|
Advanced Search Options
Case Laws
Showing 21 to 40 of 23051 Records
-
2019 (12) TMI 1670
Deduction u/s 80IB - sale consideration of the FSI generated from its slum development project at Mayanagar, Worli - difference between actual sale value less the value at which the TDR is disclosed in the books of account - assessee had transferred FSI to the associated concerns for Rs. 13,672/- as against ready reckoner rate of Rs. 11,520/- - CIT(A) allowed deduction -
Objection of the Assessing Officer that since deduction u/s. 80IB(10) in A.Y. 2003-04 was rejected and as it was not assailed in appeal, the assessee could not repeat the same in the year under consideration - HELD THAT:- As noted that in A.Y. 2003-04 the claim was rejected on the ground that the whole of the project was not completed. Most importantly, the assessment order for that year was passed on 30.12.2008 whereas the CBDT issued the notification, exempting notified projects from the condition of completion of the project, on 05.01.2011. Therefore, the assessee has not contested the said order. As against the above, during the relevant previous year, the entire project was completed and the FSI granted by the Government in lieu of the cost factor was in fact sold. It is, therefore, the reference made by the AO to the proceedings of A.Y. 2003-04 was illogical and uncalled for as the claim made in the year under appeal was not dependent upon that of the earlier year; and the CIT (A) was perfectly justified in refuting such argument canvassed by the AO.
Since the Mayanagar project was approved on 26.11.1998, the benefit of the Notification No. 67/2010 dated 03.08.2010 and the corrigendum issued vide Notification No. 02/2011 Income Tax dated 05.01.2011 was not available - As it is noted that the inference drawn by the Assessing Officer is contrary to the statutory provisions set out under section 80IB(10) of the Act.
If, one go through the provisions of S.80-IB(10) and notifications issued by the CBDT, it is found AO clearly erred in disregarding the proviso which mandates that the limitations prescribed in causes (a) and (b) were inapplicable to housing projects completed as per the scheme of Central or State Government. Indisputably, the Mayanagar project was sanctioned under the scheme of the Government of Maharashtra under DCR 33(10) for rehabilitation of the slum dwellers, and it was covered by the Notifications. Therefore, in view of the unambiguous language of the proviso, the project completed by the assessee was excluded from the restrictions imposed by clauses (a) and (b) of sub-s. (10) of S. 80-IB - Hence, we are of the considered view that rejection of assessee's claim for deduction u/s, 80-IB(1O) was unjustified, and it was rightly so held by the CIT(A) in his order.
We, further noted that a similar interpretation as drawn by the Assessing Officer with respect to the notification dated 05.01.2011, that it was to extend the permissible period in respect of projects approved after 01.04.2004, was considered and adjudicated by the co-ordinate Bench of this Tribunal in the case of Ramesh Gunshi Dedhia [2014 (9) TMI 653 - ITAT MUMBAI] which was relied upon before the CIT (A). In the said case, it was held that as a consequence of the proviso, the conditions prescribed in clauses (a) and (b) are relaxed if the housing project was carried out in accordance with the scheme of the Central or State Government. Since, the CIT(A) has extracted in extenso the findings recorded by the Tribunal.
Since the consideration for construction of the rehabilitation building was received in kind and not in cash/cheque, the benefit of S. 80-IB(10) of the Act would not available to the assessee - As noted that this inference drawn by the Assessing Officer is also untenable as held in various decisions, cited before and considered by the CIT (A) in his order holding to the contrary. In the premises, we are of the considered view that the CIT (A) was justified in rejecting the argument of the Assessing Officer that since the consideration was received in kind and not in cash/cheque, the assessee was not entitled to the deduction in paragraph 4.19 of his order The order of the CIT (A), therefore, does not call for any interference on this count too.
Most importantly, in A.Y. 2015-16 also, a similar claim for deduction u/s. 80-IB(10) of the Act was preferred in respect of the FSI granted and sold in identical fact-situation. We find that after taking note of the entire scheme, statutory provisions and notifications cited hereinabove, the Assessing Officer himself had granted the deduction sought for vide his order dated 28.12.2017 passed u/s. 143(3) of the Act.
We further noted that in arriving at his decision to delete the disputed disallowance during the year under consideration, the CIT (A) has also taken note of the aforesaid order dated 28.12.2017 passed u/s. 143(3) of the Act for A.Y. 2015-16 in paragraph 4.21 of his order. For all the above reasons, we are of the view that the denial of deduction claimed u/s. 80-IB(10) of the Act was unwarranted and unjustified. The reasoned order of the CIT (A) deleting the disallowance is in order and it does not call for any interference.
Objection raised by the AO that the FSI granted was sold to a group entity at an inflated rate - As we find that the statute does not prohibit such sale to group concern. Further, the ready reckoner rate is not sacrosanct, and there might be innumerable reasons for demanding higher price. In any case, the transaction under consideration is supported by a valuation report submitted to A.O. in which the rate of FSI was supported with the help of three comparable instances. Further, the inference drawn by the Assessing Officer is based upon his own theory, and neither supported by any independent verification nor after discrediting the valuation submitted by the assessee for valid reasons. We, therefore, are of the considered view that the CIT(A) was justified in refuting the aforesaid stand taken by the AO.
Thus we are of the considered view that the limitations prescribed in clause (a) and (b) of proviso to section 80IB(10) of the Act, in respect of date of commencement and completion of the project has no application to projects undertaken under the scheme of Central or State Govt. Thus, in view of the fact that the project on which the benefit of deduction was claimed u/s 80IB(10) of the Act, was approved under DC regulation 33(10) of Govt. of Maharashtra, and also notified by the CBDT u/s 80IB(10) of the Act, we are of the considered view that the assessee is entitled for deduction towards sale of FSI/TDR. The CIT(A) after considering relevant facts, has rightly allowed the benefit and deleted addition made by the AO. Hence, we are inclined to uphold the order of the ld. CIT(A) and dismissed appeal filed by the revenue.
Disallowance u/s 14A r.w.r. 8D - AO has disallowed expenditure incurred in relation to exempt income u/s 14A of the Act, by invoking Rule 8D(2)(ii) and (iii) of I.T. Rules, 1962 - HELD THAT:- We find merit in the arguments of assessee for the reasons that the Hon’ble Supreme Court, in the case of CIT vs Reliance Industries Limited [2019 (1) TMI 757 - SUPREME COURT] had considered an identical issue and held that no interest disallowances can be made u/s 14A of the Act, if own funds are sufficient to coverup the value of the investments. Also in the case of CIT vs Reliance Utility and Power Limited [2009 (1) TMI 4 - BOMBAY HIGH COURT] held that when, mixed funds including own funds are more than the value of the investments, then a general presumption goes in favor of the assessee that investments made in shares is out of own funds, consequently no disallowance could be made towards interest expenditure. A similar ratio has been laid down in the case of CIT vs HDFC Bank Limited (2014 (8) TMI 119 - BOMBAY HIGH COURT]supra). Therefore, we are of the considered view that the Ld. AO was erred in disallowed interest expenditure u/s 14A, r.w. Rule 8D(2)(ii) of the I.T. Rules, 1962 and hence, we direct the AO to delete disallowance of interest expenditure u/s 14A of the I.T. Act, 1961.
Disallowance of expenditure under Rule 8D (2)(iii) - As facts with regard to exempt income earned for the year is not coming out from the orders of the lower authorities. Even, the assessee has not furnished any details with regard to exempt income earned for the year under consideration and hence, we are of the considered view that the issue needs to go back to the file of the AO. We, therefore, set aside the issue to the file of Ld.AO for the limited purpose of ascertaining the fact with regard to the exempt income earned for the year under consideration and restrict disallowance of expenditure u/s 14A to the extent of exempt income; if at all any exempt income is earned for the year under consideration. Insofar as, the arguments of the Ld. DR that if disallowances u/s.14A is restricted to the extent of exempt income, then the assessed income may go below the return income, which is not permissible under the law.
We find that in the case of M/s Sundaram Multipap [2018 (4) TMI 1204 - ITAT MUMBAI] had considered an identical issue and by following another decision of co-ordinate bench in the case of TATA Industries Limited (2016 (7) TMI 1011 - ITAT MUMBAI]upra) held the issue in favor of the assessee and accordingly, we reject the contention of the Ld. DR.
Disallowance made u/s 14A, while calculating the book profit u/s 115JB - We find that this issue has been squarely covered in favor of the assessee by the decision of Mrinalini Trading Company Ltd. [2017 (7) TMI 1365 - ITAT MUMBAI] where the Tribunal by following the order of Vireet Investments Pvt. Ltd(2017 (6) TMI 1124 - ITAT DELHI) held that computation of book profit in terms of clause (f) of Explanation (1) to Section 115JB (2) is to be made without resorting to computation as contemplated u/s 14A r.w. Rule 8D. We direct the Ld. AO to delete adjustments made towards book profit computed u/s 115JB, in respect of disallowance of expenditure 14A.
Exclusion of DRR [denture Redemption Reserve] from book profit computed u/s 115JB - HELD THAT:- DRR was created by the assessee in the present case as per the mandate given under S. 117C of the Companies Act. It is also an ascertained liability and not a mere provision as has been held in the binding judgments of the Hon'ble Bombay High Court discussed hereinabove. It may also be stated that the aforesaid judgment, rendered by the non-jurisdictional High Court, was considered but still the issue was decided in favour of the assessee by the coordinate Benches of this Tribunal in Rachana Finance & Investment P. Ltd. and Repute Properties P. Ltd. [2017 (5) TMI 1819 - ITAT MUMBAI]. Similarly, in a subsequent order in the case of Housing Development and Infrastructure Ltd. [2019 (1) TMI 2039 - ITAT MUMBAI] also, the coordinate Bench of this Tribunal, even after considering the aforesaid judgment of the Hon'ble Delhi High Court had decided the issue in favour of the assessee. In the premises, the ratio laid down in the aforesaid judgment of the Hon'ble Delhi High Court would not be applicable to the case of the assessee.
In this view of the matter and consistent with view taken by the coordinate bench, we direct the AO to delete additions made towards provisions for DRR to book profit computed u/s 115JB of the I.T. Act, 1961.
Deduction u/s 80IA(4) - AO has rejected deduction claimed towards notified industrial park u/s 80IA(4), on the ground that the benefit of the Industrial Park scheme, 2008 was not available to the assessee, since it was received the requisite approval 05/06/2006 - HELD THAT:- In view of the unambiguous language of clause 4.1 and clause 5.6 of the Industrial Park Scheme, 2008 it is not understood as to how the Assessing Officer had inferred that the industrial parks of the assessee, for which approvals were granted under 2002 Scheme were covered by the 2008 Scheme. Therefore, we are of the considered view that the rejection of the claim of the assesses which was in accordance with the statutory provisions and supported by requisite approvals and notifications was rightly reversed by the CIT (A). Further, a similar claim was made in A,Y, 2005-06 for a sum of Rs. 10,59,66,901/-. During the course of scrutiny, the Assessing Officer observed that in respect of the same properties the assessee had offered rental income as 'income from house property' in A.Ys 2001-02 to 2004-05 in the returns filed u/s. 139(1) of the Act. Hence, the treatment of such income from Industrial Parks as 'business income’ was not accepted by the Assessing Officer and, the claim of deduction u/s. 80-lA(4)(iii) of the Act was rejected. On same lines, the claim made u/s. 80-IA(4)(iii) for A,Y. 2006-07 was also declined. Since the orders of the Assessing Officer for both the years were reversed by the CIT (A), the revenue carried the matter unsuccessfully in further appeals to Tribunal.
Tribunal order in M/s. Ackruti City Ltd., (Formerly known as Akruti Nirman Ltd.) DCIT Central Cir. 36, Mumbai [2011 (6) TMI 1038 - ITAT MUMBAI] carried in proceedings u/s. 260A of the Act by the revenue but in vain. The Hon’ble High Court vide their judgment dated in Commissioner of Income-tax, Central-III, Mumbai Versus Ackruti City Ltd. 2013 (4) TMI 488 - BOMBAY HIGH COURT had dismissed such appeals.
Considering the totality of the facts and circumstances of the case, more particularly in absence of any non-compliance of statutory requirements by the assessee, the rejection of its claim for deduction u/s. 80-IA(4)(iii) of the Act was uncalled for. The CIT (A) was, therefore, perfectly justified in correcting the error committed by the Assessing Officer by passing an exhaustive; elaborate and reasoned order. Hence, we are inclined to uphold order of the ld. CIT(A) and reject grounds raised by the revenue.
-
2019 (12) TMI 1669
Murder - framing of charges - non-application of judicial mind by the learned trial judge - HELD THAT:- In the present case, upon hearing the parties and considering the allegations in the charge sheet, the learned Second Additional Sessions Judge was of the opinion that there were sufficient grounds for presuming that the Accused has committed the offence punishable Under Section 302 Indian Penal Code read with Section 34 Indian Penal Code. The order dated 12.12.2018 framing the charges is not a detailed order. For framing the charges Under Section 228 Code of Criminal Procedure, the judge is not required to record detailed reasons. As pointed out earlier, at the stage of framing the charge, the court is not required to hold an elaborate enquiry; only prima facie case is to be seen - As held in KANTI BHADRA SHAH AND ANR. VERSUS STATE OF WEST BENGAL [2000 (1) TMI 989 - SUPREME COURT], while exercising power Under Section 228 Code of Criminal Procedure, the judge is not required record his reasons for framing the charges against the Accused.
Upon hearing the parties and based upon the allegations and taking note of the allegations in the charge sheet, the learned Second Additional Sessions Judge was satisfied that there is sufficient ground for proceeding against the Accused and framed the charges against the Accused-Respondent Nos. 1 and 2. While so, the High Court was not right in interfering with the order of the trial court framing the charges against the Accused-Respondent Nos. 1 and 2 Under Section 302 Indian Penal Code read with Section 34 Indian Penal Code and the High Court, in our view, erred in quashing the charges framed against the Accused. The impugned order cannot therefore be sustained and is liable to be set aside.
Appeal allowed.
-
2019 (12) TMI 1668
Bogus LTCG - scrip being a penny stock company - exemption u/s 10(38) towards sale of equity shares denied - HELD THAT:- Relevant factors to be considered are surrounding circumstances, objective facts, evidence adduced, presumption of facts based on common human experience in life and reasonable conclusions.
In present facts of the case it is further observed that Ld. AO has not examined/called for any evidences in respect of purchase/sale of alleged scripts. Assessee is therefore directed to provide all relevant documents to establish sound financial of alledged companies and that fluctuation in price was market driven. Ld.AO shall take all evidences into consideration and then decide the issue as per law.
In the event de hors statement, there are overwhelming evidences and assessee is unable to establish genuineness of sale and purchase of alledged scripts, adverse view would be taken by holding the transaction to be sham.
AO is directed to provide all statements recorded by investigation wing to assessee, referred to in assessment order. In the event, statements recorded are not of secondary and subordinate category, cross examination has to be granted to assessee. Ld.AO is directed to re-examine the case of assessee in the light of aforestated direction in accordance with law. Assessee’s appeal stands allowed for statistical purposes.
-
2019 (12) TMI 1667
Income taxable in India - Alleged Permanent Establishment in India of the Appellant u/a 5(1) and 5(2)(i) of the India UAE Tax Treaty - as primarily argued that as per Article 5(1), the Permanent Establishment means a fixed place of business in which the business is carried out and in the case of assessee they did not have any fixed place of business, but were present intermittently for execution of the contracts and not stayed more than nine months in any particular year - whether "at the disposal” denotes an absolute legal right/control over a place /room/cabin/space or it connotes only the right to access and use such place? - HELD THAT:- The place of disposal should not be tested from the angle of 'exclusion of others' but from the perspective of type and duration of business carried on by the taxpayer from such place. The agreement not only provides the assessee with an unrestricted right to access the hotel premises but also the complete control over such premises. This clearly establishes the fact that the hotel premises were at the disposal of the assessee in view of the length and duration of their use by the assessee and the less invasive activities being carried on there from. It can't be denied that the assessee had certain amount of physical space at its disposal in the form of hotel premises.
"Temporal" aspect or the "Permanency Test" - The operating term of the lease is 20 years. It is not the contention of the assessee that the visits of its employees are "occasional". The visits are mandated by a written contract and have been historically going on at a regular basis year after year. Although the appellant claims that the visits are only for a limited period, the truth is that the employees of the assessee have been visiting the premises of AHL year after year. Thus, the visits of the employees are NOT sporadic or one off affairs and there is a continuity and repetitiveness to it.
To quote from Hon'ble Supreme Court in the case of Formula One World Championships [2017 (4) TMI 1109 - SUPREME COURT] the appellants are trying to trivialize the issue by harping on the fact that duration of the event was three days and, therefore, control, if at all, would be for that period only the presence is neither ephemeral or fleeting, or sporadic". The indicator is not the presence of the employees for short periods in one year, it's about the continuity and repetitiveness of such presence year after year. Considering the purpose for which such visits are necessitated, terms of contract as well as the period spent as per the statement enclosed to this submission, the visits are definitely not a "one-off"/ "temporary"/ "occasional"/ "ephemeral"/ "fleeting"/"sporadic" ones. Accordingly, considering the permanency, consistency and frequency of such visits, the temporal aspect of the disposal test is also satisfied.
Whether it can be said that the business of enterprise is being wholly or partly being carried on through such place? - The term "business" is not fully or exhaustively defined; accordingly, it has the meaning that it has under the domestic law of the state applying the tax treaty, plus professional and independent services, as explicitly provided for in article 3(l)(h) of the OECD Model. Coming to the nature of business of the assessee, it describes its role is "to increase the efficiency and effectiveness of the services provided by the Hyatt Group to the Hotel Owners in South Asia and Gulf Co-operation counsel region."
Assessee had a place of business at the premises of AHL from where it can ensure and control that not only the hotel is run and managed to its satisfaction, but also the other associated processes towards the maintenance of standards and quality as well as the exploitation of its commercial rights are being carried on. The AHL thus, afford a live connection amounting to business connection.
For the very same reason, AHL also constitute a permanent establishment of the assessee in India because the assessee virtually projects itself in India, through it. Coupled with this, the fact that the salaries of the employees were paid by the assessee and the employees also came and worked in the office of AHL in India; enjoyed perquisites from AHL establish that prima facie the office of AHL can be considered as a projection of the assessee in India. Conclusion drawn by the AO that the assessee carries on its business either wholly or partly through the fixed place and accordingly, the business premises of AHL constitute a PE of the assessee within the meaning of Art- 5(1) of DTAA should be confirmed.
As regards of existence of PE under Art-5(2)(i), the AO' has clearly proved that contention of the assessee is factually incorrect and the employees have stayed beyond the requisite period thereby establishing PE under Art-5(2)(i) as well.
SOA defines that the owner AHL consents to the ownership management, licensing and operation by HISWA (the assessee). The SOA also clearly mentions that the HISWA will have complete control and discretion with regard to all aspects of operations of the hotel. It also mentions that the right of the owner AHL to receive financial returns from the operation of the hotel shall not be deemed to give the owner any right or obligations with respect to the operation or management of the hotel. These clauses clearly prove that the HISWA, the assessee is totally involved in the maintenance and operations of running the hotel even allowing the owner a very minimal role. This also clearly establishes that the hotel premises were at the disposal of the assessee in view of the length and duration of the use of the premises. Even taking into consideration, the permanency test and the temporal aspects detailed by the Hon’ble Supreme Court in the case of Formula One World Championships prove that the assessee has got fixed place of business and can be considered having a permanent establishment in view of Article 5(1) of the DTAA.
Permanent establishment it has been examined whether the assessee has got PE in relation to Article 5(1) or Article 5(2) of the DTAA. Article 5(2)(i) stipulates a PE in case of the furnishing of services including consultancy services provided that such activities continue for the same project or connected project for a period or periods aggregating more than 9 months within any 12 months period. Thus, the period of stay stipulated only in relation to invocation of Article 5(2) but not with regard to Article 5(1) of DTAA. Thus, we hold that based on the DTAA of Indo-UAE under Article 5(1), the assessee is having a permanent establishment in India.
Various clauses of SOA such as the AHL cannot unreasonably withheld or delay the appointment of GM and appointment of employees as full time members of executive staff goes to prove the extent of control and management of HISWA in the affairs of the running of the business. The agreement provides absolute control to the assessee over the day to day management administration, finance and all other sphere of the running of the hotel including opening and operating of the bank accounts. Thus, it cannot be held that the assessee is only giving consultancy services to the hotel.
The operations such as guest admission, charges for rooms, operating of bank account, overseeing, implementation and administration of the same on day to day account, recruiting, interviewing, hiring, establishing Hyatt operating standards, establishing purchasing policies with regard to selection of goods, supplies, food, beverages including vermin extermination, security, garbage removal are all managed and operated by the assessee. All these operations are controlled through the General Manager who in turn reports to the assessee in all aspects.
Based on the clauses of the Strategic Service Agreement and Strategic Oversight Agreements, we hold that the revenue’s earned by the assessee are taxable under Article 12 of the DTAA.
Determination of the profit, we hereby hold that the taxable profits may be computed in accordance with the provisions of Section 44DA of Indian Income Tax Act and Article 12 of Indo-UAE, DTAA. During the arguments, it was also submitted that the assessee has incurred losses in the assessment year 2008-09. The assessee be given an opportunity of submitting the working of apportionment of revenue, losses etc on financial year basis with respect to the work done in entirety by furnishing the global profits earned by the assesse, so that the profits attributable to the work done by the PE can be determined judiciously. The same may be considered while determining the taxable profits in India in accordance with the provisions of Section 90(2) of Indian Income Tax Act, 1961.
Assessee appeal dismissed.
-
2019 (12) TMI 1666
Dishonour of cheque - validity of order of acquittal - existence of legally enforceable debt or not - HELD THAT:- A holder of a cheque is entitled to the benefit of legal presumption under Section 118(g) of the N.I. Act that he came into possession of the instrument in due course unless it is shown to have come to the custody of the possessor by means of an offence, fraud or other unlawful means. In this case, the accused had not even put a suggestion to P.W. 1 that the cheque came to his possession otherwise than by lawful means. When the holder becomes a payee, he could successfully prosecute the drawer of the cheque under Section 138 of the N.I. Act irrespective of whether or not he had direct transaction with the drawer.
The question that arises is whether she could be charged with criminal liability if she could show by materials on record that the liability of husband undertaken by her was for a much lesser amount than what was shown in the cheque. Taking the testimonies of P.W. 1 and D.W. 2 together, it could be reasonably inferred that liability of D.W. 2 to the complainant was at the most for an amount of Rs. 30,000/-. This is what was recorded in the agreement itself going by the testimony of D.W. 2. The execution of agreement is not denied by P.W. 1 also. In my view, in the absence of complainant producing the agreement and showing that the amount actually settled as per the agreement was Rs. 1,30,000/-, the evidence of D.W. 2 alone must be preferred. The burden in this respect is only on P.W. 1 especially because the evidence on record has shown that his alleged financial transaction with accused was untrustworthy. This burden was not discharged by the complainant.
What emerges from the entire materials on record is that a blank cheque came to the possession of P.W. 1 which he filled up making it appear that it was delivered for discharge of liability larger than what the accused had undertaken for her husband. If this is the actual position, the presumption of consideration arising under Section 139 of the N.I. Act cannot attach to Ext. P1 blank cheque nor can it help the complainant to contend that the issue of cheque was in discharge of entire amount of Rs. 1,30,000/-. This is apart from the contention of D.W. 2 that he discharged his debt to complainant through the office of C.I. of Police, Nilambur - There is no reason to interfere with the same as it cannot be rejected as being perverse or absurd. Therefore, the impugned order of acquittal is only to be confirmed.
Appeal dismissed.
-
2019 (12) TMI 1665
Requirement of pre-deposit on filing appeal - quantum of pre-deposit - petitioner points out that while filing First Appeal, the petitioner had deposited 10% of the disputed tax liability as provided under subsection (6) of Section 107 of the Act - it is submitted that the petitioner is ready and willing to deposit 20% of the remaining amount of tax in dispute - HELD THAT:- The petitioner is permitted to deposit 20% of the remaining amount of tax in dispute and as soon as the said amount is deposited, the recovery proceedings for the balance amount shall remain stayed as provided under subsection (9) of Section 112 of the Act.
List in the third week of January, 2020.
-
2019 (12) TMI 1664
Waiver of condition relating to delay in intimation and lodging of the claim, by appointing a surveyor - absence of any mention, of aspect of delay in intimation and violation of conditions of Clause 6(i) of General Conditions of Policy, in the repudiation letter, the same could be taken as defence before the NCDRC - whether the insurer had waived the condition as to delay in intimation by appointing a surveyor? - HELD THAT:- This Court in Sonell* Clocks [2018 (8) TMI 1910 - SUPREME COURT] has distinguished Galada Power on facts and held that the appointment of a surveyor cannot, as a matter of law, be construed as a waiver of the terms and conditions of the insurance policy. However, in Sonell* Clocks, the insurer had taken a specific plea in the repudiation letter that the loss was not conveyed within the stipulated period.
The law as laid down in Galada [2016 (7) TMI 1603 - SUPREME COURT] on issue still holds the field. It is a settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation. If the insurer has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at the stage of hearing of the consumer complaint before NCDRC.
Admittedly in the case at hand there was no reference of delay in intimation or lodging of the claim as stipulated in Clause 6(i) of the General Conditions of Policy in the repudiation letter - The NCDRC has failed to take into consideration this aspect of the matter and, therefore, cannot be held to be justified in rejecting the claim of the Appellant, on that ground.
The Respondent-insurer is directed to make payment of Rs. 63,43,679/-, as assessed by the surveyor, to the Appellant with interest @ 8% from the date of the filing of the claim of petition till date of payment - Appeal allowed.
-
2019 (12) TMI 1663
Disowning of petitioner by Myanmar - completion of sentence for the alleged offences - It is argued that such deportation would tantamount to a death sentence against the petitioners, in view of the plight of the petitioners in Myanmar, which country has the declared policy of an all-out onslaught on the said "Rohingya" Community.
HELD THAT:- In view of the imminent plight of the petitioners, who, despite having basic human rights in consonance with the Fundamental Rights provided by the Constitution of India as well as the U.N. Charter and the norms of any civilized society, a minimum protection ought to be given to the petitioners till the writ petition is decided, in order to uphold the spirit of humanity, if not the Fundamental Rights enshrined in the Constitution of India, which is the grundnorm of all Indian statutes - the respondents are directed to file their affidavit(s)-in-opposition within January 10, 2020. Reply/replies, if any, shall be filed by the petitioners within January 17, 2020.
Let the matter appear next "For Hearing" on January 20, 2020.
-
2019 (12) TMI 1662
Maintanaibility of appeals in ITAT - low tax effect - HELD THAT:- We find that the tax effect involves in the appeal of the Revenue is below Rs. 50 lakhs. There is no dispute that the Board’s instructions or directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of Rs. 50 lakhs.
The appeal is not maintainable in the instant case as the tax effect is less than Rs. 50 lakhs. Accordingly, it is held that appeal filed by the revenue is not maintainable.
-
2019 (12) TMI 1661
Calculation of interest on refund claim - relevant date - HELD THAT:- There shall be stay of operation of the impugned judgments and orders in FEMC-PRATIBHA JOINT VENTURE VERSUS COMMISSIONER OF TRADE & TAXES [2019 (7) TMI 1993 - DELHI HIGH COURT] passed by the High Court of Delhi at New Delhi till the next date of hearing.
-
2019 (12) TMI 1660
Levy of service tax - Auctioneers’ Service - conducting auction of goods and property on consideration, for which trading charges, handling and incidental expenses and appraising charges were collected - Business Support Service - activity relating to pledging of jewellery - HELD THAT:- The Show Cause Notice carries the explanation through statement of one of the office bearers of the appellant-society wherein he has inter alia stated that their objective was “facilitating the marketing of agricultural produce to its members at a remunerative price”, “arranging for and undertaking of purchase, storing, processing and marketing of the agricultural and other produce or products of its members or of the society to the best advantage”; that normally members would bring their produces to the society for auction on the scheduled date and on receipt of produces, they are given a receipt with identification lot number; that the same are stacked/stored in the auction yard, etc.
The very same activities were carried on by the assessee in the case of M/s. Attur Agricultural Producers [2019 (8) TMI 262 - CESTAT CHENNAI] relied on by the Learned Advocate for the assessee wherein, after considering various arguments, this Bench has held that the demands on the above counts were not sustainable - the above ruling would apply squarely to the present case as well.
The impugned orders set aside - appeal allowed.
-
2019 (12) TMI 1659
Valuation of imported goods - Pig Iron - rejection of declared value - enhancement of value based on the data available with the NIDB - it was held by CESTAT that the department cannot reject the declared value and assess the goods as per the NIDB data.
HELD THAT:- There are no reason to interfere with the judgment/order impugned - the Civil Appeal is dismissed.
-
2019 (12) TMI 1658
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- As the application under Section 9 is barred by limitation and there is a pre-existence of dispute, it is held that application under Section 9 was rightly rejected by the Adjudicating Authority.
The appeal is dismissed
-
2019 (12) TMI 1657
Refund of confiscated brass scrap's sale proceeds with interest - HELD THAT:- The CESTAT passed an order in favour of the petitioner. The direction was given to the revenue to return the scrap. The revenue challenged the said order. Their appeal was dismissed by the High Court in the year 2016. The administration thus passed an order on 22.06.2016 to return the sale proceeds as scrap was sold in between. A cheque was also enclosed alongwith it but it was not accepted, as he was demanding interest. The interest would not be payable to the petitioner in absence of the order by the CESTAT. The petitioner has not even challenged the order dated 22.06.2016.
The view taken by the opposite parties is supported by the judgment of the Apex Court in the case of UNION OF INDIA VERSUS UPPER GANGES SUGAR & INDUSTRIES LTD. [2005 (1) TMI 109 - SUPREME COURT]. Thus the demand of interest on a sum of Rs.1,99,327/- is not admissible. However, if the amount aforesaid has not been accepted by the petitioner earlier, the opposite parties are directed to send the cheque again within a period of one month from the date of production/receipt of certified copy of this order.
Petition disposed off.
-
2019 (12) TMI 1656
Violation of Regulation 11(1) of the SAST Regulations - Non issue of open offer - Huge rise of traded volumes and price of the shares on BSE - Whether agreement/decision/intention to acquire the shares and control of the Target Company by the acquirer triggers the open offer requirement under Regulations 10 and 12 of SAST Regulations, 1997 respectively? - HELD THAT:- Any person either by himself or along with the persons acting in concert who “agrees to acquire shares or voting rights” or “agrees to acquire control over the target company” would come within the definition of ‘acquirer’ irrespective of the time when actual acquisition of shares happened.
As per Regulation 2(1)(b) i.e. definition of "acquirer"; Regulation 10 relating to acquisition of 15% or more shares or voting rights; Regulation 12 relating to acquisition of control and the provisions of Regulation 14(1) and 14(3) relating to public announcement, open offer requirement under SAST Regulations, 1997 are triggered by person along with persons acting in concerts on (i) agreeing to acquire shares of the Target Company above the limits prescribed; (ii) agreeing to acquire control of a target company. Therefore, agreement/decision/intention to acquire the shares and control of the Target Company by the acquirer triggers the open offer requirement under Regulations 10 and 12 of SAST Regulations, 1997 respectively.
Whether the Noticees had the agreement/decision/intention to acquire the shares of FFSL and to take control of the management of FFSL? - Whether the MOU is only in the nature of mere understanding or has taken the character of agreement which records the rights and obligations agreed between the parties? - HELD THAT:- As no proof of communication of rescission of “MOU” was given by the Noticees. Instead, even as per their case, some tranches of physical share certificates were continued to be transferred in the name of BPJ nominees in the month of April, 2012. If the MOU has been rescinded in November 2010, there was no occasion for acceptance of physical share certificates later in April 2012 which only go to show the Noticees were acting still pursuant to the MOU. Further, BPJ vide letter dated January 30, 2019 has stated that AMPL and NVPL had backed out in the month of June 2010. However, instead of rescinding the MOU even at that stage, their shares were subsequently transferred to Mr. R Rathinmala and Mr. B Satya Prakash respectively showing further that the argument of rescission of “MOU” is only an afterthought.
It is further noted the basis of the trigger of respective provisions of the SAST Regulations, 1997 in the instant matter is on the basis of “agreement to acquire” shares and control. Therefore, the consideration of arguments which goes to establish that the actual acquisition of threshold limits of shares or actual acquisition of control did not happen as advanced by the Noticees, does not require consideration. Accordingly, those arguments are not considered.
As per the MOU dated May 27, 2010, Noticees (except) BPJHUF had an agreement / decision / intention to acquire 58.08% of the shares of FFSL for a consideration of Rs. 21,76,650 /- (by issuing cheques / post-dated cheques) and control of management of FFSL by appointing majority of directors on the Board on FFSL.
Whether the Noticees are acquirers/Persons Acting in Concert? - As upon perusal of MOU dated May 27, 2010 and letters attached thereto, I note that BPJ-HUF was neither the part of MOU dated May 27, 2010 nor issued any cheques to Mr. Natarajan or promoter of FFSL for acquisition of shares of FFSL. Hence, on May 27, 2010, BPJ-HUF did not have any agreement / decision / intention to acquire the shares of FFSL and control over FFSL. Thus, on May 27, 2010 BPJ-HUF was neither the acquirer nor person acting in concert for the acquisition of 21,76,650 equity shares (58.08%) of FFSL and control over FFSL. Hence, find merit in the said contention of BPJ-HUF.
Whether the Noticees have violated the provisions of Regulations 10 and 12 of SAST Regulations, 1997 and Section 12A(f) of SEBI Act, 1992 as alleged in the SCN? - In the instant matter, it is noted that Noticees (except BPJ-HUF) had agreed / decided that nominees of BPJ shall be appointed on the Board of FFSL leaving one promoter director. Thus, on May 27, 2010 Noticees (except BPJ-HUF) had agreed / decided to the right to appoint the majority of directors on the Board on FFSL i.e. to have control over the management of FFSL. Thus, Noitcees (except BPJ-HUF) were required to make public announcement of offer within 4 working days from the date of deciding the changes that would result in control over management of FFSL. However, it is noted that Noticees (except BPJ-HUF) did not made any public announcement of offer within 4 working days from May 27, 2010. Hence, Noticees (except BPJ-HUF) had violated the provisions of regulation 12 read with regulation 14(3) of SAST Regulations, 1997.
Thus, the allegation for the violation of the provisions of Regulations 10 and 12 of SAST Regulations, 1997 and Section 12A(f) of SEBI Act, 1992 against Noticees (except BPJHUF) stands established.
BPJ-HUF had not violated the provisions of Regulations 10 and 12 of SAST Regulations, 1997. Thus, the allegation for the violation of the provisions of Regulations 10 and 12 of SAST Regulations, 1997 and Section 12A(f) of SEBI Act, 1992 against BPJ-HUF does not stand established.
What directions should be issued against the Noticees? - As the fact that the scrip is under suspension further strengthens the case that in the interest of shareholders / investors, it is fit case to direct the Noticees (except BPJ-HUF) to make a public announcement of open offer.
ORDER:
B. P. Jhunjhunwala, Ruhi Jhunjhunwala, Mala Jhunjhunwala, Skyed Network Private Limited, Anurodh Merchandise Private Limited, Nandlal Vyapaar Private Limited, BPJ Holdings Private Limited and Radhasoami Resources Limited shall make a public announcement to acquire shares of the target company in accordance with the provisions of the SAST Regulations, 1997, within a period of 45 days from the date of service of this order;
B. P. Jhunjhunwala, Ruhi Jhunjhunwala, Mala Jhunjhunwala, Skyed Network Private Limited, Anurodh Merchandise Private Limited, Nandlal Vyapaar Private Limited, BPJ Holdings Private Limited, Radhasoami Resources Limited shall, alongwith the consideration amount, pay interest at the rate of 10% per annum on the consideration amount to the eligible shareholders as per the ratio laid down in Clariant International Limited and another vs. SEBI [2004 (8) TMI 390 - SUPREME COURT] after adjustment of dividend paid, if any.
-
2019 (12) TMI 1655
Seeking for a writ of certiorari to quash Ext. P14 to the extent of rearranging the work done by the petitioner at his risk and cost - seeking writ of mandamus directing the respondents to release the Earnest Money Deposit (EMD) - HELD THAT:- The PWD authorities have no dispute regarding the fact that in the bill of quantities, petitioner was asked to give a bid 'without taxes'. Therefore, there is justification on the petitioner to have given a rate without taxes. In fact, the Chief Engineer's office of PWD was apprehensive about the low rate quoted by the petitioner and therefore, petitioner had given a clarification of the rate analysis.
Petitioner was called upon to execute the agreement based on Ext. P9. Therefore, it is clear that there is ambiguity in the tender (BoQ) as a result of which petitioner had given a quote without taxes. But when he was called upon to submit an undertaking as per Ext. P6 format, the format included the value inclusive of all taxes, levies statutory fees etc at which time, he had objected to the same stating that his rate did not include any taxes. But without considering the same, Ext. P8 letter of acceptance had been issued calling upon him to undertake the work for an amount, ₹ 7,99,99,990/-, inclusive of taxes. Since the petitioner was not agreeable, the work was cancelled at his risk and cost and his EMD became liable to be adjusted.
Though the issue projected in the writ petition comes within the realm of a contract, if there is an arbitrary action on the part of the authorities and the issue projected does not involve substantial questions of fact, it is always open for a writ Court to consider whether there is any arbitrariness or illegality in the act of the Governmental authorities.
It could be seen that the acceptance of the offer made by the petitioner was not in terms with the tender. His quoted price was without taxes and he cannot be called upon to undertake the work inclusive of all taxes. Under such circumstances, we have no hesitation to hold that the 3rd respondent was not justified in terminating the contract at the risk and cost of the contractor. It is also settled law that when an offer is made in a tender, acceptance has to be unconditional. If any conditions are imposed in the acceptance letter, it does not become valid as such. The termination of the contract is therefore totally illegal and arbitrary.
The respondents shall refund to the petitioner the EMD of ₹ 22,60,000/- within a period of one month from the date of receipt of a copy of the judgment - Appeal allowed.
-
2019 (12) TMI 1654
Violation of Regulation 11(1) of the SAST Regulations - period of limitation - artificial price rise in the scrip during the period 2004-2008 - appellant submitted before us that the order is liable to be quashed on the sole ground of the delay - HELD THAT:- The time line of the events would show that the alleged violation had occurred between March, 2004 to June, 2004. The appellant had disclosed the transaction to the BSE at that time. The show cause notice however was issued in the present case dated 7th November, 2017. The investigation report itself would show that for non availability of the documentary evidences the investigating authority did not recommend taking drastic action to direct making of public announcement. Thus, there was inordinate delay in initiation of the proceedings.
No escape from the conclusion that the proceedings are required to be quashed. Therefore the appeal is hereby allowed.
-
2019 (12) TMI 1653
Fee payable to CA for Special Audits directed u/s 142(2A) - Nomination of the Special Auditor by the IT Department - Validity of order passed by the Micro and Small Enterprises Facilitation Council, New Delhi ( ‘MSME Council) whereby the matter has been referred to arbitration before the Delhi International Arbitration Centre (DIAC) - HELD THAT:- Respondent no. 1 submits that the jurisdiction of the MSME Council is de hors the provisions of the Income Tax Act as relied upon Section 24 of the MSMED Act, 2006 to argue that the provisions in Sections 15 to 23 shall have effect notwithstanding the provisions of the Income Tax Act. He also refers to the decision of M/s Bharat Heavy Electricals Ltd vs. Micro and Small Enterprises & Anr[2019 (2) TMI 2082 - DELHI HIGH COURT] This issue would require consideration.
Once Respondent no. 2 has been paid its statutory audit fees, in terms of the orders passed by this Court, the jurisdiction of MSME Council could not have been invoked.
Till the next date of hearing, the order dated 19.09.2019 and the proceedings emanating therefrom shall remain stayed.
List on 21st April, 2020.
-
2019 (12) TMI 1652
Contempt of Court - Violation of specific undertaking to repay the balance outstanding amount to the petitioner bank within a total period of two months and 15 days from 05/05/2017 - disobedience of the consent order and violation of undertaking given by the respondent amounting to civil contempt as defined in Section 2(b) of the Contempt of Courts Act, 1971 or not.
Interpretation of the clauses of the minutes of the order dated 05/05/2017, in terms of which this Court disposed of the writ petition.
HELD THAT:- The minutes of the order and all its clauses are required to be read as a whole to come to a conclusion as to whether the respondent can be said to have committed contempt of this Court under Section 2(b) of the aforesaid Act, due to breach of undertaking specifically recorded in the said minutes of the order. The undertaking, the breach of which is alleged by the petitioner is found in Clause 8 of the above quoted minutes of the order. In the said clause, the respondent was required to sell the movable properties handed over by the petitioner bank to raise amount for depositing it towards dues in the loan account - It is an admitted position that the respondent did not deposit the balance amount due within the said period of two months and 15 days. Therefore, the said undertaking was not honoured by the respondent.
There can be no doubt about the fact that a contempt petition be maintainable even if order or decree of the Court of which contempt is alleged, is executable. But, in the said judgment of the Hon’ble Supreme Court in the case of Rama Narang Vs. Ramesh Narang and another [2006 (4) TMI 553 - SUPREME COURT], it was specifically laid down that ultimately the matter was one of discretion of the Court, having regard to the facts of the case. It is relevant to note that after the said judgment was delivered, the Hon’ble Supreme Court had occasion to consider the very same matter on the question as to whether the alleged contemnor had indeed committed contempt of the consent order of the Hon’ble Supreme Court by breach of undertakings. The subsequent judgment of Rama Narang Vs. Ramesh Narang and another. After discussing the facts of that case and applying the position of law, the Hon’ble Supreme Court came to a conclusion, in the facts of that case, that the alleged contemnor had committed contempt of the consent order passed by the Hon’ble Supreme Court.
Whether in the facts of a particular case the undertaking given by a party is such that the breach of the undertaking has the consequence of defiance and disobedience of the Court itself? - HELD THAT:- In the present case, the consequence of the failure on the part of the respondent to abide by the undertaking incorporated in Clause 8 of the minutes of the order, was clearly an action available to the petitioner bank under Clause 9 of the minutes of the order. As noted above, this might appear to be onerous for the petitioner bank, but, since it agreed to such specific terms in the minutes of the order, full effect needs to be given to the fall out of Clauses 8 and 9 read together. It is relevant that the manner in which the minutes of the order were drafted, the possession and attachment of the flat has continued with the petitioner bank and it is not as if the respondent got away with the property mortgaged to the bank, as well as being relieved of the obligation of returning the outstanding amount. In this situation, this Court is unable to come to a conclusion that failure on the part of the respondent to abide by the requirements of Clause 8 of the minutes of the order would result in punishment of the respondent for contempt of this Court under Section 12 of the said Act.
Considering over all facts and circumstances of the present case, it appears that the respondent did send communication to the petitioner bank that she tried to abide by the undertaking given in Clause 8 of the said minutes of the order, but, she was unable to abide by the same due to certain circumstances. It was also stated that the respondent herself was making efforts to bring buyers for the flat in question so that the outstanding amount could be paid to the petitioner bank. It is also an admitted position that the respondent did deposit the amount of Rs.20,00,000/- and subsequently, an amount of Rs.7,00,000/- during pendency of the proceedings. Although, the said amount is far less than the amount due to the petitioner bank, as per Clause 9 of the said minutes of the order, the petitioner bank is at liberty to dispose of the said flat to realize the outstanding amount - this Court is of the opinion that the manner in which the minutes of the order were drafted, particularly Clauses 8 and 9 thereof, in the facts of the present case, it cannot be said that the respondent has committed civil contempt of this Court under Section 2(b) of the said Act.
The contempt petition is dismissed.
-
2019 (12) TMI 1651
Addition of other expenses u/s. 14A r.w.r. 8D - assessee has explained that it has not used borrowed fund for making investment in share however it has disallowed employee devoted towards the activity of M.F. - AO stated that top management was involved in taking decision and the decision making process was very complicated which required careful analysis from the top management - CIT(A) has dismissed the appeal of the assessee after considering the size of the investment stating that one employee cannot make investment decision - HELD THAT:- We observe that disallowance of only 10% of one employee as a cost of administrative expenditure to the amount is not sufficient and appropriate looking to the size of the investment and the quantum of exempt income earned from the investment which was claimed as exempt.
We are of the view that involvement of top executives and use of other business office equipment like computer etc. and office premises in respect of investment activities cannot be ruled out, therefore, we are of the view that it will be reasonable to restrict the disallowance under administrative expenditure to the amount of Rs. 4 lacs. Appeal of the assessee is partly allowed.
........
|
9911796707
