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Showing 1 to 20 of 1902 Records
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2019 (8) TMI 1903 - DELHI HIGH COURT
Consequence of the registration of the reference under the provisions of SICASuit for recovery - prohibition under Section 22 of the SICA - Seeking to set aside ex-parte judgement - It is contended that Applicant was unaware of the suit proceedings - HELD THAT:- The suit for recovery against a company which is registered under the Provisions of SICA, would not ipso facto be rendered as not maintainable. The prohibition as contemplated under Section 22 of the SICA, would not be applicable to the present suit which is essentially for recovery and proving the debt. The proceedings that come within the purview of Section 22(1) of SICA are proceedings in nature of execution, distress or the like. It would depend on the facts of each case that whether the suit is hit by Section 22 of the Act.
Concededly, the present suit is for recovery and is not one which has the effect of execution, distress or like action against the properties of the Sick Company and therefore it would not be hit by Section 22 (1) of the SICA. Significantly, there is no denial to the averments made in the Plaint, the contents of the Plaint have to be presumed to be correct. The final decision of the Court is only determinative of the indebtedness of the Applicant. The suit even without the permission of BIFR was maintainable on the date of filing.
It is further significant to note that Plaintiff on becoming aware of the reference before BIFR, filed an application before BIFR on 23rd July, 2012, seeking its permission to execute the decree. The Defendant was provided an opportunity to file a reply to the said application, however, the same was not filed. Plaintiff was impleaded in the said proceedings before BIFR on 12th December, 2012. Defendant came out of purview of the Act on 18th September, 2014. This clearly shows the Judgment Debtor was aware of the decree passed by this court since 2012. After coming out of the purview of SICA, from 2014 to 2019 the Judgment Debtor remained silent. The conduct of the Defendant is completely laid-back and lackadaisical.
There is no ground for interference. Application is dismissed.
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2019 (8) TMI 1902 - SC ORDER
Classification of imported goods - Video Conferencing System - classified under CTH 85176990 or under CTH 85176290 - whether the benefit of exemption under Notification No 24/2005-Cus (Sl No 13) admissible in respect of the goods imported by the appellant describing them as “Video Conferencing system”? - it was held by CESTAT that The equipments under import are used for reception, conversion and transmission or regeneration of voice and video (images) and hence get classified under double dash heading 851762, and at triple dash under heading 85176290 - HELD THAT:- There are no ground to interfere with the impugned order passed by the Tribunal. The appeal is, accordingly, dismissed.
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2019 (8) TMI 1901 - SC ORDER
Benefit of Section 10A and 10B - Interest on fixed profit - Whether the interest received and the consideration received by sale of import entitlement is to be construed as income of the business of the undertaking? - As decided by HC [2018 (11) TMI 1957 - KARNATAKA HIGH COURT] Substantial question of law that arises has been covered by case of MOTOROLA INDIA ELECTRONICS PRIVATE LIMITED [2014 (1) TMI 1235 - KARNATAKA HIGH COURT]
HELD THAT:- Delay condoned. Leave granted.
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2019 (8) TMI 1900 - ITAT PUNE
Deduction u/s. 80IA(4) - income derived from the four windmills separately - AO rejected assessee’s claim by treating all the four windmills as single undertaking - HELD THAT:- It is an undisputed fact that the date of commencement of operation of each windmill is different. The stand of the Revenue is that instead of claiming deduction u/s. 80IA(4) on each windmill as separate unit, the assessee should have computed deduction on all the windmills as single undertaking.
We find that the issue whether deduction u/s. 80IA(4) is to be computed on each windmill unit separately or on consolidated basis was considered in the case of M/s. D.J. Malpani Vs. ACIT [2015 (12) TMI 896 - ITAT PUNE]
Since, the issue has already been considered by the Tribunal and has held that each unit of windmill has to be considered separately for computing deduction u/s. 80IA(4), we see no reason to deviate from the view already taken. No contrary judgment has been placed on record before us by the Revenue. DR has pointed that the Department has filed appeal against the Tribunal’s decision in the case of M/s. D.J. Malpani [2015 (12) TMI 896 - ITAT PUNE], however, no order by the Hon’ble High Court either staying or reversing the aforesaid decision of Tribunal has been furnished by the DR.
No infirmity in the order of CIT (A) in allowing assessee’s claim of deduction u/s. 80IA(4) considering each windmill as separate unit for allowing deduction u/s. 80IA(4).
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2019 (8) TMI 1899 - SUPREME COURT
Family settlement - Prohibition against fragmentation of the site - Suit for specific performance directing first Defendant to execute sale deed in respect of one-third share to the Plaintiff - it is contended that the family settlement was forged and fabricated - enforceable contract or not - impact of absence of written concurrence by brothers for sale.
Whether there was a family settlement? - HELD THAT:- No material has been placed by the second Defendant to establish that the alleged family settlement is a forged document. There is no case that it is not a family settlement. The settlement is arrived at between the Plaintiff, his brother-the first Defendant and another brother-third Defendant. Therefore, we can proceed on the basis that there is a family settlement.
Whether the High Court was right in, without even a plea, holding that the family settlement is vague and unenforceable and void? - HELD THAT:- What is intended is that after the written concurrence is obtained for selling in order that property is not sold to a third party/stranger, the other two brothers are given an opportunity to buy that property. This portion of the Clause cannot also be described as vague as such. No doubt, it could be argued that the price at which the offer is to be made is not expressly mentioned. It is found that the Clause is part of a family settlement between brothers. Courts ordinarily lean in favour of family settlement. Clause (5) itself does not contain an agreement to sell. It only contemplates a preferential offer being treated as a condition precedent to a brother affecting a sale outside of a family to a stranger. The price can only be understood as market price which would be the fair price. Therefore, the finding by the High Court that contract is vague cannot be sustained.
Whether an offer was made by the first Defendant to the Plaintiff before the sale of the property to the second Defendant? - HELD THAT:- The agreement could not be executed as per the offer because Defendant never turned up in Chandigarh. He was ready to make the entire payment while coming at Chandigarh, since the property is in Chandigarh. An amount of Rs. 5 lakh was settled as consideration amount. (It may be noted that Plaintiff, in P18 letter writes "please try to reduce the total value, if there is some scope). He further says, it is correct that he had offered in that letter-Exhibit P19 to get the payment at Bhilai and after the payment, the documents will be executed. He volunteered and stated that since the documents could not be executed at Bhilai as the property in question is at Chandigarh, he never made any final payment to the first Defendant in Bhilai - Apparently, in keeping with the family settlement, a preference was indeed shown. The price was reasonable and acceptable even to the Plaintiff though he wanted a reduction. Having regard to the health of the first Defendant and the dire stage at which first Defendant and his wife were placed, we cannot for a moment but hold that they had made an attempt to comply with the condition in the family settlement providing for preference.
Whether the High Court was right in holding that the courts could not exercise discretion Under Section 20 of the Specific Relief Act, 1963 as the contract is not specifically enforceable? - HELD THAT:- There is no case expressly set up in the plaint that what Appellant is seeking to enforce is a right of preemption. If the suit involved a right of preemption, and proceeding on the basis that the Appellant was pursuing his secondary right to follow the property sold, then, the relief would have been to substitute himself in place of the buyer/second Defendant. As held by this Court, the right of preemption is not right of re-purchase. Even proceeding on the basis of it being a case of preemption, as held by the High Court, first preference was given to the Plaintiff - All that it contemplates is an offer being made to the brothers, once the first step of concurrence in writing by the brothers for the sale is obtained - the Appellant would not be justified in invoking the principle underlying the right of preemption in this case.
What is the impact of absence of written concurrence by brothers for sale? - HELD THAT:- The first Defendant has acted clearly on the basis that the requirement of the first stage was not being insisted upon. Otherwise, he could have certainly obtained the concurrence. Having thus acted in the matter, and the second stage having been reached, when for reasons where the fault cannot be attributed to the first Defendant, the offer, which the Appellant himself describes as reasonable, was not seized upon by the Appellant, the third stage emerged. This meant that it became open to the first Defendant to sell to a stranger and which is what he did by it selling it to the second Defendant. Even proceeding to enforce the clause, we find that the Appellant is clearly estopped from setting up the plea of absence of written consent of the brothers. It would be inequitable, particularly when we are considering the matter in an appeal sourced Under Article 136 of the Constitution of India.
What is the effect of the prohibition against fragmentation of property in question under the Capital of Punjab (Development and Regulation) Act, 1952? - HELD THAT:- The word "site" means any land which is transferred Under Section 3 of the 1952 Act. When it comes to the terms of Section 3, it contemplates power with the Central Government to transfer by auction, allotment or otherwise any land or building belonging to the Government in Chandigarh on such terms and conditions as may subject to any Rules that can be made under the Act, the Government thinks fit to impose. Thus, though it is open to the Central Government to transfer either land or building belonging to the Government in Chandigarh Under Section 3 of the 1952 Act, the word "site" is confined to only the land which is transferred by the Central Government Under Section 3. In fact, the word "building", as defined in the Act, points to any construction or part of construction which his transferred Under Section 3. It includes outhouse, stable, cattle shed and garage and also includes any building erected on any land transferred by the Central Government - The High Court, in fact, tides over this objection by the Appellant by pointing out that once the second Defendant steps into the shoes of the first Defendant, he became a co-owner and his remedy is to sue for partition and while fragmentation of property, is not 'admissible', the market value of the property can be determined, and buying each other's share, as per the provisions of Sections 2, 3 and 4 of the Partition Act, 1893.
The second Defendant has produced the communication dated 19.12.1997 which indicates the transfer of rights of site in Sector 19A held by Vishnu Dutt Mehta (first Defendant) is noted in favour of the second Defendant subject to certain conditions. This is obviously before the 2007 Rules came into force.
The Appellant cannot be permitted to impugn the transaction on the said ground - the contentions of the Appellant are liable to be rejected - appeal dismissed.
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2019 (8) TMI 1898 - DELHI HIGH COURT
Money Laundering - statement of the petitioner was recorded under Section 50 (2) of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Ad interim relief is granted to the effect that summons dated 19.08.2019 (Annexure P-1), issued to the petitioner, is hereby stayed till the next date of hearing.
List on 12.09.2019.
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2019 (8) TMI 1897 - BOMBAY HIGH COURT
Dishonour of Cheque - funds insufficient - legally enforceable debt or not - despite of service of notice, accused failed to return the amount of cheque - HELD THAT:- The statutory assumption is in favour of the complainant that the cheque was issued towards the legally enforceable debt and liability by the accused and the accused has failed to disprove the said presumption. Similarly, there is no crossexamination that the blank cheques were issued towards the security by he accused at the time of entering into the transaction. Thus, the accused has not disputed the issuance of cheque under his signature. He has failed to bring on record that the transaction between the complainant and himself was of any other nature than the claim made by the complainant. In the absence of any material on record, the presumption in favour of the complainant about the issuance of the cheque or discharge of legally enforceable debt and liability cannot be said to be rebutted as required by the law. On the contrary, the complainant has proved and her evidence establishes that the complainant has paid Rs.2,90,000/to the accused by way of handloan from time to time.
Thus, no illegality or perversity is noticed in the judgment and orders passed by the Courts below. Hence, no interference is required in the impugned judgment and orders passed by the Courts below - Revision dismissed.
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2019 (8) TMI 1896 - SUPREME COURT
Illegal gratification - offence under Sections 7 and 13(1) (d) read with Section 13(2), Prevention of Corruption Act, 1988 - HELD THAT:- It is noted that two three-judge benches of this Court, in the cases of B. Jayaraj v. State of Andhra Pradesh, [2014 (3) TMI 1104 - SUPREME COURT] and P.Satyanarayana Murthy v. District Inspector of Police, State of Andhra Pradesh and Another, [2015 (9) TMI 1666 - SUPREME COURT], are in conflict with an earlier three-judge bench decision of this Court in M. Narsinga Rao v. State of A.P., [2000 (12) TMI 892 - SUPREME COURT], regarding the nature and quality of proof necessary to sustain a conviction for the offences under Section 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 when the primary evidence of the complainant is unavailable.
It is considered appropriate to refer the question of law framed to be decided by a bench of appropriate strength. The Registry is directed to place the papers before the Chief Justice of India for appropriate orders.
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2019 (8) TMI 1895 - GUJARAT HIGH COURT
Recovery of dues - seeking a direction to the Debts Recovery Tribunal-1, Ahmedabad to frame, consider and decide as preliminary issues, the issues raised by the petitioners in their pleadings of Original Application.
Whether the Debts Recovery Tribunal is empowered to decide issues as preliminary issues? - HELD THAT:- Prima facie, the Act does not contemplate deciding issues as preliminary issues by the Debts Recovery Tribunal. This is more so considering the object behind the enactment, viz., setting up of Special Tribunals for recovery of dues of the banks and financial institutions by following a summary procedure. The intention of the legislature in enacting the Act is to provide for expeditious adjudication and recovery of debts due to banks and financial institutions; therefore, if all the provisions of the Code are applied to proceedings before the Debts Recovery Tribunal, it would defeat the very object of the enactment. Nonetheless, while ordinarily the Debts Recovery Tribunal should not decide issues as preliminary issues, in the opinion of this court, if the issue raised is one which goes to the root of the matter and strikes at the very jurisdiction of the Tribunal to decide the application, the court is of the view that the Tribunal is not barred from deciding such issue as a preliminary issue merely because section 22 of the Act does not specifically refer to the power to frame and decide preliminary issues. However, such power should be exercised sparingly, only in cases where the question of the jurisdiction of the Debts Recovery Tribunal to decide the case is involved.
Whether the issues proposed by the petitioners can be said to be pure questions of law? - HELD THAT:- In the present case, the petitioners do not admit that the averments made in the application under section 19 of the Act are true. However, they contend that because the petitioners (original defendants) admitted the documents on which the respondents (original applicants) rely, they are entitled to raise a plea in the nature of demurer. In the opinion of this court, such plea of demurer would be available to the petitioners if they had admitted the averments made in the application and the questions were required to be decided on the basis thereof. However, the preliminary issues proposed by the petitioners are based on the contents of the documents tendered by the respondents which the petitioners have admitted, and which both the parties seek to interpret differently, and not on the basis of the averments made in the application under section 19 of the Act. Under the circumstances, the petitioners are not entitled to the plea of demurer.
Whether even if the issues proposed by the petitioners are pure questions of law, can they be decided as preliminary issues as contemplated under Order XIV rule 2 of the Code? - HELD THAT:- In the facts of the present case, the petitioners have not contended that the Tribunal lacks the jurisdiction to entertain and decide the application under section 19 of the Act; the preliminary issues raised by the petitioners do not touch upon the jurisdiction of the Tribunal to decide the application made by the respondents; and it has also not been contended that the proceedings are barred by any provision of law. Under the circumstances, considering the nature of the issues raised by the petitioners as preliminary issues, even if the same were pure questions of law, the same would not fall within the scope and ambit of Order XIV rule 2 of the Code - this court is in agreement with the view adopted by the Debts Recovery Appellate Tribunal and does not find any legal infirmity in the impugned order so as to warrant interference.
The petition, therefore, fails and is, accordingly, dismissed.
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2019 (8) TMI 1894 - DELHI HIGH COURT
Dishonour of Cheque - insufficient funds - non-appearance on behalf of petitioner - none appeared before the learned Metropolitan Magistrate at Rohini District Court as the advocates were on strike - HELD THAT:- Considering the explanation rendered by the petitioner that on 23rd July, 2015 because of the strike of the lawyers neither the lawyer nor the complainant could appear and the clerk of the counsel for the complainant wrongly noted the next date as 1st December, 2015 and thus they could not appear before the Trial Court on 19th November, 2015 and that on 1st December, 2015 when the complainant along with counsel appeared before the Court he came to know that the complaint had already been dismissed for non-prosecution as also the fact that the counsel for the petitioner was present before the court on each and every date, this court deems it fit to restore the complaint to its original position subject to cost.
The impugned order dated 19th November 2015 dismissing Complaint Case which was pending in the Court of learned Metropolitan Magistrate North Rohini court is restored to its position subject to the petitioner paying a cost of ₹5,000/- to the respondent on the date before the learned Trial Court which is fixed as 2nd September, 2019 when the petitioner with his counsel and respondent with his counsel will be present in Court.
Appeal disposed off.
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2019 (8) TMI 1893 - MADRAS HIGH COURT
Permission for clearance of the imported Pigeon Peas (Toor Whole) - failure to produce the notifications before the Legislature - Section 19(3) of the Foreign Trade (Development and Regulation) Act, 1992 - HELD THAT:- In the light of the decision of the Hon'ble Supreme Court of India in ATLAS CYCLE INDUSTRIES LTD. AND ORS. VERSUS STATE OF HARYANA [1978 (10) TMI 150 - SUPREME COURT], which has been reiterated by subsequent decisions, the contention raised by the Learned Counsel for the Petitioners does not merit any acceptance.
Petition dismissed.
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2019 (8) TMI 1892 - RAJASTHAN HIGH COURT
Client code shifting - Shifting of income by client code modification - Profit shifting an exercise carried out by the assessee which used to trade in stocks and securities, with trading members - AO citing a SEBI circular of 29.07.2011, and after examining several instances held that the shifting was contrary to the guidelines inasmuch as there was no similarity, in the nature of transactions or the parties, involved with client code - assessee’s appeal was allowed on both the questions of reopening of assessment as well as on the merits - ITAT took into account the submissions of revenue, specially the effect of the circular dated 29.07.2011 and also significantly observed that neither was survey conducted u/s 133(6) by the AO despite the specific request of the assessee nor was any notice u/s 131 issued in respect of transactions which led to the shifting of profits - HELD THAT:- Counsel stressed that the SEBI circular, is decisive and that the shifting of client code was in respect of suspect parties.
It is not disputed by the Revenue that pursuant to the so called violation of the SEBI circular, further investigation or enquiry was not carried out by the AO before concluding that the amounts claimed as shifting of profits, were in fact dubious and had to be added back in the manner that the AO actually did. Furthermore, the findings of the CIT (A) have been confirmed by the ITAT; consequently, the Court is now called upon to examine and appreciate concurrent factual findings. No substantial question of law arises.
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2019 (8) TMI 1891 - SUPREME COURT
Mob assault - Appellants submits that once the other Accused have been acquitted, the two Appellants alone cannot be convicted with the aid of Section 149 of the Indian Penal Code - Can the evidence of a solitary doubtful eye witness be sufficient for conviction? - HELD THAT:- Conviction on basis of a solitary eye witness is undoubtedly sustainable if there is reliable evidence cogent and convincing in nature along with surrounding circumstances. The evidence of a solitary witness will therefore call for heightened scrutiny. But in the nature of materials available against the Appellants on the sole testimony of PW-1 which is common to all the Accused in so far as assault is concerned, we do not consider it safe to accept her statement as a gospel truth in the facts and circumstances of the present case. If PW-1 could have gone to the police station alone with her sister-in-law at an unearthly hour, there had to be an explanation why it was delayed by six hours.
Given the harsh realities of times, it is found virtually impossible that two women folk went to a police station at that hour of the night unaccompanied by any male. These become crucial in the background of the pre-existing enmity between the parties leading to earlier police cases between them also. The possibility of false implication therefore cannot be ruled out completely in the facts of the case.
The High Court concluded that the Appellants alone were the assailants of the deceased. Ishwar is also stated to have assaulted with a lathi capable of causing lacerated wounds - The susceptibility of eleven injuries, including incised wounds, by two Accused is considered highly improbable.
The order of the High Court found to be unsustainable and accordingly set it aside - The Appellants are acquitted - appeal allowed.
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2019 (8) TMI 1890 - ITAT COCHIN
Survey proceedings u/s 133A - Authenticity of the data contained in the pendrive seized - cross examination before the AO not provided of Person from whom residence pen drive is claimed - HELD THAT:- Assessee has stated that Shri Riyaz is no more an employee of the assessee-company. However, the assessee has not furnished any details of his resignation when he left the employment with the assessee-Company and also has not furnished his new address.
Without furnishing the details of the new address of Shri Riyaz if he left the employment with the assessee-company, the assessee is only blaming the Department for not providing an opportunity of cross examination of Shri Riyaz which is only a self serving argument. We do not find any fault of the Department for not giving opportunity of cross examination of Shri Riyaz. Now the assessee wants to derive benefit out of it which cannot be given by us at this stage. Hence, in our opinion, the CIT(A) is justified in holding that there is no necessity of providing opportunity of cross examination of Mr. Riyaz by these assessees.
Whether AO has gone wrong in accepting the pen drive as a piece of evidence and making substantial additions to the income returned? - The assessees objected to consider the pen drive found with Mr. Riyaz as evidence for framing the assessments. The pen drives were unearthed from Mr. Riyaz and it is an admitted fact that the data contained therein belonged to the assessee. Being so, it was used for framing the assessments. Under section 2(12A) of the Act, books of accounts includes ledgers, day book, cash books, account books and other books kept in written form or printouts of data stored in a floppy, disc, tape or in other forms of electronic magnetic data storage device. Hence, pen drive forms part of the books of accounts and the data therein could be used for framing assessments. We do not find any infirmity in the order of the CIT(A) and the same is confirmed. Thus, this ground in all the appeals is dismissed.
Assessee had produced expert opinion of cyber expert with regard to generation of hash value report - Whether the additional grounds of appeals can be raised before the Tribunal which does not arise out of the order of the CIT(A)? - In the present case, there is no sufficient cause to procure such cyber expert opinion after such a long period after survey in this case. The seeker of justice must come with clean hands and should prove that there was no negligence whether in action or want of bona fides. We find that in the affidavit, the assesses were not able to understand the significance of the hash value report. There was delay in procuring the expert opinion and it was procured with such a delay so as to delay the proceedings under the Act.
More so, the affidavits filed by the assesses herein were self serving documents so as to derive undue benefit. We are not convinced with the reason explained by the assessee in obtaining the cyber expert opinion after such a long period. Even if it is admitted as additional evidence, that cannot bind the AO. The apprehension of the assesses is that the Department has tampered with the pen drives.
In our opinion, pen drives were impounded by the Department during the course of survey u/s. 133A on 14/07/2014 in the office of Mr. Riyaz and the inventory report was prepared on 14/07/2014 and after such a long period of delay, the assessee is making this allegation that the pen drives are tampered which cannot be appreciated. The hash value report was generated on 22/07/2014 and 23/07/2014 which was duly witnessed by two local punchas and countersigned by the assesses as well as the forensic expert which means that the assesses were well aware of the generation of hash value report and the same was done in their presence.
Hence, the additional evidence at this stage cannot be admitted as there was no sufficient cause in procuring such additional evidence. More so, if the assessees have doubted the integrity of the income tax officer concerned stating that they have tampered or manipulated the pen drives, in such circumstances, the assessees ought to have reported the matter to the higher authorities concerned so as to take appropriate action against the erred officer. Accordingly, the additional evidence is not admitted and these issues in all the appeals of the assesses are dismissed.
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2019 (8) TMI 1889 - DELHI HIGH COURT
Jurisdiction - power of Directorate of Revenue Intelligence (DRI) to issue show cause notices - amended Section 28 of the Customs Act, 1962 - HELD THAT:- In VIPUL OVERSEAS PVT. LTD. & SHRI SURENDER GARG VERSUS COMMISSIONER OF CUSTOMS & ORS. [2017 (11) TMI 1412 - DELHI HIGH COURT], coordinate Bench noted that the judgment in M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2016 (5) TMI 225 - DELHI HIGH COURT] had been stayed by the Supreme Court and the appeal was pending adjudication. The Division Bench disposed of the said appeal by quashing the remand order passed by the Tribunal with a direction that the Tribunal will decide the appeal on merits, including the question of jurisdiction of officers of the DRI to issue show cause notice, uninfluenced by the decision in Mangli Impex.
The Tribunal shall apply its mind independently to the question of jurisdiction and decide the appeal on merits including the aspect of imposition of penalty. However, a prior notice shall be issued to the parties before proceeding to hear the matters on merits.
Appeal allowed.
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2019 (8) TMI 1888 - ITAT KOLKATA
TP Adjustment - CIT(A) accepting segmental profitability statement of the assessee - DR pointed out that the segmental profitability statement is not a part of the audited financial statement therefore it must be rejected - HELD THAT:- It is pertinent to note that the dispute arising from this segment reporting issue has already been adjudicated by the Coordinate Bench of ITAT in assessee`s own case [2019 (4) TMI 2103 - ITAT KOLKATA] noted that it is an undisputed fact that the assessee company belongs to the category of 'Small and Medium Sized Companies'. As a consequence, the Accounting Standard(AS)-17 is not mandatory for the assessee company. That is why, the assessee company has not disclosed segment reporting in the audited financial statements for the relevant financial year. However, it is pertinent to note that the assessee company submitted segment reporting to the Ld TPO solely for the purpose of application of the TNMM..
Coordinate Bench Delhi Tribunal in the matter of GSR Technology (India) (P.) Ltd [2017 (12) TMI 809 - ITAT DELHI] held that even if such segmental results were not shown in the audited financial accounts, they had to be accepted. There was no legal requirement that the segment wise working submitted before the TPO should have been audited by the Assessee's Chartered Accountant. See Infotec Ltd. [2013 (5) TMI 834 - ITAT CHENNAI]
We note that in the instant case the assessee provided software development services to the AE generating revenue which constituted 99.24% of total AEsales. The assessee rendered a large variety of services to non-AEs such as drawing consultancy services (generating revenue which constituted 94.30% of the total non-AE sales), annual maintenance of website, annual maintenance contract for hardware, video editing and hiring of camera equipment, CD sales, digital media sales, charges for gift online etc., among other services.
Since the services rendered by the assessee to the AE are different from the services rendered by the assessee to non-AEs, the assessee determined the arm's length nature of the international transaction under the TNMM based on segmental accounts duly certified and verified by the independent statutory auditor of the assessee dated 11th August 2010 (date of signature of annual financial statements). In the aforesaid segmental accounts, one segment is 'Sales to AE and associated expenses' and the other segment is 'Sales to Non-AEs and associated expenses'.
TPO rejected the segmental accounts and the arm's length analysis undertaken by the assessee based on the segmental accounts under the transaction-by-transaction approach, primarily based on the allegation that the segmental accounts had not formed part of audit report and hence, the same was not reliable - We note that that the Coordinate Benches of ITAT, as explained above, have accepted segmental accounts for the purpose of arm's length analysis of international transactions under the TNMM where the functions performed by the assessee under the AE-segment are different from the functions performed by the assessee under the non-AE segment, though the segmental accounts do not form part of the audit report.
Having regard to the nature of functions performed by the assessee under the AE segment and the non-AE segment respectively and the relevant decisions of the Coordinate Benches of ITAT in this regard (as mentioned hereinabove), we are inclined to accept the segmental accounts used by the assessee for determination of the arm's length price of the international transaction under consideration under the TNMM on transaction-by- transaction basis. That being so, we decline to interfere with the order of Id. C.I T.(A) in accepting the segment report and hence the ground of appeal of the Revenue is dismissed.
Rejection of comparables - Intec Software Pvt Ltd was not functionally comparable to the assessee company in the instant case.
Cherrytec Intelisolve Ltd, Cigniti Technologies Ltd and Secure Earth Technologies Ltd. - TPO cannot suo moto apply the filter 'companies who have less than 75% of the revenue as export sales were excluded' in order to exclude Cherrytec Intelisolve Ltd, Cigniti Technologies Ltd and Secure Earth Technologies Ltd. In this connection, it is pertinent to note that the TPO has not disputed; otherwise functional or FAR (function-asset-risk) comparability between the assessee company and Cherrytec Intelisolve Ltd, Cigniti Technologies Ltd and Secure Earth Technologies Ltd. That being so, we decline to interfere in the order passed by the ld CIT(A), his order on this issue is hereby upheld and ground No.4 raised by the Revenue is dismissed.
Kireeti Soft Technologies Ltd - We note that in the assessee`s case under consideration, the employee cost to sales ratio of Kireeti Soft Technologies Ltd is 24.31%, whereas the TPO set the threshold at 25% and rejected the aforesaid company. The TPO has not disputed, otherwise functional or FAR (function-asset-risk) comparability between the assessee company and Kireeti Soft Technologies Ltd. We reject the contention of the TPO and accept Kireeti Soft Technologies Ltd as comparable to the assessee company. That being so, we decline to interfere in the order of ld CIT(A) and dismiss the ground No. 5 raised by Revenue.
Akshay Software Technologies Ltd. be accepted as functionally comparable to the assessee as it is clearly evident from the annual report of the comparable company itself that it is engaged in rendering software development activity only.
Avani Cimcon Technologies Ltd. - As total revenue of the said company stands at INR 3.05 crore out of which the operational revenue stands at INR 2.83 crore. The cost incurred by the company stands at INR 2.73 crore leading to profit before tax amounting to INR 0.33 crore. Thus, the allegation made by the Revenue that the company has insignificant cost base has no leg to stand. It is also not true that in the case of the aforesaid company, with a small variation in profit, the impact in the profit margin will be very significant. We therefore accept Avani Cincom Technologies Ltd as comparable, and for that we rely on the judgment of the Coordinate Bench of ITAT Hyderabad in the matter of CNO IT Services (India) (P.) Ltd. [2018 (1) TMI 1151 - ITAT HYDERABAD]
CAT Technologies Ltd is to be selected as comparable .
Selecting cash profit over sales - We accept the cash profit margin ratio as an appropriate profit level indicator(PLI) under the TNMM which places the tested party and comparable companies on equal footing. In the aforesaid decisions, nowhere it is stated that cash profit margin is an appropriate net profit indicator only for a company which operates in capital intensive industry. The cash profit margin ratio is also applicable to other companies, as profit level indicator (PLI) and it is not only restricted to capital intensive industries; that is, it is equally applicable to other industries also. We accept cash profit margin ratio as appropriate profit level indicator (PLI) in the assessee`s case under consideration. That being so, we decline to interfere in the order of ld CIT(A) and dismiss the ground raised by Revenue.
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2019 (8) TMI 1887 - CALCUTTA HIGH COURT
Jurisdiction of the Special Court treating offences committed territorially under the SEBI Act - scope of proceedings after the amendment of the SEBI Act 2014 and offences under the SEBI Act committed prior to the 2002 amendment - revisionist would argue that no part of the cause of action in the original complaint that was adjudicated by SEBI arose in Kolkata and the entire proceedings were initiated at Mumbai in which the revisionist was penalised as said first proceeding was carried in appeal to the Securities Appellate Tribunal at Mumbai, which affirmed the order of the Adjudicating Officer - HELD THAT:- As in the case of Securities and Exchange Board of India –Vs.- Classic Credit Limited [2017 (8) TMI 869 - SUPREME COURT] related to a trial and not enforcement of a final order passed by the Adjudicating Officer. Since the final order of the Adjudicating Officer has been upheld all the way to the Supreme Court. The issue as to the person to whom the penalty should be paid can no longer be reopened. The impugned proceedings are for failure on the part of the Revisionist to repay the amount of the order of the Adjudicating Officer to the Regional Manager of the SEBI at Kolkata. The principle to be followed in this regard is that an executing court cannot go behind the original order that is sought to be executed.
This Court finds no infirmity in the proceedings and, therefore, the revisional application must fail and hereby dismissed.
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2019 (8) TMI 1886 - MADRAS HIGH COURT
Reversal of ITC - petitioners had effected inter-state sale of goods without 'C' Form Declarations - second revision notice - first revision notice already dropped - HELD THAT:- Having dropped the first proposal, there is clearly no justification for issuance of the second revision notice wherein the respondent has simply sought wide – ranging particulars from the petitioners.
It appears that what the Assessing Authority has embanked in the second revision upon a fishing expedition. No flaw or lacunae in the turnover returned by the assessee has been pointed out in the second revision notice, in the absence of which the notice has no justification at all.
Petition allowed.
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2019 (8) TMI 1885 - ITAT CHANDIGARH
Monetary limit for filing the appeals by the Department before the ITAT - maintainability of appeal on low tax effect - HELD THAT:- In the present case it is an admitted fact that the CBDT vide Circular No. 17/2019 enhanced the monetary limit to Rs. 50,00,000/- for not filing the appeal by the department before the ITAT, earlier this limit was specified at Rs. 20,00,000/- in the original Circular no. 03/2018 dt. 11/07/2018.
From the contents of the aforesaid Circular it is crystal clear that the anomaly in the earlier Circular no. 3 of 2018 dt. 11/07/2018 at page 5 has been removed and the limit specified in para 3 of the earlier Circular has been enhanced. It is also not in dispute that the earlier Circular was applicable retrospectively to the pending appeals / cross objections.
Now the CBDT simply enhanced the monitory limit and the directions given earlier vide para nos. 12 & 13 of the Circular no. 3 / 2018 dt. 11/07/2018 are still intact which is crystal clear from the language of the Circular no. 17/2019 wherein it has been mentioned that there is enhancement of monetary limit and amendment to Circular no. 3 /2018 for reducing the litigation. We therefore are of the confirmed view that the amended Circular No. 17/2019 now issued by the CBDT is also applicable to the pending appeals as has been specified in para 13 of the original Circular no. 3/2018 dt. 11/07/2018 and that the Department ought not have filed the appeals before the ITAT where the tax effect is Rs. 50 Lacs or less.
In view of the aforesaid discussion all the above appeals filed by the Department are dismissed.
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2019 (8) TMI 1884 - ITAT CHANDIGARH
Monetary limit for filing the appeals by the Department before the ITAT - HELD THAT:- In the present case it is an admitted fact that the CBDT vide Circular No. 17/2019 enhanced the monetary limit to Rs. 50,00,000/- for not filing the appeal by the department before the ITAT, earlier this limit was specified at Rs. 20,00,000/- in the original Circular no. 03/2018 dt. 11/07/2018.
CBDT simply enhanced the monitory limit and the directions given earlier vide para nos. 12 & 13 of the Circular no. 3 / 2018 dt. 11/07/2018 are still intact which is crystal clear from the language of the Circular no. 17/2019 wherein it has been mentioned that there is enhancement of monetary limit and amendment to Circular no. 3 /2018 for reducing the litigation. We therefore are of the confirmed view that the amended Circular No. 17/2019 now issued by the CBDT is also applicable to the pending appeals as has been specified in para 13 of the original Circular no. 3/2018 dt. 11/07/2018 and that the Department ought not have filed the appeals before the ITAT where the tax effect is Rs. 50 Lacs or less. Appeal filed by the Department is dismissed.
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