|
Advanced Search Options
Case Laws
Showing 161 to 180 of 1642 Records
-
2024 (7) TMI 1482
Addition for unexplained/unreconciled deposits - Estimated addition of 21% was made for alleged difference between the deposits appearing in the Bank statement, vis-à-vis the books of account - HELD THAT:- AO has grossly erred in simply matching the net decrease under the head “loans and advances” appearing in the balance sheet with the credits or receipts of Bank statement.
Since there is no difference as alleged by AO in the assessment order framed after directions of the ld. PCIT, we are inclined to set aside the finding of ld. CIT(Appeals) and delete the addition (addition made by the ld. Assessing Officer in the order under section 143(3) of the Act, which was further added by the ld. Assessing Officer in the order framed under section 143(3) r.w.s. 263 of the Act). Thus effective grounds of appeal raised by the assessee are allowed.
-
2024 (7) TMI 1481
Disallowance of commission paid to the Director u/s 36(1)(ii) - AO rejected the submission of the assessee on the ground that it is only an arrangement to avoid dividend distribution tax and deduction cannot be allowed - as per AO board resolution cannot be considered as evidence of extra service provided by the director as the board is constituted by the director employee to whom payment is made - HELD THAT:- AO primarily relied on the case of Dalal and Broacha Stock Broking Pvt. Ltd. [2011 (6) TMI 251 - ITAT, MUMBAI] which is factually distinguishable. In the present case, the assessee has provided substantial evidence demonstrating the services rendered by Shri Girish Chovatia/Director and the resultant benefits to the company.
The case laws cited by the assessee before the Ld.CIT(A), particularly M/s Nat Steel Equipment Pvt. Ltd. [2018 (6) TMI 750 - ITAT MUMBAI] and M/s.Marks Shipping Pvt. Ltd. [2016 (10) TMI 805 - ITAT MUMBAI] support the view that commission paid for actual services rendered cannot be disallowed merely on the presumption of tax avoidance. AO did not provide concrete evidence to show that the payment was made to avoid DDT. The assessee has clearly distinguished the judgement relied upon by the AO and the Ld.CIT(A).
Thus, we hold that the commission paid to director/Shri Girish Chovatia is an allowable business expenditure u/s 36(1)(ii).
Disallowance of weighted deduction claimed u/s 35(2AB) - claim denied relying upon Form 3CL issued by DSIR - HELD THAT:- AO's reliance solely on the DSIR report, without considering the detailed books of accounts and certification by a Chartered Accountant, is not justified. The principles of natural justice require that any reduction in the claim should be substantiated with clear reasons and the assessee should be given an opportunity to respond.
Following the judgment in Bosch Ltd. vs. Secretary, DSIR [2016 (4) TMI 1294 - KARNATAKA HIGH COURT] we hold that the restriction of the weighted deduction u/s 35(2AB) of the Act by the AO is not sustainable. Accordingly, the disallowance made by the AO and confirmed by the Ld.CIT(A) is deleted, and the assessee's claim is allowed in full.
Assessee appeal allowed.
-
2024 (7) TMI 1480
TDS u/s 195 - payments made by resident Indian end-user to non-resident computer software manufacturers/suppliers - payment for software licenses as royalty under Article 12 of the India-UK Tax Treaty - As per AO tax was required to be withheld as the payments are chargeable to tax u/s.9(1) (vi) r.w.s. 195 read with corresponding Articles of relevant DTAA - assessee stated that it made a payment for use of the standard Mycom software, without obtaining any rights towards creation of copies or modification or adaptation of the particular standard software
HELD THAT:- Based on the definition of royalties contained in Article-13 of the relevant DTAA, it is evident that these payments do not fall under the purview of royalties. The EULAs do not create any interest or right in the distributors/end-users that would amount to the use of or right to use any copyright. Therefore, there is no obligation on the persons mentioned in section 195 to deduct tax at source. The provisions of section 9(1)(vi) and its explanations, not being more beneficial to the assessee than the DTAA, are not applicable in these cases.
Revenue also argues that the amounts paid to non-resident computer software manufacturers/suppliers are taxable in India as they constitute income arising from the use of copyright, which should be taxed as royalties.
The amounts paid by resident Indian end-users to non-resident computer software manufacturers/suppliers, as consideration for the use of the computer software through EULAs, do not constitute the payment of royalties for the use of copyright in the computer software. Consequently, these payments do not give rise to any income taxable in India. Therefore, the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS on these payments. Decided in favour of assessee.
-
2024 (7) TMI 1479
Revision u/s 263 - as per CIT AO has not made efforts to examine any details and in this case simply the details furnished by the assessee only examined and passed the assessment order, thus order passed by AO is erroneous and prejudicial to the interest of Revenue - Addition of loans and advances, sale of shares and profit on sale of share of SMS Infrastructure Ltd. and receipt of interest and interest payment - HELD THAT:- The assessee has borrowed huge loans and also made advances. The assessee also made various sales and he received profit on sale of share of SMS Infrastructure Ltd. He received interest also. The Assessing Officer has not examined any of the issues and not called for any details from the assessee. The assessee filed some details about borrowed funds which were given to certain parties out of which the assessee himself has disallowed @ 12%, and for the remaining parties, the Assessing Officer has added. The assessee himself has claimed huge interest and also filed loss return of income. It was the duty of the Assessing Officer to call for the details such as what is the reason for borrowing such huge amount; what is the amount of money utilised for the purpose of business; why he has given loans to various parties; what is the receipt of interest; the quantum of shares have been sold by the assessee and what is the ratio of profit he received whether long term capital gain / short term capital gain. All such details have were required to be examined by the Assessing Officer and he has examined nothing. For the reasons stated above, we are of the opinion that it is a fit case for invoking the provisions of section 263 of the Act. We find that the order passed by the Assessing Officer is erroneous inasmuch as it is prejudicial to the interests of Revenue
-
2024 (7) TMI 1478
Taxability of overseas sales commission - “FTS” - receipt from Associated Enterprises (AEs) towards commission on sales though it will not take up the nature of fee for technical services u/s 9(1)(vii) of the Act as it is neither managerial nor consultancy services - HELD THAT:- It is clear that services rendered by 'Guangzhou Usha' are clearly different from activities of Steer America and therefore, services of Steer America cannot be considered in nature of technical, managerial or consultancy in nature as referred under the Income Tax Act or 'Fees for technical services' as per India USA DTAA.
SEPL India is a Champion of technology developed indigenously in India and with strong manufacturing presence in India supplies to global customers, brings in made in India Flavor with locally developed and globally registered Patents.
Steer America Inc, performs pure sales function with connecting potential customers from United States of America by performing pre sales activity of introducing SEPL India to potential customers rest of the activity is predominantly taken care by SEPL India as evident from the services and functions listed.
AO in the impugned order under surmise and conjectures have made out list of reasons to treat overseas sales commission as Fee for Technical Services, without appreciating the fact that Assessee Steer America Inc, does not render services resulting in provision 'Fee for Technical Services' (FTS) or Make available Technical Knowledge to Steer India.
In the case of DCIT v. Welspun Corporation Ltd [2017 (1) TMI 1084 - ITAT AHMEDABAD] wherein it was observed and held that Assessee paid commission to non-resident export commission agents for highly technical products. As held that just because a product is highly technical does not change the character of activity of the sale agent. The object of the salesman is to sell and familiarity with the technical details, whatever be the worth of those technical skills, is only towards the end of selling. Payment to non-resident commission agents was for securing orders and not for rendering any managerial, technical or consultancy services per se. The commission paid to non-resident export commission agents is not taxable in India whether or not the non-resident is tax resident of a jurisdiction having a tax treaty and whether or not the tax treaty has an FTS clause.
We hold that the impugned payment received by present assessee from Steer Engineering SCL, Bangalore is commission on sales and marketing services and cannot be treated as FTS in the hands of present assessee in terms of section 9(1)(vii) of the Act and accordingly, we allow all the grounds raised by the assessee.
Levy of interest u/s 234A & 234B are consequential and mandatory in nature to be computed accordingly.
-
2024 (7) TMI 1477
Denial of approval u/s 80G(5) - approval being sought as being u/s. 12AA as already obtained - approval u/s. 80G(5) can be denied to an applicant is on the ground of non-satisfaction of the conditions set out in s. 80G(5)(vi) - HELD THAT:- The impugned order is clearly is a cryptic order. Apart from the fact that it refers to s. 12AB of the Act, reference to sec 80G or the rules there-under in conspicuous by its absence. There is no reference therein to the provisional approval u/s. 80G(5)(iv) on 17/3/2022.
It is only a perusal of the application that one discovers that the same is qua an application for approval u/s. 80G(5) r/w r. 11AA of the Rules. It is perhaps for the reason that both the provisions provided for application in the same format that led to it being construed by the competent authority as for another.
Whatever may be the cause, it is indeed very unfortunate that an application by a charitable institution is treated in such a careless and cavalier manner, which in fact deserves imposition of cost. There is, resultantly, no question of the assessee’s application being decided on merits, i.e., qua the said grant or otherwise of the approval under s. 80G(5)(iv), which an order granting approval or, as the case may be, denying it, is to specify in clear terms along with reasons therefor.
We, accordingly, have no hesitation in, setting aside the impugned order, direct (re)adjudication by the competent authority on merits, per a speaking order, and in accordance with law, allowing the assessee a reasonable opportunity of being heard. Assessee’s appeal is allowed.
-
2024 (7) TMI 1476
Condonation of delay in filing of appeal before Tribunal - appeal filed by the assessee is delayed by 357 days - As submitted that CA of assessee was not aware of the provisions of direct appeal to ITAT against the order u/s 263 of the Act - HELD THAT:- The simple and bland statement in the affidavit that CA, Shri Varun Agarwal was not aware of the provisions of direct appeal to ITAT against the order u/s 263 of the Act is unbelievable. How would a practicing CA not know about appealable order and the proper appellate forum for filing appeal arising from orders passed by different income-tax authorities? No supporting evidence in the form of confirmation letter or affidavit of Shri Varun Agarwal has been enclosed to substantiate its claim. It is clear that assessee waited for the fresh order u/s 143(3) r.w.s. 263 of the Act and when it found that no relief was granted on the issue of unsecured loans, he has filed appeal before both Ld. CIT(A) and the ITAT. The reasons given by the assessee are therefore general, self-serving and not convincing.
It is settled law that condonation of delay should not be granted only on the ground that ordinarily a litigant does not stand to benefit by lodging an appeal late.Condonation of delay should not be granted only on the ground that ordinarily a litigant does not stand to benefit by lodging an appeal late. The reason given by the assessee in the present case is not adequate or enough and also looks bonafide on its part.
It is thus crystal clear that assessee was grossly negligent, inactive and casual in filing of appeal. Such negligent, casual and lackadaisical approach to file appeal cannot constitute “sufficient cause” within the meaning of section 253(5) of the Act. Appeal filed by the assessee in dismissed.
-
2024 (7) TMI 1475
Determination of tax liability for a Trust u/s 164(1) - AO and CIT(A) held that the share of income of the Trust is unknown and in determinative, so relevant income shall be taxed at maximum marginal rates - assessee main contention is that there is a family Trust and at the creation of the family Trust income has been determined as it appears from the last will of the executor Savita Gouri Malani.
HELD THAT:- There was a Trust namely Savita Gouri Malani Grand Children Trust. From perusal of the order of ld. CIT(A) it appears to us that he took the assistance of Section 164(1) of the Act in calculation of the tax by saying that in the present case share of the income of the Trust is unknown and not determinative. The submission of ld. Counsel for the assessee is that in the present case determination of the tax should be as per the 2nd proviso to Section 164(1) of the Act treating the assessee as an AOP and to tax it in conjunction with Section 160(iv) of the Act.
Share and income of the trustees have already been determined in the last will. So, we find substance in the arguments of the ld. Counsel for the assessee that tax should be computed at normal rate and not at the maximum marginal rate in short MMR. Appeals filed by the assessee allowed.
-
2024 (7) TMI 1474
Penalty u/s 271(1)(c) - furnishing inaccurate particulars of its income - adjustment made u/s 92CA - whether the penalty levied u/s 271(1)(c) on the adjustment made u/s 92CA is legally valid or not? - HELD THAT:- CIT(A) rightly deleted addition as held AO while imposing the penalty, simply relied on the addition/adjustment made by the TPO and did not examine in detail as to whether penalty was imposable on such adjustments or not.
The scheme of Explanation 7 to section 271(1)(c) of the Act makes it clear that the onus on the assessee is only to show that the ALP was computed by the assessee in accordance with the scheme of section 92C of the Act in good faith and with due diligence. It is not in dispute here that the ALP was computed in accordance with the scheme of section 92C in as much as there was no dispute over the MAM, PLI or timescale of data used.
AO/TPO only adopted a different set of comparables to determine ALP. There is no allegation by the AO in the penalty order that the actions of the appellant lack good faith and due diligence.
AO has not been able to demonstrate any specific act, fact or conduct of the affairs of the appellant which proves that it was lacking in good faith and was done without due diligence. No such argument has been raised nor suggested otherwise. Therefore, lack of due diligence in determining the ALP is neither indicated nor can be inferred. In such a situation, it cannot be said that the appellant had not determined the ALP in accordance with the scheme of section 92C of the Act in good faith and with due diligence and accordingly, the conditions precedent for invoking Explanation 7 to section 271(1)(c) did not exist on the facts of the instant case. Appeal of the Revenue is dismissed.
-
2024 (7) TMI 1473
Condonation of delay in filing appeal against the order u/s 143(1) - delay on 1190 days in filling the appeal - conclusion of the learned CIT(Appeals) leading to the dismissal of the appeal is that the appellant’s rectification petition u/s 154 of the Act against order u/s 143(1) dated 14/01/2016 was already discharged by the AO and rejected by the order dated 14/03/2016 - HELD THAT:- As in order u/s 154 appellant has furnished the Application for Rectification u/s 154 dated 20.06.2016. Since this application under Section 154 of the Act was pending as on the date of the affidavit in support of the prayer for condonation of delay, the appellant was fully justified in contending that the application for rectification u/s 154 of the Act is pending. In fact subsequently, the appellant has received an Intimation dated 19.03.2020 from the CPC saying that the Return of Income for the above year is transferred to the jurisdictional Assessing Officer for necessary action.
This justifies that condonation of delay the application supported with affidavit. It is also to be noted that the said Application for Rectification u/s 154 of the Act is still pending with the learned jurisdictional AO. Thus we are of considered opinion that the delay in filing the appeal was for good and sufficient reasons as the appellant was pursuing another remedy with all bonafides.
Appeal allowed. CIT(A) shall condone that delay in filing the appeal and after giving, an opportunity of hearing on merits, decide the issue on merits.
-
2024 (7) TMI 1472
Deductibility/legality of expenditure - assessee’s claim for expenditure on repossession charges - assessee receives remuneration by way of commission from banks and financial institutions for repossessing assets pledged with them by the defaulting borrowers, enabling, either by way of disposal of those assets or otherwise, settlement of their dues. The assessee states of engaging ‘influential’ people of the locality, without good social background though, to identify and repossess assets, using force where necessary - HELD THAT:- We have, at this stage, two options, i.e., to restore the matter back to the AO for examining the deductibility of the expenditure from the standpoint of Explanation to sec.37(1), qua which there is no finding; there being no estopple against law. The second, which we would prefer, is to examine the expenditure from the limited standpoint of the reasonability of the disallowance.
The Tribunal is to decide matters based on the material on record. While nothing has been produced before us, it is an admitted fact that the only material furnished is an unverifiable list of about 400 persons, stated to be ‘influential’ persons of the locality, without as much as a proof of their identity. Why, for all one knows, these ‘persons’ may not exist.
Unless each of the said persons falls in a different locality, a person once identified for the purpose would normally be engaged for another property in the area/locality, while there is no repetition at all. No one goes searching for such persons, found satisfactory, all over again and, further, how many such ‘influential’ people one could find in a locality, being, rather, a few for the entire area.
This refrain by the Revenue is understandable and, thus, valid. The detail furnished is sketchy, and its non-verifiability, admitted. It is, as we see it, only a make-believe, with no evidentiary value, given only for the sake of it, presumably to pre-empt disallowance u/ss. 40(a)(ia) & 40A(3).
Limiting deduction to 50% of that claimed, is, under the circumstances, not unreasonable.
As regards the charge of it being ad hoc, the same misses the point that it is only where not verifiable – which in the instant case extends to the entire sum claimed, that that estimated as reasonable is saved, disallowing the balance. As explained in CIT v. Durga Prasad More[1971 (8) TMI 17 - SUPREME COURT] science has yet not invented any instrument to measure the reliability of evidence, while here we find it to be not even qualifying as one. Estimation is integral to assessment, of which disallowance of expenditure is a part. Why, we see it all the time, as for personal purposes; again, in the absence of proper record.
It is well-settled that it is permissible for the tax authorities to consider disallowing the sum estimated as incurred in excess (Swadeshi Cotton Mills Co. Ltd. [1966 (9) TMI 30 - SUPREME COURT]; Lakshmiratan Cotton Mills Co. Ltd [1968 (9) TMI 13 - SUPREME COURT]; Lachminarayan Madan Lal [1972 (9) TMI 4 - SUPREME COURT].
Reference in this context may also be made to CIT v. Eastern Condiments P. Ltd. [2009 (10) TMI 452 - KERALA HIGH COURT]; Pr. CIT v. Rimjhim Ispat Ltd. [2016 (1) TMI 374 - ALLAHABAD HIGH COURT]. The AO has, in the absence of any material, viz. property-wise details; basis for payment, itself unevidenced, estimated the expenditure liable for disallowance at 50%, which we find as reasonable. Appeal filed by the assessee is dismissed.
-
2024 (7) TMI 1471
Validity of reopening of assessment - reasons to believe - notice beyond period of four years - as argued AO has failed to point out the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year - HELD THAT:- Admitted facts are that the original assessment was completed by the AO u/s. 143(3) of the Act on 30.03.2015. The assessment year involved is AY 2012-13 and notice u/s. 148 of the Act was issued on 25.03.2019 and admittedly, it is beyond 4 years. Once the notice is beyond 4 years, we have to see whether there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year 2012-13.
It cannot be inferred or there is no iota or word about the escapement of income, how the income has escaped due to the failure on the part of the assessee to file fully and truly all material facts necessary for its assessment. Once this is a fact, this issue is fully covered by the decision of Foramer France [2003 (1) TMI 101 - SC ORDER] wherein the Hon’ble Supreme Court has affirmed the decision Foramer France [2000 (8) TMI 45 - ALLAHABAD HIGH COURT] wherein as held it is the new Section 147 which will apply to the facts of the present case. In the present case, there was admittedly no failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for the assessment. Hence, the proviso to the new Section 147 squarely applies, and the impugned notices were barred by limitation.
In the absence of any failure on the part of the assessee to disclose fully and truly all material facts and assessment framed u/s. 143(3) of the Act and reopening is beyond 4 years, the issue is squarely covered in favour of the assessee
-
2024 (7) TMI 1470
Notices for payment of Terminal Handling Charges (THC) levied by Port Terminals - HELD THAT:- The petitioners are agreeable to the Impugned Public Notices No. 14 of 2020 dated 28th January 2020 and 11 of 2020 dated 17th January 2020 being read subject to the contracts between the Shipping lines and exporter/importer. This is on account of paragraph No.24 of the affidavit in reply at page no.127 of the Writ Petition No. 2914 of 2021 wherein it is averred that the Impugned Public Notices dated 28th January 2020 and 17th January 2020 do not interfere with private contracts that the shipping lines have with the importers and exporters. Therefore, the Impugned Public Notices No. 14 of 2020 and 11 of 2020 dated 28th January 2020 and 17th January 2020, respectively, are subject to the private contracts which shipping lines have with importers/exporters.
Petition disposed off.
-
2024 (7) TMI 1469
Classification of imported goods - to be classified under Customs Tariff Item [CTI] 6102 30 10, CTI 6202 9390 and CTI 6210 5000 of the First Schedule to the Customs Tariff Act, 1975? - wilful suppression of facts or not - HELD THAT:- It is clearly a case of interpretation of the Tariff entries and willful suppression of facts cannot be attributed in such a situation for section 28 (4) of the Customs Act to be applicable. The appellant had declared the details of the imported goods which were also physically examined. It is also stated that earlier the Customs Authorities had also examined the previous classification of subject goods on several occasions and permitted clearance under the classification adopted by the appellant.
The appellant has placed on record the order dated 24.02.2023 passed by the Commissioner in respect of a show cause notice dated 01.10.2022 issued to the appellant for the past consignment of goods imported from September 2015 in which invoking the provisions of section 28 (4) of the Customs Act were also invoked.
The Commissioner, however, not only held that the provisions of section 28 (4) could not have been invoked, but also held that sections 111 and 114A could also has not been invoked - The Commissioner has noted in the order that there was nothing to suggest presence of willful suppression of facts so as to enable the department to take recourse to the provisions of section 28 (4) of the Customs Act as it was a case of mis-classification only. The Commissioner also noted that once informed, the correct classification was accepted and the differential duty was paid.
In view of the findings recorded by the Commissioner in the order dated 24.02.2023, which findings would be applicable in the present case, the impugned order dated 21.06.2021 passed by the Commissioner (Appeals) cannot be sustained and is set aside - Appeal allowed.
-
2024 (7) TMI 1468
Revocation of Customs Broker License - forefeiture of entire security deposit - levy of penalty - overvaluation of export goods to claim higher drawback - violation of Regulation 1(4), 10(d), 10(e) and 10(n) of CBLR - HELD THAT:- It is found that the finding of the Commissioner that the appellant had sublet his licence to M/s Planet World Cargo and thereby violated Regulation 1(4) is contrary to his finding that the appellant had violated Regulations 10(d), (e) and (n). While holding that the appellant had sublet his licence the Commissioner presumed that the M/s Planet World Cargo acted as the customs broker using the licence sublet by the appellant. He also presumed that Shri Tilak Raj who processed the documents was working for M/s Planet World Cargo. On the contrary, while holding that the appellant had violated Regulations 10(d), (e) and (n), the Commissioner presumes that the appellant was the customs broker in the matter and in that capacity failed to fulfill certain obligations.
At any rate, in the entire investigation, even a summon was not issued to the appellant to record his statement to determine if the shipping bill was filed by the appellant or by M/s Planet World Cargo and if it was filed by the appellant then what it had advised the exporter and what information it had imparted to the exporter and how it had verified the identity and functioning of the exporter as required under the Regulations.
The impugned order cannot be sustained. The appeal is allowed.
-
2024 (7) TMI 1467
Lack of territorial jurisdiction - petition seeking initiation of investigation into the affairs of M/s Vikram Structures Pvt. Ltd. (VSPL) and its related parties by the SFIO dismissed on the ground of lack of territorial jurisdiction - HELD THAT:- This Court is of the view that the foundation for approaching the Ministry of Corporate Affairs, Government of India is the order passed by NCLT, Bengaluru. Moreover as the registered office of VSPL is situated in the state of Karnataka, the High Court which would have the jurisdiction to deal with the issues arising out of the order passed by NCLT, Bengaluru would be the Karnataka High Court.
The learned Single Judge has rightly refused to exercise its discretionary jurisdiction by invoking the Doctrine of Forum Conveniens and directed the Appellant to approach the Karnataka High Court instead.
Appeal dismissed.
-
2024 (7) TMI 1466
Seeking dissolution of the respondent/company - Section 481 of the Companies Act, 1956 - HELD THAT:- This Court is of the opinion that these liquidation proceedings warrant a quietus, and the company (in liquidation) should be dissolved as the Official Liquidator cannot proceed any further with the winding up process.
Relying on the decision of the Supreme Court in Meghal Homes [2007 (8) TMI 447 - SUPREME COURT] as also the import of Section 481 (1) of the Act, besides the facts and circumstances of the present case, these liquidation proceedings warrant to be brought to an end.
The company (in liquidation) – M/s. ARC Cement Ltd., stands dissolved and the Official Liquidator is hereby discharged as its Liquidator - the present application is allowed.
-
2024 (7) TMI 1465
Winding up of company - seeking release of lands and claiming rights in the land taken over by the OL - manner in which the contribution made by the CRB Group is to be reversed in favour of CRB Group i.e., the OL, as the company is currently under provisional liquidation - HELD THAT:- The Court has taken an estimate of the share contributed, as also the market value placed on record. At best, the company would have been entitled to its own share which is 50%, 37.5% and 25% in Talan, RSEB and Gulab Bagh lands, respectively. Applying a valuation-based approach on these shares would be one of the modes of compensating the company for value of its share in these lands.
In view of the valuations seen and the amount of Rs. 25 crores which has been determined as payable to the OL, this Court is not inclined to direct any adjustment of the said amount of Rs. 47 lakhs being claimed, as the same is not an admitted sum.
Application disposed off.
Sanction of the revised scheme for compromise and/or arrangement under Section 391/394 of the Companies Act, 1956 - Rule 9 of the Company (Court) Rules, 1959 - HELD THAT:- An affidavit has now been filed by the Ex-Management setting out the latest position of the assets and liabilities. The assets and liabilities of the company have been attached with the application Co. App. 384/2024, as per which the projected fund flow statement has also been given. Details of fixed assets, shares and securities, the list of unsecured creditors, bond holders, etc., have all been provided in the form of a full set of documents. Copies of the said documents have been served upon the OL. The OL may verify the same and file a response/report by the next date of hearing.
Directing the Disbursement Committee to recommence disbursements to the depositors and bond holders - HELD THAT:- The Court has been supervising the above disbursements through the Disbursement Committee for the last several years. The above order passed by the ld. Division Bench was considered by the Supreme Court, which has directed that the directions in the interim order dated 15th December, 2010 of the ld. Division Bench, shall remain operative but the payments would be subject to further orders of the Company Judge - Considering the number of claims that are now pending, in accordance with law, it is deemed appropriate to direct that the Disbursement Committee ought to continue disbursement of the remaining 1,719 claims. As of today, according to the Committee’s report, there is approximately Rs .9 crores in the Committee’s account. Accordingly, let the disbursement in respect of 1719 claims be continued.
Let the entire records be handed over to the new Committee on or before 30th April, 2024. The said new Committee shall start functioning from 1st May, 2024 - The disbursements shall be re-commenced by the new Disbursement Committee and a further report shall be placed on record. Committee shall submit a report every two months in the present company petition.
-
2024 (7) TMI 1464
Challenge to arbitral award - non-consideration of the facts - rights of the petitioner bank against whom the same recovery is sought by the committee of creditors in the IBC proceedings - Section 34 of the A&C Act - HELD THAT:- The Supreme Court in PSA SICAL Terminals (P) Ltd. v. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin, [2021 (7) TMI 1456 - SUPREME COURT], inter-alia held that 'It is only such arbitral awards that shock the conscience of the court, that can be set aside on the said ground. An award would be set aside on the ground of patent illegality appearing on the face of the award and as such, which goes to the roots of the matter. However, an illegality with regard to a mere erroneous application of law would not be a ground for interference. Equally, reappreciation of evidence would not be permissible on the ground of patent illegality appearing on the face of the award.'
It is important to remember that the position with respect to the limited interference of the courts has changed slightly in light of the 2015 Amendment to Section 34 of the A&C Act. The scope of violating Indian public policy has been expanded to include fraud or corruption in the award-making process, violating Sections 75 or 81 of the Act, violating the fundamental policy of Indian law, and going against the most fundamental ideas of justice or morality as a result of the addition of Explanation 1 to Section 34(2). Furthermore, Section 34 now contains sub-section (2-A), which states that in the event of domestic arbitrations, patent illegality appearing on the face of the verdict also constitutes a breach of Indian public policy.
This court at the stage of challenge under section 34 has to only prima facie see if there is a patent illegality in the impugned award which shocks the conscience of the court. Further, this court cannot appraise the evidence or merits in a challenge under section 34 of the A&C Act. The mere fact that another reasonable conclusion can be drawn from the case’s merits does not give the power to this court to interfere with the arbitral award. The award passed by the learned arbitrator is found to be correct and in accordance with the law.
Petition dismissed.
-
2024 (7) TMI 1463
Fraudulent siphoning/diversion of funds - Initiating and carrying out appropriate inquiries and investigation against the management of ‘Three C Shelters Private Limited’, i.e., respondent No.3 and sister group of companies - manipulating of records and siphoning off funds of the said company to certain shell companies based in Kolkata - HELD THAT:- This Courts finds it unfathomable that the information about the state of affairs of respondent No.3 and its group of companies have not reached the ears of respondent No.1& 2, and yet shockingly no action has been taken in terms of Chapter XIV of the Companies Act, 2013. It is but imperative that they must exercise their statutory and public duties in arresting pilferage, siphoning off of the assets of respondent company (in liquidation)/respondent No.3 and its group of companies and safeguard the legitimate interests and rights of the petitioner and those similarly placed. It is surprising that despite issuance of advance notice and having a battery of lawyers on their panel, no one has bothered to even appear for respondent No.1 and 2 today during the hearing.
There is no gainsaying that Chapter XIV of the Act provides for a detailed mechanism to inspect, call for the accounts and record of the company, inquire and investigate into the financial affairs of the company. Further, where the Registrar or inspector has reasonable grounds to believe that the books or documents with regard to the company under investigation are likely to to be destroyed, mutilated, altered, falsified or secreted, an order can be prayed for from the Special Court for the seizure of such books and papers in the manner provided vide section 209 of the Act and proceed for freezing of the accounts of the company under investigation.
Considering the prayer made in the interim application moved on behalf of the petitioner, unhesitatingly there are compelling and justifiable grounds to pass certain directions so as to safeguard the paramount interests of the petitioner and those who are similarly placed in larger ‘public interest’.
Respondent Nos. 1 and 2, are hereby conjointly directed to initiate action and ensure step-wise compliance in terms of Section 206 to 210 of the Companies Act, 2013 and other analogous provisions in Chapter XIV of the Companies Act, 2013, and thereby inspect the affairs of ‘Three C Shelters’ and the related companies of ‘Three C Shelters’ in terms of the Status Reports of the IRP before the NCLT as brought out in his reports dated 9th August, 2023 and submit an Inspection Report within four weeks from today before this Court.
Re-notify for hearing on 14th March, 2024.
............
|
9911796707
