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2021-TIOL-NEWS-141 Part 2| June 16, 2021

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INCOME TAX

2021-TIOL-986-ITAT-MUM

Sinnar Thermal Power Ltd Vs DCIT

Whether disallowances/additions cannot be made in assessment framed u/s 153A in absence of any incriminating material found during search relatable to concluded assessment on date of search – YES: ITAT.

Whether AO cannot make disallowance u/s 14A r/w Rule 8D without recording his satisfaction as mandated u/s 14A r/w Rule 8D(1) that assessee's claim is not acceptable – YES: ITAT.

- Appeals disposed of: MUMBAI ITAT

2021-TIOL-985-ITAT-MUM

Marg Foundation Vs ITO

Whether merely because assessee is engaged in certain profit-generating activities, assessee cannot be deemed to have ceased carrying on primary charitable activity – YES: ITAT

- Assessee's appeals allowed: MUMBAI ITAT

2021-TIOL-984-ITAT-MUM

Bachhraj Factories Pvt Ltd Vs ACIT

Whether investment which does not yield exempt income is liable to be excluded while assessing the expenditure to earn the exempt income u/s 14A r.w. Rule 8D(2) - YES : ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

2021-TIOL-983-ITAT-DEL

ACIT Vs KS Chawla and Sons

Whether addition made on the basis of valuation report does not sustain and deserved to be deleted as report does not specifically set out that differential amount has been received by the assessee - YES : ITAT

- Revenue's appeal dismissed: DELHI ITAT

 
INDIRECT TAX

2021-TIOL-1319-HC-MAD-CUS

Mohammed Haroon Vs Addl. DG of DRI

Cus - Smuggled of gold either by concealing in the form of paste in the rectum or in the form of crude chains - While the stand of DRI is that the petitioners attempted to smuggle gold and electronic goods, the petitioners claim that they never had any such intention and that they wanted to declare before the customs authority - Their specific contention is that before they could do so, they were intercepted and apprehended - The petitioners would claim that when they were apprehended, it was captured in the CCTV installed in the airport premises - The petitioners would pointedly allege that even before they could cross the Door Frame Metal Detector (DFMD), they were taken into custody by the DRI officials - On 07.11.2019 itself, the petitioners invoking the provisions of the RTI Act sought from the airport authorities copies of the CCTV footage, however, the petitioners' request was declined - Question that arises for consideration in these writ petitions is whether the right to fair adjudication has been infringed.

Held:

+ The respondents allege that the petitioners were intercepted when they were about to exit the green channel. The petitioners on the other hand claim that after the completion of immigration formalities and before crossing the DFMD, they were taken to custody. This controversy can be very easily resolved by production of the CCTV footage. The petitioners have not raised this contention as an afterthought. Right from the beginning this was their stand. Therefore, Bench impleaded the Airport Authority and directed them to make available the CCTV footage. The standing counsel for the Airport Authority, after getting instructions, submitted that since the occurrence had taken place in the 1st week of November, 2019, the footage got erased a few weeks thereafter and, therefore, the direction issued in February, 2021 is impossible of being complied with. [para 11]

+ The petitioners could have established their defence only by producing the CCTV footage. They have been denied access to this vital piece of evidence. The best evidence was very much available and it was allowed to vanish. The airport authority is a limb of the State. DRI cannot wash away its hands by taking the plea that they have not installed the CCTV and that it is not in their control. When a huge smuggling attempt was busted and when two of the arrested from whom recoveries were made wrote to the Additional Director General, DRI, Chennai that if he verifies the contents of the CCTV footage, their stand will be vindicated, then it was the bounden duty of DRI to have secured the CCTV footage. Since this was not done, Bench has to necessarily draw adverse inference against them. [para 12]

+ Where the fundamental right of the noticees to fair adjudication has been violated, adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt. In view of Bench's finding that the petitioners' defence has been prejudiced because of the non-production of CCTV footage, the adjudication proceedings initiated against them can be allowed to continue only for the limited purpose of determining whether the goods in question can be allowed to be re-exported or whether they can be cleared on payment of applicable duties. Such an order will be passed by the concerned authority within a period of four weeks. The authority will hear the petitioners or their authorised representative through Video Conferencing or in person before passing final orders. [para 13]

+ The petitioners claim that their passports have not been returned. The stand of DRI is that they never seized the petitioners' passports. There is no point in probing the issue. It is well settled that pendency of a criminal case at FIR stage is not a ground for denying the issuance of passport or renewing it. Bench permits the petitioners to apply to the jurisdictional passport authority for issuance of duplicate passport. [para 14]

+ Suspicion is one thing while proof is another. It is the prosecution that has to cover the distance. In Re: Arulanandu (AIR 1952 Mad 267), Panchapakesa Ayyar , J. remarked that the misfortune of the prosecution should never be allowed to become the misfortune of the accused. Just as the culprits in undetected crimes escape punishment, the unproved persons also must be unhesitatingly acquitted. [para 15]

- Writ petitions disposed of: MADRAS HIGH COURT

 

 

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ORDER

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