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Showing 1 to 20 of 1721 Records
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2019 (9) TMI 1727 - ITAT DELHI
Income from house property - Determination of annual value or determined vacancy allowance - Deemed/assumed rental income - as argued property in question remained vacant throughout the year under appeal because no tenant could be found - CIT (A) held that the benefit of the vacancy allowance u/s 23(1)(c) of the Act is not available to the assessee as a property was not let out anytime, at least once - HELD THAT:- Having regard to the clear provisions of the Act, and harmonious reading of Section 23(1)(a) and 23(1)(c) of the Act, were hereby hold that the rent received by the assessee has to be treated as the annual value of the house and liable to tax under income from house property. The action of the ld. CIT (A) on this ground is hereby upheld.
Addition on account of cash and jewellery found from the residence of the Appellant and bank lockers in the names of family members of the Appellant during search and seizure operations - argument of the ld. AR that the jewellery was purchased with the imprest money of the company available with the assessee -HELD THAT:- Wealth Tax Return of Surpreet Suri and Kinty Suri[wife] shown a total amount of 2481.672 gms whereas the total jewellery found and recorded as per the panchanama pertaining to Surpreet Suri and Kinty Suri was 3622.15 gms. Since, the assessee has got two sons and no provision has been given by the revenue regarding the jewellery possessed by them in view of the Instruction No. 1916 dated 11.05.1994 in para (ii) and (iii), keeping in view the return income of the assessee which is 4.5 crores for the assessment year 2013-14, we hereby consider it fair to allow 200 gms of jewellery per person and thus, an amount of 740 gms can be treated as unexplained excess jewellery in the hands of the assessee against 2528 gms determined by the revenue.
This was due to the fact that the amount of jewellery of 1388 gms belonging to Narender Kaur Suri and Preet Pal Suri parents of the assessee, found at the residence of the assessee were treated in the hands of the assessee wrongly, even though the panchnama reveals clearly that the jewellery belongs to the parents of the assessee. The appeal of the assessee on this ground is treated as partly allowed.
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2019 (9) TMI 1726 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Allocation for payment in favour of Financial Creditor - Revised Resolution Plan under Section 12A is under consideration before the Committee of Creditors - HELD THAT:- The Appellant and the Promoters during the discussion in the meeting of ‘Committee of Creditors’ may give fresh proposal for payment and the amount to be paid to all the similarly situated ‘Financial Creditors’ and ‘Operational Creditors’. If no revised proposal equating all the ‘Financial Creditors’ and ‘Operational Creditors’ is submitted by 12th September, 2019, this Appellate Tribunal will not allow further time to the Appellant and will proceed in the matter on merit. In case a revised proposal as per our observation is submitted by 12th September, 2019, the ‘Committee of Creditors’ will consider the same and will ensure that no discrimination is made between equally situated ‘Financial Creditors’, ‘Operational Creditors’ and ‘Creditors’ and pass appropriate order by 26th September, 2019.
Post the case ‘for order’ on 30th September, 2019.
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2019 (9) TMI 1725 - CESTAT HYDERABAD
Classification of services - Business Auxiliary Services or not - education services rendered by service recipients - the services rendered are in the nature of business or not? - HELD THAT:- In view of the order of the Third Member all appeals are decided in favour of the assessee and against the Revenue. Appeals allowed.
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2019 (9) TMI 1724 - SUPREME COURT
Enforceability of an agreement - non-alienation Clause of 15 years - whether the agreement to sell dated 15.05.1990 executed by Bale Venkataramanappa in favour of the Plaintiff would be enforceable in law or not? - HELD THAT:- The transaction between the late Bale Venkataramanappa and the Plaintiff is not disputed. Initially the said Bale Venkataramanappa had executed a registered mortgage deed in favour of the Plaintiff. Within a month, he entered into an agreement to sell wherein, the entire consideration for the transfer as well as handing over of the possession was acknowledged. It could thus be seen, that the transaction was nothing short of a transfer of property. Under Section 61 of the Reforms Act, there is a complete prohibition on such mortgage or transfer for a period of 15 years from the date of grant. Sub-section (1) of Section 61 of the Reforms Act begins with a non-obstante clause.
It is thus clear that, the unambiguous legislative intent is that no such mortgage, transfer, sale etc. would be permitted for a period of 15 years from the date of grant. Undisputedly, even according to the Plaintiff, the grant is of the year 1983, as such, the transfer in question in the year 1990 is beyond any doubt within the prohibited period of 15 years. Sub-section (3) of Section 61 of the Reforms Act makes the legislative intent very clear. It provides, that any transfer in violation of Sub-section (1) shall be invalid and it also provides for the consequence for such invalid transaction.
Undisputedly, in the present case, the claim of the Plaintiff is entirely based upon the agreement to sell dated 15.05.1990, which is clearly hit by Section 61 of the Reforms Act. There is no other foundation for the claim of the Plaintiff except the one based on the agreement to sell, which is hit by Section 61 of the Act - It could thus be seen that, the trial Judge upon finding that the agreement of sale was hit by Section 61 of the Reforms Act, had rightly dismissed the suit of the Plaintiff.
The judgment and order passed by the High Court of Karnataka dated 08.06.2015 and the Order passed by the Fast Track Court-III, Bangalore Rural District, Bangalore, dated 17.06.2008 are quashed and set aside - Appeal allowed.
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2019 (9) TMI 1723 - SUPREME COURT
Mis-declaration established in respect of valuation of the goods - "transmission apparatus" - Technical Assistance Fee Under Article 4 - Valuation of imported goods under Rule 9 and 10(1)(c) - Post-importation activities - confiscation - penalty - HELD THAT:- It is a matter of record that after considering the purchase order in the instant case, the Tribunal found that apart from supply of equipment, necessary software had to be embedded in the equipment before the supply was effected. The facts also disclose that out of 19 items indicated in the Bill of Entry, only 8 items were physically presented while the rest were already embedded in the main unit. These facts are not only reflective that the individual components were intended to contribute together and attain a clearly defined function as dealt with in Note 4 of Section XVI as stated above, but also indicate that software that was embedded through cards in the main unit, was not any post-importation activity. The value of the software and the concerned services were therefore rightly included and taken as part of the importation.
The facts on record as stated, further disclose that the Department was therefore right in invoking principle under said Note 4 and considering the imported items as part of one apparatus or machine to be classifiable under the heading appropriate to the function. The submission advanced by the Appellant in that behalf therefore has to be rejected.
Rule 9(1)(b) of 1988 Rules as quoted above in the decision in Toyota Kirloskar [2007 (5) TMI 20 - SUPREME COURT], case shows that the value in respect of "materials, components, parts and similar items incorporated in the imported goods" has to be added while determining the transaction value. Said Rule 9 is almost identical to Rule 10 of 2007 Rules. Thus, even if the governing Rule is taken to be Rule 9 of 1988 Rules, there would be no difference in the ultimate analysis.
Consequently, we do not find any merit in the present appeal. Affirming the view taken by the Tribunal, we dismiss this appeal.
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2019 (9) TMI 1722 - ITAT DELHI
Disallowance on account of bank interest expenses - CIT(A) deleted addition - HELD THAT:- As from the perusal of the records it can be seen that the loan procured was utilized by the assessee wholly and exclusively for its business as per clause 14 of the arrangement between third party contract bottling units (CBUs). The working capital is advanced to these CBUs so as to enable them to procure material, undertake manufacturing and maintain stocks and debtors for the assessee.
Assessee’s profit earning source is the arrangement with the CBUs wherein the assessee provides working capital to these CBUs to enable them to procure materials and carry out large scale manufacturing of alcoholic beverages and deliver the same to the assessee’s customers on its behalf. Thus, from this it is clear that working capital loan was taken by the assessee for its business purpose and use for business purposes only. CIT(A) was right in deleting this disallowance. Ground No. 1 of the Revenue’s appeal is dismissed.
Disallowance on account legal & Professional Fee Expenses and warehousing and demurrage charges - CIT(A) deleted addition - HELD THAT:- As admitted position that during the year there was no business activity, but during the said period the assessee incurred expenses on the maintenance of its business establishment. During the said year, the AO has not pointed out any bogus or expenditure of personal nature, which will warrant any disallowance. CIT(A) rightly held that by simply mentioning that the expenditures are not commensurate with the turnover, will not automatically prove that they have not been incurred wholly and exclusively for business purposes. Thus, there is no need to interfere with the findings of the CIT(A). Ground Nos. 2 and 3 are dismissed.
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2019 (9) TMI 1721 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Rejection of Application under Section 9 of IBC - rejection on the ground that there is a dispute about quantum of debt - HELD THAT:- There is no dispute with regard to the aforesaid amount and it remaining outstanding and being more than Rs. 1 Lakh, the Application under Section 9 was fit to be admitted.
The impugned order is set aside - case remitted to the Adjudicating Authority to admit the Application under Section 9 after Notice to the Respondent, so that the Respondent may get an opportunity to settle the matter prior to the admission of the Application - appeal allowed.
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2019 (9) TMI 1720 - ITAT CHENNAI
Admission of additional income in search - voluntary disclosures - Additional income admitted by virtue of service tax refund brought to tax u/s 41(1) - service tax refund accrued to the assessee in the assessment year under consideration or not? - HELD THAT:- As during the course of search u/s 132 Department has not impounded any incriminating documents or materials against the assessee. The Director of the assessee company voluntarily admitted additional income that would cover up all issues arising on account of stock, cash in hand, various omissions, commissions, assets, jewellery valuable, documents and on any instances where the search party is not satisfied on the explanations and clarifications given by us on any issues may be on account of large number of whole-sellers, agents, distributors, sub-agents, retailers in their own capacity and enormous volume of transactions, etc. Moreover, it was made it clear before the investigating authorities that the above admission of additional income was declared in good faith with a spirit of cooperation with the department and to buy peace of mind with the clear understanding that no penalty shall also be imposed and no prosecution proceedings will be initiated against any of their group concerns or any of the family members.
If the Department is prompted to bring to tax of the Service Tax Refund in view of the decision of the Hon’ble Supreme Court, which was delivered on 24.10.2013, the same should have been taxed in the relevant to the assessment year 2014-15 or it can be taxed as and when the said sum or any part thereof is actually received by way of refund from the concerned authorities.
AO has not discussed anything in the assessment order of receipt of service tax refund during the assessment year under consideration - Also service tax refund was not accrued to the assessee in the assessment year under consideration in lieu of the Hon’ble Supreme Court’s decision.
The provisions of section 41(1) of the Act warrant taxation of the benefit obtained, whether in cash or in any other manner whatsoever or accrued. By virtue of the judgement of the Hon’ble Supreme Court delivered on 24.10.2013 towards service tax refund, the Assessing Officer cannot held that the benefit of service tax refund accrues to the assessee in the assessment year 2015-16 automatically. Assessee also filed an undertaking before the AO by way of an affidavit that the actual receipt of the service tax refund will be offered to tax, we are of the considered opinion that the Assessing Officer was not factually and legally correct to bring the same to tax in the assessment year in which the assessee has not actually received the refund or accrued.
Balance addition towards variation in additional income admitted - assessee has not advanced any argument or the assessee has furnished any material evidence on record. When the assessee was asked to explain with regard to the short fall in income that was admitted under section 132(4) of the Act being ₹.80,53,26,740/-, before the ld. CIT(A), the assessee has explained about service tax refund of ₹.77.80 crores only and no reply was given on the difference amount of ₹.80,53,26,740- ₹.77,80,00,000. Accordingly, the balance addition of ₹.2,73,26,740/- stands confirmed.
Appeal filed by the assessee is partly allowed.
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2019 (9) TMI 1719 - CHHATTISGARH HIGH COURT
High pitched assessment - Entitlement to waive off the pre-deposit of 20% of the assessed tax liability - as contented assessment was calculated which is 78 times higher - HELD THAT:- The perusal of the assessment order would show that the detailed discussion has been made and it is out come after the seizure was made and the various documents were seized. The petitioner contended that the assessment has been made high pitched which is 78 times more. The Assessment Officer justifies the same in the order, which is of course subject matter of adjudication before the first appeal pending before the Commissioner, Income Tax (Appeals). In view of the facts of the case, we are not inclined to allow the application for interim relief. Accordingly, the same is rejected. Petitioner shall be at liberty to make request before the Assessment Officer for relaxation, which the Assessment Officer may decide in the facts & situation of this case.
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2019 (9) TMI 1718 - SUPREME COURT
Dishonour of Cheque - existence of debt or liability or not - oral sale of a property and towards consideration for purchase - HELD THAT:- The offence alleged was that a cheque was given towards consideration for purchase of a property. Neither any document was produced on record nor there was any evidence that any conveyance was executed in favour of the appellant. Thus, the submission of the appellant that there was no existing debt or liability against which the cheque was given had to be accepted - the High Court was in error in accepting the appeal and upsetting the view taken by the Trial Court.
The decision of the High Court is set aside - appeal allowed.
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2019 (9) TMI 1717 - KARNATAKA HIGH COURT
Enhancement of compensation - Section 54(1) of the Land Acquisition Act, 1894/Section 74(1) of 2013 Act - condonation of delay in filing appeal u/s 5 of Limitation Act - Right to file an appeal to the High Court by a person being aggrieved by an award passed by the reference Court - HELD THAT:- It is a settled position of law that the right to file an appeal is a statutory right or a creature of the statute and no other right to file an appeal can be recognized de hors a statute. A right of appeal is a creature of statute and no appeal can be filed unless it is clearly expressed in terms of a statute. Further, the right of appeal is a substantive right and not merely a matter of procedure. It is a vested right which can be exercised when the adverse judgment is pronounced. Though it exists from the date the lis commences, such right is governed by the law prevailing on the date of the institution of the suit or proceeding and not by the law that prevails on the date of its decision or on the date of the filing of the appeal.
In Anant Mills Company Limited vs. State of Gujarat, [1975 (1) TMI 62 - SUPREME COURT] (Anant Mills Company), it has been held that though the right of appeal is a creature of a statute, there is no reason why the legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory.
There is a fundamental distinction between a right to file a suit and right to file an appeal which has been explained by Y.V. Chandrachud J. (as he then was) in the case of Ganga Bai vs. Vijay Kumar, [1974 (4) TMI 95 - SUPREME COURT].
Filing of a suit or an appeal within the prescribed period of limitation - HELD THAT:- In N. Balakrishnan v. M. Krishnamurthy, [1998 (9) TMI 602 - SUPREME COURT] (N. Balakrishnan), the Hon'ble Supreme Court has held Rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time - In State of Madhya Pradesh vs. Pradeep Kumar, [2000 (9) TMI 1042 - SUPREME COURT] (Pradeep Kumar), on the question of a belated appeal being unaccompanied by an application seeking condonation of delay and the consequences of not filing the said application along with the memorandum of appeal and the fact that the said defect is curable, the Hon'ble Supreme Court has observed The effort of the Court should not be one of finding means to pull down the shutters of adjudicatory jurisdiction before a party who seeks justice, on account of any mistake committed by him, but to see whether it is possible to entertain his grievance if it is genuine.
Analysis of Section 74(1) of 2013 Act and Section 29(2) of Limitation Act - Whether Section 74(1) of 2013 Act, which is a special law prescribing a different period of limitation than as prescribed under the schedule to the Limitation Act, in terms of Section 3 of the Limitation Act excludes the application of Sections 4 to 24 (inclusive) of the Limitation Act and particularly Section 5 thereof? - HELD THAT:- If on a reading and interpretation of Section 74(1) of 2013 Act it is held that Sections 4 to 24 (inclusive) of the Limitation Act are expressly excluded, then there cannot be any extension of time or condonation of delay as sought for by the appellant under Section 5 of the Limitation Act. On the other hand, if on a plain reading and interpretation of Section 74(1) of 2013 Act, it is held that Sections 4 to 24 (inclusive) of the Limitation Act are not excluded under Section 74(1) of 2013 Act, then the application filed by the appellant under Section 5 of the Limitation Act has to be held to be maintainable and considered.
The proviso to Section 74(1) of the 2013 Act is similar to the proviso to Section 125 of the Electricity Act. But, the main Section under Section 125 of the said Act prescribes a limitation of sixty days from the date of the communication of the decision or order by the appellate tribunal to an aggrieved party. Under Section 74(1) of the 2013 Act, the limitation period prescribed is sixty days from the date of the award and not from the date of the communication of the award. After considering Section 29(2) of the Limitation Act in light of Section 125 of the Electricity Act, the Hon'ble Supreme Court considered the scheme of Electricity Act and observed that it is a self-contained comprehensive legislation and a special adjudicatory forum i.e., Tribunal has been established to deal with a grievance of any person who may be aggrieved by an order of an adjudicating officer or of an appropriate Commission.
Thus, whenever there is a special enactment prescribing a limitation period different from the Limitation Act, it is necessary to consider as to whether Section 5 of the Limitation Act is excluded. of course, in Section 29(2) of the Limitation Act, the expression used is "expressly excluded by special or local law". But, with the passage of time, the expression "expressly excluded" has also been interpreted to also mean exclusion by necessary implication having regard to the scope, object and scheme of the special law being a code by itself prescribing a limitation period different from the Limitation Act, which would exclude application of Section 5 of the Limitation Act - in computing the period of limitation for filing an appeal under Section 74(1) of the 2013 Act, the time spent in prosecuting bona fide with due diligence an appeal before an appellate court not being the competent court in good faith has to be excluded. In fact, Section 14 of the Limitation Act has been made applicable to Section 34(3) of the Arbitration Act.
Thus, there can be no exception to the period of limitation to file an appeal to the High Court and the 60 days has to be computed after application of Sections 12, 13 and 14 of the Limitation Act. In other words, while applying the period of limitation prescribed under Section 74(1) of the 2013 Act in the matter of filing an appeal to the High Court against the judgment and Award of the reference court, while considering as to whether the appeal filed is within the period of 60 days, the exclusion of time as envisaged under Sections 12, 13 and 14 must be made applicable. In our view, such an interpretation would also be in consonance with Article 300A of the Constitution, which recognizes the Constitutional right of a person to his property as no person can be deprived of such a Constitutional right except by authority of law.
Thus, Section 74(1) of 2013 Act is already interpreted in light of Section 29(2) of the Limitation Act by holding that Section 5 thereof is not applicable whereas Section 4 and Sections 12, 13 and 14 are applicable while computing the period of limitation of 60 days + 60 days. As already noted, there is no indication as to when the certified copy was delivered to the appellant even though it was prepared on 01/12/2018 and the appellant was required to appear on 10/12/2018. In the instant case, while we accept the contentions of learned counsel for the respondent that Section 5 of the Limitation Act is not applicable to Section 74(1) of the 2013 Act and there cannot be any condonation of delay as contemplated under the said Section in the instant case, nevertheless, Sections 4, 12 to 14 of the Limitation Act are applicable to Section 74(1) of the 2013 Act while computing the period of sixty days + sixty days under Section 74(1) of the 2013 Act. Further, we do not venture to condone any delay that has occurred in filing of this appeal under Section 5 of the Limitation Act as the same is not applicable to Section 74(1) of the 2013 Act.
Ignorance of law is no excuse. In the instant case, there is a blatant ignorance of law on the part of the Department/State. Therefore, it is necessary for all concerned to become aware of the specific period of limitation prescribed under Section 74(1) of the 2013 Act so that the right to file an appeal is not lost either on account of ignorance of the provision or due to laxity in acting within time.
Appeal dismissed.
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2019 (9) TMI 1716 - SUPREME COURT
Gross judicial impropriety, judicial indiscipline, lack of integrity, gross misconduct and an act unbecoming of a Judicial Officer.
HELD THAT:- As far as the first charge is concerned, a major fact, which was not considered by the enquiry officer, the disciplinary authority as well as the High Court was that the Additional Public Prosecutor, who had appeared on behalf of the State had not opposed the prayer of the accused for grant of bail. In case, the public prosecutor does not oppose the bail, then normally any Judge would grant bail - The main ground to hold the appellant guilty of the first charge is that the appellant did not take notice of the orders of the High Court whereby the High Court had rejected the bail application of one of the accused vide order dated 26.11.2001. It would be pertinent to mention that the High Court itself observed that after framing of charges, if the non-official witnesses are not examined, the prayer for bail could be removed, but after moving the Lower Court first. The officer may have been guilty of negligence in the sense that he did not carefully go through the case file and did not take notice of the order of the High Court which was on his file. This negligence cannot be treated to be misconduct.
After rejection of the bail application of the accused, two out of three accused moved the High Court. The High Court granted bail to one of the accused and the bail application of the other was rejected, not on merits but on the ground that he did not disclose the fact that he had earlier moved the High Court for grant of bail. This itself is clear indicator of the fact that probably even the order passed by the appellant is not an incorrect one.
Coming to the second charge, which is under the Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter referred to as the "NDPS". On 18.07.2002 the appellant, a Special Judge, closed the evidence of the prosecution which resulted in material witnesses not being examined and consequently the accused was acquitted. As far as this allegation is concerned, the enquiry officer on the basis of the statements of two clerks of the Court has made lengthy observations that the appellant did not send any communication to the Superintendent of Police, the District Magistrate and other authorities to ensure the production of the witnesses - the enquiry officer, while conducting the enquiry, has noted, while considering the arguments of the delinquent official, that he had raised a plea that he closed the evidence because the Public Prosecutor had made the statement, but while holding the appellant guilty of misconduct no reference has been made to the statement of the Public Prosecutor.
The judgment of the High Court set aside - appeal allowed.
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2019 (9) TMI 1715 - ITAT DELHI
Reopening of assessment u/s 147 - case of the assessee as completed us 153A - unexplained cash credit u/s 68 - HELD THAT:- We find that that the addition which is in dispute before us has been deleted by the Ld. First Appellate Authority in his order relying on the decision of the Hon’ble High Court in the case of Kabul Chawala [2015 (9) TMI 80 - DELHI HIGH COURT] and the Revenue challenged that order of the Ld. CIT(A) before the Tribunal. Thus, it is an admitted fact that very sum in respect of which the Assessing Officer reopened the proceeding, were the subject matter of the appeal before the Tribunal. We find that the third proviso mandates that no proceeding can be initiated to tax such income, which is subject matter of the appeal.
We are of the considered opinion that AO was not justified in reopening the assessment for assessing the income which was subject matter of the appeal before the Tribunal. Accordingly, we hold the reassessment in the instant case as void-ab-initio thus, the reassessment proceeding are accordingly quashed. Decided in favour of assessee.
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2019 (9) TMI 1714 - ITAT CUTTACK
Maintainability of revenue appeal on low tax effect - scope of relaxation in the monetary limit in departmental appeals - HELD THAT:- Going by the prescription of amended Circular No. 17/2019, dated 8th August, 2019, we are of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in the appeal is admittedly less than the prescribed limit, i.e., Rs. 50,00,000/- for not filing the appeal, which is not maintainable as per the provisions of Section 268A of the Income Tax Act, 1961.
As keeping in view the order passed in the case of Dinesh Mudhavlal patel [2019 (8) TMI 752 - ITAT AHMEDABAD] we are of the view that the relaxation in the monetary limit in departmental appeals vide circular dated 8th August, 2019 shall be applicable to the pending appeals in addition to the appeals to be filed henceforth. Thus, the contention of ld D.R. is dismissed.
Accordingly, we dismiss the appeal filed by the Revenue without going into merits of the case.
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2019 (9) TMI 1713 - ITAT CHENNAI
Assessment of trust income - Exemption u/s 11 rejected - return was processed u/s 143(1) - admittedly registration was not available u/s 12AA - HELD THAT:- Admittedly, registration u/s 12AA of the Act was not available to the assessee during the year under consideration. Therefore, income of the assessee has to be computed commercially by allowing all the expenditure for earning the income. In other words, the total expenditure incurred by the assessee for earning the income has to be reduced and whatever remains has to be brought for taxation.
As rightly submitted by assessee, the corpus donation has also to be taken as income / receipt. Since such an exercise was not done, this Tribunal is of the considered opinion that the matter needs to be re-examined by the AO. Accordingly, orders of both the authorities below are set aside and the AO is directed to take the net income after reducing the expenditure and levy tax thereon. We are conscious that proceeding arises for considering is u/s 143(1) - This is prima facie adjustment, therefore, the AO while considering the matter, has to keep in mind the provisions of Section 143(1) of the Act which enables him to make prima facie adjustment. Both the appeals filed by the assessee are allowed for statistical purposes.
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2019 (9) TMI 1712 - CALCUTTA HIGH COURT
Granting stay of operation of an order passed by the court of first instance, dated April 22, 2019 - grant of ad interim order of injunction restraining the defendant/opposite party from illegally suspending a Permissive User Agreement (PUA) for a limited period.
Whether subject-matter of the PUA ex facie fall within the ambit of "preferential transactions", barred under Sections 43(2)(a) and 44(1)(b) of the IBC?
HELD THAT:- The NCLT has authority to examine the PUA under Sections 43 and 44 and therefore also has authority to examine and decide whether the PUA was backdated or manufactured. No other forum or court can decide such an issue - As far as the PUA not being void but at best voidable, and that the same has to be terminated, otherwise the rights of the petitioner under the same continues, such proposition is refuted by the opposite party. It is submitted by the opposite party that the PUA itself is fabricated and as such, since the existence of the same is not admitted by the opposite party, an attempt to terminate the same would validate and/or acknowledge the existence of such a fabricated, non-existent document. The question of termination would only arise if the existence of the document was acknowledged.
Secondly, by virtue of the order dated April 8, 2019, the NCLT has approved the resolution plan in its totality, thereby terminating the PUA, and no further specific termination thereof is required in law.
Upon hearing both sides, it is seen that Sections 43 and 44, as well as Section 45 of the IBC are inapplicable to the present case, in view of those being maintainable only at the instance of a liquidator or a resolution professional. Hence, the petitioner had no scope to resort to the said provisions for the reliefs claimed in the suit - the transaction-in-question, being the PUA, being of the year 2014, was well beyond the look-back period as contemplated in Section 46. Mere alteration in the Memorandum and Articles of Association to include manufacturing purposes or absence of any prima facie proof of any transaction relating to the trademark having occurred during the relevant look-back period do not ipso facto invalidate the said agreement or indicate that the same was manufactured or fraudulent.
The pendency of the avoidance petition itself is not a bar to the institution of the suit, more so because the PUA is ex-facie of 2014, that is, beyond the look-back period contemplated in Section 46 of the IBC.
It is apparent that there is and was strong prima facie case in favour of the petitioner for grant of ad interim injunction in its favour.
Irreparable injury - balance of convenience and inconvenience - HELD THAT:- Those are obviously in favour of the petitioner, in view of the conduct of the opposite party and the circumstances of the case, inasmuch as the resolution plan has been approved and a direct challenge has been thrown to the validity of the suit itself, thereby putting the petitioner at the peril of losing its rights on the PUA, which is its only collateral security for the claim of outstanding money from the opposite party.
The impugned order suffers from patent jurisdictional error and ought to be set aside - Order disposed of by setting aside the impugned order of the appellate court and reviving the order of ad interim injunction passed by the trial court, with liberty to the petitioner to pray for extension/re-imposition of the trial court's order, if not already extended.
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2019 (9) TMI 1711 - SUPREME COURT
Dishonor of cheque - Consolidation of four complaints - main ground raised is that in terms of Section 219 of the Code of Criminal Procedure, 1973 since the offences took place during the period of one year, the cases should be dealt together - HELD THAT:- There is no provision of consolidation of cases in the Code of Criminal Procedure.
The only relief that can be granted to the Appellant is that it is directed the Trial Magistrate to fix all the four cases on one date so that it is convenient to both the parties to attend the hearing of all the four cases on one date - It shall be open to the trial Court to record the evidence in the manner it feels like. Since the original complaints were filed in the year 1999, the Magistrate is directed to fix day to day hearing in the matters and dispose of these complaints latest by 31.12.2019.
Appeal disposed off.
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2019 (9) TMI 1710 - ITAT MUMBAI
Taxability of profits of life insurance business - addition on account of Surplus disclosed in Form 1 of Actuarial Report - HELD THAT:- As decided in assessee own case [2017 (3) TMI 1696 - ITAT MUMBAI] relying on case of ICICI Prudential Insurance Co. Ltd [2012 (11) TMI 13 - ITAT MUMBAI] has held that “where assessee was carrying on life insurance business and Tribunal following a decision of Supreme Court, while determining assessee’s income under section 44, had taken into consideration total surplus as arrived at by actuarial valuation and further held that income from shareholders account was also to be taxed as a part of life insurance business, there was no substantial question of law arising for consideration”.
Reference was made to the decision in LIC of India vs. CIT [1963 (12) TMI 5 - SUPREME COURT] wherein the Hon'ble Supreme Court has held that the Assessing Officer has no power to modify the account after actuarial valuation is done. Decided against revenue.
Disallowance of loss from pension fund - assessee in the computation of income has claimed exemption u/s 10(23AAB) on account of surplus / deficit pension fund - AO disallowed the claim of the assessee and passed the assessment order by adding the amount on account of the provision for solvency margin and loss from Jeevan Suraksha Fund, inter alia, on the ground that the provision for solvency margin was not an ascertained liability and that income from Jeevan Suraksha Fund being exempt u/s 10(23AAB), the loss incurred from the said fund could not be adjusted against the taxable income - HELD THAT:- While deciding identical issue raised by the Revenue in assessee’s own case for assessment year 2011–12, [2017 (3) TMI 1696 - ITAT MUMBAI] held that (i) amount set apart by insurance company towards solvency margin as per the direction given by IRDA is to be excluded while computing actuarial valuation surplus, and (ii) pension fund like Jeevan Suraksha Fund would continue to be governed by provisions of section 44 irrespective of the fact that income from such fund is exempted, or not and, therefore, even after insertion of section 10(23AAB), loss incurred from pension fund like Jeevan Suraksha Fund has to be excluded while determining actuarial valuation surplus from insurance business u/s 44.
Revenue appeal dismissed.
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2019 (9) TMI 1709 - ITAT KOLKATA
Assessment proceedings u/s 153C(1) - determining the six assessment years - HELD THAT:- As going by sec. 153A (1)(b) applicable in such a scenario except that to the extent of its exclusion in view of the first proviso to sec. 153C(1), the six assessment years in this taxpayer’s case preceding the assessment year relevant to the previous year in which the search is conduced (AY 2017-18 herein since the reference to date of search brings us to August, 2016) are 2016-17, 2015-16, 2014-15, 2013-14 2012-13 assessment year 2011-12 and not beyond that.
Hon'ble Delhi high court’s twin decisions RRJ Securities Ltd [2015 (11) TMI 19 - DELHI HIGH COURT] and SSP Aviation Ltd. [2012 (4) TMI 335 - DELHI HIGH COURT] decide the very question in assessee’s favour going by the very reasoning. We conclude in these facts that the impugned assessments in assessment years 2009-10 and 2010-11 not sustainable in law. The same stand quashed.
Assessment proceedings u/s 153C(1) - addition u/s 68 - Whether any incriminating material found or seized during the course of search? - HELD THAT:- Although the search assessment provision nowhere contemplates that addition should be strictly made on the basis of evidence found in the course of search or other post search material or information available with the AO which can be related to the evidence found, it does not mean that an assessment can be arbitrarily made without any relevance or nexus with the seized material.
Such an assessment under this provision has to be made only on the basis of seized material. Learned CIT-DR fails to dispute that there is no such incriminating material so far as the twin sec. 68 addition(s) of cash deposits in question.
We accordingly hold that the impugned assessment(s) deserve to be quashed for this precise reason alone since they are not based on any incriminating material found or seized during the course of search.
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2019 (9) TMI 1708 - ITAT RAJKOT
Disallowance of expenses claimed against the gross income in the absence of any documentary evidence - Non justify the claim made against the income from other sources - HELD THAT:- As primary onus lies on the assessee to justify the nature of the income shown under the head other sources but the assessee has failed to clarify the same. Similarly, the assessee has not specified the nature of the expenses against such gross income based on any cogent material.
Generally, the income cannot the generated without incurring the expenses qua to the income. But it does not apply to each and every kind of income. For example, in case the assessee has invested his own fund in the bank account and earning interest income thereon. Then, there cannot be any claim of the expenses against such income. Yet, if the assessee claims any expense against such income, then the onus lies on the assessee to justify such expenses based on the documentary evidence.
The provisions of section 57 of the Act requires that the expenditure against the income from other sources will be deducted provided it is not in the nature of capital expenditure and laid out or expended wholly and exclusively for the purpose of making or earning such income. Thus, it is the duty of the assessee to justify that the deduction claimed by him was incurred in connection with the impugned gross income. But the assessee, failed to do so. Therefore, we do not find any reason to interfere in the finding of the authorities below. Hence the ground of appeal of the assessee is dismissed.
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