Get Source IBC: CIRP - Belated claim filed - Resolution Plan has already been approved by the CoC and is pending consideration of the Adjudicating Authority - In IBC, where time-lines are well laid down, any indulgence shown by way of belated admittance of claim is likely to jeopardise the CIRP and set the clock back which certainly is not the intent and purpose of the IBC. - AT Visit to Get Source IBC: Initiation of CIRP - pre-existing dispute or not - NCLT admitted the application - the Appellant, in the written submissions filed before the Adjudicating Authority has made bald averments of making request several time to the Respondent to take back the material which has not been accepted by the IOCL, without giving any particular date of the said instance. Therefore, the objection raised by the Appellant about the pre-existing dispute is just for the sake of an objection otherwise it has no legs to stand. - AT Visit to Get Source IBC: Initiation of CIRP - Financial Debt or not - The present transaction was in pursuance of the sale agreement. There was no other agreement formed between the parties for amount claimed in default/amount transferred towards corpus fund, hence the given transaction of transfer of corpus funds into the loan account would not qualify as a financial debt as per the definition laid down in Section 5(8) - Applicant failed to qualify the threshold prescribed in the proviso laid down under section 7 (1). - Tri Visit to Get Source IBC: Initiation of CIRP - Threshold limit for filing application - enhancement of minimum amount of default to one crore - filing of the petition was before that i.e. on 01.03.2020 - Since any notification issued by the Government are generally Prospective in nature unless specifically expressed, hence the notification is not applicable to the present case - the instant Application satisfies the pecuniary criteria under Section 9 of the Code, 2016. - Tri Visit to Get Source Service Tax: Refund claim of service tax - Benefit of exemption with retrospective effect - lease premium - time limitation - Request for refund made to wrong forum (service provider / PIPDIC ) initially and not to be service tax department - the petitioner has filed the claim before PIPDIC which is altogether a different entity. However, the mere fact that the entity approached was PIPDIC and not an officer of the Department does not, in the light of the reasoning adduced above, persuade me to take a view adverse to the petitioner as I believe that such a conclusion would be hyper-technical. - HC Visit to Get Source Service Tax: Refund of mandatory pre-deposit in terms of Section 35 F of Central Excise Act 1944 - Adjustment with with confirmed demand of duty - The bare perusal makes it clear that even the Circular No.984/08/2014 does not speak about setting off the amount of pre-deposit as made under section 35 F against any partial confirmation of demand - the refund claim irrespective of a confirmation of duty liability has wrongly been rejected. - AT Visit to Get Source Central Excise: Classification of goods - Tipper Trucks/ Vehicles - In the present case we are concerned with the period after the insertion of the said chapter notes in the chapter 87 of the First Schedule to Central Excise Tariff Act, 1987 and as stated in the above circular the classification has to be determined as per the said chapter note and not by following the decisions as relied upon by the revenue while filing this appeal. Accordingly Commissioner has determined the classification of garbage compactors under chapter heading 8705 and found them to be eligible for benefit of exemption as special purpose vehicle under Notification No 6/2006-CE. - Revenue appeal dismissed - AT Visit to Get Source VAT: Levy of Entry Tax - stock transfer price - validity of Equalized List Price (ELP), adopted by the appellant - As per Section 4 of the Entry Tax Act, the entry tax payable by the dealer under this Act shall be charged on his taxable quantum relating to goods specified in Schedule-II and Scheduled-III, but there is no such provision for charging of entry tax on ELP adopted by the appellant, same is alien to the Entry Tax Act or VAT Act. - HC Visit to Get Source Articles Faceless assessment rectification and appeals- Authorities must look into records of all related proceedings information on portal of department and should not act unreasonably to harass taxpayers by raising huge demands. DOCUMENT IDENTIFICATION NUMBER UNDER GST LAWS Ex-parte Order are violative of principles of natural justice Notifications Central Excise 28/2022 - dated 31-8-2022 - CE Road and Infrastructure Cess for exports of petrol and diesel - increase cess on export of Diesel - Seeks to amend No. 10/2022-Central Excise, dated the 30th June, 2022. 27/2022 - dated 31-8-2022 - CE Increase the Special Additional Excise Duty on export of Diesel - Seeks to further amend No. 04/2022-Central Excise, dated the 30th June, 2022. 26/2022 - dated 31-8-2022 - CE Increase the Special Additional Excise Duty on production of Petroleum Crude export of Aviation Turbine Fuel - Seeks to amend No. 18/2022-Central Excise, dated the 19th July, 2022. 25/2022 - dated 31-8-2022 - CE Special Additional Excise Duty leviable on Aviation Turbine Fuel - Seeks to amend the eighth schedule to the Finance Act, 2002 to revise the duty on Aviation Turbine Fuel Customs 26/2022 - dated 31-8-2022 - ADD Extension to levy of ADD on Jute Products originating in or exported from Nepal and Bangladesh. 46/2021 - dated 31-8-2022 - Cus Extends the existing concessional import duties on specified edible oils up to and inclusive of the 31st March, 2023 - Restrict the reduced rate of AIDC on 3 item till 1-10-2022 - Seeks to amend notification Nos. 48/2021 and 49/2021 - Customs, both dated 13.10.2021 45/2022 - dated 31-8-2022 - Cus Exemption from Additional duty on specified goods by designated airlines when imported from specified countries - amendment in few entries - Seeks to further amend notification no. 130/2010-Customs dated 23rd December, 2010 72/2022 - dated 31-8-2022 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver GST - States F. 12(97)FD/Tax/2017-Pt.-I-42 - dated 31-8-2022 - Rajasthan SGST Amendment in Notification No. F.12 (11) FD/Tax/2022-103 dated 23.02.2022 1395-F.T. - dated 23-8-2022 - West Bengal SGST Seeks to Amend notification No. 1137-F.T. dated 28.06.2017 regarding Reverse charge mechanism(RCM) for services 1394-F.T. - dated 23-8-2022 - West Bengal SGST Seeks to Amend notification No. 1136-F.T. dated 28.06.2017 regarding Nil rated services SEZ S.O. 4061 (E) - dated 30-8-2022 - SEZ Special Economic Zone for IT/ITES in the State of Maharashtra, Village- Ghansoli, Navi Mumbai - de-notifies an area of 2.7081 hectares, thereby making the resultant area as 3.1438 hectares. News ₹ 1,43,612 crore gross GST revenue collected in the month of August 2022 Exchange Rate Notification No. 73/2022 - Customs (N.T.) Monthly Review of Accounts of Union Government of India upto the month of July 2022 for the Financial Year 2022-23 Income Tax Department conducts searches on a prominent Transmission Tower manufacturing group in West Bengal Commerce Ministry organizes Brainstorming session on Services Exports Case Laws: GST 2022 (9) TMI 47 Opening of portal for filing of Form GST TRAN-1 electronically or accept the same manually - transitional input tax credit - Section 140 read with Rule 117 of the CGST/OGST Rules - HELD THAT:- It is seen from the letter dated 28th October, 2021 issued by Assistant Commissioner-Opposite Party No.8 that the processing/acceptance of the claim of the Petitioner would be subject to outcome of SLP which was then under contemplation by the Department. It is desired that the Assistant Commissioner, GST CX, Cuttack-I Division-Opposite Party No.8 shall adhere to what has been assured in his letter bearing C.No. IV(16)01/TRAN-1/TECH/CTCI/2018(Pt-I)/2661, dated 28.10.2021. It is directed that the said Authority shall comply with the directions contained in the orders of the Hon ble Supreme Court as well as this Court. Petition disposed off. 2022 (9) TMI 46 Seeking grant of Regular bail - fraudulent transfer of Input Tax Credit - procuring invoices without actual receipt of goods - procuring invoices without actual receipt of goods - evasion of huge amount of Goods and Service Tax - HELD THAT:- The entire case is based on documentary evidence and same are in the custody of the department. Record indicates that after filing the complaint, still no show cause notice for determining the liability is issued by the Department. However, the applicant herein has shown his bonafide and is willing to deposit Rs.2 crore before the department. Considering the observations made by the Apex Court in case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [ 2019 (12) TMI 186 - SUPREME COURT] i.e. even allegations of grave economic offence, it is not a rule that bail should be denied in every case and whether bail is granted or not, will have to be on the case to case basis of the facts involved therein and securing the presence of the accused to stand trial. , it is deemed fit to exercise the discretion in favour of the applicant. The authorities shall release the applicant if he is not required in connection with the any other offence. If breach of any above condition is committed, the Sessions Judge concerned shall take appropriate action or issue warrant against the applicant. The bail bond to be executed before the learned trial Court having jurisdiction to try the case - application disposed off. 2022 (9) TMI 45 Evasion of GST - creation of bogus firms - issuance of invoices without transportation of goods - whether the police custody / remand of the petitioner-accused can be ordered by the Court pending adjudication and in an interregnum time, when the initial period of 15 days is over? HELD THAT:- Considering the provisions of Section 167 of the Cr.P.C., it provides for cases where investigation cannot be completed within 24 hours fixed by Section 57 and the police require more time to investigate. In such a case, the police officer is required to produce the accused before a Magistrate and the Magistrate is given discretion to detain the accused either in police custody or judicial custody. The period during which a Magistrate can remand an accused either in judicial custody or in police custody has been limited for a term not exceeding fifteen days in the whole. The proviso to Section 167 provides for detention of an accused in judicial custody beyond the period of fifteen days, if a Magistrate is satisfied that adequate reasons exists for doing so. However, such a detention is limited to 90 days where the offence is punishable with death, imprisonment for life or for a term not less than ten years and the period is limited to 60 days where the investigation relates to any other offence - sub-section (2) of Section 167 makes it clear that a Magistrate can grant such custody as he thinks fit which means he can grant either police custody or judicial custody. The Investigating Officer is empowered with the provisions of law to investigate thoroughly. Thorough investigation is the base on which the superstructure of the entire criminal jurisprudence exists. The entire criminal trial depends on a material evidence collected during the course of investigation. If, by any means, the investigation is not allowed to be made thoroughly, in that event, the Court would not be in a position to arrive at a just conclusion - the investigation is the heart of the criminal jurisprudence based on which the Criminal Court proceeds to do justice. Thus, the investigation is considered to be the most crucial element in criminal trial. In other words, with the assistance of the able and effective investigation, the Criminal Court can achieve its paramount goal to impart substantial justice. What is relevant to note is that the accused therein was ordered to be on remand in judicial custody. Whereas, in the instant case, the learned Magistrate, while rejecting the application for remand in police custody, has not passed any order granting remand even in judicial custody. Thus, by virtue of the order of the learned Magistrate, in a way, remand of an accused either in police custody or in a judicial custody completely denied, which would be prejudicial to the statutory right of the Investigating Officer to investigate the matter thoroughly - in the case on hand, the learned Magistrate, while rejecting the demand of remand in police custody, has not even granted remand in judicial custody, in that event, completion of initial period of 15 days, would not be fatal to the Investigating Agency. The order passed by the learned Sessions Judge, Jamnagar granting seven days remand cannot be said to be illegal and is hereby upheld - Application dismissed. 2022 (9) TMI 44 Maintainability of appeal - appeal rejected on the ground that the Appellant had not made the pre deposit as per section 35F of the Central Excise Act, 1944 - requirement to make pre-deposit by debiting the Electronic Cash Ledger and Electronic Credit Ledger - section 41 of the GST Act - HELD THAT:- In M/S. DELL INTERNATIONAL SERVICES INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX GST COMMISSIONERATE [ 2019 (1) TMI 1033 - CESTAT BANGALORE] , the Tribunal accepted the contention of the appellant as learned authorized representative did not dispute that mandatory pre deposit can be made through the CGST Credit. Accordingly, the Tribunal held that mandatory pre deposit can be made through the CGST Credit. Thus, it has to be held that mandatory deposit under section 35F of Excise Act cannot be made by way of debit in the Electronic Credit Ledger maintained under CGST Act - the defect is not cured. However, four weeks time is granted to the appellant to make the mandatory pre-deposit, so as to remove the defect. Income Tax 2022 (9) TMI 56 Scheme of settlement commission - Order granting partial immunity to the petitioner from penalty u/s 245H(1) - petitioner Income Tax Authorities have challenged the impugned order of the settlement commission granting partial immunity to the petitioner u/s 245H(1) by way of imposing lesser amount of penalty - HELD THAT:- Settlement Commission itself has recorded that attitude of the assessee respondent was not acceptable to it and that it runs contrary to the settlement scheme and in its order settlement commission also recorded and came to the finding that the assessee s professional receipts were much higher than the requisite monetary limit and he was statutorily obliged to maintain proper record and books of accounts as per Section 44AA yet the respondent assessee had continued with the default of not maintaining books of accounts of the four relevant assessment years and that such conduct of the assessee respondent was deliberate and intentional. It is strange that in spite of such finding of the learned Settlement Commission how it has granted partial immunity from penalty to the petitioner u/s 245H(1) of the Act which is contrary to the spirit of the settlement scheme. Impugned order of the Settlement Commission to the extent of granting partial immunity to the petitioner from penalty under Section 245H(1) inspite of specifically recording that it was evident to the Settlement Commission that the respondent assessee had not come forward with full and true disclosure before it and that the attitude of the assessee respondent was not acceptable and runs contrary to the spirit of the Settlement Commission and by also recording that default in non maintenance of books of accounts u/s 44AA was deliberate and intentional on the part of the petitioner, the impugned order of settlement commission is bad, illegal and not sustainable in law and is contrary to the aims and objects of the settlement commission under Chapter XIXA of the Income Tax Act and accordingly the impugned order of the settlement commission is quashed to the extent it has granted partial immunity from penalty to the assessee respondent and in view of quashing of the impugned order. 2022 (9) TMI 55 Reopening of assessment u/s 147 - scope of reopening by issuance of notice under section 148 - reference to expressios reason to believe and change of opinion - As argued by petitioner that there was no additional material which was available before the Assessing Officer and notices issued prior to the assessment was duly replied with supporting documents - HELD THAT:- As decided in Rajesh Jhaveri Stock Brokers P. Ltd. [ 2007 (5) TMI 197 - SUPREME COURT] that expression reason to believe should not be read to mean that Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The expression reason to believe would mean cause or justification for reopening. If the Assessing Officer has cause or justification to know or suppose to know that income had escaped assessment, it can be said to have reason to believe that income had escaped assessment. Thus, the expression reason to believe would mean and include that there should be subjective satisfaction by objective assessment available with the Assessing Officer for issuance of notice. In the instant case, the said notices, which are issued to the petitioner, have been furnished to the petitioner and conclusion drawn by the AO for reopening of assessment is that the AO received insight portal information to the effect that the petitioner firm is in business of lucky draw networking scheme and that no other tangible assets were handled by the firm other than financial transactions. Though Mr.Darshan Patel has made valiant attempt to contend before this Court that information sought for while issuing notices under sections 143(2) and 142(1) of the Act, details have been produced. The fact remains that the Assessing Officer did not possess this insight portal information which has been relied upon for issuance of the notices under section 148 of the Act. As such, the contention raised by learned counsel appearing for the petitioner requires to be considered for the purpose of outright rejection and it stands rejected. Whether while giving approval under section 151 of the Act, there has been no due application of mind by the said authority? - The information which was secured by the Assessing Officer subsequent to the assessment proceedings or scrutiny proceedings has been referred to and this has been considered, examined and on objective assessment of the material on record available before the said authority, permission has been accorded under section 151 of the Act which cannot be said, held or construed as without due application of mind. As such, the said contention also stands rejected. Though several judgments on the said issue i.e. change of opinion and explaining the term or expression reason to believe have been relied upon, we are of the considered view that all these judgments are based on the facts and as such, without dwelving upon each of these judgments, we hold that there cannot be any second opinion with regard to proposition of law that mere change of opinion cannot form the basis for reopening of assessment. This Court in exercise of powers vested under Article 227 of the Constitution of India would not take over the decision making powers of the statutory authority. The Honourable Apex Court in the case of D.N. Jeevaraj [ 2015 (11) TMI 1798 - SUPREME COURT] has held that the High Court cannot mandate beyond the course of action to be taken by the statutory authority by giving complete go-by to the procedural requirement and the Court itself taking over functions of the authority. Thus contentions of learned counsel appearing for the petitioner cannot be accepted and it stands rejected and the point formulated hereinabove is accordingly answered in the negative i.e. in favour of the respondent and against the petitioner assessee. 2022 (9) TMI 54 Nature of expenditure - expenditure incurred towards lease deed registration - revenue or capital expenditure - whether the Tribunal was justified in law in not directing the lower authorities to allow depreciation / amortization on the expenditure treated by them as a capital expenditure? - HELD THAT:- There is no dispute with regard to the fact that monthly rent payable by any assessee is to be treated as revenue expenditure. Law requires that if the period is more than one year, the lease deed must be registered under Section 17B of the Registration Act, 1908. Further, based on the monthly rent and the security deposit, ad valorem stamp duty will have to be paid. Thus, the intention of the parties namely, lessor and lessee are clear that the lessee shall take premises by paying rents every month for a certain period. In the case of PLANTATION CORPORATION [ 1993 (6) TMI 46 - KERALA HIGH COURT] following the decision of Bombay High Court in CINCIETA PVT. LTD. [ 1982 (2) TMI 58 - BOMBAY HIGH COURT] has recorded that the Allahabad, Calcutta and Karnataka High Courts, while rendering the decisions in United Commercial Corporation V. CIT [ 1970 (8) TMI 10 - ALLAHABAD HIGH COURT] , Gobind Sugar Mills Ltd. [ 1978 (8) TMI 65 - CALCUTTA HIGH COURT] and Hotel Rajmahal [ 1984 (3) TMI 24 - KARNATAKA HIGH COURT] did not have the advantage of the liberal and pragmatic approach made by the Supreme Court in three decisions which we have referred to above and held that the stamp duty and registration charges as revenue expenditure. Thus question of law raised by the assessee is answered in favour of the assessee by holding that the expenditure made towards stamp duty and registration charges as revenue expenditure and against the revenue. 2022 (9) TMI 53 Gain on land sold - FMV determination - estimating the cost of acquisition of the immovable property as on 1/4/1981 at Rs. 350/- per sq yd relying on the market value of the property certified by the Joint Sub-Registrar, Rajahmundry as on 17/2/1987 - HELD THAT:- Fair market value of a capital asset is the value which would ordinarily fetch on sale in the open market on the relevant date and not on the value adopted for stamp duty purposes. In the absence of a confirmed fair market value as on 1/4/1981, the Ld. AO has also not referred the matter to the DVO for valuation of the property as on 1/4/1981. We also find that the Ld. CIT (A) has estimated the value at Rs. 350/- per sq yd based on the valuation provided by the Joint Sub-Registrar, Rajahmundry as on 17/2/1987. In the absence any evidence of fair market value, not being provided by both assessee and Revenue, we are therefore of the considered view that, since the property is located within a distance of one kilometre from the RTC Complex, within the Rajamundhry municipal limits, we find that the estimate made by Ld.CIT(A) is reasonable and hence no interference is required. Thus, the grounds No. 2 and 3 raised by the Revenue are dismissed. Cash expenses for the purpose of development of land - The admitted facts are that there are certain expenses incurred by the assessee in the development of land into plots. This was never denied by the Revenue Authorities. The only contention of the Revenue is that since the assessee has incurred certain expenditure by way of cash and documents evidencing by way of self-made vouchers, these expenses are not genuine. The expenses incurred by the assessee in the development of land is also evidenced from the inspection report submitted by the ACIT, Rajamahendravaram. The only dispute is with respect to the amount of expenditure actually incurred by the assessee for the development of land into plots. We find that the Ld. CIT(A) has rightly estimated the cost of development at Rs. 2,000/- per sq yd which in our view is reasonable and hence no interference is required on this issue in the order of the Ld. CIT(A). It is ordered accordingly. Thus, Grounds No. 4, 5 6 raised by the Revenue are dismissed. Levy of penalty Notice u/s 274 r.w.s. 271D - Cash sale of immovable property - Receipt of cash in relation to transfer of immovable property by the assessee attracting the provisions of section 269SS of the Act - HELD THAT:- Any person is barred from receiving from any amount otherwise by cheque or through banking channels in relation to transfer of the immovable property. Section 269SS of the Act prohibits receipt of any amount by way of cash in relation to the transfer of any immovable property. The Memorandum explaining the provisions of Finance Bill 2015 with respect to amendment proposed w.e.f 1/6/2015 in section 269SS. The objective of the amendment proposed in 269SS of the Act is to curb generation of black money. In the instant case the fact is that cash received by the assessee has been recorded in the sale deed and deposited by the assessee into the bank account, hence does not attract the provisions of section 269SS of the Act since there is no suppression of cash receipts by the assessee. The assessee has also offered the capital gains to tax. Therefore, in our opinion the order of the Ld JCIT deserves to be quashed. It is also found that the Ld.AO has not recorded satisfaction regarding the initiation of penalty proceedings. The Ld AO merely proposed to initiate penalty proceedings u/s 271(1)(c) of the Act - Thus the order Ld JCIT deserves to be quashed as relying on Jai Laxmi Rice Mills [ 2015 (11) TMI 1453 - SUPREME COURT] and therefore the order of the Ld. CIT(A) does not require interference and hence the appeal of the Revenue is dismissed. 2022 (9) TMI 52 Reopening of assessment u/s 147 - change of opinion - Non-deduction of TDS from transportation chargespaid by the assessee which were liable to be added back, purchase from undisclosed sources of income which is unexplained investment and was liable to be added to the income of the assessee and refund of VAT and TCS which were not reflected in the bank account of the assessee and thus recomputed the undisclosed income of the assessee which has escaped assessment and liable to be added - HELD THAT:- We note that the assessment was framed in the case of assessee u/s 143(3) - We observe from the records and also rival arguments before us that the reasons recorded on the basis of audit report which was available before the AO at the time of original assessment proceedings which culminated in assessment order being framed u/s 143(3) - Thus, this apparent from the above that there was no new substantive material before the AO at the time of recording of reasons. In our opinion, the assessment was reopened on the basis of same material which was available before the AO in the original assessment proceedings. Therefore we do not find any infirmity in the order of Ld. CIT(A) which has been passed after following the decisions of Hon ble Apex Court in the case of CIT Vs Kelvinator of India Ltd [ 2010 (1) TMI 11 - SUPREME COURT ] and Hindustan Lever Ltd [ 2004 (2) TMI 42 - BOMBAY HIGH COURT ] Considering the facts and circumstances as discussed above we are inclined to uphold the order of ld CIT(A) on the issue of reopening. - Decided against revenue. 2022 (9) TMI 51 NP estimation on unaccounted turnover - Assessment u/s 153A - grievance of the assessee is that the income/net profit embedded in unaccounted turnover must have been taxed and not the entire turnover - HELD THAT:- As noted that the unaccounted turnover of the assessee works out to 33% of the total turnover both disclosed and undisclosed and hence the assessee has disclosed nearly 67% of the turnover in the books of accounts. The net profits declared for the various assessment years as per the above table was assessed and not disputed by the AO. Similarly, it is also admitted that the seized material contains unaccounted expenditure also. We find that the AO has merely relied on the sworn-in statement recorded by the Managing Director of the assessee-company admitting the total income for various assessment years but has failed to give deduction for the unaccounted expenditure by the assessee for earning unaccounted income.In the case of CIT vs. President Industries [ 1999 (4) TMI 8 - GUJARAT HIGH COURT] has held that it cannot be the matter of an argument that the amount of sales by itself cannot represent the income of the assessee. It is the realization of excess over the cost incurred that only forms part of the profit included in the configuration of sale. We are of the opinion that the entire unaccounted turnover cannot be brought to tax or the turnover admitted at the time of search operations cannot be brought to tax and as such there can only be a reasonable estimation of net profit on the unaccounted turnover. Since the assessee has declared an average net profit of 8.18% for the AYs 2012-13 to 2018-19, we are of the considered view that the same net profit percentage shall be adopted on the unaccounted turnover of the assessee for the various assessment years. We are therefore inclined to set-aside the orders of the Revenue and the grounds raised by the assessee are allowed. 2022 (9) TMI 50 Reopening of assessment u/s 147 - unexplained investment - Primary onus - assessee case was reopened u/s 148 based upon AIR information that assessee has made investment during the year under consideration in Mutual Funds - HELD THAT:-Primary onus is on the assessee to bring cogent evidences to substantiate its contentions whether the amount was invested during the year out of redemption of old Mutual funds or as to exemption of dividend/interest income received by the assessee. The primary onus is on the assessee to bring on record cogent evidences , so that correct income chargeable to income-tax within the provisions of the 1961 Act, is brought to income-tax. It is equally true that if the assessee has made investments in preceding years out of his tax paid known sources, merely redemption of the said old investments cannot be brought to tax , except income earned on it or is specifically provided to be chargeable to tax by the statute i.e. 1961 Act , but the onus is squarely on the assessee to substantiate its taxability or otherwise, by bringing on record cogent material. As also observed that the assessee has deposited cash in its ICICI Bank account on various occasions, and onus is very heavy on assessee to explain these cash deposits. It is for the assessee to substantiate its state of affairs and income which is chargeable to tax. If the assessee fails to discharge its primary onus, then Revenue has all the right to bring to tax unexplained credits, money as well investments. It is equally true that the correct income which is chargeable to tax under the provisions of the 1961 Act, is to be brought to tax for the correct assessment year in the hands of correct assessee. The authorities also must assist assessee in all reasonable ways, so that correct income chargeable to tax under the provision of the 1961 Act is brought to tax for correct assessment year in the hands of correct assessee. Reference is drawn to circular number 14 of 1955, dated 11.4.1955 issued by CBDT. Thus, after considering the entire material on record, I restore the matter back to the file of AO for denovo assessment on merit, in accordance with law - we clarify that I have not commented on the merits of the issues and all contentions are kept open. Needless to say that the AO will give proper and adequate opportunity of being heard to the assessee in set aside remand proceedings. The evidences/explanation submitted by assessee in denovo assessment proceedings shall be admitted by AO and adjudicated on merits in accordance with law. If the assessee do not co-operate in set aside denovo assessment proceedings, the AO shall be free to proceed in accordance with law. Thus, the appeal of the assessee is allowed for statistical purposes 2022 (9) TMI 49 Revision u/s 263 by CIT - Assessee purchased certain lands for development and incurred certain expenditure on it in the form of stamp duty and land development expenses - HELD THAT:- There are no more sale deeds, the copies of which were not filed by the assessee during the original assessment proceedings. The observation made by CIT is totally wrong as he has not looked into this aspect that besides an amount of sale deed, the assessee had incurred certain development expenses and other expenses also, the details of which were submitted to him as well as were submitted to the AO during assessment proceedings. As regards the expenses incurred on these pieces of land, the AO, during assessment proceedings, required the assessee to produce bills/vouchers of such expenses and the assessee, vide letter dated 07/12/2017, placed at pages 33 34 of the paper book, vide reply No. 2, had produced for verification the vouchers of site development and land development etc. The copy of order sheet entry dated 01/12/2017 also supports this fact wherein the AO required the assessee to produce bills/vouchers of site development expenses and the order sheet entry dated 07/12/2017 states that the assessee has filed bills/vouchers of expenses, including lease rent, commission and land development expenses. All these details suggest that the AO has passed the order after taking into account and after examination of all the evidences with respect to amount debited in the purchase account of land. Therefore, there is no justification of initiating and passing order u/s 263 by learned Pr. CIT. For other issue of site wages and other expenses assessee had already filed copy of ledger account of such wages/development expenses vide reply wherein the assessee, in view of notice dated 16/01/2017, had submitted the copy of account of expenses including site wages expenses/development expenses. We further note from the order sheet dated 07/12/2017 that Assessing Officer has noted that details of expenses relating to business promotion, lease rent, commission, petrol, travelling etc. were filed by the assessee and which were checked. Therefore, in view of these facts and circumstances, we find that the Assessing Officer had carried out sufficient examination of the expenses relating to site wages and therefore, passing of order u/s 263 on this account is also not justified. In the present case, the order passed by Assessing Officer on these two issues is neither erroneous nor prejudicial to the interest of Revenue therefore, we cancel the order passed by Pr. CIT on these two issues. In respect of other objections of learned Pr. CIT, the Learned counsel for the assessee did not advance any argument therefore, we have not adjudicated on those issues. Therefore, the action of learned Pr. CIT on those issues, not argued by Learned counsel for the assessee, is upheld. Appeal of the assessee stands partly allowed. 2022 (9) TMI 48 Penalty u/s 271(1)(c) - Defective notice u/s 274 - case of the assessee that the AO while imposing penalty was in a mind of ambiguity and has not arrived at a proper satisfaction since both in the penalty order as well as in the notice u/s 274 r.w.s. 271(1)(c) - HELD THAT:- AO in the entire process of initiation of levy of penalty u/s 271(1)(c) was ambiguous and did not have any clarity of mind so as to under which limb of the provision, he intend to impose penalty on the assessee. There is no evidence on record to suggest that the A.O has arrived at any satisfaction. As per the penalty order and the notice u/s 274 r.w.s. 271(1)(c) of the Act, it is clear that there was ambiguity in the mind of A.O so that he has not struck off the inappropriate limb of the provision and has retained both the limbs i.e. concealment of income and furnishing of inaccurate particulars of income while imposing penalty. This exercise is not at all warranted in the realm of income-tax proceedings. The jurisdictional High court in the case Shri Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT ] has held that the A.O is under obligation to satisfy the appropriate limb of section 271(1)(c) at the time of initiation of levy of penalty. We have also observed that the notice u/s 274 r.w.s. 271(1)(c) is ambiguous and that the A.O has not arrived at satisfaction as to which limb of the provision he is levying the penalty. A.O has not struck off the inappropriate limb of the provision which is evidently noticed. We set aside the order of the ld. CIT(A) and direct the A.O to delete the penalty from the hands of the assessee. The ground of appeal of the assessee is allowed. 2022 (9) TMI 43 Review application - Entitlement to exemption u/s 10B - question whether assessee will be entitled to exemption under section 10B of the Income Tax Act for business of blending of tea being carried on by it taking aid from provisions of other statutes and the policies answered in favour of the revenue and against the assessee - HELD THAT:- The question framed by the Court was argued by the counsels during hearing of the appeal and each and every issue was considered in the judgement [ 2021 (10) TMI 143 - CALCUTTA HIGH COURT] - A review of the judgment is by no means an appeal in disguise whereby a decision is reheard and corrected, but only if an error is apparent on the face of the record. Mere repetition of the same grounds agitated in review is not maintainable when the same relief sought at the time of arguing the appeal had been negatived. 2022 (9) TMI 42 Maintainability of appeal before High Court - Statutory remedy of appeal u/s 246 - TDS u/s 194J - penalty u/s 201 as petitioner-college having failed to deduct tax at source in regard to payment made by way of honorarium to Guest Faculty Lecturers - petitioner submits that in view of undisputed facts involved of the Guest Faculty Lecturers neither falling under technical service nor professional service as per Section 194J statutory remedy of appeal though available is not efficacious, and therefore, grievance raised herein can very well be adjudicated under Article 226 of the Constitution. HELD THAT:- As having perused the material on record and the provisions of Section 194J of Act of 1961, this Court is of the considered view that to ascertain the real object and import of the relationship between petitioner-college and Guest Faculty Lecturers and as to whether Guest Faculty Lecturers on the anvil of Section 194J for the purpose of T.D.S., disputed questions of fact will have to be gone into. It is trite law that writ jurisdiction ought not to be exercised when disputed questions of fact are involved and the relevant statute provides for an alternative efficacious remedy. Petitioner has not availed the alternative efficacious statutory remedy of appeal u/s.246 of Act of 1961 before Commissioner (Appeals). This Court do not see any apparent jurisdictional error in the order of Assessing Authority (Annexure P/1), and therefore, none of the exceptions laid down in the decision of Apex Court in the case of Whirlpool Corporation vs. Registrar of Trademarks, Mumbai [ 1998 (10) TMI 510 - SUPREME COURT] can come to the rescue of petitioner-college. Since an interim order was passed by this Court which continues to subsist till date, this Court grants 45 days time to petitioner-college to approach the Appellate Authority u/s 246 of Act of 1961 and till then the interim order passed by this Court on 02.08.2021 shall continue to subsists. It is made clear that continuance of interim order is made merely to enable the petitioner to approach the appropriate appellate Forum and not to prejudice the mind of Appellate Authority, who is free to adjudicate the appeal on admission as well as on interim relief without being influenced by this order. 2022 (9) TMI 41 Reopening of assessment u/s 147 - sale of the impugned property was duly recorded as the turnover of the Petitioner and a penalty u/s 271D read with Section 269SS - HELD THAT:- This Court is of the view that the impugned order does not consider the contention of the petitioner that the amount received as consideration for the property has already been disclosed by the petitioner in its return and that the said fact had been admitted by the authorities in the penalty order passed under Section 271D - fact that TDS on the sale consideration was duly reflected in the Form 26AS as well as in the Income Tax Return has not been examined. Consequently, the impugned order under Section 148A(d) and the impugned notice under Section 148 of the Act, both dated 30th July, 2022 are set aside and the matter is remanded back to the Assessing Officer for a fresh decision. Petitioner is given liberty to file amended/additional reply to the notice issued under Section 148 of the Act within four weeks. The Assessing Officer is directed to pass an order under Section 148A(d) of the Act within four weeks thereafter in accordance with law. 2022 (9) TMI 40 Exemption u/s 11 - deemed grant of registration - Tribunal justification in applying the time limit of 6 months provided in section 12AA(2) in a case where the order u/s 12AA is to be passed in second round to ITAT'S direction - HELD THAT:- It is not the intention that if, on an appeal filed against such an order, any directions are issued and thereafter any decision is taken which is taken beyond the period of six months then such a decision would be a nullity in view of sub-Section (2) of Section 12A of the Act, 1961. Any such understanding of the provision would be against the express language of the provision. Once a decision is taken on the application within the period of six months envisaged in Section 12AA(2) then subsequent events are irrelevant so far as application of Section 12AA(2) of the Act is concerned. The period of six months referred in Section 12AA(2) has to be calculated from the end of the months in which the application under Section 12A was received and not from any other date. Therefore, we are of the opinion that substantial questions of law framed at point no.(1) has to be answered in favour of the Revenue and against the Assessee. Tribunal was not justified in applying Section 12AA(2) of the Act, 1961 in the facts of the present case and the order of Commissioner of Income Tax, Faizabad could not have been set aside on this ground. The decision of the Tribunal is based on a misreading and misunderstanding of Section 12AA(2) of the Act, 1961, its purport and scope. Deemed registration - Recent decision of Hon'ble the Supreme Court in 'Harshit Foundation Sehmalpur Jalalpur Jaunpur [ 2022 (5) TMI 179 - SC ORDER] wherein this very question of 'deemed registration' arose and their Lordships of Hon'ble the Supreme Court after considering the Full Bench decision in the case of CIT vs. Muzafar Nagar Development Authority [ 2022 (5) TMI 179 - SC ORDER] approved the same and dismissed the Special Leave Petition against the judgment of a Division Bench of this Court [ 2015 (3) TMI 99 - ALLAHABAD HIGH COURT (LB)] rendered in Income Tax Appeal Defective No.24 of 2013 'Commissioner of Income Tax Faizabad vs. Harshit Foundation Sehmalpur Jalalpur Jaunpur'. Law on the question of 'deemed registration' which had already been clarified and declared by the Full Bench of this Court referred hereinabove stands further crystallized and approved by Hon'ble the Supreme Court by the aforesaid decision. In view of the aforesaid declaration of law, decision of the Division Bench of this Court in the case of Society for the Promotion of Education, Adventure Sport Conservation of Environment [ 2008 (4) TMI 700 - ALLAHABAD HIGH COURT] is not good law as held by the Full Bench though it may be binding between the parties in view of the order passed in the civil appeal arising therefrom as already discussed. Substantial question no.(2) is answered in terms of the Full Bench decision in the case of CIT vs. Muzafar Nagar Development Authority [ 2015 (3) TMI 99 - ALLAHABAD HIGH COURT (LB)] and decision of Hon'ble the Supreme Court in the case of Harshit Foundation Sehmalpur Jalalpur Jaunpur [ 2022 (5) TMI 179 - SC ORDER] in favour of the Revenue as there is no question of deemed registration merely because the application is not decided within the period of six months referred in Section 12AA(2) of the Act, 1961. Power to grant or refuse registration - In view of the discussion already made in the context of substantial question nos.1 and 2 and for the reasons mentioned hereinabove, we hold that the Tribunal erred in granting deemed registration to the Assessee under Section 12AA of the Act, 1961. We, accordingly, answer question no.(3) in favour of the Revenue and against the Assessee. 2022 (9) TMI 39 Nature of expenditure - amortization of lease premium paid to the Noida Authority - Capital expenditure or Revenue Expenditure - HELD THAT:- Admittedly, the issues of law and fact in the lease deeds executed between the Appellant as well as the Noida Authority, Vishakhapatnam and Tuticorin Authorities are similar to the case decided by the learned Predecessor Division Bench in [ 2012 (7) TMI 526 - DELHI HIGH COURT] held that the said expenditure is capital expenditure. Consequently, the present appeal is disposed of in terms of the judgment of the learned Coordinate Bench in [ 2012 (7) TMI 526 - DELHI HIGH COURT] 2022 (9) TMI 38 Undisclosed profit and unaccounted investment in undervalued goods - survey action under section 133A - CIT-A deleted the addition also confirmed by ITAT - AO has made addition based on the information received from DRI - HELD THAT:- AO has not mentioned any independent investigation carried out by him which leads to finding of making addition and further the Assessing Officer simply relied upon the information received from the Customs authority regarding the search action conducted by the officers of the DRI. It is held by both the authorities below that the Assessing Officer has committed an error by solely relying on information received from the customs authority and treated the undervaluation of the imported goods as unaccounted investment and thereby making peak addition on account of the same. Assessing Officer also made addition of Gross Profit by taking such unaccounted purchase as sale made by the assessee in cash without making any independent inquiry. It was observed by both the authorities that the Assessing Officer has solely relied upon the information from the Customs authority and statement of Pragnesh Jariwala - Director of the assessee-company made before DRI which was retracted later on. Tribunal has also considered the fact of the appeal being allowed by the Custom, Excise Service Tax Appellate Tribunal, Mumbai Bench in case of assessee holding that the allegation of undervaluation of imported goods was not established and therefore, directed the Customs Authority to grant the refund of customs duty collected by them. It was observed by the Tribunal that when the very basis on which the addition was made by the Assessing Officer stands deleted by the CESTAT in appeal preferred by the assessee, the addition based on their information does not survive and hence, the CIT(Appeals) has rightly deleted the addition on account of unaccounted investment and Gross profit. No substantial question of law. - Decided against revenue. 2022 (9) TMI 37 Capital gain computation - rectification application u/s 154 as stated that the cost of acquisition of property sold was wrongly adopted in the return filed for the assessment year 2016-17 which resulted in capital gains - AO concluded that the assessee has not filed any revised return of income under section 139(5) of the Act and therefore, the plea of the assessee was not considered and moreover, there was no error in the assessment order passed under section 143(3) - HELD THAT:- Assessee has not made any fresh claim, but plea for modify the claim of deduction, in fact, during the course of assessment proceedings, the assessee has brought to the notice of the Assessing Officer that the cost of acquisition of property sold was wrongly adopted in the return of income filed for the assessment year 2016-17 which resulted in capital gains. Since the Assessing Officer has not heed to the plea of the assessee and rejected the claim to modify the deduction since the assessee has not filed revised return under section 139(5) by following the decision of the Hon ble Supreme Court in the case of Goetze (India) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] the Assessing Officer rejected the claim of the assessee. On appeal, while dismissing the appeal of the assessee, the ld. CIT(A) has observed that the issue is not amenable to section 154 of the Act, and if at all, the issue should have been challenged by the assessee by an appeal against the order under section 143(3) of the Act dated 30.12.2018. The ld. Counsel for the assessee has submitted that the appeal against the order under section 143(3) of the Act dated 30.12.2018 is pending before the ld. CIT(A). Under the above facts and circumstances, we remit the matter back to the file of the ld. CIT(A) to adjudicate the claim of deduction while adjudicating the appeal against the assessment order under section 143(3) of the Act by affording reasonable opportunity of being heard to the assessee. Appeal filed by the assessee is allowed for statistical purposes. 2022 (9) TMI 36 Net profit estimation - total cash deposits treated as the turnover of the assessee - HELD THAT:- It is well settled principle of law that the holder of account is under legal obligation to explain source of cash deposits in his bank account. It is categorically stated by the AO that the assessee grossly failed to furnish supporting evidences in support of its contention that the deposits are related to purchases of live stocks. If it was so, even then burden was on assessee to prove the veracity of such claim. In the absence of supporting evidences, the authorities below are justified in treating the entire cash deposits as turnover of the assessee. However, it is noticed that both the authorities below have applied net profit on estimation basis, without verifying it by making field inquiries. CIT(Appeals) has applied net profit @ 8%. Both the lower authorities have not considered comparable instances from market regarding similarly situated traders.It would sub-serve the interest of substantial justice if 5% is adopted as a net profit. AO is, therefore, directed to adopt 5% as net profit and re-compute the addition accordingly. The grounds of appeal are partly allowed. 2022 (9) TMI 35 Deduction u/s 54F - Deduction not claimed in the return of income filed - HELD THAT:- Hon ble Supreme Court s judgment in the case of Goetz India Ltd [ 2006 (3) TMI 75 - SUPREME COURT] that dealt with a fresh claim made in the income tax return, and this claim was made by way of filing a letter, rather than by revising the income tax return. Taking note of this position, Their Lordships had observed that The return was filed on 30-11-1995 by the appellant for the assessment year in question. On 12-1-1998, the appellant sought to claim a deduction by way of a letter before the Assessing Officer (emphasis, by underlining, supplied by us). It was in this context that Their Lordships held that such a course of action was impermissible. That is not the case, as learned CIT(A) has rightly appreciated, before us. Here is a case in which a claim for exemption was rightly made, but only a wrong section was quoted while making a claim, which is qualitatively different from was no fresh claim was such. In our considered view, therefore, the Assessing Officer was indeed in error in adopting such a hyper-pedantic approach and in holding that there was a fresh claim for exemption under section 54F. The grievance raised by the Assessing Officer, in this appeal, is, therefore, devoid of any legally sustainable merits. It proceeds on the fallacious assumption that a change of section, on account of an inadvertent and bonafide error, under which the claim is made, by itself, amounts to a fresh claim. We reject the same. We approve the conclusions arrived at by the learned CIT(A) and decline to interfere in the matter. Appeal dismissed. 2022 (9) TMI 34 Addition on account of certain loose slip found during the course of search - as contended that during the course of assessment proceedings, balance sheet duly disclosing the capital work-in-progress and amount payable towards such purchases was duly submitted - HELD THAT:- CIT(A) has not accepted the contention of the assessee holding that no bills have been submitted in respect of purchases besides the assessee has failed to explain the source of making the payment in the next financial year. In our view, where the liability towards such purchases has been shown under the head capital work-in progress which corresponds to document found during the course of search and which continues to remain outstanding (and payment not being made during the year) in the books of accounts at the year end, it is a case where the assessee has neither claimed the expenditure during the year under consideration nor any payment has been made during the year under consideration, the question of disallowance or making an addition towards the same doesn t arise and is hereby directed to be deleted. In the result, the ground of appeal is allowed. Addition on account of non disclosure of work-in-progress in the Income Tax Return - HELD THAT:- Firstly, regarding receipts from professional activities and from agricultural income, CIT(A) has not accepted the same holding that no documentary evidence has been filed in support thereof which has now been contested by the assessee stating that the said receipts have been duly disclosed in the return of income and has been accepted by the AO. We agree with the contention of the assessee that where the nature and source of receipt has been duly accepted by the Revenue, there is no basis to deny the claim of the assessee as the source of investment in his real estate projects and the addition is hereby directed to be deleted. Receipts on account of unsecured loan from three persons - The claim of the assessee has been denied by the CIT(A) holding that these transactions are not reflected under the head unsecured loans in the balance sheet as on 31.03.2018. The claim of the assessee however has been that these unsecured loans were taken in personal capacity by the assessee and the amount has been received in his saving bank account and thereafter, these amounts have been transferred by way of capital contribution to the account of M/s M.P Builders Developers and has been shown under the head capital contribution and form part of Rs 43.66 lacs capital contribution which is not under dispute. On perusal of the documents available on record, we believe that the assessee has sufficiently explained the source of investment in his real estate projects by way of loan taken in personal capacity which has been invested and show as capital contribution. In the result, the addition is directed to be deleted. In the result, the ground of appeal is allowed. Addition on account of alleged investment in jewellery - As contended that the value of jewellery found during the course of search is well within the limits as provided in CBDT Instruction no. 1916 dated 11.05.1994 as corroborated by the copy of panchnamas and department valuer report. The panchnamas and the department valuer report are part of the assessment records and the same can be verified to examine veracity of the contention so raised by the assessee. We accordingly set-aside the matter to the file of the AO to examine the said contention as per law after providing reasonable opportunity to the assessee. In the result, the ground of appeal is allowed for statistical purposes. 2022 (9) TMI 33 Disallowance of payment of royalty - payment to related party - royalty paid to Shriram Ownership Trust as classified as payment to related party - HELD THAT:- As in the case of DCIT v. Shriram City Union Finance Limited [ 2019 (11) TMI 42 - ITAT CHENNAI ] decided the issue against the Revenue. CIT(A) has rightly deleted the disallowance made by the AO towards payment of royalty - we find no infirmity in the order passed by the ld. CIT(A) on this issue. Accordingly, the ground raised by the Revenue is dismissed. 2022 (9) TMI 32 Rectification u/s 154 - Addition u/s 68 - contention of the assessee that increase in cash in hand was to correct the accounting error committed by the assessee s Accountant and the said sum was already included in the addition made u/s 68 - HELD THAT:- Upon verification, the assessee noticed that this amount was paid by Motcab Finance Pvt. Ltd. to the assessee on 14.09.2015, which inadvertently was considered by the assessee s Accountant as cash in hand deposited into assessee s account, resulting in a decrease in cash balance (Therefore it was submitted that amounts received from Motcab Finance Private Limited was Rs.3.88 crore during the year and not Rs.3.58 crore). Immediately thereafter, revised return was filed on 03.11.2017 with updated schedules. Accordingly, as per the revised return, the AO had completed the assessment by making the total addition of Rs.3.88 crore (3.58 crore + 30 lakh). The original return and the revised return filed by the assessee are placed on record. In the original return, the loans and advances outstanding was disclosed at Rs.9,70,90,675 and the same was increased by Rs.30 lakh in the revised return to Rs.10,00,90,675 - Further, the cash in hand as per original return was at Rs.3,48,71,938 and the same was increased by Rs.30 lakh to a sum of Rs.3,78,71,938 - AO and the CIT(A) had considered the addition of Rs.30 lakh on a standalone basis without reference to the corrections made in the revised return. (increase in cash in hand and loans advances). The addition of Rs.30 lakh is made in a rectification order passed u/s 154 - There is no mistake apparent and facts on record only discloses an error in accounting entry by the Accountant, which does not warrant a rectification u/s 154 - Further, this amount of Rs.30 lakh is prima facie already included in Rs.3.88 crore while the A.O. making the addition u/s 68 of the I.T.Act. For the aforesaid reasons, we quash the rectification order passed u/s 154 - Assessee appeal allowed. 2022 (9) TMI 31 Revision u/s 263 by CIT - claim of Deduction u/s 80IB (10) - lack of enquiry by AO - HELD THAT:- It emerges during the course of hearing that although the assessee has claimed section 80IB (10) deduction as per the seized documents(supra), the fact remains that the alleged payee Mr. Sagar Bagul had nowhere purchased the corresponding residential unit so as to satisfy the clinching derived from condition having first degree nexus in light of Landmark decision in Liberty India [ 2009 (8) TMI 63 - SUPREME COURT] . This is indeed coupled with the fact that the assessee also could not invite our attention to the Assessing Officers detailed inquiries on the instant issue as well. We thus quote Malabar Industrial Co. [ 2000 (2) TMI 10 - SUPREME COURT] that lack of such an inquiry during the assessment itself renders the same to be an erroneous one causing prejudice to interest of the Revenue. We accordingly affirm the Learned PCIT s revision directions qua the instant former issue. PCIT s directions regarding application of section 269(SS) r.w.s 271D penalty - DR could hardly dispute that there is no loan agreement between the assesses and Mr. Bagul which could attract the forming penal provision as such a seized document indeed carries presumption of correctness u/s 292(c ) of the Act. We therefore reverse the impugned revision direction to this effect in para 7 in very terms. Ordered accordingly. 2022 (9) TMI 30 Revision u/s 263 - AO had wrongly accepted section 80P(2)(a) deduction claim regarding interest income derived from deposits made in the co-operative banks - HELD THAT:- We have given our thoughtful consideration to the Revenue s foregoing arguments supporting the learned PCIT s revision directions and find no merit therein as this tribunal s recent co-ordinate bench s order in Rena Sahakari Sakhar Karkhana [ 2022 (1) TMI 419 - ITAT PUNE ] held that 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) CIT-DR could hardly pinpoint any distinction on facts and on law regarding the instant issue of 80P deduction claim raised on interest income derived from deposits made in co-operative banks. We accordingly reverse the learned PCIT s revision directions in issue. Ordered accordingly. 2022 (9) TMI 29 Penalty u/s 271(1)(c) - concealment of income v/s furnishing of inaccurate particulars of income - Whether notice issued u/s 274 did not mention specific default on which penalty was sought to be levied? - HELD THAT:- AO failed to consider regarding that there is no escapement of income being which is exemption of special allowance claimed by the assessee are genuine - AO erred in finding that the income of the assessee shown by him in his return of income filed for the assessment year 2012-13 as escaped income. We observed that the exemption was claimed by the assessee on the basis of expert advice of tax professional regarding the special allowance. During the course of reassessment proceedings when the assessee came to known that the exemption was claimed incorrectly the assessee himself withdrew the claim and paid due taxes along with interest amount. We also observed that the CIT(A) has recorded the written submissions filed by the assessee during the appellate proceedings which is considered carefully and but in holding the finding of the AO is unjustified. Going through the present facts and circumstances of the case we are of the view that concealment of income is quite different from furnishing of inaccurate particulars of income. No hesitation on this point to delete the penalty and the addition made. In support, reliance was placed on the judgments referred by the AO and CIT(A) without appreciating that facts of the case are on different facts than that the assessee s case where the assessee not only provided explanation regarding the source of amount but also explained the reasons for its claim as exempt when the assessee came to know about error in return as per advice of erstwhile tax consultant and the assessee deposited the tax amount along with interest due u/s 234B 234D. CIT(A) and the AO impose the penalty is unjustifiable. Reliance was placed on the judgments in case of CIT vs. reliance Petrochemicals Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT ] and in case of M/s Rane Industries Pvt. Ltd. [ 2022 (6) TMI 1298 - ITAT PUNE] where the assessee s case is similar and identical where no hesitation to delete the penalty by following precedents where the excess claim of deduction was due to bona fide and unintentional mistake. Assessee appeal allowed. 2022 (9) TMI 28 TP Adjustment - AMP expenditure as established as an international transaction - HELD THAT:- We set aside the whole issue back to the file of the learned Assessing Officer/ Transfer Pricing Officer for determination of Arm s Length Price of international transition of excess AMP spend of the assessee Capital work in progress - assessee has shown a capital work in progress at schedule 6 of the fixed assets - Assessee objection before the learned dispute resolution panel who gave a direction to allow project cost expenditure to the extent third party bills has been submitted by the assessee - HELD THAT:- The fact shows that in this year the assessee has shown a capital work in progress and has not claimed any deduction. Therefore, the question of making any disallowance or addition on that account does not arise in this year. However when the assessee makes capitalization of the capital work in progress into fixed assets, the learned assessing officer has every right to examine the actual cost of the asset, when it is put to use an the use for business purpose for allowability of the depreciation. Therefore, at present, the findings of the learned assessing officer are premature. Accordingly, ground number 19 of the appeal is allowed. Disallowance of bad debt - Assessee did not submit any detail and therefore the claim of the bad debt was disallowed - HELD THAT:- Before the lower authorities, the assessee did not submit any information. Therefore, the addition was confirmed. Even in the form of additional evidences before us, the assessee has merely submitted the name of the parties, the amount, and the permanent account number of some of the parties. For the claim of the bad debt, the assessee should have shown that these amounts have been included in income of the assessee in earlier years. The assessee has failed to show the same. Therefore, we do not find any infirmity in the orders of the lower authorities in confirming the disallowance of the bad debt. Accordingly, ground number 20 of the appeal is dismissed. Mismatch in annual information return - AO asked the assessee to reconcile the AR information as per 26 AS with the books of accounts - HELD THAT:- We find that merely because there are difference between the AIR and the books of account, the addition cannot be made but it is the first trigger point for making further investigation and obtaining the details from the assessee to justify the difference. If the assessee can reconcile such difference and even otherwise satisfy the learned assessing officer, that such addition is unwarranted, the addition is not required to be made. As the learned assessing officer as well as the learned DRP has made the addition merely on the basis of the difference between form No 26 As and failure of assessee to reconcile it with the books , we set-aside this ground of appeal back to the file of the learned assessing officer with a direction to the assessee to satisfy the learned assessing officer by producing the relevant details that there is no mismatch between income offered by the assessee as well as items reported in AIR. If the learned assessing officer is satisfied with the same, the addition deserves to be deleted. Therefore, the learned assessing officer may verify the information furnished by the assessee and decide afresh in accordance with the law. Accordingly, ground number 24 of the appeal is allowed with above direction. Disallowance of royalty u/s 37 (1) - AO asked the assessee to furnish the information about the royalty paid to Diageo North America and why shame should not be disallowed u/s 37 (1) - Whether assessing officer is not authorised to consider the benefit test and make the disallowance u/s 37 (1) of the act.? - HELD THAT:- The identical issue arose in case of the assessee for assessment year 2010 11 before the coordinate bench and it was decided in [ 2019 (12) TMI 1615 - ITAT MUMBAI] wherein the issue was set aside to the file of the learned assessing officer. Therefore with similar direction we also set-aside ground number 25 of the appeal. Accordingly, this ground is allowed with above direction. Charging of interest u/s 234A - Assessee submits that the return of income was filed by the assessee on 22/11/2011 whereas the due date for filing of the return of income was 30/11/2011 and therefore no interest u/s 234A of the act should have been charged, as there is no delay in filing of return of income - HELD THAT:- Apparently, if the assessee has filed the return of income within the due date prescribed u/s 139 (1) of the act, interest u/s 234A cannot be levied. Therefore, the learned assessing officer is directed to delete the interest charged under that Section. Ground number 27 of the appeal is allowed. 2022 (9) TMI 27 Penalty u/s. 271(1)(c) - Defective notice u/s 274 - non specification of charge - HELD THAT:- AO had though observed that there is concealment of income and accordingly Assessee company is liable for penalty proceeding u/s. 271(1)(c) of the Act. However, when the notice was issued on 27.03.2015 there was no specific indication of the limb of the default. Further during the penalty proceeding while making the conclusion the AO observed in view of the above discussions and decided case laws, I hold that the Assessee had concealed/furnished inaccurate particulars of its income and is liable for imposition of penalty u/s. 271(1)(c) of the Act as follows . Thus, inspite of giving observation in the assessment order that there is concealment of income. Notice issued and the penalty order makes it ambiguous as to under which limb, the penalty order has been passed. Para 7 of the order of Ld. FAA shows that this argument was specially raised and relevant precedents were cited but Ld. CIT(A) has failed to make any discussion on this aspect - Following the settled proposition of law recognized in Pr. CIT Vs. Sahara Life Insurance Company Ltd.[ 2019 (8) TMI 409 - DELHI HIGH COURT] that where there is failure on the part of the AO to indicate and specify under which limb of section 271(1)(c) penalty proceedings has been initiated, the penalty order cannot be sustained. The ground No. 1 stands allowed and as very exercise of jurisdiction becomes vitiated. Appeal of assessee allowed. 2022 (9) TMI 1 Nature of expenditure - Disallowance of royalty claim - revenue or capital expenditure - HELD THAT:- Similar issue on an identical fact was subject matter in appeal before the Tribunal for the assessment year 2016-17 [ 2019 (11) TMI 42 - ITAT CHENNAI] CIT(Appeals) has rightly found that the payment made by the assessee is in the revenue field. In fact, similar addition made by the Assessing Officer for the assessment year 2002-03 was deleted by this Tribunal. The CIT(Appeals) by placing reliance on the order of this Tribunal in Shriram Tamil Nadu Pvt. Ltd. allowed the claim of the assessee. DR could not controvert the above decision of the Tribunal by filing any higher Court s decision having modified or reversed the order of the Tribunal. Respectfully following the above decisions of the Tribunal, the ld. CIT(A) has rightly deleted the disallowance made by the Assessing Officer towards payment of royalty. Thus, we find no reason to interfere with the order passed by the ld. CIT(A). Accordingly, the ground raised by the Revenue is dismissed. Customs 2022 (9) TMI 26 DFIA Scheme - Conditional provisional release of goods - in-shell walnut - whether the subject walnuts in-shell are covered under the description of input entries dietary fibre and therefore, whether same can be permitted for duty free clearance against the DFIA issued against the export under SION E5 which inter-alia permits duty free import of dietary fiber ? - time limitation. HELD THAT:- In the case at hand, it is observed that the respondent-company has imported 791 bags of in-shell walnuts under Bill of Entry No.9878513 dated 31st January, 2019 and has claimed exemption under the said notification dated 11th September, 2009 on the strength of the DFIA against import item of dietary fibre under SION E5. The said goods as mentioned earlier were cleared without payment of duty and exemption benefit was allowed. The custom authorities have however seized the said 791 bags lying in the godown of Hemkunt Agro Care Private Limited on the pretext that in-shell walnuts do not fit into the description of dietary fibre . In our view, once the transferability of the DFIA having been approved and effected by the licensing authorities, customs authorities cannot impose restrictive condition on the transferee to deny the exemption sought. The technical opinion by JNCH Lab dated 8th August, 2018 suggests that in-shell walnuts can be used as dietary fibre. The usability of walnuts in biscuits is well known. It is settled law that it would not be open to any one to take a contrary stand unless and until such technical opinion is displayed by specific and cogent evidence in the form of technical opinion. Whether the impugned order passed after ten months from the date of conclusion of hearing is justified? - HELD THAT:- It is observed that there is no ground taken with respect to the said question. Secondly, there is no statutory limitation prescribed under the Customs Act to pass any order within any certain period of limitation after the conclusion of the hearing. Therefore, the said question, does not raise any question of law let alone a substantial one. The adjudicating authority has discretion with respect to the security and conditions that he may require while provisionally releasing the seized goods. It is settled law that what power or discretion that is vested in an adjudicating authority can also be exercised by the appellate authority or the Tribunal. The Tribunal has exercised its discretion and in our view rightly so to unconditionally release the goods dispensing with the condition of bank guarantee and bond/undertaking imposed by the adjudicating authority for release of the subject goods. The order of unconditional release of the seized goods passed by the Tribunal cannot be faulted with. There is no error apparent or perveristy in the order of the Tribunal. The appeal does not raise any substantial question of law and is dismissed. 2022 (9) TMI 25 Refund of Customs Duty - refund claim filed after threshold of limitation prescribed in section 27 of Customs Act, 1962 or not - Central Board of Excise Customs (CBEC) in circular no. 45/2016-Cus dated 23rd September 2016 - HELD THAT:- There is no doubt that public notice no. 30/2015-20 dated 8 th September 2016 did prescribe mode of surrender of one or the other to be exercised within nine months thereof with the observation that penal consequences and detriment would not follow. The disinclination of the lower authorities to adhere to this commitment in the public notice, adopted in its entirety by Central Board of Excise Customs (CBEC) in circular no. 45/2016-Cus dated 23rd September 2016, was the direction in the latter that pending cases be disposed off accordingly. The duty and interest liability were made good before issue of show cause notice despite which proceedings under section 28 of Customs Act, 1962 were initiated and, it would appear, as mandatory penalty under section 114A of Customs Act. 1962 was invokable. The recovery was required to be completed by issue of adjudication order; however, under the new incorporation in section 28 of Customs Act, 1962, facility of reduced penalty was made available and the appellant opted for the benefit bringing the proceedings to a conclusion on their own which, even without a speaking adjudication order, is closure and not dropping of proceedings - The existence of protest is not germane to consequential relief with its own self-contained frame of limitation. The claim for refund is not maintainable; that would be tantamount to interference with concluded, and unchallenged, proceedings - Appeal dismissed. 2022 (9) TMI 24 Valuation of imported goods - undervaluation - rejection of declared value - Admissibility of evidences - corroboration of the printouts with any independent evidence - demand is raised on the basis of an investigation conducted by the department pursuant to the search operation office premises of Appellant importer - cross-examination of witnesses. Whether the appellants undervalued the 6 V and 12 V batteries they imported from Honk Kong/ China over the years? - Whether the allegation made by the department legally sustainable in the face of the evidence put forth by investigation? HELD THAT:- On close reading of Section 138C of the Act, 1962, it is observed that the Customs Act has prescribed the detailed procedure to accept the computer printouts and other electronic devices as evidences. It has been stated that in any proceedings under the Customs Act, 1962, where it is desired to give a statement in evidence of electronic devices, it shall be evidences of any matter stated in the certificate. In present case we find that the mandatory provisions of Section 138C of the Act were not complied as regard use of printouts as evidence. From the facts of the case and the Panchnama prepared for opening up of hard disks and their mirror image, it is clear that the same were not undertaken in presence of any authorized person. The entire case is based upon the electronic documents as evidence. However no compliance with the provisions of Section 138C has been made to establish the truthfulness of neither the documents nor the seizure memo was made and neither the same was presented before adjudicating authority. Thus the evidence of electronic devices in the form of printouts cannot be relied upon as evidence. When the department conducted market survey and the persons were there witness, it was their duty to mention name of person on such Proforma invoice or to find such person from cross examination as the Appellant were not made present during market survey. The market survey was conducted in absence of Appellant and they could not be expected to name the person who has issued such Proforma invoice. When the revenue itself does not knows as to who has issued such Proforma invoice and there is no statements of makers of such invoice, in that case the Proforma invoices has no evidentiary value. Further as the cross examination was not given the Proforma invoices cannot be relied upon. The redetermination of value under Rule 3 (1) on the basis of printouts and other documents taken from Hard disks is not sustainable. Further in case of M/s Suqian Yongda Imp Exp Trade Co. Ltd. and Guanzhou NPP Power Co. Ltd. the value has been re-determined under Rule 5 of Valuation Rules. As there is no evidence hence the transaction value was proposed based upon correspondence with local buyers through emails and printout from hard disks - in the instant case the Appellant had imported more than 15 lakhs batteries from suppliers over the period of time and were regular importer in bulk. Hence the imports cited by the revenue are not comparable and cannot be said to be contemporaneous. Similarly in case of 12 Volt battery we do not find any evidence to reject the declared value apart from reliance based on printouts and also on the face of the facts that no contemporaneous imports of such bulk quantity has been relied upon. There is no reason to reject the declared prices and the impugned order is not sustainable. Similarly, in appeal filed by Shri Kapil Garg, as the charges of undervaluation are not sustainable, hence there is no reason to impose penalty upon him - Appeal allowed - decided in favor of appellant. 2022 (9) TMI 23 Valuation of imported goods - allegation of over-valuation of the goods that were imported for the purpose of setting up Transmission Lines and Substations in the State of Maharashtra - who is actual importer of goods? - MEGPTCL or PMC? - reliability of documents, admissible evidences or not - EPC contract - related parties or not - Whole effect of contract/effect of registration under PIR - rejection of value declared by PMC and MEGPTCL - goods liable to confiscation under sub-section (d) and (m) of section 111 of the Customs Act or not - levy of penalty under sections 112(a) and 112(b) of the Customs Act and section 114AA of the Customs Act on the noticees. Who is the importer? - While it is the case of the Department that MEGPTCL is the importer as it had declared itself to be owner of the goods, it is the case of both MEGPTCL and PMC that the importer is PMC - HELD THAT:- As per Section 2 (26) of the Customs Act, an importer in relation to any goods includes any owner or any person holding himself out to be an importer. In the present case, it is not in dispute that the Bills of Entry were filed by PMC. It is also not in dispute that in respect of 26 consignments where benefit of Chapter Heading 98.01 of the Tariff Act was not available, duty has been paid by PMC on the tariff value at the time of assessment under section 14 of the Customs Act. For an assessee to fall within the term importer , it is necessary that an assessee, as the owner of goods, clears the goods for home consumption by filing a Bill of Entry. It is important to note that the definition of importer also includes any person who holds himself out as the importer vis- -vis the goods in question between the date of its importation until the time of its clearance for home consumption. MEGPTCL did not hold itself out to be the importer. Undisputedly, the Bills of Entry were filed by PMC and right from filing the Bill of Entry to the stage of investigation PMC held itself to be the importer. The document of title, on the basis of which ownership is determined, is the Bill of Lading. It is not the case of the department that the Bill of Lading was not in the name of PMC, for it is on the basis the said Bill of Lading that PMC had filed the Bills of Entry as an importer. Thus, MEGPTCL cannot be termed as an importer or de-facto importer as claimed by the Revenue. There is no difficulty in holding that PMC alone can be treated as the importer of goods as the Bills of Entry were filed by it and duty with respect to 26 consignments was also paid by it - the definition of term importer was amended w.e.f. 31.03.2017 wherein the term beneficial owner was for the first time, introduced. A person who would fall under the category of beneficial owner can also be treated as an importer w.e.f. 31.03.2017. The change in law w.e.f. 31.03.2017 would apply to all imports on or after that date and would not be applicable to imports made prior to the said date. In the instant case, the imports took place much prior to the said amendment. Documents admissible as evidences - It is the case of the Department that each document was authenticated and attested under the seal of Bank and was received under the letter head of the Bank - HELD THAT:- A bare perusal of section 138C of the Customs Act reveals that a computer print-out is admissible as direct evidence under the Customs Act if the condition mentioned in sub-section (2) is satisfied. Section 138 C (4) deals with cases where any document is required to be produced as an evidence in proceedings under the Customs Act and the Rules framed thereunder - as the provisions of section 138C (4) of the Customs Act have not been satisfied for the reason that the certificate prescribed therein has not been furnished, the documents obtained by Directorate of Revenue Intelligence from various banks outside India cannot be admitted as evidence. Reliance cannot, therefore, be placed on these documents for this reason. The documents relied upon by the Department are inadmissible as evidence as the authenticity of the same have not been proved in terms of provisions of sections 138C(4) and 139(ii) of the Customs Act. Related parties or not - It is the case of Revenue that since Dharmesh Parekh, an employee of PMC, had signed the contract executed between EIF and the Original Equipment Manufactures as an authorized signatory of EIF, the distinction between PMC and EIF was obliterated - HELD THAT:- Under the provisions of Customs Act, two parties can be termed and treated as related if they fall within any of the eight clauses of rule 2(2) of the Valuation Rules. It is no doubt true that Dharmesh Parekh was an employee of PMC and that PMC and EIF were part of the Consortium and had entered into an agreement for supply of Transmission Equipment, and that Dharmesh Parekh, being an employee of PMC, had signed the contract that was entered between EIF and Original Equipment Manufactures on behalf of EIF, but there is nothing which may prohibit and disqualify an employee of PMC to be authorized by EIF for signing a contract on its behalf. The said act of authorizing an employee of PMC to sign a contract on behalf of EIF cannot lead to a conclusion that EIF and PMC were related to each other under rule 2(2) of the Valuation Rule. There are no merit in the contention of the Department that PMC was only a contractor acting as a conduit on behalf of the buyer. EPC Contract - nature of the contract entered into between PMC and EIF - HELD THAT:- The respondents are correct in their submission that the contract between PMC and EIF cannot be compared with contract executed between EIF and Original Equipment Manufactures. The submission advanced by the learned special counsel for the revenue that this was an afterthought cannot be accepted. The letter issued by the Engineering Firms states that the extended warranty of 10 years for critical equipment such as Transformers and Shunt Reactors would be somewhere in the range of 8% to 9% per annum and 80% to 90% for 10 years. This apart, other factors such as liquidated damages, type testing charges, stringent delivery schedule cannot also be overlooked. Due to a default on the part of EIF, PMC could charge liquidated damages to the extent of INR 700 Millions from EIF. There are no hesitation in holding that the contract between PMC and EIF and EIF and the Original Equipment Manufactures cannot be compared as there is a clear difference. The contract executed between PMC and EIF is, therefore, an EPL contract. Valuation of goods - Department has proposed to reject the value of imported goods declared by PMC and sought redetermination of the same, basis the transaction between the supplier namely, EIF and the Original Equipment Manufactures- whether the Department is justified in redetermining the value of the goods on the basis of the Valuation Rules? - HELD THAT:- The provision of rule 12 of Valuation Rules read with section 14 of the Customs Act have been invoked and the redetermination of the value is sought to be made under rule 4 of the Valuation Rules read with section 14 of the Customs Act. - It has already been found that the documents, which form the basis for the proposed redetermination of value, are inadmissible in evidence. Therefore, they cannot be considered for seeking a redetermination of the value - Even otherwise, the value could not have been rejected and redetermined. In terms of General Exemption Notification dated 01.03.2002 at serial no. 424, High Voltage Power Transmission Project equipment was permitted to be cleared under concessional rate of customs duty. Thus, concessional rate of customs duty benefit was available for 765KV auto transformers, shunt reactors, isolators and surge arrestors, subject to fulfillment of the conditions specified therein - No objection was raised by the Department at the time of clearance of goods and the assessment was finalized under section 14 of the Customs Act. All other Bills of Entry, where the benefit under Chapter Heading 98.01 of the Tariff Act was availed, were assessed provisionally and subject to reconciliation under PIR. There is no dispute that all goods/items have been imported against the approved list of goods registered with Customs and the value as declared by PMC in the Bills of Entry have also been accepted by Customs. There is also no dispute that the goods imported are mentioned in the approved list. It is true that fraud would vitiate everything, but then fraud has not only to be alleged but also proved. In the present case, the documents that form the basis of the allegation of overvaluation cannot be relied upon by the Department as the same cannot be admitted as evidence under the Customs Act. The allegation of fraud, therefore, has not been proved - the proposition that despite finalization of assessment under section 14 of the Customs Act, the provisions of section 111(m) of the Customs Act can still be invoked cannot be accepted. While the Department has placed reliance on evidence which have been found to be inadmissible, the respondents have submitted contemporaneous data with evidence in the form of a letter stating that in case of extended warranty the premium on the product would be 8 to 9% per year. No error can, therefore, be found in the view taken by the adjudicating authority and it is also in accordance with the law laid down by the Supreme Court in COMMISSIONER OF CUSTOMS, CALCUTTA VERSUS SOUTH INDIA TELEVISION (P) LTD. [ 2007 (7) TMI 9 - SUPREME COURT] wherein it was held that in the absence of contemporaneous imports, the transaction value cannot be discarded. The transaction value, therefore, has to be accepted and the question of redetermination of the value does not arise at all. No error can be attributed to the aforesaid finding of the adjudicating authority as undisputedly when the whole bidding process was ongoing and when PMC was awarded the contract, MSETCL was a part of the Joint Venture. In such circumstances, it is difficult to accept the submission regarding the alleged overvaluation - the documents which formed the basis of redetermination have also been held to be inadmissible in evidence - thus, there is absolutely no evidence available on record which can create a doubt on the correctness of the declared transaction value. Therefore, the declared transaction value is required to be accepted under rule 3 of the Valuation Rules read with section 14 of the Customs Act. Whole effect of contract/effect of registration under PIR - adjudicating authority concluded that the contract as a whole was required to be assessed and not individual consignments - HELD THAT:- This issue was examined at length by this Bench in Adani Power Maharashtra Ltd. [ 2022 (7) TMI 837 - CESTAT MUMBAI] and after examination of the provisions of Chapter 98 of the Tariff Act and regulations 2,4,5 and 7 of the PIR, the Bench observed that the goods imported for the project become a subject matter of assessment as whole and individual consignments are not required to be separately assessed. It is, therefore, clear that PIR does not deal with import of individual consignment and the assessment of the goods imported for the project have to be dealt with together. In view of the detailed discussions on this issue in Adani Power Maharashtra Ltd., there is no difficulty in holding that the contract as a whole was required to be assessed and not individual consignment. Confiscation of goods - whether the goods can be held liable for confiscation under section 111 (d) and (m) of the Customs Act when there is no case of short levy of duty and assertion that the goods were prohibited in nature? - HELD THAT:- As the allegation of over-valuation has not been established, it is not necessary to examine this aspect. Appeal dismissed. Corporate Laws 2022 (9) TMI 22 Sanction of scheme of arrangement - Section 230 of the Companies Act, 2013 - HELD THAT:- From perusal of the Section 230(3) of Companies Act 2013, it is observed that the notice is required to be sent only if the meeting is directed to be convened under Section 230(1) of Companies Act 2013 - Since, in the instant case the meetings are dispensed with and no meetings are being convened under the provisions of Section 230(1) of Companies Act 2013, therefore the question of serving notices in terms of Section 230(3) and 230(5) do not arise. Notices are required to be sent to the Sector Regulators and objectors in terms of Rule 16(2) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 at the time of filing Second Motion application, while intimating the Noticees about the next date of hearing of the Application. In view of the above, the prayer of the Applicant Companies is rejected, so far as seeking direction of serving notices at this stage is concerned. Application disposed off. Insolvency & Bankruptcy 2022 (9) TMI 21 Distribution of liquidation proceedings - distribution of amount less any applicable withholding tax out of accumulated cash profit lying with the Bank in the account of corporate debtor to the stakeholders - waterfall mechanism as specified under Section 53 of the IBC - HELD THAT:- Once the order impugned had already taken its finality there was no reason to advance further arguments. Even though learned counsel for the appellants were conveyed regarding the present situation, learned counsel for the appellants insisted to pursue the Court. It is noticed that without any plausible reason during arguments false allegations were made against Respondent No.1/liquidator on the point of facts relating to pendency of two appeals before this Appellate Tribunal. The fact regarding pendency of the appeal before this Appellate Tribunal was brought on record by the liquidator by way of filing rejoinder/reply affidavit before the Adjudicating Authority as it is apparent from Volume I and Volume II. The reply filed by the Respondent No.1 was already served on the appellants even then learned counsel for the appellants have ventured to make allegations against Respondent No.1 regarding suppression of fact of pendency of appeal before this Appellate Tribunal. Section 61 of IBC in a specific term contemplates filing of appeal by an aggrieved person. It was not a stage of corporate insolvency proceeding. After CIRP since it failed, liquidation order was passed by the Adjudicating Authority on an application filed by the Liquidator under Section 33(1) of the IBC. Once corporate debtor went into liquidation and the petition for distribution of accumulated profit was filed wherein representatives of employees as well as representatives of shareholders were arrayed as party there was no reason for third person to file the present appeal. Distribution of sale proceeds as contemplated under Section 53 IBC as well as Regulation 32 and 42 of Regulation 2016 - HELD THAT:- In the present case there was accumulation of profit in the account of corporate debtor regarding which account as per Regulation 41 in the account of corporate debtor the word liquidation is to be added being custodian of the said account. Being custodian of the said account it was duty on the part of the Liquidator to immediately distribute accumulated profit lying in the said account. Had it been not done by the liquidator after noticing accumulation of huge accumulated profit amounting to the tune of Rs.96 crores, question would have raised as to why the said amount was lying in the bank account. In such situation in all fairness it would be the duty on the part of the liquidator to take immediate steps to distribute the accumulated profit in terms of Section 53 of the Act under the waterfall mechanism - there are no error or default in liquidator for approaching the Adjudicating Authority regarding distribution of accumulated profit. The appeals are devoid of merits and require to be rejected with imposition of heavy cost - Appeal dismissed. 2022 (9) TMI 20 CIRP proceedings - Financial Creditors - Non performing assets - applicability of time limitation - guarantee given as Managing Director/ Director of CD shall be treated as personal guarantee or not - on failure of settlement agreement, the FC need to go to DRT or can directly approach Hon ble Adjudicating Authority for enforcing claims of FC against CD as well as personal guarantor - demand of interest. Whether, debt was due and default took placed? - HELD THAT:- Various term loan and working capital facilities were given by SBT SBBJ which later merged into SBI (FC). This fact was never disputed by Appellant. It is also noted that subsequent to FC s claim under SARFAESI Act and later before Hon ble DRT, CD proposed compromise settlement which also clearly stipulated about existence and acceptance of debt in terms of both principal as well as interest. Therefore, there was clear financial debt which was due and not paid and Adjudicating Authority has, therefore, rightly admitted Application under Section 95(1) of the IBC. Whether the present application filed under Section 95(1) of the IBC is barred by law of limitation? - HELD THAT:- The final order was passed by Hon ble DRT on 20.09.2019 and the last payment of Rs. 5 crore was made by CD on 31.12.2019, whereas, the Application under Section 95(1) filed before Hon ble Adjudicating Authority on 03.11.2021. Considering the Hon ble Supreme Court Suo Moto Writ Petition IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2021 (3) TMI 497 - SC ORDER ] excluding period of limitation from 15.03.2020 to 28.02.2022 the present application was filed within 74 days from the last payment of 31.12.2019. Thus, it is clear that the Application u/s 95(1) was filed within Limitation Period and we therefore, there are no error in the Judgment of Adjudicating Authority on this point. Whether guarantee given as Managing Director/ Director of CD shall be treated as personal guarantee or otherwise? - HELD THAT:- Section 2 of IBC described the Applications of IBC Code. Section 2(e) of the IBC which case in force w.e.f. 01.12.2019 in so far as they relate to Personal Guarantor to Corporate Debtor. The new section 2(e) came vide notification dated 15.11.2019. The notification also enforced certain other provisions, namely, Section 78, 79 94 to 187 (Part III) which provide for Insolvency Bankruptcy of Individual and also Section 239 (Power to make rules), Section 240 (Power to make regulations) and Section 249 (Part V) in so far as they relate to PGCD - With these amendments through the amended Section 2(e) pertaining to PGCD, it was made possible to subject PGCD to Insolvency Proceedings before same Adjudication Authority (NCLT)/ Appellate Authority (NCLAT) who decides matter related to CD. Thus, if the CD s debt remains unpaid, the personal guarantor would not stand discharged but would himself be forced to face bankruptcy proceedings before the Adjudicating Authority - thus, there are no error in this regard. Whether, on failure of settlement agreement, the FC need to go to DRT or can directly approach Hon ble Adjudicating Authority for enforcing claims of FC against CD as well as personal guarantor? - HELD THAT:- There was no requirement to approach the Hon ble DRT for getting Recovery Certificate before approaching the Adjudicating Authority - there are no merit in the contention of the Appellant on this issue. Whether, the provision of interest by Adjudicating Authority was incorrect and contrary to DRT final order? - HELD THAT:- In any commercial loan, time value is very important. The definition of `financial debt as provided in Section 5(8) of IBC mentioned herein above. It makes clear that `Financial Debt along with interest against consideration for the time value of money is required. This Tribunal is of the considered view that no ground is made out for any interference by this Tribunal with the impugned order - Appeal dismissed. 2022 (9) TMI 19 Seeking directions against the Resolution Professional of Corporate Debtor, for admitting his claim in the Resolution Plan and to be treated as secured Financial Creditor - seeking condonation of 60 days delay in filing this Appeal - Appellant has shown due diligence in submitting the claim before the IRP/Resolution Professional or not - admitting the claim at a time when the Resolution Plan has already been approved by the CoC and is pending consideration of the Adjudicating Authority - Tripartite Agreement between the Appellant, Corporate Debtor and the borrowers/Homebuyers. HELD THAT:- Since the Resolution Plan has not only been accepted by the CoC but also placed before the Adjudicating Authority for approval, accepting any belated claim at this stage, will put paid to the efforts achieved so far by the Resolution Professional in completion of CIRP process. In IBC, where time-lines are well laid down, any indulgence shown by way of belated admittance of claim is likely to jeopardise the CIRP and set the clock back which certainly is not the intent and purpose of the IBC. Whether the Tripartite Agreement between the Appellant, Corporate Debtor and the borrowers/Homebuyers which has been validated by the Hon ble DRT by issue of DRCs provides enforceable rights in favour of the Appellant Bank? - HELD THAT:- There is a need to take a close look at the terms of the Tripartite Agreement whereby the Appellant Bank sanctioned and released housing loans to some allottees /Homebuyers for purchase of flats in the project floated by the Corporate Debtors. There are substance in the contention of the Learned Counsel for the Respondent that mere permission to mortgage is of no relevance in the absence of not having registered a charge. Furthermore, we also agree that being merely in possession of enforceable rights under Tripartite Agreement is not enough. The claimant was required to act upon those rights and establish the claim before the Resolution Professional which having not been done, nothing remains in respect of the undecided claim. The Adjudicating Authority has committed no error in passing the Impugned Order. We find no cogent reason to interfere with the Impugned Order - The appeal is dismissed. 2022 (9) TMI 18 Initiation of CIRP - barred by time limitation or not - SIC company - pre-existing dispute or not - NCLT admitted the application - HELD THAT:- The law is now well settled that the limitation for filing an application either under Section 7 or 9 of the Code is three years in view of Article 137 of the Limitation Act, 1961 which has to be seen from the date of default. There is no dispute that the Appellant was referred to as a Sick unit by BIFR on 09.11.2005 and the embargo of Section 22 of the SICA was lifted with the repeal of SICA w.e.f. 01.12.2016 - The right to apply under Section 9 of the Code accrued to the Respondent after SICA Act was repealed on 01.12.2016 and also when the Insolvency and Bankruptcy Code, 2016 came into force - the application filed under Section 9 of the Code by the Respondent is well within the period of three years and as such the application is not barred by limitation. Pre-existing dispute or not - HELD THAT:- The Respondent has submitted that the issue regarding the pre-existing dispute is concocted by the Appellant because no evidence is brought on record to show that there has ever been any effort by the Appellant either by filing any suit or any proceedings in respect of quality of the goods. It is further submitted that the Appellant, in the written submissions filed before the Adjudicating Authority has made bald averments of making request several time to the Respondent to take back the material which has not been accepted by the IOCL, without giving any particular date of the said instance. Therefore, the objection raised by the Appellant about the pre-existing dispute is just for the sake of an objection otherwise it has no legs to stand. Appeal dismissed. 2022 (9) TMI 17 Initiation of CIRP - NCLT admitted the application ex-parte - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- It is also pertinent to mention here that though the Appellant had a remedy to file the application before the Tribunal for recalling of the admission order dated 12.01.2022 but again for the reasons best known to it no such application was filed rather the present appeal has been filed in which the issue of pre-existing dispute which is purely an issue of fact has been raised. Applicable Threshold limit - the threshold was Rs. 1 lac and during the pendency of the application the threshold is changed Rs. 1 lac to 1 Crore - HELD THAT:- the decision rendered in the case of Madhusudan Tantia [ 2020 (10) TMI 547 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] by this Tribunal is directly on the issue wherein it was held that, if the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, is made applicable to the pending applications of IBC (filed earlier to the notification in issue) it will create absurd results of wider implications / complications. Pre-existing dispute or not - HELD THAT:- There is no evidence brought on record by the Appellant in this regard, except for referring to invoices relied upon by the Operational Creditor to contend that those invoices pertains to a new company i.e. Rajprotim Supply Chain Solutions Pvt. Ltd. In this regard, we would hasten to add that by virtue of an agreement dated 21.12.2016, the entire business of the Appellant was transferred to the new company i.e. Rajprotim Supply Chain Solutions Pvt. Ltd. and the Appellant had been paying the dues/debts of the Operational Creditor till December, 2017 and then stopped the same. As a result thereof, the Operational Creditor had to initiate the proceedings. No other point has been raised. There are no merit in this appeal and the same is hereby dismissed though without any order as to costs. 2022 (9) TMI 16 Seeking approval of the Resolution Plan - Section 30(6) read with Section 31 of the Insolvency Bankruptcy Code, 2016, read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- In view of Section 31 of the Code, the Adjudicating Authority, before approving the Resolution Plan, is required to examine that a Resolution Plan which is approved by the CoC under Section 30(4) of the Code meets the requirements as referred under Section 30(2) of the Code. From the averments made in the Application as well as in Form-H as filed by the Resolution Professional in relation to the procedural aspects, the same seems to have been duly complied with for which the applicant has issued a certificate and it is not necessary for this Tribunal to go into the same. However, this Tribunal is duty bound to examine the Resolution Plan vis- -vis with the mandatory compliance under the Code and the compliance made under is captured hereunder - all the requirements of Section 30(2) are fulfilled. In respect of compliances regarding CIRP Regulations especially Regulations 38 and 39, the Resolution Professional has certified in Form-H and explained in details that the Resolution Plan has complied with all the required Regulations. The Resolution Plan fulfils the requirement as referred in Section 30(2) of the Code and there are sufficient provisions in the Plan for its effective implementation as required under the proviso of Section 31 (1) of the Code. The Resolution Plan has been unanimously approved by CoC - there is no impediment in giving approval to the Resolution Plan. The Resolution Plan is approved - application allowed. 2022 (9) TMI 15 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors/allottees under a real estate project - transfer of corpus funds into the loan account - Financial Debt or not - existence of debt and dispute or not - HELD THAT:- As per the facts in the present matter, it is clearly established that the Financial Creditors are the allottees under a real estate project and thus reference needs to be made to Section 7 of the Code - For the want of fulfilment of the criteria set by the Insolvency and Bankruptcy Code, 2016 in matter of Real Estate projects, this Petition cannot be allowed as it is filed only by a single allottee and cannot be considered as per the provision laid down in Section 7(1) of the Code. Under the Code, a minimum of 100 people or 10% of the total allotee must be there to initiate a proceeding in IB Code. There are no material to conclude that the Financial Creditors amount to minimum 10 percent. Accordingly, the Financial Creditors are not eligible to file a Petition before this forum. The present transaction was in pursuance of the sale agreement. There was no other agreement formed between the parties for amount claimed in default/amount transferred towards corpus fund, hence the given transaction of transfer of corpus funds into the loan account would not qualify as a financial debt as per the definition laid down in Section 5(8) - Applicant failed to qualify the threshold prescribed in the proviso laid down under section 7 (1). Therefore, this Petition is liable to be rejected. Petition dismissed. 2022 (9) TMI 14 Recovery of dues of Financial Creditors - whether the amounts of financial creditors will be recovered either on the culmination of CIRP into approval of the Resolution Plan or Liquidation of the assets of the Corporate Debtor are yet to be ascertained and in the absence of which, the amount recoverable from the Respondent herein, if any, cannot be crystallized - surety to secure the credit facilities sanctioned by the members of the consortium to Corporate Debtor - production of vouchers and other supporting documents in support of the alleged debit entries and other alleged transactions contained in the statements of accounts. HELD THAT:- There is no provision in the Code which bars the initiation of Insolvency Resolution Process against the Personal Guarantor until the debt amount which is to be recovered from the Corporate Debtor gets crystallized. Further it is a well settled principle that the liability of surety in the Contract of Guarantee is co- extensive with that of Principal Borrower. Other contention raised by the Personal Guarantor is that the Respondent/Personal Guarantor was coerced into signing the Personal Guarantee agreement - HELD THAT:- The Law of Contract is very clear with respect to voidable contract that when consent to an agreement is caused by coercion, the agreement which is a contract is voidable at the option of the party whose consent was so caused. Meaning thereby that unless proved otherwise the said agreement would be valid and enforceable and since no action was taken to make the contract void it will remain valid and enforceable as per law. Production of vouchers and other supporting documents in support of the alleged debit entries - HELD THAT:- It is pertinent to mention here that the Applicant has registered the debt with the Information Utility i.e. NESL and the copy of the same is also annexed with the application filed by the Financial Creditor. Further, section 99(3) of the IBC, 2016 states that when the debt is registered with the information utility the debtor shall not be entitled to raise dispute to the validity of such debt. Hence, this contention of the Respondent is also not sustainable. After going through all the documents on record the Petition filed under the provisions of Section 95 of IBC, 2016, is hereby admitted under section 100 of the IBC, 2016 - Petition admitted - moratorium declared. 2022 (9) TMI 13 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - services in relation to the freight forwarding of Air Export/Air Import consignment to the corporate debtor - existence of debt and dispute or not - HELD THAT:- It is seen that the applicant is part of group company and offering individual solutions for transportations and logistic to the corporate debtor since the year 2007. Since then, the corporate debtor was paying the invoice payments to applicant, but after 17.09.2016 the corporate debtor has committed default in making payments of invoices due to be payable. Pursuant to which, the applicant made several oral and written request to make payment for the unpaid dues. Though, the corporate debtor never raised any dispute nor any objection with regards to the to the quality of services provided by corporate debtor. Relatively, the corporate debtor has made part payments towards running ledger of the goods supplied by the operational creditor. This leaves no doubt that the default has occurred for the payment of the unpaid operational debt to the applicant. It is reiterated that despite service of demand notice and notices by this court no objection has been raised by corporate debtor. The corporate debtor has chose to remain absent - since no objection has ever been raised by corporate debtor, it can be concluded that the applicant has established its claim which is due and payable by the corporate debtor. The present application is admitted. Petition admitted - moratorium declared. 2022 (9) TMI 12 CIRP process - recovery of debt from Corporate Debtor - whether the financial creditors will recover either the dues on the culmination of CIRP into approval of the Resolution Plan or Liquidation of the assets of the Corporate Debtor are yet to be ascertained and in the absence of which, the amount recoverable from the Respondent herein, if any, cannot be crystallized? - HELD THAT:- There is no provision in the Code which bars the initiation of Insolvency Resolution Process against the Personal Guarantor until the debt amount which is to be recovered from the Corporate Debtor gets crystallized. Further it is a well settled principle that the liability of surety in the Contract of Guarantee is co- extensive with that of Principal Borrower. Whether the Respondent was coerced to stand as surety to secure the credit facilities sanctioned by the members of the consortium to Corporate Debtor? - HELD THAT:- The Law of Contract is very clear with respect to voidable contract that when consent to an agreement is caused by coercion, the agreement which is a contract is voidable at the option of the party whose consent was so caused. Meaning thereby that unless proved otherwise the said agreement would be valid and enforceable and since no action was taken to make the contract void it will remain valid and enforceable as per law. Whether the Applicant has not placed on record the vouchers and other supporting documents in support of the alleged debit entries and other alleged transactions contained in the statements of accounts? - HELD THAT:- It is pertinent to mention here that the Applicant has registered the debt with the Information Utility i.e. NESL and the copy of the same is also annexed with the application filed by the Financial Creditor. Further, section 99(3) of the IBC, 2016 states that when the debt is registered with the information utility the debtor shall not be entitled to raise dispute to the validity of such debt. Hence, this contention of the Respondent is also not sustainable. After going through all the documents on record, the Petition filed under the provisions of Section 95 of IBC, 2016, is hereby admitted under section 100 of the IBC, 2016 - Petition admitted - moratorium declared. 2022 (9) TMI 11 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It is now well settled that the period of limitation for an Application seeking initiation of the CIRP under Section 9 of the Code is governed by Article 137 of the Limitation Act and is, therefore 3 years from the date when the 'Right to Apply' accrues i.e., failure to clear the dues. As the debt has been duly acknowledged by the Corporate Debtor on 16.03.2017, accordingly, the limitation period will be reckoned from 16.03.2017. Thus the present Application which has been filed within three years from 16.03.2017 as prescribed in Article 137 of the Limitation Act successfully survives the bar of Limitation. Threshold limit for filing application - HELD THAT:- In order to initiate the CIRP against a Corporate Debtor on an Application filed by the Operational Creditor before 24.03.2020, it must primarily qualify the threshold limit of Rs. 1 lakh. It is pertinent to mention here that the Notification regarding the enhancement of minimum amount of default to one crore for the purpose of Section 4 was issued by the Ministry of Corporate Affair on 24th March, 2020 and the amount defaulted by the Corporate Debtor and filing of the petition was before that i.e. on 01.03.2020. Since any notification issued by the Government are generally Prospective in nature unless specifically expressed, hence the notification is not applicable to the present case - the instant Application satisfies the pecuniary criteria under Section 9 of the Code, 2016. This Authority is satisfied that there is an outstanding operational debt as well as there is default by the corporate debtor. Considering the facts and circumstances in which this debt has arisen, the nature of the Debt is an 'Operational Debt' as defined under section 5 (21) of the Definitions under the Code and there is a Default also as defined under section 3 (12) of the Code on the part of the Corporate Debtor. This Authority is of the firm view that there was default on the part of the respondent in pursuance of invoices raised on behalf of the applicant. Accordingly, the present application stands admitted in terms of Section 9(5) of the Code and CIRP is hereby ordered to be initiated against the respondent Corporate Debtor, forthwith - Application admitted - moratorium declared. Service Tax 2022 (9) TMI 10 Maintainability of appeal - appeal rejected on the ground that the petitioner has not made the mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 as made applicable to the Finance Act, 1994 - an opportunity sought for making such deposit which would enable the First Appellate Authority to consider the matter on merits - HELD THAT:- The appeal will stand restored to the file of the 2nd respondent on condition that the petitioner makes the pre-deposit in terms of Section 35F of the Central Excise Act 1944 as made applicable to the Finance Act, 1994, within a period of one month from today. Petition allowed. 2022 (9) TMI 9 Refund claim of service tax - Benefit of exemption with retrospective effect - lease premium - time limitation - Request for refund made to wrong forum (service provider / PIPDIC ) initially and not to be service tax department - Section 104 of FA 2017 - HELD THAT:- Section 104, no doubt, states that no tax shall be levied or collected as a one-time measure, in regard to the taxable services provided or agreed to be provided, by a State Government, Industrial Development Corporation or Undertaking to industrial units by grant of long term lease in excess of 30 years. It further provides that there shall be a grant of refund of any service tax collected on the aforesaid account - this is not a case where, by virtue of an amendment, by way of insertion of a provision, the charging provision is rendered unconstitutional. The provisions of Section 66/66B, insofar as applicable to this issue, have not been struck down as unconstitutional or ultravires but are merely rendered inoperative by virtue of the munificence provided by Section 104 - The notification granting such benefit would thus have to be construed strictly and it is solely upon compliance with the conditions set out therein, that the assessee would become entitled to the benefit of refund. This argument is rejected. Time Limitation for filing refund - HELD THAT:- It is imperative on the part of the assessee to have complied with the conditions set out under Section 104 and in this view of the matter, the order passed by the authority, impugned in this writ petition, contains no flaw. The application for refund has been filed by the petitioner before the authorities only 18.10.2018, which is, admittedly, beyond the period of six months as prescribed under Section 104 and to this extent, the impugned order cannot also be said to be erroneous. After all, one cannot expect the authorities to take an expansive view of the matter as urged by the petitioner and consider the application filed by the petitioner before PIPDIC as a refund claim under Section 11B filed before the Authorities. In this case, the petitioner has filed the claim before PIPDIC which is altogether a different entity. However, the mere fact that the entity approached was PIPDIC and not an officer of the Department does not, in the light of the reasoning adduced, persuades to take a view adverse to the petitioner as it is believed that such a conclusion would be hyper-technical. Petition allowed. 2022 (9) TMI 8 Refund of service tax - Club Association Service - Mandap Keeper Service - Renting of Immovable Property Service - Legal Consulting Service - Technical Inspection and Certification Agency Service - Sponsorship Service - Selling of Space or Time Slots for advertisement - Section 11B of the Central Excise Rule, 1944 - HELD THAT:- In the present case the fact is not under dispute that the appellant have admittedly paid the service tax on the service of Club or Association and same was not challenged by them at any point of time. They filed refund claims on 27.01.2020 for the period from 2010-2011 to 2017- 2018 (April to June-2017), therefore, the claim of the appellant was filed after one year limit which is prescribed under Section 11B. As regard, the submission of the appellant that they being a member of Federation of Indian Chambers of Commerce and Industry ( FICCI) and Federation of Indian Chambers of Commerce and Industry ( FICCI) was one of the party in the Calcutta Club Limited [ 2019 (10) TMI 160 - SUPREME COURT] , the period of limitation should start from the date of the judgment of the Supreme Court. Since filed the refund claim after one year from the date of payment of service tax, the same is hit by limitation. The Learned Commissioner (Appeals) also considered in detail, the submission of the appellant in as much as they claimed that they being a member of Federation of Indian Chambers of Commerce and Industry ( FICCI) should get the benefit of the Calcutta Club Limited case as the Federation of Indian Chambers of Commerce and Industry ( FICCI) was one of the party in that case. On going through the finding of the impugned order carefully, there are no infirmity in the impugned order. The refund of the appellant is clearly hit by limitation in terms of the Section 11B of the Central Excise Rule, 1994. Appeal dismissed. 2022 (9) TMI 7 Refund of mandatory pre-deposit in terms of Section 35 F of Central Excise Act 1944 - Adjustment with with confirmed demand of duty - period of three months from the date of the order of the final authority/ CESTAT - time limitation - Circular No.984/08/2014-CX dated 16.09.2014 - HELD THAT:- The perusal of these Departmental clarifications and directions, are sufficient to hold that it was a mandate upon the Department to sanction the refund of amount as was deposited under Section 35F of Central Excise Act. The adjudicating authorities are held to have committed an error while adjusting the said amount to a confirmed duty demand. The Board circular No.984/08/2014 dated 16.09.2014 though has been relied upon, present being a case of partial confirmation of demand. The bare perusal makes it clear that even the Circular No.984/08/2014 does not speak about setting off the amount of pre-deposit as made under section 35 F against any partial confirmation of demand - the refund claim irrespective of a confirmation of duty liability has wrongly been rejected. Appellant is entitled for the refund of the amount of pre-deposit thereof alongwith the interest at the applicable rate from the date of deposit till the date of realisation - Appeal allowed. 2022 (9) TMI 6 Levy of penalty - Business Auxiliary Service - amount has been received by the Appellant as commission from Amway and Britt. - service tax along with interest paid before issuance of Show Cause Notice - HELD THAT:- The proceedings should have been concluded before issuance of the Show Cause Notice. The penalties are set aside - the Service Tax as confirmed in the Adjudication order not interfered with - appeal allowed - decided in favor of appellant. Central Excise 2022 (9) TMI 5 Classification of goods - Tipper Trucks/ Vehicles - Benefit of exemption from duty - to be classified under CSH 87042120, 87042290 and 87059000 or not - fabricated to be classified under sub-heading 87071000 or not - vehicle - to be covered under heading No.8703 or not - other vehicles - to be covered under heading No.87079000 or not - applicability of N/N. 6/2006-CE dated. 1.3.2006 - HELD THAT:- In the present case it is observed that the show cause notice was issued to the appellant on the basis of certain physical examination of manufacturing process undertaken by the revenue authorities. Commissioner has found that the report received from the division office was not in accordance with the allegation made, based on physical examination of manufacturing process. It is also observed show cause notice also do not rely on any report prepared for such physical examination and make it a relied upon document for issuance of the show cause notice. So to clarify on the basis of the show cause notice the clarification is sought from the from the concerned authorities as to existence of any such physical verification report. In absence of any such verification report of the manufacturing process at the time of issuance of the Show Cause Notice, the entire basis for the issue of show cause notice fails. The appeal can be disposed on this short point itself. Thus the findings recorded by the Commissioner on the basis of the subsequent report called during the adjudication proceedings and Chartered Engineer certificate cannot be disputed. In case of COMMISSIONER OF C. EX., PUNE-III VERSUS KAILASH AUTO BUILDERS LTD. [ 2010 (6) TMI 387 - CESTAT, MUMBAI ], CESTAT held that 'Skip Loader , a specially designed garbage collection vehicle required by municipal local bodies, was classifiable under Heading 87.05 and eligible for benefit of exemption under Notification No. 162/86-CE dated 1.3.1986. In the present case we are concerned with the period after the insertion of the said chapter notes in the chapter 87 of the First Schedule to Central Excise Tariff Act, 1987 and as stated in the above circular the classification has to be determined as per the said chapter note and not by following the decisions as relied upon by the revenue while filing this appeal. Accordingly Commissioner has determined the classification of garbage compactors under chapter heading 8705 and found them to be eligible for benefit of exemption as special purpose vehicle under Notification No 6/2006-CE. The appeal filed by the revenue is dismissed. CST, VAT & Sales Tax 2022 (9) TMI 4 Levy of Entry Tax - stock transfer price - validity of Equalized List Price (ELP), adopted by the appellant - HELD THAT:- As per Section 3(a), entry tax is leviable on an entry in the course of business of a dealer of goods specified in Schedule-II, into each local area for consumption, use or sale therein and such tax shall be paid by every dealer under the VAT Act who has affected the entry of such goods. Section 4 defines the rate at which entry tax to be charged and as per sub-section (1), the entry tax payable by a dealer under this Act shall be charged on his taxable quantum relating to goods specified in Schedule-II and Schedule-III - The appellant has evolved the ELP system for sale in the market throughout the country and the price mentioned in Form F is only the stock transfer price not liable to be treated as the sale price of the goods. As per Section 4 of the Entry Tax Act, the entry tax payable by the dealer under this Act shall be charged on his taxable quantum relating to goods specified in Schedule-II and Scheduled-III, but there is no such provision for charging of entry tax on ELP adopted by the appellant, same is alien to the Entry Tax Act or VAT Act. The respondents/authorities have rightly charged the entry tax on the price mentioned in the stock transfer note/bill as a market value - thus, no question of law much less substantial question of law is involved in this appeal and the appeal is liable to be dismissed. Appeal dismissed. Indian Laws 2022 (9) TMI 3 Dishonor of Cheque - acquittal of the accused - lower court granted relief to the accused non-appearance of the complainant - Section 256 of the Code of Criminal Procedure - HELD THAT:- The provision of Section 256 of the Code of Criminal Procedure clearly imposes a duty upon the Magistrate to proceed with the provisions of the said Section leading to acquittal of the accused if the complainant is found absent. It has been specifically provided in the said Section that unless for some reason he thinks it proper to adjourn the hearing of the case to some other day - In the present case learned Magistrate on three occasions thought it proper to adjourn the hearing of the case to another day (without reasons). But on the date of dismissal i.e. 7th September, 2001 the learned Magistrate did not find any reason, which he thought proper, to adjourn the hearing of the case to some other day (as the Section clearly provides) Learned Magistrate did not adjourn the case on the said date by recording specific reasons and justified his decision in his order relating to the conduct of the complainant on several occasions and proceeded to dismiss the case and finally acquitted the accused persons rightly, complying with the provisions of Section 256 of the Code of Criminal Procedure - the order under appeal being in accordance with the provisions under Section 256 of the Code of Criminal Procedure, wherein the learned Magistrate has recorded specific reasons justifying dismissal of the case and also applied judicial discretion to the facts and circumstances of the case before proceeding to acquit the accused persons under Section 256(1) of the Code of Criminal Procedure by dismissing the case. Considering the conduct of the appellant/complainant before the Trial Court as also before this Court, (in a case of as old as 24 years), this Court is of the view that it seems that the appellant/complainant has lost interest in the appeal as also before the Trial Court and as such this Court finds no reason to interfere with the said order/judgment of acquittal under appeal - Appeal dismissed. 2022 (9) TMI 2 Condonation of delay in filing appeal - exclusion of the period from 15.03.2020 to 28.02.2022 - time limitation - HELD THAT:- In view of the order of the Hon ble Supreme Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2021 (3) TMI 497 - SC ORDER ], the appellant is entitled to exclusion of the period from 15th of March, 2020 to 14th of March, 2021 in computing the period of limitation and thereafter further 90 days limitation from 15th of March, 2021 - In the present case, after filing the application for condonation of delay, a supplementary affidavit has also been filed with additional documents to explain the delay. A perusal of GA 1 of 2021 and also the supplementary affidavit reveals that the copy of the order of the learned Single Judge was received by the appellant on 18.04.2019 and the same was placed before the Regional Manager and a prompt decision was also taken to prefer an appeal and the communication dated 6th of May, 2019 was sent by the applicant to the advocate making a request to file the appeal against the order of the learned Single Judge but thereafter the appeal was not filed within time and the same was filed on 16th of July, 2021 - It is settled position of law that a party cannot be made to suffer on account of the fault or lapses committed by the advocate. There was no negligence or lapse on the part of the appellant and the appellant had taken proper and prompt steps for filing the appeal and the appellant issued instruction to the learned advocate to file the appeal within time - It is settled position of law that application for condonation of delay is required to be considered liberally. Since, in the present case, it is found that sufficient explanation has been furnished for the delay and the delay is not attributable to the appellant, therefore, it is deemed proper to allow application and condone the delay in filing the appeal. The delay is condoned - application allowed.
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H: Validity of Assessment order u/s 147 r.w.s. 144B - Procedural Irregula...

C: Extension of due date for filing of Form No. 10A/10AB under the Income...

H: Condonation of delay - substantial delay of 166 days before ITAT - The...

H: Income deemed to accrue or arise in India - Attribution of Profit to p...

H: Condonation of delay - Delay in filling of an appeal before ITAT - The...

H: LTCG - Determination of Fair Market Value (FMV) - The Assessing Office...

N: Export of 2,000 MT of White Onion under Code 0703 10 19

C: Ease of Doing Business: Text on Contract Note with respect to Fit and ...

H: Rejection of application for registration u/s 12AA(1)(ac)(iii) r.w.s 8...

H: Estimation of income - bogus purchases - The Tribunal recognized the a...

H: Penalty u/s 270A - allegation of misreporting as per section 270A(9) -...

A: REFUND OF ITC ON EXPORT OF GOODS WITHOUT PAYMENT OF TAX – RULE 89(4) O...

A: FILING APPEAL AS PER THE DIRECTIONS OF HIGH COURT

A: Understand the Contrasts between Government and Public Limited Companies

A: PIL challenging provisions of 101st Constitutional Amendment Act relat...

N: Exemption from specified income U/s 10(46) – ‘Kerala Autorickshaw Work...

C: Unauthorised foreign exchange transactions