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2019 (12) TMI 1308
Issuance of No-objection certificate of the District Authority for obtaining licence for establishing petroleum retail outlets - whether No-objection certificate for the said purpose could be denied on the ground that the site proposed for the outlet is not one conforming to the Guidelines for Access, Location and Layout of Roadside Fuel Stations and Service Stations prescribed by Indian Roads Congress (IRC Guidelines) and the Norms for the Access for Fuel Stations, Service Stations and Rest Areas along National Highways prescribed by the Ministry of Road Transport and Highways, Government of India (MORTH Norms)?
HELD THAT:- It is seen that the Rules are framed by the Central Government in exercise of the powers conferred, among others, under sub-section (1) of Section 29 of the Act. Sub-section (1) of Section 29 deals with the power of the Central Government to make provisions for protecting the public from danger arising from import, transport, storage, production, refining or blending of petroleum products. It is also seen that No-objection certificate under Rule 144 of the Rules is issued so as to enable the applicant to obtain licence under the Rules for storage of petroleum products. The proforma in which the No-objection certificate is to be issued, as contained in sub-rule (7) of Rule 144, indicates the matters to be considered by the District Authority while granting/refusing No-objection certificate.
The duty of care is the legal responsibility of a person to avoid any behavior or omissions that could reasonably be foreseen to cause harm to others. The duty of care to be exercised by a statutory authority would depend upon various factors such as relevant statutes, rules, regulations, general standard of care etc. If specific duties are written into law, there may not be any difficulty for the competent authority to discharge its functions. However, if specific duties are not written into law, the authorities must act with the same degree of care that an ordinary person would have acted in the same situation. Reverting to the facts, the Rules have prescribed only the matters to be considered while granting/refusing No-objection certificate. Since specific duties to be performed have not been prescribed, as noted, the District Authority under the Rules is expected to act with the same degree of care that an ordinary prudent person would have acted in the same situation - The contention of the petitioners that IRC Guidelines do not have the force of law and therefore the same should never be the basis of the decision by a statutory authority is unsustainable also for the reason that a similar contention that IRC Guidelines which do not have the force of law shall not be insisted by oil marketing companies for the purpose of establishing petroleum outlets, has been repelled by the Apex Court in Arti Devi Dangi, taking the view that the same being norms framed in the interest of public safety, the instrumentalities of the States cannot be found fault with for having insisted compliance of the said Guidelines.
As it is found that the District Authority exercising power under Rule 144 of the Rules cannot be found fault with for having placed reliance on IRC Guidelines in the matter of discharging its functions nor can the District Authorities be precluded from placing reliance on IRC Guidelines or similar in the matter of discharging its functions under the Rules, it is unnecessary to consider the contention advanced by the learned counsel for the petitioners that the PWD Manual has been amended only in terms of an executive order issued on 22.10.2019 and the same does not, therefore, apply to the applications for No-objection certificates preferred prior to 22.10.2019.
Applicability of MORTH Norms - HELD THAT:- MORTH Norms were not intended to apply to fuel stations along roads other than National Highways. If that be so, rejection of applications for No-objection certificates in respect of petroleum outlets other than those proposed to be established along the National Highways based on the said guidelines which are not intended to be applied for the same, would be arbitrary.
Petition dismissed.
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2019 (12) TMI 1307
Penalty levied u/s 271A - absence of maintenance of books of accounts as prescribed u/s.44AA - Whether CIT(A) has erred in confirming the penalty levied u/s.271A by the AO without rejecting the books of accounts of the assessee u/s.145(3) ? - HELD THAT:- On perusal of the penalty order dated 30.09.2016 for the assessment year 2013-2014, the AO has mentioned that the Auditor in the Audit Report has certified in Form 3CD that the assessee maintains various books of account viz. cash book & ledger. In the assessment order also, the AO noted that the authorised representative of the assessee appeared and produced audit report, copy of acknowledgement of e-Return filed, copies of bank account details, Vakalatanama & copy of Service Tax Return.
Only dispute raised by both the authorities below that the assessee has not produced books of account, whereas the AO has himself admitted that the return of income filed was accompanied by audit report and other documents. The assessee has produced the tax audit report which has been accepted by the AO. The auditor has also certified that the various books have been maintained. The revenue has not brought any cogent material on record so as to establish that the assessee has not maintained books and such documents as required u/s.44AA of the Act or the rules made thereunder. Therefore, the penalty levied u/s.271A for both the assessment years under consideration cannot be sustained on the facts and circumstances of the present case.
On further perusal of the assessment as well as appellate order, we find that both the authorities below have only pointed out that the assessee has failed to produce books of accounts before the AO. In this regard, the assessee has explained with reasonable cause for non-production of the same before the AO stating accountant of the assessee was asked about the books of account. The accountant replied that the books of account are with the auditor, but when the assessee inquired with the auditor about the books of account, the auditor replied that it was returned back immediately after the audit was over. As the books of account are misplaced and are not traceable at present, it is difficult on the part of the assessee to produce the books of account.
For this reason also the assessee gets immunity from the provisions of Section 273B - CIT(A) was not justified in sustaining the penalty imposed by the AO under Section 271A - Decided in favour of assessee.
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2019 (12) TMI 1306
IFRS audit fees - disallowance on the ground it pertains to the period prior to the year under consideration - HELD THAT:- We find that though the audit pertains for the year ended 31/12/2007, the invoice was raised by the concerned Auditor only on 28/11/2008 as the service was rendered thereon during the year under consideration. We find that the services have been crystalised during the year under consideration and accordingly become an expenditure allowable as deduction for the year under consideration. It is not the case of the revenue that assessee had indeed claimed deduction for the very same sum in the earlier year on mercantile basis. We hold that the assessee is indeed entitled for deduction towards IFRS audit fees. - Decided in favour of assessee
Deduction towards service tax credit written of - addition on the basis that it pertains to earlier period - HELD THAT:- It is not in dispute that this service tax receivable emanates out of the input services used for the purpose of business of the assessee. Once, the service tax input credit is not eligible to be utilised against the output tax, the same requires to be written off as business expenditure, which is what is done by the assessee in the instant case. There is no dispute that the service tax input credit was not eligible to be utilised towards output service tax by the assessee. In these circumstances, the action of the assessee in writing off the input service tax credit lying in current assets loans and advances as on 01/04/2009 and consequentially claiming the same as deduction, is in accordance with law.- Decided in favour of assessee.
Adhoc disallowance of 30% of total travelling and conveyance expenses - HELD THAT:- These details were subject to verification by the ld. AO in the remand proceedings and in the remand report, the ld. AO had held that some of the expenses are not fully verifiable. We find in these circumstances, some adhoc disallowance of expenses need to be made. Disallowance @30% would be on the higher side given the status of the company and the behaviour of the assessee. Hence, we hold that disallowance on an adhoc basis at 10% of total travelling and conveyance expenses would meet the ends of justice in the peculiar facts and circumstances of the instant case. Accordingly, the ground No.3 raised by the assessee is partly allowed.
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2019 (12) TMI 1305
Reopening of assessment - circular dated 20.10.2011 bearing reference No. VAT/Cell/Roc.No. 37188/2011/Circular No.22/2011 - HELD THAT:- There is no provision under the TNVAT Act, 2006, to call upon a dealer who is a manufacture to reverse credit on “invisible loss” of input in the course of manufacture of final product. TNVAT Rules, 2007 also does not speak about input-output norm. Further, Rules also do not contemplate 100% assimilation of inputs into final products. Section 19(9)(i), (ii) & (iii) of TNVAT Act, 2006 only deals with three situation when input tax is not available.
The expression "inputs destroyed at some intermediary stage of manufacture" in sub Clause (iii) of Section 19(9)(iii) of TNVAT Act, 2006 will not take within its fold those inputs "consumed" in the manufacture of final product. Only when inputs are “destroyed at some intermediary stage of manufacture”, reversal of input tax credit is warranted. They would be instance of inputs which are withdrawn at an intermediary stage of manufacture and are incapable of being used further and are sold as scrap/waste or physically destroyed by an assessee having no residual value. Such inputs alone can be construed as "inputs destroyed at some intermediary stage of manufacture" - There is no scope for reversal of input tax credit on inputs which get consumed during the course of manufacture as “invisible loss”.
Petition disposed off.
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2019 (12) TMI 1304
Fees payable u/s.234E - intimation u/s.200A - HELD THAT:- If there is late filing of those TDS statements then the Revenue Authorities may charge late filing fees u/s.234E of the Act. That however, this power the Legislature was provided to the Authorities by inserting Clause (c) to Section 200A(1) of the Act w.e.f. 01.06.2015. There are plethora of cases which decided this issue that if TDS statements were filed prior to 01.06.2015 then there cannot be any levy of late fees u/s.234E. TDS statements filed after 01.06.2015 would attract the late filing fees as per Section 234E .
In these instant cases before us, in some of the cases, TDS statements were filed prior to 01.06.2015 while in some other cases, they were filed after 01.06.2015. This is the position on merits. That however, CIT(Appeal)‟s in their respective orders has not dealt with the merits of these cases and has dismissed the appeals of the assessee on the ground that there is substantial delay in filing of these appeals and also for the reason that the reasonableness attributed to that delay could not be established by the assessee therein.
We find that in the case of Anil Kumar Nehru Vs. ACIT [2019 (1) TMI 1075 - SC ORDER] as held that even if there is substantial delay in filing of appeals it can be condoned on the ground that it involves a question of law which goes into the root of the matter. In these set of appeals before us, it pertains to a legal question whether late fees would be leviable on the assessee or not depending upon the merits involved in each case.
In the interest of justice, we set aside the respective orders of the Ld. CIT(Appeal)‟s in all these cases and restore them back to their respective files to examine the matter on merits involving legal ground of Section 234E - Appeal of assessee are allowed for statistical purposes.
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2019 (12) TMI 1303
Eligibility for exemption under N/N. 6/2006-CE dated 1.3.2006 (Sl.No.19) - manufacture of bus bodies - buses cleared to M/s. Delhi Metro Railway Corporation (DMRC) - HELD THAT:- In view of the subsequent order by the Customs, Excise and Service Tax Appellate Tribunal granting exemption from Excise Duty to Tata Motors on whose chasis the applicant built bus-bodies and in view of the observations of the High Court arising in the suit filed by the applicant, we grant liberty to the applicant to move the Tribunal for fixation and quantification of the Excise Duty in accordance with law.
Application allowed.
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2019 (12) TMI 1302
Disallowance u/s 14A r.w.r. 8D - CIT-A restricted the addition held that 0.5% of the investment treated as expenses incurred for earning exempt income - HELD THAT:- No infirmity in the order of the CIT(A). In the case of Vireet Investment Pvt. Ltd. and Anr. [2017 (6) TMI 1124 - ITAT DELHI] held that average value of investment which yielded exempt income during the year only shall be considered for the purpose of disallowance u/s 14A.
Since the CIT(A) has given a categorical finding that the assessee has received dividend income of ₹ 6,48,431/- from the current investment of ₹ 11,02,496/-, therefore, 0.5% of the above investment has to be treated as expenses incurred for earning exempt income which comes to 5,512/- and which is in accordance with the decision of the Special Bench of the Tribunal cited (supra). Accordingly, we do not find any infirmity in the order of the CIT(A) and the same is upheld. Ground raised by the Revenue is accordingly dismissed.
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2019 (12) TMI 1301
Unexplained investment from undisclosed sources - CIT-A deleted the addition - as per revenue it is device to cover up the undisclosed income by the assessee by planting a purchaser whose income is exempt under section 10(26AAA) - assessee has claimed to have sold the land through an unregistered agreement which is not possible when the purchaser belongs to Sikkim and will pay such a huge consideration without having a proper title document - HELD THAT:- It is beyond preponderance of human probability that a person from Gangtok (Sikkim) would purchase a land in Rajasthan against a consideration of ₹ 2,88,60,000/- without having a proper title deed in his favour. The alleged agreement to sell is not a document which can be verified independently and can be considered as a conclusive evidence for transaction of purchase and sale of the immovable properties.
The immovable properties cannot be transferred under such an unregistered document being agreement to sell. The details of assessee’s share in the alleged ancestral land are also not available on record. It is also not clear from the record whether the assessee was having the share in the ancestral property to the extent of 19.20 bigha. Not executing the sale deed and registration with the authorities even after the expiry of such a long time creates a genuine doubt about the transaction.
The genuineness of the claim has not been established with verifiable documentary evidence. It is also a relevant fact that the alleged purchaser of the land being a Sikkimese, is exempt from Income tax as per section 10(26AAA) - possibility of using the name of such a person as a device to evade the tax cannot be ruled out. Accordingly we set aside this matter to the record of the AO for conducting a proper enquiry particularly on the point of the assessee’s share in the alleged ancestral property and whether the said property is available in the exclusive right of the assessee for transfer. The status of the land regarding the possession and the real ownership is also required to be verified. Needless to say that the assessee be given a proper opportunity of hearing before passing the fresh assessment order. - Decided in favour of revenue for statistical purposes.
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2019 (12) TMI 1300
Allocation of Calcined Pet Coke for Aluminium Industry and Raw Pet Coke (RPC) for CPC manufacturing - allocation based on installed capacity - HELD THAT:- A perusal of the Impugned Minutes of Meeting dated 22.04.2019 of the respondent no. 1, also clearly shows that the installed capacity as on 09.10.2018 has to be considered by the respondent no. 1 for making allocation of RPC. The Minutes, however, do not show the consideration of documents that have been referred to hereinabove by the leaned senior counsel for the petitioners, by the respondent no. 1 while making such allocation.
The respondent no. 1 is directed to consider the petition as a representation of the petitioner and pass a speaking order thereon, within a period of four weeks from today. While taking such decision, the respondent no. 1 shall also grant an opportunity of hearing to the petitioners.
Petition disposed off.
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2019 (12) TMI 1299
Assessment u/s 153A - Reopening of assessment u/s 147 - unabated assessment - HELD THAT:- The concept of unabated assessment has been explained by the courts, as per which any assessment, which is not pending as on the date of search is considered as unabated assessment. In the light of above legal position, if you examine facts of the present case, it is abundantly clear that the assessment for the impugned assessment year is abated as on the date of search, because before search and seizure action conducted on 13/10/2010, the Ld. AO has reopened the assessment u/s 147 by issuing notice u/s 148 on 26/22/010.
Once, the assessment is reopened, then the AO shall have time limit for completion of assessment one year from the end of the relevant assessment year in which notice u/s 148 is issued. In this case, since notice u/s 148 was issued on 26/12/2010, the Ld. AO will have time limit for completion of reassessment up to 31/03/2011, which is much later than the date of search i.e on 13/10/2010. Consequently, the assessment for the impugned assessment year is abated and the Ld. AO shall have the power to assess or re-assess total income, including undisclosed, if any found as a result of search.
Disallowances of additional depreciation claimed on fixed assets - assessee has claimed additional depreciation u/s 32(1)(iia) @ 20% of the cost of plant and machinery which were purchased, installed and put to use in the proceeding previous year - AO has disallowed the claim of additional depreciation in the second year, on the ground that said claim is allowable in the year in which said plant and machinery was purchased/installed and put to use and also, it is one time claim - whether, an assessee can claim additional in the subsequent years in absence of any reference to a specific previous year after amendment by the Finance Act, 2005 in section 32(1)(iia) ? - HELD THAT:- On a literal reading of section 32(1)(iia), the additional depreciation is restricted to one time deduction and there is no explicit provision entitling the assesee to claim additional depreciation in subsequent year or years, when the additional depreciation was allowed in the year, when plant and machinery has been put to use. It is illogical and irrational to presume so, when the legislation intention is to allow one time additional depreciation u/s 32(1)(iia) in a previous year in which plant and machinery is installed and put to use. CIT(A) after considering relevant facts has rightly noted that there is no error in the findings recorded by the ld. AO in disallowances of additional deprecation on plant and machinery for second year - findings recorded by the CIT(A), while confirming additions made by the Ld. AO towards of additional depreciation in subsequent years is in accordance with law as enumerated under the provision of section 32(1)(iia) and hence, the findings of the ld. CIT(A) does not call for any interference from our side. Accordingly, the ground taken by the assessee is dismissed.
Disallowances of expenditure incurred in relation to exempt income u/s 14A - HELD THAT:- Although provisions of Rule 8D has no strict application for the year under consideration, but a reasonable expenditure related exempt income needs to be estimated considering the nature of investments and the amount of exempt income earned by the assessee. In this case, the assessee has earned huge amount of exempt income in the form of dividend from shares but did not disallowed any expenditure on its own. Although, the Ld. AO has determined disallowances, as per Rule 8D and which is on higher side, when compare to nature of investments and amount of exempt income earned for the year, but adhoc disallowances of ₹ 1 Lac sustained by the Ld.CIT(A) cannot be accepted. Therefore, considering the totality of facts and circumstances of this case and also taken note of the decision of the Hon’ble Bombay High Court in assessee’s own case for AY 2009-10 [2019 (3) TMI 397 - BOMBAY HIGH COURT] we are of the considered view that a reasonable amount of expenditure attributable to exempt income needs to be disallowed. Accordingly, we direct the Ld.AO to disallow 5% of total exempt income earned for the year towards expenditure incurred in relation to exempt income u/s 14A.
Characterization of income - treatment of sales tax incentives and excise duty benefits received - revenue or capital receipt - HELD THAT:- An identical issue has been considered by the co-ordinate bench of ITAT, in the case of Welspun India Ltd. Vs DCIT [2019 (2) TMI 1061 - ITAT MUMBAI] where under identical set of facts, the Tribunal held that sales tax incentives and excise duty benefit received by the assessee is in the nature of capital receipts not liable to tax.
Disallowance of depreciation on fixed assets u/s 40(a)(ia) r.w.s 37(1) under different categories on the plea that the deprecation was disallowed in the AY 2005-06 - whether the claim of the assessee with regard to depreciation on fixed assets, in respect of that expenditure for non deduction of tax at source is in accordance with law - HELD THAT:- The provisions of section 40(a)(ia) of the Act, is applicable, where any expenditure is debited into profit and loss account without deduction of tax at source, then to that extent, the expenditure on which TDS was not deducted is not allowable as deduction. Similarly, if any amount as capitalized to fixed assets and depreciation was claimed thereon, if no TDS is deducted, in respect of those capitalized fixed assets, then depreciation to that extent is not allowable. Assessee has failed to bring on record any evidence to prove that whether, the claim made, in respect of depreciation on fixed assets, in respect of those expenditure is in accordance with provision of section 40(a)(ia) of the Act. Therefore, we are of the considered view that the issue needs to go back to the file of AO for verification of facts with regard to applicability of provision of section 40(a)(ia). Hence, we set aside the issue to file of the Ld. AO and direct him to reconsider the issue in accordance with law.
Disallowances of FCCB premium and depreciation on FCCB premium debited to pre-operative expenses - HELD THAT:- Assesse has debited provision towards FCBB premium and FCBB issue expenditure, even though the bond holders have not exercised their option. If any expenditure is debited to profit and loss account by creation of provision and such liability was not crystallized, then obviously, the same cannot be allowed as deduction, and therefore to that extent, the findings of Ld. AO is correct. However, the fact remains that assessee claims to have offered the same for taxation for AY 2014-15, when the bond holders have exercised their option. In this regard, he has filed a copy of statement of total income, where FCCB premium paid on conversion of bonds into equity shares have been disallowed in the statement of total income. But, the facts with regard to the availability of these evidences before the AO at the time of assessment proceedings are not clear - issue needs to go back to the file of the Ld. AO to ascertain the fact with regard to the claim of the assesee that said expenditure has been suffered to tax in AY 201415. Hence, we set aside the issue to the file of the Ld. AO and direct him to cause necessary enquiries and if he is found that the said amount has been offered to tax in AY 2014-15, then the additions made for the year under consideration needs to be deleted.
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2019 (12) TMI 1298
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - competency of person who has signed and filed the petition - existence of debt and dispute or not - Time Limitation.
Whether the person who has signed and filed the petition is competent? - HELD THAT:- The corporate debtor has placed reliance on the decision of the Hon'ble NCLAT in the case of Palogix Infrastructure Private Limited Vs. ICICI Bank Limited [2017 (10) TMI 913 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] for the proposition that Power of Attorney holder was not competent to file an application on behalf of the Financial Creditor. However, it is observed that in para 36 of the said order it has been held that mere use of word " Power of Attorney" while delegating such power will not take away the authority of such officer and for all purposes, it was to be treated as an authorization by the financial creditor. Thus, in fact, this order supports the case of the Financial Creditor - The Hon'ble NCLAT in para 38 has also observed that if an officer was authorised to grant loan then it could not be said that such person did not the have power to recover the loan amount or to initiate Corporate Insolvency Resolution Process in spite of default in payment of a debt. In the present case there exists two documents which make the case of the Financial Creditor more strong.
Thus, to give effect to the provisions of IBC,2016 a harmonious and liberal approach is needed. Further, Regulations made thereunder must confirm to be substantive provisions of IBC,2016 as prescribed in section 240 of IBC,2016 or to the overall object of IBC, 2016. Thus, on all counts this contention of the corporate debtor fails.
Whether as per contract there exists liability to pay? - HELD THAT:- There is a event of default as an enumerated in the contract/ agreements read with the sanction letter. The consequences thereof follow accordingly. Thus, the amount disbursed till then along with interest becomes due and payable. Thus, this contention of the corporate debtor is rejected.
Whether debt is barred by limitation? - HELD THAT:- The date of default has been stated as 05.08.2014. The financial statements for the year ended 31 st March, 2017, which also contain figures for the financial year ended 31 st March, 2016, show the amount of long term borrowings both secured and unsecured. In Clause 3.4 thereof,it has been stated that the company has made certain defaults payment of term loan and interest. •It is also mentioned that the continuing default as on 31 st March, 2017 was in respect of interest on term loan and the period of delay was more than 180 days.ln the Auditor's report also the fact of default in payment of interest and repayment of principal amount has been mentioned. Thus, there is an admission of continuing default in the financial statements - It is now a settled judicial position that presentation in the financial statements constitutes acknowledgement of debt within the meaning of provisions of section 18 of the Limitation Act, 1963.
Impact of non mentioning of the name of the Financial Creditor in the balance sheet specifically - HELD THAT:- As per explanation to section 7 (1) of IBC,2016, the proceedings under section 7 of IBC,2016 get triggered even in case of a default by the debtor in respect of any financial creditor other than the applicant. In the present case, it is not in dispute that there is a default in respect of payment of financial debts. Thus, for this reason also, there is no merit in this contention of the corporate debtor.
Promise under section 25 (3) of Indian Contract Act, 1872 - HELD THAT:- The presentation of a debt as liability in the balance sheet is a statement made by the corporate debtor to the world at large that this amount is payable by the corporate debtor. Even for commercial purposes such as credit ratings/ renewals, obtaining of financial assistance or fixation of drawing limits or additional loan facilities etc. such liability is taken into consideration for computing net-worth, current ratio, capital gearing debt equity ratio etc.,hence, such presentation is of paramount importance from all perspectives.Thus, the• same cannot be ignored for the purposes of proceedings under section 7 or 9 of IBC, 2016 - such presentation also amount to promise under section 25 (3) of Indian Contract Act, 1872.
The application filed by the Financial Creditor under section 7 of IBC,2016 is complete in all respects - this application is liable to be admitted.
Application admitted - moratorium declared.
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2019 (12) TMI 1297
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its debt - time limitation - dishonor of cheque - HELD THAT:- It is noted that in the financial statements for the year ended 31st March, 2016, the amount of secured loan has been shown. The fact of default has also been mentioned. The said balance-sheet also contain figures of such loan in financial year ended on 31st March, 2015. It has been also noted that in financial year 2011-12 and 2012-13 cheques given by the Corporate Debtor as EMI have been presented by the Bank which have got dishonoured. Such cheques were neither recalled nor any instructions had been issued as regard to cancellation/ non encashment. The Financial creditor has also produced the demand promissory note and other documents to establish the fact of continuation of limitation till December, 2012. Thus, a prima facie case of a alive claim has been established.
In the present case, there is a continuous cause of action and an acknowledgement of debt resulting into continuation/ extension of limitation period before the expiry of the original limitation period. In this regard, the presentation of outstanding loan in the financial statements for the year ended on 31st March, 2016 which also depict the figures of the same as on 31 st March,2015 is continuation of such outstanding loan from the earlier financial years as in such a case no other conclusion can be arrived i.e. the outstanding loan continues from earlier years except the figure of the same which may vary due to interest, if any, charged subsequently or due to repayment of loan, if any.
There are no merits in the contention of the Corporate debtor that there exists some dispute and it was a case of non performance for the reason that even a disputed claim can be considered for the purpose of section 7 so long, there is debt which is due and payable and a default has occurred in payment thereof.
In the present case, it is not in dispute that undisputed claim remains more than Rs. One Lakh, hence, CIRP can be initiated. Thus, this claim of the corporate debtor is also rejected - The petition is otherwise complete in all respects and defect free - The name of the IRP has also been proposed who has given his consent and it has been claimed that no disciplinary proceedings are pending against him. Accordingly, his name is approved.
Application admitted - moratorium declared.
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2019 (12) TMI 1296
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- After hearing the counsel for the applicant and the admission in form of email from the CD with respect to the debt falling due the default is proved beyond doubt. The CD has neither replied nor appeared for defending the application and thus application deserves to be admitted - The registered office of corporate debtor is situated in New Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The present application is not barred by limitation as the date of deault is 28.07.2017 as per part IV of Form 5 and application is filed on 28.09.2019.
The applicant has filed an affidavit in compliance of Section 9(3)(b) stating no notice of dispute was raised from CD by the applicant. The applicant has attached the copy of bank statement in compliance with the requirement of Section 9(3)(c) of the IBC 2016.
The present application is complete and the Applicant is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfilment of requirements under section 9(5) of the Code. Hence, the present application is admitted - Moratorium declared.
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2019 (12) TMI 1295
Filing of Form “TRAN-I” - inability to upload the details of un-utilized Input Tax Credit - HELD THAT:- The issue decided in the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] where it was held that Respondent authorities were having complete record of already registered persons and at present they are free to verify fact and figures of any Petitioner thus inspite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit.
The present petition allowed with permission/modification to file the said Statutory Form TRAN-I by 31.01.2020.
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2019 (12) TMI 1294
Depreciation on electric installation - @10% OR 15% - Whether electrical installation is an integral part of the plant and machinery - HELD THAT:- As relying on assessee's own case [2018 (5) TMI 1988 - ITAT SURAT] assessee is eligible for depreciation @15% instead of 10% allowed by the ld.Assessing Officer(AO), accordingly the AO is directed to allow deduction of depreciation as mentioned above - Decided in favour of assessee.
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2019 (12) TMI 1293
Condonation of delay of 916 days in filing appeal - the explanation for the delayed filing was not accepted and the Division Bench of the High Court on 29.10.2018 dismissed the LPA on the ground of delay without considering the merits of the appeal - Permission for the proposed construction of a group housing society on the land originally owned by the Ministry of Defence in the University enclave - whether violative of the MPD2021 and is against the larger public interest - change in the character of the subject landis - restriction on certain developments for Metro Station prescribed under Master Plan of Delhi – 2021.
HELD THAT:- The position is clear that, by and large, a liberal approach is to be taken in the matter of condonation of delay. The consideration for condonation of delay would not depend on the status of the party namely the Government or the public bodies so as to apply a different yardstick but the ultimate consideration should be to render even handed justice to the parties. Even in such case the condonation of long delay should not be automatic since the accrued right or the adverse consequence to the opposite party is also to be kept in perspective. In that background while considering condonation of delay, the routine explanation would not be enough but it should be in the nature of indicating “sufficient cause” to justify the delay which will depend on the backdrop of each case and will have to be weighed carefully by the Courts based on the fact situation - However, what cannot also be lost sight is that the consideration therein was in the background of dismissal of the application seeking condonation of delay in a case where there was delay of four days pitted against the consideration that was required to be made on merits regarding the upward revision of compensation amounting to 800 per cent.
The entire explanation for the inordinate delay of 916 days is twofold, i.e. the non availability of the Vice Chancellor due to retirement and subsequent appointment of new Vice Chancellor, also that the matter was placed before the Executive Council and a decision was taken to file the appeal and the said process had caused the delay. The reasons as stated do not appear very convincing since the situation was of availing the appellate remedy and not the original proceedings requiring such deliberation when it was a mere continuation of the proceedings which had already been filed on behalf of the appellant herein, after due deliberation.
In the present matter, the land was converted to residential use in 2005 and Respondent No.11 – DMRC had invited bids and public auction was conducted on 28.07.2008 which ought to have awakened the appellant herein for the first time since the fact of conversion of the land into residential development was in public domain even if is assumed that the earlier process of approval etc. by the DDA on the approval request of DMRC are internal process and not be known to the appellant - Despite the writ petition having been filed belatedly in respect of certain actions which had commenced in the year 2005 and even though the writ petition was filed after obtaining approval of the Executive Council, no steps were taken to file the writ appeal for 916 days after disposal of the writ petition. In such circumstance, the cumulative effect of the delay and laches cannot be ignored.
In the matter of condonation of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be lightly dealt with. In that regard, rather than taking note of the hardship that would be caused to the respondent No.13 as contended by the learned Senior Counsel, what is necessary to be taken note is the manner in which the respondent No.11 – DMRC has proceeded in the matter - The respondent No.11 DMRC is engaged in providing the public transport and for the said purpose the Government through policy decision has granted approval to generate resources through property development and in that regard the development as earlier indicated, is taken up. Pursuant thereto the respondent No.11 has received a sum of ₹ 218.20 crores from respondent No.13 as far back as in the year 2008. The said amount as indicated is used for its projects providing metro rail service to the commuting public - In such circumstance, if at this stage the inordinate delay is condoned unmindful of the lackadaisical manner in which the appellant has proceeded in the matter, it would also be contrary to public interest.
Thus, not only the learned Single Judge was justified in holding that the writ petition inter alia is hit by delay and laches but the decision of the Division Bench in dismissing the LPA on the ground of delay of 916 days is also justified - appeal dismissed.
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2019 (12) TMI 1291
Exemption u/s 10(37) - qualify definition of “Compulsory acquisition” - Whether acquisition of impugned agricultural land by Surat Municipal Corporation (SMC) eligible for exemption? - AO has disallowed the claim u/s 10(37) on the ground that the assessee has sold the land voluntarily, and it is not case of compulsory acquisition of land by SMC - HELD THAT:- The Hon’ble Gujarat High Court in the case of CIT v. Amaratbhai S. Patel [2013 (5) TMI 449 - GUJARAT HIGH COURT] held that for the purpose of section 10(37) it is not required that the assessee himself should carry out the agricultural operations on the land. The appellant referred Para 8 of said order which states that “In view of the above provisions, as noted, the Revenue contended that the assessee would not be entitled to that exemption since the agricultural land was not cultivated by the assessee himself. We may recall that CIT (Appeals) was himself convinced that such exemption would be available even in case of a land situated in municipal area. But that the other conditions, namely of the cultivation of such land by the assessee would crucial.”
So far the contention of the assessee that land was agricultural land and it was case of compulsory acquisition by SMC, it is noticed that as per letter no. ACT/SR/3161 dated. 31.08.2010 it has been clearly mentioned by the SMC that nature of payment was “compulsory acquisition” (Land/ Building).It is further seen from the perusal of letter no. TBT/OUT/ 4089/ 22 dated. 23.09.2014that land in question was placed under reservation by the Government of Gujarat vide order dated Notification No. GH/V/100 of 2004/DVP/1403/3307/L dated. 02.09.2014 under the provision of section 20 of Gujarat Town Planning & Urban Development Act 1976 at the disposal of the SMC to acquire the land under section 77 of Bombay Provincial Municipal Corporation Act, 1949 for erection of Sewerage Treatment Plant. Thus, it was a case of compulsory acquisition of land for which the SMC under the instruction of Government of Gujarat for which the SMC has also given a certificate dated 12.08.2010 [letter no. ACT/SR/NO2861] wherein nature of payment to the assessee is described against compulsory acquisition of land at Dindoli.
ITAT- D- Bench, Ahmedabad in the case of ITO v. Dipak Kalidas Pauwala [2015 (8) TMI 1268 - ITAT AHMEDABAD] wherein the Tribunal has held the that said land in Dindoli ( at Block no. 305) was acquired by SMC for sewerage Treatment Plant are agricultural land which has been compulsory acquired by SMC under the provision of section 107 of GTP & UD Act, 1976 as the land needed for the purpose of Town Planning Scheme or Development Plan shall be deemed to be meaning for public purpose within the meaning of Land Acquisition Act , 1894 (I of 1894) and eligible for exemption under section 10(37) . Also confirmed by HC [2016 (4) TMI 431 - GUJARAT HIGH COURT]
Thus we hold that the land in question was compulsory acquisition by the SMC under the direction of Government of Gujarat. Hence, conditions stipulated in section 10(37) is satisfied. - Decided in favour of assessee.
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2019 (12) TMI 1290
Removal of nominee director - entitlement to shares - shares freely transferable with the right to nomination or not - HELD THAT:- The CD has got the right to maintain the required number of its nominated directors in R-5. Here in this case, by the force of Sub-Section 7 of Section 33 of the Code, the nominee directors deemed to have vacated their directorship under nomination from the CD unless they are permitted to continue by the liquidator as on the date of order of liquidation of CD.
The liquidator has the power to nominate directors to maintain the required number of nominee directors in R-5. The nominee directors being nominated by the CD and CD having been taken over by the liquidator, the nominee directors are bound by the directions of the liquidator. Even under section 19 of the Code, and under section 284 of the Companies Act 2013, the nominee directors are bound to obey the directions of the liquidator. The nominee directors shall extend full cooperation to the liquidator in discharge of his functions and duties. Here, in this case they have failed in co-operating with the liquidator and also were reluctant to vacate the office as the nominee directors of CD in R-5.
The Articles of Associations were entered into with express consent of the parties. The eventualities arising out of retirement, dismissal, removal or vacation of office voluntarily are dealt with in the agreement. Truly, eventualities like discharging authority conferred on nomination upon force of law is not dealt with in the agreement or in the Article of Association. But it appears to us that as per section 238, provisions of the Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law to override other laws. That being the legal position as of now, there is notice of discharge to the nominee directors of the CD in R-5 as per section 33(7) of the Code.
The application filed by the Liquidator deserves consideration. It has come out in evidence that RI and R2 acted against the interest of the liquidator. It is incorrect to hold that R-5 is not bound by the terms of agreement so as to accept the proposal of the liquidator to accept the nominee directors proposed by the liquidator. R-5 is bound by the proposal and is obliged to present before the AGM for its approval. It cannot take a unilateral decision that it is not bound by the proposal legitimately submitted by the liquidator in exercise of the powers vested in him under the provisions the Code read with Article 121 and 140 (4) of the Article of Association. R-5 also is not entitled to know the reason behind the replacement of the existing nominee directors by the CD/liquidator. Even if the nominee directors are elected as the directors because they have acquired shares independently in R-5, they cannot under the provisions of the Code, unless the liquidator authorises them to continue, they have no right to sit as nominee director. Their nominee director status stands discharged with effect from 17.10.2017. These points are also answered in the affirmative.
The power to remove the nominee directors and can nominate directors and that R-5 is bound to act upon the proposal of replacement of existing nominee directors of CD - Application allowed.
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2019 (12) TMI 1289
Benefit of un-utilized ITC accrued - filing of statutory Form “TRAN-I” - HELD THAT:- It is conveyed that the date for filing annual returns has been extended from 31.12.2019 to 31.1.2020.
The present petition is allowed with permission/modification to file the said Statutory Form TRAN-I by 31.01.2020.
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2019 (12) TMI 1288
Deduction u/s.80P(2)(a)(i) - Appellate Tribunal treating the Associate members as regular members while deciding that the assessee is eligible to claim deduction u/s.80P(2)(a)(i) - HELD THAT:- Senior standing counsel would submit that the issue raised in these Appeals are already covered by the judgment passed by this Court in the Assessee’s own case in [2016 (8) TMI 1427 - MADRAS HIGH COURT]upholding the order of the income tax Appellate Tribunal. Since the issue has already been decided against the revenue, following the same, these Appeals are also dismissed.
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