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Showing 1 to 20 of 2008 Records
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2019 (5) TMI 2008 - SC ORDER
Sale of assets of the company in liquidation of the companies debts - petitioners wish to make a representation to the Review Committee of the Axis Bank as to whether, in the light of these subsequent events, they should be continued to be classified as wilful defaulter - HELD THAT:- Such representation will be made within two weeks from today. The Review Committee under the Master Circular dated 01.07.2015 of the Reserve Bank of India, will then decide the said representation and give its reasons in accordance with judgment in STATE BANK OF INDIA VERSUS M/S. JAH DEVELOPERS PVT. LTD. & ORS. [2019 (5) TMI 862 - SUPREME COURT].
SLP disposed off.
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2019 (5) TMI 2007 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Rejection of section 9 application - existence of dispute or not - dispute raised prior to issuance of demand notice or not - HELD THAT:- The demand Notice under Section 8(1) of the ‘I&B Code’ was issued by the Appellant on 30th October, 2017. Much prior to issuance of demand notice by e-mail dated 6th March, 2017, the ‘Corporate Debtor’ raised dispute about insufficient services in sending the goods on time.
Admittedly, the Appellant is a transport carrier which provides services and not the goods. There being a dispute about providing proper services, the application under Section 9 was not maintainable.
In absence of any merit, the appeal is dismissed.
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2019 (5) TMI 2006 - SUPREME COURT
Direction to hand over the physical possession of the units allotted to the Respondents (Complainants), complete in all respects within a period of four months - HELD THAT:- The District Forum under the Consumer Protection Act, 1986 Act is empowered inter-alia to order the opposite party to pay such amount as may be awarded as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party including to grant punitive damages. But the forums under the Act cannot award interest and/or compensation by applying Rule of thumb. The order to grant interest at the maximum of rate of interest charged by nationalised bank for advancing home loan is arbitrary and no nexus with the default committed - There cannot be multiple heads to grant of damages and interest when the parties have agreed for payment of damages at the rate of Rs. 10/- per sq. ft. per month. Once the parties agreed for a particular consequence of delay in handing over of possession then, there has to be exceptional and strong reasons for the SCDRC/NCDRC to award compensation at more than the agreed rate.
Though the 1986 Act empowers the authorities to award compensation for any loss or injury including building damages but the order of NCDRC or that of SCDRC of awarding compensation is without any foundation being laid down by the complainant on judicially recognised principles and is by Rule of thumb. Therefore, grant of compensation under various heads granted by the NCDRC cannot be sustained.
The complainant is entitled to interest from the Appellant for not handing over possession as projected as is offered by it but it is not a case to award special punitive damages as the one of the causes for late delivery of possession was beyond the control of the Appellant.
Appeal allowed.
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2019 (5) TMI 2005 - ITAT CHENNAI
LTCG - Deduction u/s 54EC - date of actual transfer of shares - As per AO in respect of investment said to be made AO found that it was beyond the period of six months from the date of transfer of shares, therefore, not eligible for deduction - HELD THAT:- Share Transfer Form in Form 7B is not completely filled up. The attestation column is left blank. Moreover, the occupation and address columns were also left blank. In the computation of statement, the assessee admittedly mentioned the date of transfer as 30.09.2013. Moreover, for transfer of shares, a resolution by the company’s Board of Directors is essential. In this case, the assessee could not clarify immediately before this Tribunal when the resolution was passed.
In view of the above factual situation, 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 entire issue is remitted back to the file of the AO. AO shall re-examine the issue in the light of the material that may be filed by the assessee and thereafter decide the issue afresh in accordance with law.
Disallowance u/s 35(1)(ii) - weighted deduction in respect of the donation made to Shri Arvindo Institute of Applied Scientific Research Trust - According to revenue assessee was misrepresented by the Trust saying that the approval granted for deduction u/s 35(1)(ii) of the Act was renewed and a forged gazette notification was also said to be obtained by the Trust - HELD THAT:- Shri Arvindo Institute of Applied Scientific Research Trust was not recognized beyond 31.03.2006. Forged document has been filed before the authorities to misrepresent as if the said Trust was recognized beyond 31.03.2006. Moreover, it is also not the case of the assessee that the recognition was extended beyond 31.03.2006. Therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee under Section 35(1)(ii) of the Act. When the Trust was not renewed beyond 31.03.2006, it is not known what made the assessee to make donation.
Allowability of business loss / expenditure u/s 37(1) - The assessee now claims that he is a science graduate connected with pharmaceutical research and consultancy, therefore, it has to be allowed as business loss / expenditure under Section 37(1) of the Act. This Tribunal is of the considered opinion that the claim of the assessee cannot be allowed under Section 37(1) of the Act also.
The payment was admittedly said to be made as donation for scientific research and not for any business expenditure. When the approval was not available on the date of payment and admittedly forged document has been produced before the authorities below to claim that Shri Arvindo Institute of Applied Scientific Research Trust was approved under Section 35(1)(ii) of the Act, this Tribunal is of the considered opinion that this kind of claim cannot be appreciated. Once the recognition was not granted and the claim was made on the basis of forged and false document, including one of gazette notification, this Tribunal is of the considered opinion that the CIT(Appeals) ought not to have allowed the claim of the assessee. Since it is not a business expenditure and the claim is one of donation, it cannot be allowed under Section 37(1) of the Act also. - Decided in favour of revenue.
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2019 (5) TMI 2004 - GAUHATI HIGH COURT
Penalty of withholding of 50% of monthly pension of the petitioner on permanent basis - complaint of sexual harassment - full facts not mentioned in the inquiry report - HELD THAT:- What is important to note is that a complaint dated 18.09.2012 along with five Annexures was submitted by Smti. Sunita Singha to the Chairperson of the CCC and copy of such complaint was also made available to the petitioner. In the inquiry report the above fact is not mentioned. It also does not appear that the said complaint was brought to the notice of the disciplinary authority. The CCC was mandated by the authority to inquire into the complaint dated 30.08.2011. However, it is manifest from the inquiry report that the complaint submitted on 18.09.2012 was also taken into consideration - The requirement of the officer proceeded against to be formally asked whether he pleads guilty or not would, according to the understanding of the court, is not an opportunity to such officer only to answer the same in a mono-syllable. To give meaning to the word "formally", a real and effective opportunity has to be granted to the officer concerned to make his comment in writing in response to the complaint. Apparently, no such opportunity was afforded. There is no indication that in respect of the complaint dated 18.09.2012, the officer was even asked as to whether he pleads guilty to the allegations made therein or not.
Clause 10(11) of the Complaint Mechanism provides that complaint shall contain all the material and details concerning the alleged sexual harassment. What were the allegations in the complaint filed on 30.08.2011 after the petitioner had filed an ejahar on 26.08.2011 have already been taken note of. A perusal of the ten points would go to show that Point Nos. 1 to 6, 7(b) to (f), 9 and 10 are no way connected to the complaint dated 30.08.2011. Two inquiries had also taken place and, after more than a year later, after lodging of the complaint dated 30.08.2011, another complaint with many allegations was submitted to the Chairperson of the CCC on 18.09.2012. The CCC could not have entertained such a complaint for the purpose of a disciplinary proceeding in absence of entrustment in terms of Standing Order.
In Narendra Mohan Arya [2006 (4) TMI 570 - SUPREME COURT], the Supreme Court had observed that in a domestic inquiry fairness in the procedure is a part of the principles of natural justice and that it is not possible to lay down any rigid rules of the principles of natural justice which depend on the facts and circumstance of each case but the concept of fair play in action is the basis and the inquiry officer is not permitted to travel beyond the charges and any punishment imposed on the basis of a finding which was not the subject-matter of the charges is wholly illegal.
It is noticed that the prosecution witnesses were also put questions by the CCC, which is evident from the report of the CCC under the heading "V. Examination of witnesses", wherein the CCC itself recorded that CCC had conducted the examination-in-chief whenever it felt necessary. Thus, it is evident that the CCC also played the role of prosecutor, which vitiates the proceeding - The CCC is to record its finding based on evidence on record and not on surmises and conjectures. It will be worthwhile to recall that the prayer of the complainant for a transfer was rejected on 24.08.2011 and based on a threatening message issued by the husband of the complainant on 26.08.2011, the petitioner had lodged the ejahar on 26.08.2011. These aspects were, however, not weighed by the CCC.
The order dated 05.01.2016, imposing penalty upon the petitioner, cannot be sustained in law - Petition allowed.
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2019 (5) TMI 2003 - SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI
Market manipulation - violations of the provisions of SEBI Act and SEBI-PFUTP Regulations - off-market transaction - pattern of buying at a higher price on subsequent days was repeated throughout its trading in the scrip during patch-1 with the connected entities - Whether the Noticees by trading with connected entities have manipulated the price in the scrip of TEL during the period October 18, 2012 to June 17, 2013? - HELD THAT:- sell order quantity was known to Kingfisher but Kingfisher did not buy all the available quantity at the prevailing price. Kingfisher bought only a part of the available quantity and then on subsequent trading days bought more shares at a much higher price. For instance, on February 13, 2012, Kingfisher bought 250 shares at ₹ 381.5/- when the available quantity was 8,000 shares. Then on the next trading day, Kingfisher bought 12,500 shares at an average price of ₹ 392.16/-. This pattern of buying at a higher price on subsequent days was repeated throughout its trading in the scrip during patch-1 with the connected entities. Kingfisher's first trade in the scrip during the patch was for ₹ 381.5/- and with the exception of 3 trades, which were executed at ₹ 375/- (all trades were executed on one day), all its other trades with the connected entities during the patch were within the range of ₹ 393.3/- to ₹ 496/-. Thus, if the Kingfisher was a genuine buyer, it would not have bought shares consistently at higher prices than its previous buy, over a period of four months. It is also noted from the order log trade log that during the entire investigation period of 27 months that Kingfisher had executed 1 sell trade in the scrip. This when seen in light of the fundamentals of the company, does not justify its buying pattern in the scrip.
Taking support of the observations of Hon'ble Apex Court in Kishore R Ajmera matter [2016 (2) TMI 723 - SUPREME COURT] we note that in cases of market manipulation, admittedly, no direct evidence would be forthcoming / available. Manipulative transactions are to be tested on the conduct of parties and abnormality of practices which defy normal logic and laid down procedures. What is needed, is to prove that in a factual matrix, preponderance of probabilities indicate a fraud.
In the instant matter, the findings that have been gathered from various circumstances for instance connection between the Noticees and the counter parties, overall trading in the scrip before the Noticees started trading during patch-1, particulars of the buy orders and sell orders, absence of any explanation from the Noticees for behaving opposite to that of a reasonable buyer who buys the scrip at a low price, lack of fundamentals of the company etc., leads to the conclusion that the trades executed by the Noticees with the connected entities, are manipulative in nature. In view of the significant positive LTP contribution by the aforesaid 9 Noticees by trading with the connected entities, it is concluded that the said 9 Noticees have manipulated the price of the scrip by contributing to the price rise.
Whether the Noticees have violated the provisions of PFUTP Regulations? - In view of the conclusion arrived at paragraph 22 wherein it has been held that the trades executed by the 9 Noticees with the connected entities has contributed significantly to the positive LTP in the scrip are manipulative in nature, it is also held that such trades are fraudulent in nature and would operate as deceit upon any person trading in the extant scrip.Therefore, find that Radison Properties Private Limited, Natural Housing Private Limited, Topwell Properties Private Limited, South Asia Portfolios Private Limited, Kingfisher Properties Private Limited, Janvi Tanvi Share Traders Private Limited, Safed Sales Private Limited, Shivkhori Construction Private Limited and Spice Merchants Private Limited have violated Regulations 3(a), (b), (c), (d) and Regulations 4(1), 4(2) (a) and (e) of PFUTP Regulations.
Directions, to be issued against the Noticees - Section 11 of SEBI Act casts a duty on the Board to protect the interests of investors in securities and to promote the development of and to regulate the securities market. For achieving such object, it has been authorised to take such measures as it thinks fit. Thus, power to take all measures necessary to discharge its duty under the statute which is a reflection of the objective disclosed in the preamble has been conferred in widest amplitude. Pursuant to the said objective, PFUTP Regulations have been framed. The said Regulations apart from other things aims to preserve and protect the market integrity in order to boost investor confidence in the securities market. By executing manipulative trades, as has been executed by the aforesaid 9 Noticees in the instant matter, the price discovery system itself is affected. It also has an adverse impact on the fairness, integrity and transparency of the stock market. In view of the same and considering the violations committed by the said 9 Noticees, as find that it becomes necessary for SEBI to issue appropriate directions against them.
In exercise of the powers conferred upon me in terms of Section 19 read with Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992, hereby restrain Radison Properties Private Limited, Natural Housing Private Limited, Topwell Properties Private Limited, South Asia Portfolios Private Limited, Kingfisher Properties Private Limited, Janvi Tanvi Share Traders Private Limited, Safed Sales Private Limited, Shivkhori Construction Private Limited and Spice Merchants Private Limited from accessing the securities market for a period of seven years from the date of this order and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of seven years, from the date of this order. Needless to say, in view of prohibition on sale of securities, it is clarified that during the period of restraint, the existing securities holding, including units of mutual funds, of the aforesaid entities shall remain frozen.
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2019 (5) TMI 2002 - ITAT BANGALORE
Addition u/s 68 - only objection of the AO is this that the credit-worthiness of the investor is in doubt and this observation of the AO is on this basis alone that the investor has incurred huge losses in calendar years 2003, 2004 and 2006 - HELD THAT:- As we have seen that even after reducing the losses incurred in these three years from the income earned by the investor in 2000, 2001, 2002 and 2005, net income of the investor comes to $ 33,12,256 as against remittance by him of only about $ 10 Lakhs. Hence in our considered opinion, the addition made by the AO is not justified simply on this basis that since the investor has incurred losses and the assessee has not furnished cash flow statement, there is no creditworthiness of the investor.
In our considered opinion, this objection of the AO is not valid for making addition of this huge amount particularly when the investor has remitted money from abroad through proper banking channel and even after adjusting or reducing the losses incurred by investor in three years i.e. 2003, 2004 and 2006 also, the remaining income of four years i.e. 2000, 2001, 2002 and 2005 is more than three times of the remittance received by the present assessee from the investor abroad. Considering these facts, we find no reason to interfere in the order of CIT(A) on this issue. Appeal of the revenue is dismissed.
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2019 (5) TMI 2001 - ITAT MUMBAI
MAT - Computing the book profits u/s 115JB - deductibility of the amount set apart as Debenture Redemption Reserve - HELD THAT:- On record including the decision of the co-ordinate bench of the Tribunal in assessee’s own case [2017 (6) TMI 1391 - ITAT MUMBAI] we observe that the identical issue has been decided in favour of the assessee as in the case of JSW Energy [2013 (7) TMI 192 - ITAT MUMBAI], the Tribunal was considering the deductibility of the amount set apart as Debenture Redemption Reserve for the purposes of computing the book profits u/s 115JB of the Act. After detailed discussion, it has been held that adjustment of the amount of Debenture Redemption Reserve made while computing the book profits u/s 115JB of the Act is permissible and is within the purview of the law. The decision of CIT(A) is in consonance with the aforesaid legal position and even before us, no contrary decision has been brought out by the Revenue and as a consequence, we hereby affirm the decision of CIT(A) on this aspect. Thus, the Revenue fails in its appeal.
Addition u/s 68 - non-establish identity, creditworthiness of the lender and genuineness of the transaction - HELD THAT:- We observe that CIT(A) has called for a remand report from the AO in the appellate proceedings and during the remand proceedings the AO issued notice u/s 133(6) to the loan parties and were duly replied by these parties by submitting all the necessary evidences and Ld. CIT(A) on the basis of the remand report came to the conclusion that genuineness of the loan from M/s. JCPL has already been accepted in the reassessment proceedings in 2010-11 and there is no justification for treating the loan of Rs.25 lakhs from M/s. JCPL as unexplained in A.Y. 2012-13 the year under consideration and thus deleted the addition. Consequently the interest expenditure was also held to be allowable under section 36(1)(iii) of the Act. We are in agreement with the conclusion drawn by the Ld. CIT(A) as we do not find any infirmity or anomaly in the same and accordingly raised by the Revenue are dismissed.
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2019 (5) TMI 2000 - ITAT AHMEDABAD
Disallowance of interest expenses - said interest related to borrowed fund, which were not used for business purpose - assessee has given interest free advances to its sister concern - HELD THAT:- We have also carefully considered the order passed by the Learned Tribunal for A.Y. 2010-11 & 2011-12 in assessee’s own case once an assessee demonstrated that on a particular date of accounting period it has availed interest free funds and it wants to characterize it as interest free advance out of this interest free fund, then the ld.AO cannot assume interest income by merely observing that loans were given before availability of interest free funds.
Assessee has been showing excess interest free funds. Out of which it could be assumed that these advances were made. This plea of the assessee cannot be rejected merely by observing that loans were given before 1.4.2006. There is no logic in the stand point of the CIT(A). Every year is an independent assessment year and even if the assessee has been charging interest on the advances given by him, but after a particular date, it can stop charging interest by treating the advance as given from interest free funds. In the present case, the assessee has demonstrated that it is having sufficient interest free funds out of which the loans given even in earlier years can be characterized as given in the present year. Accordingly, we allow his ground of appeal and delete the disallowance. Assessee appeal allowed.
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2019 (5) TMI 1999 - ITAT MUMBAI
Non grant of TDS credit on mobilization advance - It is the case of authorities below that assessee has not billed any revenue, so assessee credit in P & L account of income has been rejected - HELD THAT:- Once it is the case of the Revenue that assessee has not commenced any business during the assessment year, it has not made any bill for the work done and revenue recognition is rejected and authorities below emphasized that only a sum being the mobilization advance reflected in the balance sheet in liability is an acceptable figure, then how can it be said that the TDS deducted by the payer i.e. is correct is beyond comprehension.
These facts clearly indicate that on the facts and circumstances of the case, the payer had wrongly deducted TDS on this sum paid as mobilization advance.
As held by the ITAT in M/s. Patel Engineering [2015 (11) TMI 1665 - ITAT MUMBAI] wherein it was expounded that the mobilization advance was not an income and that credit for any TDS on the same should be given in the year of TDS itself. We note that the authorities below have denied the assessee's request on various technicalities that the assessee should have made an application etc. for wrong deduction of TDS in this regard. In our considered opinion such mechanical approach of the Revenue is not justified.
We draw support from case of CIT Vs. Shelly products and others [2003 (5) TMI 4 - SUPREME COURT] wherein it was held that assessee was entitled to refund excess tax paid out of abundant caution or owing to error or non-taxability. The common law maxim of aprobate and reprobate mandates that such a contradictory approach and shifting stands are not permissible. This view was reiterated by SUZUKI PARASRAMPURIA SUITINGS PVT. LTD. [2018 (10) TMI 484 - SUPREME COURT]
Assessee deserves to succeed on this issue and accordingly we direct the Assessing Officer to give the credit for the TDS.
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2019 (5) TMI 1998 - CESTAT NEW DELHI
Reversal of CENVAT Credit - removal of iron ore fines - Rule 6(3) of CCR, 2004 - HELD THAT:- The issue is no longer res integra and it have been decided by this Tribunal in BHAGWATI POWER & STEEL LTD. VERSUS C.C.E. & S.T. -RAIPUR [2018 (12) TMI 1104 - CESTAT NEW DELHI], that in the course of manufacture of sponge iron, iron ore lumps of different sizes as received by the manufacturer, are firstly subjected to crushing. Thereafter, iron ore fines are separated by screening, at the raw material handing plant. The said iron ore fines which is in powder form cannot be used for manufacture of sponge iron. Further, iron ore lumps and iron ore fines are separately classifiable under Central Excise Tariff depending upon the percentage of iron content therein. As iron ore fines is not a manufactured produce, but a residue, the provisions of Rule 6 of CCR are not attracted.
The impugned order is set aside - Appeal allowed.
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2019 (5) TMI 1997 - ITAT JAIPUR
Reopening of assessment u/s 147 - Reason to believe - mandation to get Add. CIT approval - invocation of provisions of Section 145(3) - addition made with reference to under valuation of closing stock included in the finished goods - HELD THAT:- As per section 151(2), before the AO issues notice u/s 148, satisfaction is to be recorded by the concerned higher authority, which is a sine qua non. Such satisfaction does not mean merely agreeing and approving to what the AO has said, rather the concerned higher authority should record a proper satisfaction, applying his mind, as to why it is a fit case, giving proper reasoning. The courts have time and again held that just noting the word "Yes" or “it is a fit case” or “Yes I am satisfied” and affixed his signature thereunder cannot be considered to be a proper or valid sanction as contemplated by law. However, in the present case, this mandatory precondition has not been fully and properly satisfied, in as much as, the ld. Add. CIT while granting approval has not recorded his satisfaction.
Addition made by rejecting the valuation of closing stock in respect of rejected goods and also on account of goods sent and lying with the job work units at the end of year - AO picked up an agreement and considered the same to be universally applicable and drawn an inference that every rejected item shall be destructed and that too with immediate effect. It is a matter of record that the primary condition of every agreement is restriction on sale of rejected goods. Whether to destroy or not is a secondary requirement which will be based upon certain conditions and under certain circumstances. However, some agreements are having condition of destruction which was duly complied with. If a particular item has been classified as rejected and no further sale has been made of that item then conditions of agreement has been fulfilled. It is not the case that the assessee is selling these rejected goods in the grey market neither the AO nor the ld CIT(A) made any such allegation. Hence if a particular item has been classified as rejected and simply lying in the factory with no further sale then it is beyond any understanding that how will it fetch a value of Rs.355/- per piece for valuation purpose.
Allegation of the AO that these goods are not destroyed is baseless. He might be confining the word destruction to some form of burning only, which is nowhere included in the definition. The meaning of destruction in readymade garments is to make them unsaleable/unusable. For the assessee it was a dump/wastage having no realizable value at all. Even then the assessee to be on a very fair side valued such rejected goods @ of Rs.25 per piece though was not at all required. Undisputedly, the assessee has no legal right to sell these rejected/destructed goods in the open market due to condition of agreement hence, the value of these goods was Nil for the assessee. To account for the rejected goods/destructed goods in the financial account and for the purpose of internal controls only these goods were valued on a symbolic value of Rs.25/- per piece. The allegation of the AO that no documentary evidences were submitted to support this price is completely wrong on the facts. The assessee filed Quality Control Audit Report mentioning complete details of Goods in defect along with description of defects. Having admitted the binding agreement, its legal effect could not be ignored.
AO has alleged that percentage of rejection claimed by the assessee at 2.16% of total production was on higher side - Since the assessee has no right to sale these goods hence to minimize the losses reusable accessories (buttons, zips etc.) were extracted from these items. This extraction work is carried out in very rough and speedy manner and after this it is totally impossible to sale these items. After this operation they got converted into a scrap items (also known as Chindi) and this was sold on kilogram basis. The bills of Chindi items sold were also submitted before the lower authorities. The AO did not deny from this fact but merely suspected that it did not show the sale of chindi resulting from the rejection goods which however, was an impractical and almost impossible task. Further the regular labourer engaged by the assessee, was also engaged in the destruction of the rejection goods but to evidence such activity, was not humanly practical and possible. Hence there remains no doubt that the assessee had rejected items, which were not as such open for sale in the open market and to minimize the losses these were sold as Chindi.
In view of the above facts and circumstances, we hold that the A.O. was not justified in making addition on account of under valuation of rejected goods which was included in the list of closing stock.
Undervaluation of the stock lying with job units - We had verified the sheets containing complete details of Fabric lying at Job Units. The Number of Piece have also been shown in the same sheet apart from showing the Raw Fabric in Meter which are expected to be prepared out of such Raw Fabric sent to these job units. Thus, whether it is number of pieces shown or fabric in meter is shown, the ultimate valuation shall remain the same and is not going to make any difference. However, this was not properly understood by the AO. Therefore, the allegation of avoidance of taxes is baseless, more particularly, when otherwise also any enhancement in the valuation of closing stock of this year will enhance the value of opening stock of the next year leaving a tax neutral effect.
As per our considered view in case of business of manufacturing of readymade garments, there are certain scientifically evolved conversion formula, based on which, one can ascertain the number of pieces desired/expected of a particular design, type of that particular garment, say a shirt consuming a particular amount of Meter of fabric. To put it differently, one can ascertain the number of particular type of shirt to be obtained out of the given quantity of the fabric. Surprisingly, the AO neither required any such conversion formula to be furnished nor he made any enquiry on his own from the experts of readymade garment industry. Therefore, there is no valid point behind the AO raising this issue merely to suspect that something may be wrong. In the entire exercise the AO has proceeded merely on suspicion & suspicion and there is absolutely no iota of material brought in support.
We observe that the allegation of the undervaluation of the stock lying with job units of Rs. 2.03 Crores, is imaginary in as much as the AO had no iota of evidence showing even remotely that the assessee incurred some cost after delivering the fabric to the job units so as to enhance the valuation from the mere cost of fabric to include some overheads. Admittedly no bills were raised by the job units up to the year-end so as to be taken into the account while valuing the closing stock. Therefore, such valuation was also highly imaginary without any evidence.
Once the AO himself admits that the assessee has incurred this cost and therefore only, the valuation of the closing stock of such raw fabrics has been enhanced by him to the extent of the cost of the finished goods i.e. @ Rs. 355/-. By his own admission, it has to be accepted that the assessee has incurred the cost to the extent of Rs.355. Thus, on one hand the AO had enhanced the valuation of the closing stock but at the same time, he has to allow the revenue expenditure (job charges/stitching charges) to this extent resulting into no tax effect. In other words, the entire exercise to enhance the value of the raw fabric is completely tax neutral in this year itself.
Thus we do not find any merit in the addition made by the A.O. in respect of raw material lying with the job worker unit, by treating the same as finished goods.
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2019 (5) TMI 1996 - CESTAT ALLAHABAD
CENVAT Credit - input services - Outdoor Catering Services - HELD THAT:- The issue of availment of Cenvat Credit in respect of Outdoor Catering Services stands held against Appellant in their own case reported as M/S HINDUSTAN COCA-COLA BEVERAGES PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, HAPUR [2019 (1) TMI 2033 - CESTAT ALLAHABAD] where it was held that the Cenvat Credit of Service Tax on Outdoor Catering Services is not available to the appellant and as such, denial of the same is upheld.
The issue stands settled against them in their own case - the demand is confirmed - As regards the penalty, the same is set aside - appeal disposed off.
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2019 (5) TMI 1995 - CESTAT CHANDIGARH
Denial of CENVAT Credit - levy of penalty - fake invoices - diversion of goods.
Main allegation is that M/s Lok Nath Varinder Kumar Impex Limited has received the goods from the manufacturers, the said goods have been diverted to Himachal Pradesh units who are not required to take Cenvat credit and another invoice has been issued to the appellant namely, National Soap Mills to avail inadmissible Cenvat credit without accompanying the goods.
HELD THAT:- In this case, investigation was conducted at the end of M/s National Soap Mills and no discrepancy in the stock was found, moreover, sample of inputs were drawn and sent to the laboratory for test but there is no wisper about the same in the show cause notice, allegation was made merely on the basis of the statement of the dealer that they have diverted the goods to Himachal Pradesh units but no evidence has been brought for record to show that the goods in question has not received by National Soap Mills. As no evidence on record to show that National Soap Mills have not received the goods or if goods were not received against the invoices in question from where National Soap Mills received the inputs to manufacture the goods which has been cleared on payment of duty. In that circumstances, Cenvat credit cannot be denied to M/s National Soap Mills, therefore, the case against National Soap mills is not sustainable. Accordingly, the impugned order qua National Soap mills is set aside.
Penalty on M/s Lok Nath Varinder Kumar Impex Limited - HELD THAT:- The penalty has been imposed on a company which is jurisdic person on which penalty cannot be Imposed as held by this Tribunal in the case of C.C.E., ROHTAK, C.C.E., DELHI-III VERSUS NOVICE POLYMERS, AIRVISION INDIA PVT LTD, DR POLYMERS [2019 (1) TMI 1159 - CESTAT CHANDIGARH] relying on the decision of the Larger Bench of this Tribunal in the case of STEEL TUBES OF INDIA LTD. VERSUS COMMISSIONER OF C. EX., INDORE [2006 (10) TMI 146 - CESTAT, NEW DELHI [LB]], therefore, no penalty can be imposed on M/s Lok Nath Varinder Kumar Impex Limited.
Appeal allowed.
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2019 (5) TMI 1994 - ITAT MUMBAI
Validity of assessment u/s 144C - non passing draft assessment order - assessee being a foreign company - HELD THAT:- We find that the assessee being a foreign company is an eligible assessee. Therefore, in this respect, the provision of section 144C of the Act are applicable which are unambiguous and sub-section 1 of section 144C of the Act, clearly provides for issuance of a draft order, which is a sine qua non before AO passes an assessment order u/s 143(3) of the Act.
In the case of Turner International India Pvt. Ltd. [2017 (5) TMI 991 - DELHI HIGH COURT] wherein it was held that the legal position is unambiguous as the failure on the part of AO to adhere to the mandatory requirement of section 144C of the Act and passing final order without firstly passing a draft assessment order results in invalidation of the final assessment order and the consequent demand notices and penalty proceedings.
Thus we find that AO had passed final assessment order u/s 144C(13) without passing a draft assessment order as mandatorily required u/s 144C(1) makes the impugned final order passed by AO nul and void - Decided in favour of assessee.
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2019 (5) TMI 1993 - GAUHATI HIGH COURT
Prayer to file an affidavit - HELD THAT:- Prayer is allowed - The affidavit be filed within 15 days from today and the same be exchanged with the learned counsel for the petitioners.
List the matter on 27-06-2019 together with Crl. Pet. No. 97 of 2019 and similar other matters.
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2019 (5) TMI 1992 - ITAT MUMBAI
Taxation of life insurance business - transfer from share holders account to Policy Holder’s account and shown as part of ‘surplus’ in the ‘actuarial valuation’ - only transfer of capital asset and not taxable u/s 44 of the Act r.w.r. 2 of the First Schedule - HELD THAT:- We find that the identical ground has already been decided by the Coordinate Bench of Hon’ble [2017 (3) TMI 1696 - ITAT MUMBAI] in assessee’s own case as held 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 of the Act.
Thus we apply the same findings which are applicable mutatis mutandis in the present case. Resultantly, this ground raised by the revenue stands dismissed.
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2019 (5) TMI 1991 - SUPREME COURT
Title to the suit schedule property - lawful possession of the suit schedule property on the date of suit - Does the plaintiff prove the interference by the defendants to his possession of the suit property? - HELD THAT:- The Trial Court as well as the First Appellate Court, gave cogent reasons on appreciation of evidence on record, more particularly, the Sale Deed dated 22.06.1964 (Exhibit P1), document dated 23.04.1971 (Exhibit D4) and subsequent Sale Deed dated 18.05.1973 (Exhibit P2) and thereafter held that the plaintiff is not entitled to the declaration that he has become the owner. While interfering with the Judgment and Decree passed by both the Courts below, it appears that the High Court has again reappreciated the entire evidence on record, which in exercise of powers under Section 100 of the CPC, is not permissible. Under the circumstances, the High Court has committed a grave/manifest error in quashing and setting aside the findings recorded by both the Courts below, which were on appreciation of evidence on record. The High Court has exceeded in its jurisdiction while exercising the powers under Section 100 of the CPC.
From the entire evidence on record, it appears that even the Sale Deed (Exhibit P1) was not acted upon. Between 1964 to 1971, even the name of Siddalingappa was not mutated/recorded in the revenue record. Both the Courts below considered in detail the aforesaid aspect which has been upset by the High Court. It is required to be noted that even in the cross-examination the original plaintiff was not sure about the sale consideration received from Siddalingappa as a remuneration in view of the registered Sale Deed dated 22.06.1964 (Exhibit P1). Even otherwise, even according to the plaintiff and even considering the material on record, as the suit land was a joint family property and/or was in the name of Nanjappa, all the brothers had an equal share and therefore the same could not have been sold by Nanjappa, plaintiff and other two brothers only and without consent of other brothers including Krishnappa unless the property was partitioned.
It is required to be noted that the deed dated 23.04.1971, under which the suit property had gone /devolved in favour of the Krishnappa, was reduced in writing before the Panchayat and Panchas, and the same was signed by the village people/panchayat people and all the members of the family including even the plaintiff. Though the plaintiff disputed that the partition was not reduced in writing in the form of document Exhibit D4, on considering the entire evidence on record and even the deposition of plaintiff (cross-examination), he has specifically admitted that the oral partition had taken place in the year 1971 - The High Court has refused to look into the said document and/or consider document dated 23.04.1971 (Exhibit D4) solely on the ground that it requires registration and therefore as it is unregistered, the same cannot be looked into.
The High Court was not justified in interfering with the findings recorded by both the Courts below. For the reasons stated above, the impugned Judgment and Order passed by the High Court cannot be sustained - Judgment and Order passed by both the Courts below dismissing the suit, are hereby restored and consequently the suit filed by the original plaintiff is dismissed.
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2019 (5) TMI 1990 - CESTAT AHMEDABAD
Demand of CENVAT credit utilized - balance credit of 2004 sought to be denied on the strength that sub Rule (3) of Rule 11 of Cenvat Credit Rules, 2004 - HELD THAT:- It is seen that sub-rule (3) of Rule 11 of Cenvat Credit Rules, 2004 was introduced vide Notification No. 10/2007 (NT) dated 01.03.2007 and thus cannot be made applicable retrospectively. Moreover, the said Rule applies only when the final product is exempted “absolutely”. In the instant case, the product manufactured by the appellant is fabric and yarn which is not exempt absolutely. Therefore, in these circumstances, this Rule is not applicable.
There are no merit in the impugned orders and the same are set-aside. Appeals are allowed.
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2019 (5) TMI 1989 - DELHI HIGH COURT
Let notice be issued to respondent No.2 by all the modes prescribed, on the petitioners taking the necessary steps, returnable on 26th September, 2019.
The impugned order dated 22nd March 2019 is stayed till the next date of hearing.
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