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Showing 121 to 140 of 1081 Records
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2021 (5) TMI 961 - ITAT PUNE
Penalty imposed u/s. 271B - non filing of audit report within stipulated time - assessee filed two sets of written submissions before the CIT(A) - HELD THAT:- The first reason has canvassed by the assessee that the Hard Disk of Computer has been corrupted and data therein is vanished for F.Y. 1999-2000 relating to A.Y. 2000-01 which is the year under consideration but however as rightly pointed by the Ld. DR no supporting evidences filed what steps the assessee has taken for the year under consideration and also for subsequent years.
DR demonstrated that there was no evidence before two Revenue authorities below and also before this Tribunal substantiating the steps taken by the assessee supporting the cause for delay canvassed by it. In our opinion, the cause of Hard Disk Drive of Computer system being corrupted and the data is vanished is no valid reason for non-filing of tax audit report.
Another reason given by the assessee in its written submissions before the CIT(A) that the Chartered Accountant who looks after all the statutory obligations of the assessee could not able to complete the statutory obligations and compliances u/s. 44AB of the Act in time due to his wife illness - We find force in the submissions of Ld. DR that one Chartered Accountant fails to do compliances, the duty of the assessee to make compliances legal obligations by appointing new Tax Auditor but however the contention of the assessee has due to ill health of wife of Chartered Accountant could not file the tax audit report in time, in our opinion it is also no valid reason that non-filing of tax audit report in time.
In the second written submissions dated 17-08-2017, the assessee contends that Shri Sachin Deshpande was appointed as Authorized Representative to look after tax work and he did not file audit report in time and it is the fault of Authorized Representative but not the assessee.
No evidence on record either before the two lower authorities or before us that the tax audit report was prepared and the said Authorized Representative Shri Sachin Deshpande could not file the same in time in the proceedings before the AO. Therefore, in our opinion, as rightly pointed by the Ld. DR that the assessee kept on changing its version for causing delay of filing tax audit report and without any evidence substantiating the said reasons. Having perused the entire record and find no valid reasons supporting the reasons stated by the assessee for delay in filing tax audit report, therefore, we do not find any infirmity in the order of CIT(A) and it is justified. Thus, the only ground raised by the assessee is dismissed.
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2021 (5) TMI 960 - ITAT JAIPUR
Reopening of assessment u/s 147 - borrowed satisfaction v/s independent application of mind - additions on different ground - HELD THAT:- Heart of the Section 147 is the formation of belief by the A.O. that income has escaped assessment. The reasons so recorded have to be based on some tangible material and that should be evident from reading the reasons. This is the bare minimum mandatory requirement of the first part of Section 147(1) of the Act. Merely saying that `loan has been advanced’ or `ITR has not been filed’, without disclosing the reasons, which led the A.O. to hold such a belief, does not confer valid jurisdiction on the A.O. to take action u/s 147 and 148 as has already been held by the Hon’ble Gujarat High Court in the case of Birla VXL Ltd. [1995 (9) TMI 45 - GUJARAT HIGH COURT]
In the case of ITO v. Lakhmani Mewal Das [1976 (3) TMI 1 - SUPREME COURT] the Hon’ble Supreme Court affirmed the decision of the High Court and held that there was nothing to show in the confession made by a third party related to the loan taken by the assessee much less a loan which was shown to have advanced by that person to the assessee and, therefore, live link or close nexus, which should be there between the material and the belief formed by the Assessing Officer was missing or was too tenuous to provide a legally sound foundation for initiation of assessment proceedings under section 147. If the primary burden u/s 147, lying on AO, remains un-discharged, then the entire proceedings would crumble.
No addition being loan given forming the main `reason for escapement of income’ u/s 147 of the Act has been made by the AO and instead, the additions have been made on new different grounds, it can be very fairly said that reasons recorded did not exist and hence the assessment framed u/s 147 read with section 143(3) of the Act deserves to be quashed. A.O. had no jurisdiction to travel beyond the reasons for reopening the assessment. We are of the view that reopening proceedings initiated by the A.O were uncalled for and without jurisdiction, therefore, we quash the same.- Decided in favour of assessee.
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2021 (5) TMI 959 - ITAT JAIPUR
Unexplained income u/s 69A - undisclosed cash deposit in bank a/c - HELD THAT:- From the cumulative consideration of both the charts i.e. chart containing agriculture income disclosing the return of income and also the chart containing cash flow statement, we noticed that the department had given benefit of the current year’s agricultural income to the tune of ₹ 25,17,195/- - from the cash flow statement, it was reflected that during the year under consideration, total cash generation was ₹ 50,48,966/- and the opening cash balance for the year under consideration was ₹ 22,91,771/-, therefore, under such circumstances, the explanation put forth by the assessee that the cash deposited by the assessee was from the agricultural and other income as well as from the accumulative past savings of the preceding years appears to be reasonable.
Department had also accepted the generation and availability of cash because of agricultural income for the year under consideration, therefore, there was no reason for ignoring the availability of cash with the assessee due to accumulative/past savings of the preceding years. Thus we direct to delete the addition sustained by the ld. CIT(A) qua this issue. - Decided in favour of assessee.
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2021 (5) TMI 958 - ITAT CHANDIGARH
Conversion of limited scrutiny into complete scrutiny - HELD THAT:- Instruction of the CBDT instruction No. 5/2016 dated 14.07.2016 shows that to convert the limited scrutiny into complete scrutiny, the Assessing Officer shall be required to form a reasonable view that there is a possibility of under statement of income and that view should be based on credible material or information available on record and such a view should not be based on mere suspicion, conjecture or unreliable resources and there should be a direct nexus between available material and formation of view. However, the above conditions are not fulfilled in this case.
AO has not referred to any credible or reliable material or information to form the view that there was a possibility of under assessment of income in this case. The AO has merely made certain disallowance on ad hoc basis without pointing out any information or material available to him which has a direct nexus to show that there was possibility of under assessment of income.
Conversion of limited scrutiny into complete scrutiny is against the spirit of CBDT mandate which is binding on the AO. Therefore, the conversion of limited scrutiny into complete scrutiny being not valid, the consequential additions made by the AO on ad hoc basis and further confirmed by the CIT(A) are not sustainable in the eyes of law. Same are ordered to be deleted. Appeal of the assessee stands allowed.
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2021 (5) TMI 957 - ITAT CHANDIGARH
Reopening of assessment u/s 147 - assessee had shown fixed assets but he had not offered any income from the said property except agriculture income - HELD THAT:- In our view this is a vague reason. Merely possession of a fixed asset does not mean that the assessee might have earned any income from the said asset which would have escaped assessment. Admittedly the assessee owns agricultural land where upon certain construction has been made by the assessee. It has been used for its own purposes.
The reasons recorded by the Assessing Officer do not disclose that the assessee has used any of his assets for any business or rental purposes. The formation of belief by the AO in this case regarding the escapement of income of the assessee, in my view is based on just assumptions and presumptions and there was no reliable material available with the AO to form the belief that the income of the assessee had escaped assessment. In this view, re-opening of the assessment in this case, in my view is bad in law and the same is therefore quashed.
Proportionate construction expenses - AO had adopted the Current Value of the construction exp. and added the proportionate const, exp.- AO not making any reference to DVO - HELD THAT:- First of all, it is seen that there was no evidence before the AO regarding the date of the construction of the property. Consequently, the value of the property has been made on estimation basis.
Assessee has brought my attention to the report of the Valuer obtained from Punjab Vigilance Bureau upon which the AO has relied upon, wherein, the year of construction has been mentioned as 2008 to 2011. The value of the property, however, has been assessed as on 3.3.2015. Therefore, the value of the property has been estimated in the year 2015 and the addition has been made on proportionate basis taking the value of the property as on 3.3.2015, whereas, it is own case of the department that the property has been constructed from 2008 to 2011.
The assessee had further requested the AO to get all the details in this respect from M/s. ICRMS company, however, the AO totally ignored the aforesaid request of the assessee and simply relied upon the report of the valuer attached alongwith the report of the Punjab Vigilance Bureau.
As observed the said valuation was done as per the value of the construction in the year 2015. In this case, even the AO did not make any independent query. Moreover, the AO in the circumstances was supposed to refer the matter to the Departmental Valuation Officer to get approximate date of construction of the property as well as value of the property on the date of construction. No such exercise has been done by the AO. The addition has been made just on estimation basis on the borrowed satisfaction of the Punjab Vigilance Bureau without any independent investigation in the matter by the AO. Such an addition made on the basis of mere suspicion, in my view, is not sustainable in the eyes of law. This addition is accordingly set aside.
Addition made by the AO as "income from other sources" as against declared by the assessee as 'agricultural income' - HELD THAT:- As before this Tribunal, assessee has submitted that the assessee has continuously been offering the agricultural land on Batai and that the aforesaid amount was earned by the assessee from agriculture operations. The ld. counsel has further submitted that during the subsequent years, the said lessee was examined by the AO and statement was also recorded and after having satisfied, no addition has been made in this respect in the subsequent years. Moreover, it has not been denied by the AO that the assessee is in possession of agricultural land and the lessee has admitted that he has paid aforesaid amount of ₹ 1.20 lacs as batai to the assessee. In view of this,we do not find any justification on the part of the AO to make the impugned addition. In view of this, the addition made by the AO on this issue is deleted.
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2021 (5) TMI 956 - ITAT CHANDIGARH
Unexplained cash found during the search action - assessee has submitted that neither any incriminating material nor any unexplained expenditure was found during the search action in respect sum surrendered by the assessee company - HELD THAT:- A separate surrender of ₹ 97.11 lacs has been made by Shri SB Bajaj Director of the assessee company on account of unexplained cash found during the search action. However, so far as the surrender of ₹ 15 lac to cover any discrepancy is concerned, the AO has not pointed out any unexplained credit in the books of account, any unexplained investment, any unexplained money, bullion or jewellery, any unexplained expenditure or any amount of loan repaid in the assessment order in this respect. Therefore, the provisions of Section 68, 69, 69A, 69B, 69C and 69D are not attracted on the surrendered .
The said amount of ₹ 15 lacs was offered in case any discrepancy is found in the books of account. However, in actual neither any unexplained investment nor any unexplained expenditure or otherwise any unexplained asset was found during the search action so far as the aforesaid surrender of ₹ 15 lacs was concerned. In these circumstances, the aforesaid surrender of ₹ 15 lacs can be said to have been offered to cover up the discrepancies in respect of likely disallowances of claims, if any, relating to its business income.
Since the aforesaid surrender is not covered under the provisions of Section 68, 69, 69A, 69B, 69C and 69D, the provisions of Section 115BBE are not attracted in this case.
The action of the lower authorities in invoking provisions of Section 115BBE on the surrender income is set aside and the AO is directed to compute the said surrendered income under normal provisions as applicable to the business income of the assessee. Appeal of the assessee stands allowed.
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2021 (5) TMI 955 - ITAT MUMBAI
Penalty u/s.271(1)(c) - Defective notice u/s 274 - HELD THAT:- As per the record, the assessment order speaks about levying the penalty on account of taken the action in view of provisions u/s 274 r.w.s. 271 (1)(c) of the Act but the notice nowhere specify any limb to levy the penalty. The notice is not justifiable in view of the law settled by the Bombay High Court in the case of CIT-11 Vs. Samson Perinchery. [2013 (11) TMI 369 - ITAT MUMBAI]
It is quite clear that the penalty is not leviable in accordance with law. Further, we noticed that the penalty was levied on account of filing the return of income in pursuance of notice u/s 153 r.w.s 153C of the Act. In the case of Kirit Dahyabhai Patel [2015 (1) TMI 201 - GUJARAT HIGH COURT].
It is quite clear that the no penalty is leviable in the said circumstances, therefore, we delete the penalty. - Decided in favour of assessee.
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2021 (5) TMI 954 - CESTAT CHANDIGARH
Refund of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess filed by them lying unutilized in their cenvet credit account - Time Limitation - GST credit or not - HELD THAT:- As the appellant has reversed the said amount in their GST account, in terms of the amendment to Section 140 of the CGST Act, 2017 on 30.08.2018, the said amount shall remain lying unutilized in their cenvat credit account on account of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess as good as on 01.07.2017. Further, as admitted by both the sides that in terms of Section 140 of the Act, the amount of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess cannot be transferred to GST account then it is only a cenvat credit of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess lying unutilized as on 01.07.2017 in their cenvat credit account. Therefore, the contention of the ld. AR that it is a GST credit, is not acceptable when the provision of law is very much clear that the said credit cannot be transferred to GST Regime.
Whether the refund claim filed by the appellant is barred by limitation or not? - HELD THAT:- The amendment to Section 140 came after one year of the switching to the GST Regime on 30.08.2018 which is applicable retrospectively. In that circumstances how the appellant could have filed the refund claim within one year from 01.07.2017 till 30.08.2018, when there was no provision of law existed, when amendment itself takes on 30.08.2018, therefore, the relevant date of filing the refund claim shall be 30.08.2018 and within one year of the said date, the refund claim has been filed by the appellant - the refund claim filed by the appellant is not barred by limitation.
Whether the decision in the case of M/S BHARAT HEAVY ELECTRICALS LTD. (EXCISE & TAXATION DIVISION) VERSUS COMMISSIONER CENTRAL GOODS SERVICE TAX, CENTRAL EXCISE & CUSTOMS, BHOPAL (MADHYA PRADESH) [2019 (4) TMI 1896 - CESTAT NEW DELHI] can be relied in this case or not? - HELD THAT:- In the case of M/s Bharat Heavy Electricals Ltd, this Tribunal laid down in law That Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess cannot be transferred to GST account and as they were lying unutilized in their cenvat credit account on 30.06.2017, the assesee is entitled to claim the refund thereof. In other words, if the appellant could have filed the refund claim before 30.06.2017 of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess, the same is admissible to the appellant.
The appellant is entitled to file the refund claim; accordingly, the impugned order is set aside - refund claim is allowed which is subject to verification of the records - appeal allowed - decided in favor of appellant.
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2021 (5) TMI 953 - ITAT JAIPUR
Reopening of assessment u/s 147 - transaction of sale of immovable property for the specified consideration - as argued notice issued U/s 148 of the Act was without jurisdiction and bad in law - HELD THAT:- From perusal of the record, we noticed that in the present case, the A.O. had recorded the reasons for reopening of assessment by mentioning that “the assessee has not field its return of income. Later on, it was noticed that the assessee has sold a property of Jaipur to Smt. Meena Sharma during the F.Y. 2008-09 for sale consideration of ₹ 18,75,000/-, however of the Sub-Registrar had adopted final face value of such property at ₹ 16,37,653/- for the purpose of charging of stamp duty. But on verification of the department portal it was noticed that the assessee had not shown capital gain. We have a reason to believe that the income to the extent of ₹ 18,75,000/- has escaped assessment with in meaning u/s 147/- of the IT Act.”
After having gone through the facts of the present case, we noticed that the A.O. had recorded the reasons for reopening of assessment in the case of assessee on wrong facts as according to records put forth before us, it is reflected that the assessee was regularly income tax assessee and filing here return of income as well as for the year under consideration also.
As the assessee had filled her return of income and disclosed the said transaction and despite the material available on record which had not been taken in to consideration before recording the reasons by the A.O. which shows that the notice has been issued by the A.O. only on factually incorrect facts and on the presumption, assumption and suspicion and without any material on record. Therefore, we are of the view that the very basis of reopening of assessment is based on incomplete or wrong facts available on record as the said transaction of sale of the property has already been duly disclosed by the assessee in her return of income and the assessee had also filed her return of income. All these facts reflect non-application of mind by the A.O. while recording the reasons and it cannot be held that there is the nexus between the material available on record and formation of belief that the income has escaped assessment.
where the very foundation for reopening the case is vitiated given that the assessee has filed her return of income disclosing the transaction of sale of immovable property for the specified consideration and offering the same to tax, therefore, there cannot be any reason to believe that income has escaped assessment for the very same transaction. The assumption or jurisdiction u/s 147 of the Act cannot be sustained and thus, the subsequent proceedings are also liable to be set-aside and is therefore, set aside - Decided in favour of assessee.
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2021 (5) TMI 952 - CESTAT CHANDIGARH
Interest on delayed Refund of service Tax - time limitation - calculation of interest on refunds after three months from the date of filing of the claim of refund - HELD THAT:- The decision of the Hon’ble Apex Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [2011 (10) TMI 16 - SUPREME COURT], wherein the Apex Court has cleared that if the assessee filed the refund claim and the same is to be sanctioned within three months from the date of filing of the refund claim and the same is not sanctioned, then the Revenue has to pay the interest thereon on till its realization after three months from the date of filing of the refund claim although there may be litigation in the matter..
Admittedly, the appellants have filed the refund claims during the period 2006-09 and 2009-10 respectively and the same have not sanctioned within three months from the date of filing of the refund claim. In these circumstances, the appellants are entitled to claim interests on delayed refunds after three months from the date of filing of the refund claim till its realization.
The claim of interest is allowed - appeal allowed - decided in favor of appellant.
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2021 (5) TMI 951 - ITAT JAIPUR
Penalty u/s 272A(2)(e) - return in this case was filed on 12/07/2017 as late by 2537 days - HELD THAT:- Assessee being an educational institution whose total receipts were less than ₹ 1.00 crore and thus falls U/s 10(23C)(iiiab) of the Act. Therefore, the entire income of the assessee was exempt and as per provisions of Section 139(4C)(e) of the Act the person is required to file the return where its income exceeds the maximum amount which is not chargeable to income tax. However, in this case, the assessee has filled its return of income declaring the nil income and assessment has also 'been completed at nil income vide assessment order dated 25.12.2017 u/s 143((3)/148 of the Act in the status of educational institution. The assessee was not required to file the return on or before 31.07.2010 and thus, in this way, no penalty could have been imposed u/s 272A(2)(e) - Decided in favour of assessee.
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2021 (5) TMI 950 - ITAT MUMBAI
Addition of on-money - Quantification of the income assessable - assessee argued estimation of the profit element embedded in the on-money receipts @20% by the CIT(A) be substituted by that shown by the assessee @12% - Quantification of the income assessable - HELD THAT:- s the receipt of on-money is inextricably interlinked and in fact interwoven with the corresponding sale transaction accounted for by the assessee in its books of account, the same, thus, cannot be divorced therefrom, and the income element therein embedded would be required to be brought to tax in the same year in which the sale transaction had been accounted for or would be accounted for by the assessee as per its regular method of accounting that has been accepted by the department.Our aforesaid view that the conduct of search and seizure operation in a particular year does not lead to an inference that the undisclosed income detected as a consequence thereof has to be taxed in the assessment year relevant to the previous year in which search was conducted, and the accounting of such income have to be made on the basis of the method of accounting followed by the assessee is supported by the order of the ITAT, Pune bench in the case of Dhanvarsha Builders and Developers Pvt. Ltd [2005 (10) TMI 276 - ITAT PUNE-A] - We, thus, direct the A.O to subject the income element embedded in the onmoney received by the assessee to tax in terms of our aforesaid observations.The Ground of appeal No. 1 raised by the assessee is allowed in terms of our aforesaid observations
Addition w.r.t the income element of the amount of on-money - change in the method of accounting adopted by the assessee - HELD THAT:- Where the change in the method of accounting adopted by the assessee is for a bonafide reason and such new method of accounting is thereafter regularly employed by the assessee, no fault can be found with the same. Our aforesaid viewis fortified by the judgment of the Hon‟ble High Court of Bombay in the case of Bajaj Auto Ltd. [2016 (9) TMI 1047 - BOMBAY HIGH COURT].Also, the Hon‟ble High Court of Bombay in its earlier judgment passed in the case of Melmould Corporation [1993 (2) TMI 82 - BOMBAY HIGH COURT] relying on the decision of Corporation Bank Ltd. [1988 (8) TMI 90 - KARNATAKA HIGH COURT] had held that where the change in the method of accounting is a bonafide one which was thereafter consistently followed by the assessee year after year, then, the change would have to be accepted irrespective of the fact that during the year when the change wsa brought about a deteriment was caused to the revenue.
As observed by us hereinabove while disposing off the assessee's appeal above as the receipt of on-money is inextricably interlinked and in fact interwoven with the corresponding sale transaction accounted for by the assessee in its books of account, the same, thus, cannot be divorced therefrom, and the income element therein embedded would be required to be brought to tax in the same year in which the corresponding sale transaction had been accounted for or would be accounted for by the assessee as per its regular method of accounting that has been accepted by the department.
Our aforesaid view that the conduct of search and seizure operation in a particular year does not lead to an inference that the undisclosed income detected as a consequence thereof has to be taxed in the assessment year relevant to the previous year in which search was conducted, and the accounting of such income have to be made on the basis of the method of accounting followed by the assessee is supported by the order of the ITAT, Pune bench in the case of Dhanvarsha Builders and Developers Pvt. Ltd.[2005 (10) TMI 276 - ITAT PUNE-A]. We, thus, direct the A.O to consider our aforesaid observations while subjecting the income element embedded in the on-money received by the assessee to tax.
Additions of on-money made u/s 68 on the basis of notings in loose sheets and data retrieved from the mobiles - HELD THAT:- We are unable to comprehend that as to on what basis the revenue is seeking inclusion of loose sheets and data retrieved from mobile phones within the scope and gamut of the definition of “books or books of accounts” as provided in Sec. 2(12A) of the Act. Alternatively, we also find substance in the observation of the CIT(A), that as both the Investigation wing and the A.O had held that the impugned notings were the on-money received by the assessee on sale of flats/shops in the building projects undertaken by it thus, in absence of any dispute as regards the nature of such receipt, the same, was liable to be assessed as a “business receipt” and not as an income u/s 68 of the Act. We concur with the view taken by the CIT(A) that now when the A.O had in the assessment order mentioned the flat wise and year wise receipts of on-money thus, the same leaves no iota of doubt that the same were in the nature of “business receipts” which were inseparable from the assessee‟s business of a builder and developer.
Accordingly, on the basis of our aforesaid deliberations, we are of a strong conviction that no infirmity arises from the order of the CIT(A) who in our considered view had rightly concluded that the impugned additions could not have been made u/s 68.
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2021 (5) TMI 949 - ITAT DELHI
Adjustment on account of export commission and royalty paid to associated enterprises - HELD THAT:- We find that the both the issues of transfer pricing adjustment with respect to determination of ALP of Rs. Nil on export commission and payment of royalty are decided in favour of the assessee. The ld. DR could not show as well as the ld. AR vehemently submitted that there is no change in the facts and circumstances of the case. In view of this Ground Nos. 2 to seven of the appeal are allowed.
Expenses of signage - revenue expenditure OR capital expenditure - HELD THAT:- The expenditure was incurred on signage for display of the name of the assessee at the dealer's premises. However, once the same is fixed at dealers site then the Courts have held that it does not satisfy the test of ownership with the assessee and the expenditure is to be allowed as revenue expenditure, We find support from the ratio laid down by the Hon'ble Delhi High Court in CIT vs Honda Siel Power Products Ltd.[2017 (6) TMI 524 - SUPREME COURT].Thus, we are of the view that the expenditure to the extent claimed by the assessee is to be allowed in the hands of the assessee and not/the entire expenditure.
Addition of sales tools expenses u/s 37 - HELD THAT:- We find that though the tribunal has considered the material facts for allowance of sales tool expenses however as we could understand referred to the signage expenses. However, in respect of the above apparent error, we find that the logic given by the coordinate bench equally applies to the sales tool expenses also. The above decision was also followed by the coordinate bench in subsequent year. The learned departmental representative also could not show that why the above logic does not apply to the sales tool expenses incurred by the assessee. Therefore, respectfully following the order of the coordinate bench in assessee's own case we hold that since tool expenses incurred by the assessee is a revenue expenditure allowable to the assessee as deduction.
Capitalization of the royalty being 25% being treated as a capital in nature as it resulted in an enduring benefit to the assessee - HELD THAT:- On careful perusal of the order, we find that the coordinate bench on identical facts and circumstances has held that the royalty paid by the assessee to the associated enterprises concern is fully revenue in nature and not the capital expenditure. Thus, the coordinate bench deleted the disallowances erred by the ld. AO that 25% of the royalty paid by the assessee is capital in nature. The coordinate bench in 2021 [2020 (9) TMI 62 - ITAT DELHI] in assessee's own case considered the decision of the honourable Supreme Court in relying on the decision of the honourable Delhi High Court allowed the claim of the assessee.
Disallowance of deduction of technical know-how claimed - HELD THAT:- As decided in own case [2020 (9) TMI 1180 - ITAT DELHI] held there is no merit in the said exercise carried out by the Assessing Officer and accordingly we direct the Assessing Officer to allow the running Royalty as business expenditure in entirety.
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2021 (5) TMI 948 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Liquidation of Corporate Debtor - section 33(1)(a) of the Insolvency & Bankruptcy Code, 2016 - HELD THAT:- No resolution plan has been called during the 180 days and extension for the for time limit of this CIRP as per section 12(2) was put before CoC for voting in the last CoC meeting. The voting as received on 12.03.2020, 66% positive vote has not been received from CoC members as mandate for it. Hence, applicant filed this application for initiation of liquidation order u/s. 33 of IBC, 2016 read with regulation 3 of the IBBI (Liquidation Process) Regulations, 2016.
This is a fit case for liquidation - Liquidation order granted - application allowed.
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2021 (5) TMI 947 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Moratorium - relevance of section 14 of the Code - Whether appointment of the Corporate Debtor as the developer of the property could be terminated during the pendency of the CIRP? - HELD THAT:- A plain reading of the salutary provision of Section 14, would indicate that on the Insolvency Commencement Date (ICD/08.05.2019), the institution of the suits or continuation of pending suits or proceedings against the Corporate Debtor before any authority or any court of law shall be prohibited.
In this case there is no dispute that the property in respect of which the development agreement was executed is not an asset of the Corporate Debtor. The Corporate Debtor only was permitted to develop it in terms of the development agreement. The fact that the Corporate Debtor was the developer in respect of the property and had undertaken certain constructions thereon in pursuance to the development agreement. This would unequivocally indicate that the property was under its occupation as on the ICD. For the purpose of this case, it would thus be sufficient to hold that on the date of Insolvency Commencement, the property was occupied by the Corporate Debtor and the Corporate Debtor was in possession thereof.
The Hon'ble Supreme Court in RAJENDRA K. BHUTTA VERSUS MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY AND ANOTHER [2020 (3) TMI 34 - SUPREME COURT] have in clear terms delineated the extent of this Code and limits of the other Authorities in dealing with a Corporate Debtor under CIRP. The termination of the Corporate Debtor as the developer would essentially result in the property being taken out of its possession. Both of which are prohibited under Section 14(1) of the Code. Therefore, the order dated 17.07.2019 being violative of the mandatory provision cannot be held to be valid and operative in law.
The issues are answered in the negative - application allowed.
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2021 (5) TMI 946 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Directions to Respondent No. 3 to place the settlement proposals of this Applicant before Respondent No. 2 through Respondent No. 1 - section 60(5), 227 and 239(2) of the Insolvency and Bankruptcy code, 2016 - HELD THAT:- From a bare perusal of Section 12A and Regulation 30A of the CIRP Regulations, it is amply clear that for any withdrawal of an admitted application it is the Original Applicant, that must present such withdrawal application for approval of the CoC.
Once the CoC (Respondent No. 2) has approved the Resolution Plan, the Administrator of the DHFL, has to obtain no-objection from RBI in accordance with Rule 5(d) of the FSP Insolvency Rules. Apart from the same, neither the Code nor the FSP Insolvency Rules, casts any other obligation on RBI vis-à-vis the CIRP process, which is left to be run by the resolution professional along with the CoC as per its commercial wisdom. The RBI cannot intervene in the CIRP process, and the reliefs as sought for by the Applicant qua RBI seeks RBI to intervene in the CIRP process, which is completely contrary and inconsistent with the spirit of the Code and will have the effect of derailing the CIR Process. Without prejudice to the aforesaid, it is pertinent to mention herein that the Applicant is the ex-promoter of DHFL against whom various proceedings, civil and/or criminal, have been filed, alleging cheating, fraud, siphoning of funds and such other serious offences. The Applicant is presently in judicial custody and most regulatory agencies like CBI, EOW, ED etc. are at present investigating against the Applicant.
It is beyond any cavil that RBI has been unnecessarily impleaded as a party Respondent in the present Application and been dragged in such litigation. RBI cannot and ought not to intervene in the CIR Process and direct the Administrator to conduct himself in a manner which is contrary to the Code. Further, considering that the CIRP is at a very advanced stage, passing any ad-interim reliefs as sought for by the Applicant will completely derail the process and force DHFL into liquidation, which will be completely against the spirit of the Code. This being so, it is necessary in the interest of justice, equity and good conscience that the Application as against RBI be dismissed in limine and costs be imposed upon the Applicant for filing such frivolous and vexatious application against the RBI.
Hon'ble Supreme Court in its decision in the matter of Swiss Ribbon Vs. Union of India [2019 (1) TMI 1508 - SUPREME COURT], has pleased to held that Corporate Debtor may come for settlement in post admission stage before the constitution of CoC and the Adjudicating Authority may exercise its power conferred to the NCLT under rule 11 of the NCLT Rules. After constitution of the CoC an application can be entertained under the procedure of section 12A of the IB Code. Hence the present application appears to be a pre-stage process of an application under section 12A. That can be considered by this AA, if it is filed by the main petitioner in the IB Petition (RBI/Administrator) with having requisite majority of more than 90% voting of the Members of the CoC. Hence there can be no prejudice to either parties if CoC gives due consideration as per norms and in its commercial wisdom to examine feasibility of such proposal of settlement for Approx. ₹ 91,000/- Crores (Rupees Ninety-one Thousand Crores) and above. The CoC may take appropriate decision by taking in to consideration the paramount interest of the Creditors, Fixed Depositors, and Stakeholders of the Corporate Debtor involved in the present matter.
CoC ought to have considered such settlement proposal of the applicant as per norms and its commercial wisdom which we did not to have been followed by the CoC in the present matter. From the Submissions of the respondents, they treat this Settlement Proposal as a resolution plan but factually that is not case as discussed - We are conscious about our jurisdiction that this Adjudicating Authority cannot substitute its view of over the Commercial Wisdom that may be exercised by the CoC in respect of the present Applicant, however there appears to be some procedural irregularity by not considering a settlement proposal which is around 150% higher value of the Resolution Plan approved. Hence it needs due consideration and cannot be kept aside nor contention of the applicant in the present IA can be brush aside that an Ex-promoter cannot move a proposal of settlement.
This Adjudicating Authority hereby directs the Administrator to place the 2nd Settlement Proposal of the applicant Mr. Kapil Wadhawan before COC for its consideration, decision, voting and inform the outcome of the same within 10 days from today and list the matter on 31.5.2021 - Petition disposed off.
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2021 (5) TMI 945 - ITAT AHMEDABAD
Exemption u/s 11 - tax liability has been raised on the assessee trust on the premise of non-availability of registration u/s 12A - admission of additional evidence - HELD THAT:- We find merit in the plea of the assessee for admission of additional evidence in the circumstances narrated above. It is a matter of fact that the Income Tax Department itself has issued certificate under s. 12AA of the Act registering the assessee for the purposes of Section 11/12 of the Act. The delinquency in non-production of registration before CIT(A) is therefore viewed benignly. The additional evidence in the form of order under s. 12AA of the Act dated 31.10.2017 is therefore admitted by the Tribunal for adjudication of dispute.
Having regard to the fact that the order under s. 12AA of the Act was not presented before the first appellate authority for its consideration, we refrain ourselves from expressing our view on merits of the eligibility of deduction under s. 11/12 - Appeals of the assessee are allowed for statistical purposes.
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2021 (5) TMI 944 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
CIRP proceedings - illegal transfer of IPR and business by the corporate debtor - Failure on the part of Promoter-Director Jasjit Singh Sawhney to provide information to the RP for discharging his functions during the CIRP - avoidance of preferential transactions, undervalued transactions and fraudulent and wrongful trading and diversion of the business of the Corporate Debtor.
Non-co-operation of promoter-director and his men - HELD THAT:- Initially, the Resolution Professional/the applicant sent emails dated 14.03.2019, 18.03.2019 to its promoter director (Rl-Sahweny) seeking information of the corporate debtor, to which Mr. Sawhney on 19.03.2019 replied seeking time to provide information, subsequent to it, one of the employees of the Corporate Debtor namely Mr. Sumit Gupta sent an email on 31.03.2019 along with some information. As that information was not sufficient to discharge CIRP functions, this Applicant had mailed on 02.04.2019, 15.04.2019, 16.04.2019, 23.04.2019 and 07.05.2019 requesting Mr. Sawhney and Mr. Sumit Gupta to provide information, but whereas Mr. Sumit Gupta wrote back on 13.05.2019 seeking time to provide pending documents as Mr. Sawhney was not feeling well. In this application, R1 has filed reply for the first time disclosing that the shares of Pipetel Communications Private Limited (Pipetel) and Net4 Network Services Limited (Net4 Network) held by the CD were transferred to Trak Online Net India Private Limited (Trak Online), the business of the CD was transferred to Net4 Network through Master Reseller Agreement (MSA) and Trade Marks of the CD were assigned to the promoter director Mr. Sawhney - This Bench also directed Mr. Sawhney to provide information on passing various orders 03.07.2019, 22.07.2019, 02.09.2019, 27.10.2019 and 20.12.2019, but till date no progress, except providing piece meal information, which is not enough to figure out the transactions of the Corporate Debtor.
Avoidance of preferential transactions, undervalued transactions and fraudulent and wrongful trading and diversion of the business of the Corporate Debtor - HELD THAT:- It is evident that the directors fraudulently transferred the shareholding of the Corporate Debtor in their subsidiary companies to Trak Online to take out the holding of the corporate debtor over Net4 Network so that the corporate debtor will not have any right over the business of the corporate debtor subsequently transferred to Net4 Network, that the Corporate Debtor entered into undervalued and fraudulent transactions such as execution of Assignment Agreement of trade marks in favor of its director (R1) and execution of Master Reseller Agreement in favor of Net4 Network (R2) for keeping the assets of the Corporate Debtor beyond the reach of the Creditors so as to defraud the Creditors - the declaration of assignment of trademarks in the name of R1 is declared null and void and execution of Master Reseller Agreement in favor of Net4 Network is invalid, and direct R1 to restore the trade name "Net4" to the Corporate Debtor and R2 to restore the business of the corporate debtor it has taken through Master Reseller agreement from the Corporate Debtor with immediate effect. Likewise, we hereby declare the Share Transfer Agreements reflecting transfer of Pipetel shares held by CD to Trak Online and transfer of Net4 Network shares to Trak Online as null and void.
For the transactions mentioned being declared as null and void, u/s. 66 & 67 of the Code, whatever business so far Net4 Network held from the date of alleged transfer of business shall be inspected by an auditor appointed by this Bench on the suggestion made by the RP within 15 days thereof, and the auditor shall determine the opportunity loss to the CD within 30 days from the date of his appointment. Upon approval of the said report by this Authority, the promoter director Mr. Jasjith Singh Sawhney (R1) shall pay back the loss estimated by the auditor to the CD because R1 is the person caused all these fraudulent transactions happened. R1 shall produce all relevant records within seven days from the date of receipt of request from the auditor to be appointed by this Bench.
Application disposed off.
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2021 (5) TMI 943 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Rejection of claim filed by the Applicant (FC and OC) before the Respondent in respect of operational debt due and payable by the Corporate Debtor, by RP - rejection on the ground that the amount claimed is disputed and is pending adjudication before Arbitral Tribunal & District Court - HELD THAT:- The admission of CIRP of the Corporate Debtor was passed on 09.08.2019. The IRP was confirmed as RP by the CoC as it first meeting on 09.09.2019. The IRP issued public announcement in Form "A" to receive claim from creditors of Corporate Debtor. The last date filing of the claim as per the public announcement was 07.11.2019, whereas the applicant lodged its claim on 12.11.2019 - In the instant case the arbitration proceedings were initiated by the Corporate Debtor and a counter claim was filed by the Applicant herein and the same was pending adjudication before the Arbitral Tribunal. The said claim was filed on 12.11.2019 and whereas the last date of submission of claim was 07.11.2019, this Bench condones the delay of four days of filing the claim before the IRP.
The Applicant who has filed a counter claim before the Arbitral Tribunal is said to have a claim and is contingent upon adjudication by the Arbitral Tribunal and hence, such a claim is necessarily to be declared as contingent claim by the Resolution Professional in the information memorandum - Application allowed in part.
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2021 (5) TMI 942 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Seeking extension of time period of the CIRP of the Corporate Debtor by a period of 90 days effective 30.03.2020 - sections 12 and 60 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- As per the facts of the present case, there is no resolution for Liquidation of the Corporate Debtor. As per section 33(1) of the IBC, 2016 which contemplates that if the maximum period permitted for completion of the CIRP has expired then this Tribunal has to order for the liquidation of the Corporate Debtor. Since this Tribunal has not granted the extension of the CIRP beyond the stipulated period of 180 days, as per operation of Section 33(1) of the IBC, 2016, the Corporate Debtor should be ordered for liquidation. Section 33(1) of the IBC, 2016.
The Resolution Professional expressed his willingness to continue as the liquidator and also a perusal of the same discloses the fact that the Resolution Professional is willing to act as the Liquidator of the Corporate Debtor, if appointed by this Tribunal.
The Liquidator shall strictly act in accordance with the provisions of IBC, 2016 and the attendant Rules and regulations including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended upto date enjoined upon him - Application disposed off.
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