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Showing 81 to 100 of 1542 Records
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2021 (9) TMI 1464
Disallowance u/s 14A - Necessity to record satisfaction - HELD THAT:- Although, the CIT(A) had observed that the possibility of use of services of staff, office and establishment relating to the proprietary business of the assessee for making investments in shares and mutual funds could not be ruled out, however, we find, that he too had failed to record his satisfaction that having regards to the accounts of the assessee, it was not possible to accept the correctness of the assessee‘s claim that no disallowance of any expenditure was called for u/s 14A.
Assessee had maintained separate books of accounts for his activity of making investments in shares and mutual funds. Accordingly, in case the A.O; or the CIT(A) in exercise of his powers which are coterminous with that of an A.O, sought to disallow the claim of the assessee that no expenses could be attributed to earning of the exempt dividend income by him, then, there was an innate obligation cast upon them to have recorded the requisite satisfaction that having regard to the accounts of the assessee, as placed before them, it was not possible to generate the requisite satisfaction with regards to the correctness of the aforesaid claim of the assessee. We are afraid that as there is a clear lapse on the part of the lower authorities in validly assuming jurisdiction for dislodging the assessee‘s claim that no disallowance u/s 14A was called for in his hands, therefore, the disallowance worked out by the A.O u/s 14A r.w. Rule 8D(2)(iii) which thereafter had been sustained by the CIT(A) cannot be upheld and is liable to be vacated. The Ground of appeal no.1 is allowed in terms of our aforesaid observations.
Claim of ‘education cess‘ on the tax payable by him should have been allowed while computing his income for the year under consideration - HELD THAT:- Claim of the Ld. A.R that unlike “rates” and “taxes” the amount paid by an assessee towards “Education Cess” or any “other cess” viz. the Secondary and Higher Education Cess is not a disallowable expenditure u/s 40(a)(ii) we find that the said issue is squarely covered by the recent order of the Hon‘ble High Court of Bombay in the case of Sesa Goa Limited [2020 (3) TMI 347 - BOMBAY HIGH COURT] therein conclude that “Education Cess” and the Secondary and Higher Education Cess is not disallowable as a deduction u/s 40(a)(ii) of the Act. Accordingly, we herein restore the issue to the file of the A.O with a direction to give consequential effect to our aforesaid observations. The additional ground of appeal raised by the assessee is allowed in terms of our aforesaid observations.
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2021 (9) TMI 1463
TP adjustment to back office support service segment - Comparable selection - TPO made adjustment to transaction of merchanting trade of Agri-comodities and provision of back office support services - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected.
Addition of outstanding receivable - Classifying the international transaction of merchandising trade as a finance arrangement - assessee has alternatively requested to take interest rate of 2.74%, which the assessee had used to pay interest on advance received from associated enterprises - As per DR assessee has paid money out of Indian rupees and, therefore, suffered loss on interest in Indian Rupees and, thus, learned TPO justified in holding the arrangement as financial arrangement and benchmarking invoking the SBI prime lending rate +300 basis point - HELD THAT:- Since the payment from ‘LD Asia’ was received after a delay of 65 days, it is in international transaction in the nature of outstanding receivable simpliciter without any allegation of arrangement of colluded finance transaction. TPO has though alleged it as financial arrangement to benefit AE, but benchmarked it is outstanding receivable. But in both ways, the currency of transaction is US Dollar. In first way, it is US Dollar have been sent to AE; in second way, US Dollar was outstanding to be received for 65 days. Neither the loan has been given in Rupees, nor outstanding was to be received in Rupees.
Benchmarking of the transaction we agree with the learned Counsel of the assessee that in view of transaction of sale in US dollar, adjustment for interest should be benchmarked on the basis of currency of transaction following the decision of Cotton Naturals (I) P Ltd [2015 (3) TMI 1031 - DELHI HIGH COURT] accordingly the Learned TPO is directed to recompute the adjustment. The ground No. 4 of the appeal is dismissed, however, the alternative ground 4.1 is allowed for the statistical purposes.
Disallowance u/s 14A - Whether addition should be made on average investment and not on turnover? - HELD THAT:- During the year under consideration, assessee has made purchase and sale of mutual funds of huge amounts and, therefore, incurring of expenditure for earning exempt income cannot be denied in terms of section 14A of the Act. However, if Rule 8D of the Rules is invoked, there would not be any disallowance in view of no opening and closing stock value of mutual funds. In the circumstances, we accept the alternative claim of the assessee to restrict the disallowance to the extent of exempted income following the decision of Joint Investment Private Limited [2015 (3) TMI 155 - DELHI HIGH COURT] and accordingly direct to restrict the disallowance to the amount of ₹ 94,929/-. The ground of the appeal of the Revenue is accordingly allowed partly.
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2021 (9) TMI 1462
Disallowance of expenses as no business activity was carried out by the assessee during the year under consideration - difference between commencement of the business and setting off of the business - HELD THAT:- The project cost in relation to a project comprises of cost of land and cost of development rights, borrowing cost, construction and development cost. In relation to land, the entire cost of land and development rights, stamp duty registration charges and other incidental expenses have to be capitalized. With relation to the borrowing cost, the interest directly related to the project is to be capitalized.
All the direct costs relating to the construction and development of the specific project have to be capitalized. The construction cost includes conversion cost, municipal sanction fee, expenses incurred, site labour cost, cost of material, cost of hiring plant & machinery, cost of designs and claims of the third party. The general administrative cost, advertisement, brokerage, selling cost, depreciation of the vehicles and office expenditure are part of the revenue expenditure and need not be capitalized.
There is difference between commencement of the business and setting off of the business. All the expenses incurred pre-commencement are to be treated as pre-operative expenses and the expenses incurred which do not form the part of the “work in progress” (WIP) like office expenses, salaries, advertising, travelling expenses which are incurred for running of the business operations are to be treated as revenue expenditure. Hence, the disallowance made by the AO is liable to be obliterated. Appeal of the assessee is allowed.
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2021 (9) TMI 1461
Validity of assessment order passed as prejudicial to petitioner - respondent no.3 has noted that a show cause notice alongwith draft assessment order was issued on 21st April 2021 but petitioner failed to provide any documentary evidence or even respond to the said show cause notice - HELD THAT:- At Exhibit “L” to the petition is a copy of the reply to the show cause notice. In the said exhibit, a print out of the e-proceedings response acknowledgment from the Income Tax Department is also annexed which confirms that the reply to show cause notice alongwith various annexures have been submitted on 27th April 2021. Therefore, respondent no.3 has erred in stating that petitioner did not even respond to the show cause notice. It is, therefore, also obvious that respondent no.3 has not considered the reply filed by petitioner before passing the assessment order.
In the circumstances, the assessment order dated 29th April 2021 impugned in this petition is quashed and set aside. Consequently, the demand notice dated 29th April 2021 u/s 156 of the Income Tax Act, 1961 is also quashed and set aside. The question of issuance of any other consequential notice will not arise.
The matter is remanded for de novo consideration. The concerned authority may pass such order as he may deem fit in accordance with law. We will hasten to add, we have not made any observations on the merits of the case.
We have to note that in the affidavit in reply filed by one Manoj Kumar, Income Tax Officer, Mumbai and affirmed on 12th August 2021, there is no denial of the fact that reply has been filed to the show cause notice. According to affiant, the Income Tax Business Application (ITBA) does not show any response of assessee to the notice. The least we would have expected the Officer, who has affirmed the affidavit, is to diligently go through the portals of the Income Tax Authorities particularly, when petitioner has annexed to the petition the e-proceedings response acknowledgment and not file a wishy washy reply.
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2021 (9) TMI 1460
DRP power to condone the delay in filing objections by the assessee before the Panel - AR admitted that there was a delay in filing the objections before the DRP by 3 days (the assessee has to file objections before the DRP u/s 144C(2)(b) within 30 days from the date of receipt of draft assessment order) - HELD THAT:- DRP derives its authorities and powers from the provisions of section 144C and its procedures are governed by Income Tax (Dispute Resolution Panel) Rules, 2009. The provisions of the Act or Rule do not give power to the DRP to condone any delay in filing the objections by the assessee before the Panel. If the Legislature had intended to give such powers, it had been expressly implied as in the case of powers with the CIT(A) u/s 249(3) of the I.T.Act and ITAT u/s 253(5) of the I.T.Act. Therefore, we are of the view that the DRP does not have powers to condone the delay of filing objections by the assessee before the Panel. See INNO ESTATES PRIVATE LIMITED [2018 (9) TMI 222 - MADRAS HIGH COURT] - we hold that the DRP has no power to condone the delay in filing objections by the assessee before the Panel.
ITAT power to hold that the assessment order is barred by limitation - In this case, the final assessment order dated 30.09.2016 was not pursuant to the direction of DRP. Therefore, the correct course open for the assessee would have been to file an appeal before the CIT(A) and pursue the said issue. The Hon’ble Madras High Court in the case of Inno Estates (P.) Ltd [2018 (9) TMI 222 - MADRAS HIGH COURT] had also decided the above issue indirectly. In the case considered by the Hon’ble High Court, the Advocate for the assessee submitted that the appeal would lie to the ITAT u/s 253(1)(d) of the I.T.Act and not before the CIT(A) u/s 246(1)(a) of the I.T.Act. This contention of the Advocate was rejected by the Hon’ble Madras High Court. The Hon’ble Madras High Court directed the assessee to file an appeal to the CIT(A) instead of ITAT
The plea of the assessee that the assessment order is barred by limitation, is not entertained on account of the reason that ITAT does not have jurisdiction for the same. Tribunal in the case of Yokogawa India Ltd. [2021 (4) TMI 151 - ITAT BANGALORE] relied by the assessee will not have application, since the ITAT has not considered the judgment of Hon’ble Madras High Court, cited supra. As regards the DR’s reliance on the ITAT order in the case of Himalaya Drug Co. v. DCIT (supra), we are not taking note of the same, since we have no jurisdiction to consider the plea of limitation on facts of this case. It is ordered accordingly.
Appeal filed by the assessee is dismissed.
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2021 (9) TMI 1459
Restructuring of financial assistance to MSME sector - Seeking direction to Respondent to implement the Restructuring Package already granted by the Respondent to the Petitioner No.1 - seeking direction to Respondent not to take any further action under the Securitisation Act and to maintain Status Quo in the matter against the Petitioners and the Properties in question.
It is the case of the petitioners that though the respondent-Bank issued the sanctioned letter for restructuring on 30th March, 2021 as per the notice issued under Section 13(2) of the SARFAESI Act, the account was classified as NPA account as on 27th February, 2021.
HELD THAT:- Having heard the learned advocates for the respective parties and considering the material on record as well as the provisions of the SARFAECI Act, it appears that the respondent-Bank has issued the sanctioned letter dated 30th March, 2021 permitting the restructuring of the existing facility provided to the petitioner No.1.
As per the circular issued by the Reserved Bank of India on 6th August, 2020 which provides for restructuring of advances to MSME sector stipulates that the restructuring of the borrower account is required to be implemented by March 31, 2021 - On perusal of the Circular, it is clear that the respondent-Bank has issued the sanctioned leter on 30th March, 2021 which is prior to the last date i.e. March 31, 2021. The interpritation of the respondent-Bank therefore is not legal and tenable by interpriting the circular that the restructuring of the borrower account is to be implemented by March 31, 2021 means all the formalities are required to be completed by March 31, 2021. Once respondent-Bank has issued the sanction letter of March 30, 2021, it would mean that the restructuring of the borrower acount is implemented subject to the fulfilment of the terms and conditions of the sanction letter.
It is apparent from the contents of the letter dated 06.07.2021, the respondent-Bank has not stated as to which of the terms and conditions as per the sanction letter of the restructuring is not fulfilled by the petitioners - In view of the facts and taking into consideration the fact about the issuance of the sanction letter dated 30th March, 2021 as well as considering the RBI circular dated 6th August, 2020, it cannot be said that the restructuring of the borrower account is not implemented by March 31, 2021.
The impugned action of respondent-Bank to cancel the sanction letter dated 30th March, 2021 as well as the letter dated 6th July, 2021 informing the petitioners about such cancellation are hereby quashed and set aside - petition allowed.
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2021 (9) TMI 1458
Prayer for issuance of a writ of quo-warranto - validity of nomination of respondent No. 2 as the Chairman of the Committee on Public Accounts - seeking direction to the respondent No. 1 to appoint/nominate member of the opposition party as Chairman of the Committee on Public Accounts.
Disqualification petition - HELD THAT:- The objective and purpose of Tenth Schedule is to curb the evil of political defections motivated by lure of office, which endangers the foundation of our democracy. The disqualification takes places from the date when the act of defection took place. The constitutional authorities who have been conferred with various powers are in fact coupled with duties and responsibilities to maintain the constitutional values. In case they fail to discharge their duties within time, it will endanger the democratic set up. Even for decision of the petitions filed for disqualification of a member by the Speaker, the Courts have to intervene and specify the timeline. A Speaker in discharge of his constitutional duties is expected to be neutral. The power of the Speaker to adjudicate upon an application filed for disqualification of a member of Assembly has been held to be quasi-judicial in nature, which is subject to judicial review by the Courts. It is because of inaction of the Speaker that this Court has been approached in this avoidable litigation. In the case in hand, petition filed for disqualification of the respondent No. 2 with allegations of his defection from BJP to AITC is pending before the Speaker since June 17, 2021. Three months period expired on September 16, 2021.
Rules of procedure and conduct of business in the West Bengal Legislative Assembly, Constitution of Committees and importance - HELD THAT:- A perusal of the various Rules of Business with reference to the working of the Committees and the work to be discharged by them and the powers conferred on them clearly establish the importance thereof. Hon'ble the Supreme Court has opined that the Committees constituted by the legislative bodies perform a key role in the functioning and working of the Houses as there is more reasonable and applied discussion in these Committees. Effective working of the Committees is a prelude to the core working of the Assemblies. The Committees are in fact an extension of legislature itself and do informed work. These Committees are consisted of Members of the Assembly having affiliation to different parties. It is a participative process in the democratic set up. The importance of the Committee on Public Accounts is evident from the fact that Rule 302 of the Rules of Business provides for proportional representation. The Chairperson has to be appointed by the Speaker. It is not the power to be exercised by the Assembly - Even if in the present case the declaration of the names of the Members of the Chairpersons of the Committees was made in the Assembly, this cannot be termed to be proceedings in the Assembly as it was merely a declaration made by the Speaker in the presence of all the Members. It was not subject matter of discussion amongst the Members in the Assembly. There may be some Committees constituted by the State Assemblies or the Parliament but the case in hand is different.
Constitutional Convention - HELD THAT:- The fact remains that the Chairman was declared keeping in view the convention and noticing all the facts. Nothing was pointed out at the time of hearing that the constitutional convention as was admitted in the declaration and as could be seen to be passing the three-question test applied in the case of Supreme Court Advocates-on-Record Association And Others's [2015 (10) TMI 2687 - SUPREME COURT] is in contravention to any of the provisions of Constitution of India. Rather it is in aid thereof to maintain the constitutional values and healthy democracy. There was no dispute raised by either of the parties on the principle of law that the constitutional convention are binding and enforceable.
Judicial Review - HELD THAT:- In the case in hand as is evident from the facts on record there is failure on the part of the Speaker to discharge his constitutional duty coupled with established admitted constitutional conventions. Apparently he has worked on dictates. Finally, he was caught in the web knitted by him. On one hand, he was fair enough to state in the declaration made by him that there is a rich and healthy tradition in the Assembly of having a Member of the opposition as the Chairman of the Public Accounts. The tradition was being followed for a period of 54 years or so. Keeping in view that tradition, the Speaker appointed a Member of the opposition party as the Chairman of the Committee on Public Accounts. However, now the aforesaid declaration is sought to be explained that it is not necessary to have a Member of opposition party as the Chairman of the Committee on Public Accounts. In fact, he was not even required to be impleaded as respondent in the petition to answer the pleadings as the contents of the declaration made by him are sufficient. Any denial by the respondent No. 2 is meaningless.
The protection given in Article 212(2) is to the officer or the member of the legislature in discharge of his duties. Both the clauses of Article 212 operate in different fields. Clause (1) talks about challenge to the proceedings whereas Clause (2) grants protection to the officers. While challenging inaction of an authority, may be constitutional authority, he need not be impleaded as party to the proceedings however, still his action can be challenged - It is not a case of procedural irregularities, which could debar this Court from entertaining the petition in terms of Article 212 of the Constitution of India. It is a case of blatant illegality. Firstly, the Speaker was required to decide the petition filed before him for disqualification of the respondent No. 2 having defected from BJP to AITC, as a result of which his membership to the Assembly itself was in doubt. In case the respondent No. 2 does not remain the Member of the Assembly, there was no question of he being even the Member of the Committee what to talk of its Chairman.
Quo-warranto - HELD THAT:- Before a writ of quo-warranto can be issued the primary question is to be decided is whether the person concerned is a usurper of a Public Office. If the answer to the question that respondent No. 2 is holding a public office, this Court can examine the prayer for issuance of a writ of quo-warranto, otherwise not - the word "Public Officer" has been defined in Code of Civil Procedure to include every officer in the service or pay of the Government or remunerated by the fee or commission for performance of any duty. In the case in hand, it cannot be denied that the Members of the Legislative Assembly get their salaries from the public exchequer. That means from the public exchequer.
In the case in hand, the allegation of the petitioner is that the respondent no. 2 had defected from BJP to AITC. A petition for disqualification was pending before the Speaker before even he was nominated as the Chairman of the Committee on Public Accounts. The disqualification is from the date when the act of defection took place. Failure on the part of the Speaker to adjudicate upon that petition despite the maximum period provided therefor having expired, is creating more trouble as a result of which the interference of this Court has been called for. In fact, the respondent No. 1 should have first decided the petition for disqualification of the respondent No. 2 and thereafter, considering his eligibility, should have taken steps to appoint him as the Chairman of the Committee on Public Accounts.
Maintainability of PIL - HELD THAT:- Maintainability of PIL in the present case will not be an issue as constitutional issues have been raised by the petitioner.
The issue pertaining to disqualification of the respondent No. 2 as Member of the Legislative Assembly is co-related with him being the Chairman of the Committee on Public Accounts. A petition filed for his disqualification is pending before the Speaker for the last more than three months, the maximum period fixed in Keisham Meghachandra Singh's case [2020 (1) TMI 1174 - SUPREME COURT] for decision thereof.
Adjourned to October 07, 2021. In case of failure this Court will decide further course of action to be taken in the matter.
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2021 (9) TMI 1457
Validity of the retrospective amendment to Section 143(1A) - whether the retrospective effect given to the amendment would be arbitrary and unreasonable inasmuch as the provision, being a penal provision, would operate harshly on assessees who have made a loss instead of a profit, the difference between the loss showed in the return filed by the assessee and the loss assessed to income tax having to bear an additional income tax at the rate of 20%? -
HELD THAT:- It is common ground raised in M/S. SATI OIL UDYOG LTD. & ANOTHER [2015 (3) TMI 854 - SUPREME COURT] as held that the issue raised in this appeal is squarely answered by this Cour Section 143 (1A) can only be invoked where it is found on facts that the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. The burden of proving that the assessee has so attempted to evade tax is on the revenue which may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has, in fact, attempted to evade tax lawfully payable by it. Subject to the aforesaid construction of Section 143 (1A), we uphold the retrospective clarificatory amendment of the said Section and allow the appeals.
As the fact situation is similar, it is urged that this appeal may be disposed of on the same terms.
Consequently, we hold that the additional tax levied on the appellant cannot be lawfully recovered. Hence, the demand raised by the Department is set aside.
Accordingly, this appeal is allowed.
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2021 (9) TMI 1456
Reopening of assessment u/s 147 - Reason to believe - Change of opinion - HELD THAT:- We are in Assessment Year 2010-11 wherein the AO had framed his section 143(3) regular assessment followed by recording of the foregoing reasons culminating in issuance of section 148. This impugned reopening therefore has been initiated beyond the specified period of four years from the end of the relevant assessment year in light of section 147(1) 1st proviso.
The said proviso stipulates that such a reopening would only be initiated if it is found that the assessee had not disclosed all the relevant particulars “fully” and “truly” before the AO in the first round.
CIT DR to dispute that the AO’s sole reopening reason has placed reliance on the assessee's books only regarding “reversal on account of cancellation and price revision”.
We therefore quote hon’ble Bombay high court’s landmark decision in Hindustan Lever Limited Vs. R.B. Wadekar[2004 (2) TMI 41 - BOMBAY HIGH COURT] that an AO’s reopening reasons have to be read on standalone basis; as it is, without any scope of further improvement at a latter stage by way of addition, deletion or substitution therein. We thus quote that to conclude that the impugned reopening has been rightly quashed by the CIT(A) as a mere change of opinion only. Revenue’s appeal is dismissed.
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2021 (9) TMI 1455
Seeking grant of regular bail - only argument raised by learned counsel for the petitioner is that the co-accused have been released on bail by the Additional Sessions Judge, Panipat - HELD THAT:- A perusal of the order dated 12.03.2021 reveals that the argument of the co-accused being granted bail was also raised by the learned counsel for the petitioner in CRM-M-298-2021 and the same did not find favour of this Court for granting bail to the present petitioner. The order passed by this Court was challenged in Special Leave to Appeal (Crl.) No.3887 of 2021 which was dismissed as withdrawn on 28.05.2021. No change in circumstances since the dismissal of the second petition for grant of regular bail vide order dated 12.03.2021 has been pointed out and canvassed.
This is not a fit case for grant of regular bail to the petitioner. Accordingly, the present petition is dismissed.
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2021 (9) TMI 1454
Revocation of cancellation of registration - Revenue is ready to consider the application of the assessee - HELD THAT:- the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.
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2021 (9) TMI 1453
Maintainability of petition - HELD THAT:- Granting liberty to the petitioner to approach the NCLT with regard to the orders passed by the authority under the RIICO Disposal of Land Rules, 1979, in terms of Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - It would be open for the RP appointed under the Insolvency and Bankruptcy Code, 2016 to raise all submissions including extension of moratorium period before the NCLT.
Petition disposed off.
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2021 (9) TMI 1452
Deduction u/s 80IA on Internet services and internet telephone - reconstitution - change in shareholding - Revenue argued business was formed by splitting up and reconstruction of business already in existence or by transfer of old Plant & Machinery - Pattern of shareholding - Once the assessee is able to show that it has used new plants and machinery which has not been previously used for any purpose and the new undertaking is not formed by splitting up or reconstruction of business already in existence - HELD THAT:- We see no reason to interfere with the impugned judgment and order passed by the High Court. The Special Leave Petition is dismissed.
Pending applications shall stand disposed of.
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2021 (9) TMI 1451
Regularization of adhoc employees - eligibility for pensionary benefits - HELD THAT:- The pensionary benefits which are being disbursed to the appellants shall not be disturbed. Likewise, the pensionary payments which are being disbursed to the respondents shall be paid over in accordance with law - No recoveries shall be made of any nature whatsoever from the appellants
Insofar as the companion appeals are concerned, as recorded earlier, CWP No 16925 of 2003 and CWP No 4490 of 1994 were instituted on the basis of the observations of the Single Judge in Malook Singh’s case. That aspect has been duly clarified both in the Letters Patent Appeal and by the Single Judge in the judgment dated 5 January 2011. Hence, no further directions are required in the companion appeals. Both sets of appeals are disposed of.
Appeal disposed off.
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2021 (9) TMI 1450
Assessment u/s 144B - Deduction u/s 80P - violation of the principles of natural justice - Petitioner is a primary agricultural credit co-operative society registered under the Kerala Co-operative Societies Act 1967 - HELD THAT:- As per the decision in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [2021 (1) TMI 488 - SUPREME COURT] the income tax authority cannot go behind the classification accorded to the society under the Cooperative Societies Act and merely because the word ‘bank’ is included in the name of the society, the same would not be sufficient to deprive a primary agricultural credit society of the benefits of deduction u/s 80P of the Act.
Contrary to the findings in the assessment order mentioned earlier, it is seen from Ext. P4 acknowledgement from the Income tax department itself that the Department received petitioner’s reply along with relevant case law as a response on 28-07-2021. Thus there is merit in the petitioner’s contention that the impugned order is bad on account of violation of the principles of natural justice.
It is relevant to refer to the Division Bench Judgment of this Court in Poonjar Service Cooperative Bank Ltd. v. Income Tax Officer [2021 (6) TMI 1084 - KERALA HIGH COURT]. In the afore cited judgment, the learned single Judge had refused to interfere with an order of assessment and relegated the assessee to the remedy of a statutory appeal. However in appeal, noticing that the assessing officer had failed to apply the law laid down by the Supreme Court in Mavilayi’s Case [2021 (1) TMI 488 - SUPREME COURT] the Division Bench set aside the order of the learned single Judge and quashed the assessment order and directed the assessing authority to redo the assessment. The assessment order is liable to be set aside on the aforesaid reason also since the assessing officer had clearly failed to apply the dictum laid down Mavilayi’s Case.
Ext.P5 order of assessment for the year 2018-19 is quashed and the first respondent is directed to re-do the assessment of the petitioner society for the said assessment year afresh after issuing notice to the petitioner and after affording him an opportunity of being heard.
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2021 (9) TMI 1449
Seeking grant of anticipatory bail - Non-bailable offence - whether the Applicants are deprived of their liberty, without following the due process of law? - HELD THAT:- In absence of any provision or procedure for releasing an accused on bail in a non-bailable offence, as adumbrated in Section 170 of the Code, the powers available therein can be sought to be made applicable in every contingency, as buttressed in the present facts and circumstances.
Concededly the Applicants appeared before the Court and sought bail, by preferring an application under Section 439 of the Code and this assumes insurmountable signifcance in the present circumstances for the obvious reason that the application for grant of regular bail before any Court would give rise to a presumption that the accused is in custody and that particular Court is duty bound to apply its mind to the material set forth before it, moreso for the reason that fling of charge-sheet ipso facto indicates commission of offences, as per the prosecution and the material collated is compiled in the charge-sheet. In any case, if material brought on record indicates the gravity of the offence and culpability as well as complicity of the accused persons then in that case, the Court is duty bound to exercise its power, which have been invoked by preferring an application as per Sections 437 and 439 of the Code.
The Court of the Magistrate or the Sessions Court cannot be held bereft of power and jurisdiction to grant bail or decline bail, once an application is preferred before it and in such a contingency, the said Court is duty bound to take into account the evident material, emerging from the charge-sheet - While charting out the procedure to be adopted by the investigating agency, it is held that unless arrest is necessary for the purpose of investigation or custodial interrogation, it shall not be adopted as a routine course, but with a clarification that arrest may be necessary if the offence is of grave nature and prescribes severe punishment. The directions for the Criminal Courts fnd its genesis in the well settled principle in case of JOGINDER KUMAR VERSUS STATE OF UP. [1994 (4) TMI 385 - SUPREME COURT] that arrest cannot be made in a routine manner as it amounts to deprivation of a person's liberty. The illustration given is in regard to the offences under Section 498A, where though the accused is not arrested during investigation, he is directed to be arrested at the stage of fling of charge-sheet.
In the instant case, it is apparent that all the Applicants are alleged to have indulged in commission of offences, which have resulted in serious dent to the financial health of the State as well as defrauding the public at large. Such offences are occurring in plenty and have resulted in stultifying overall growth of the nation and also have caused tremendous impairment to the economy of the nation. These crimes are more heinous in nature as they intend to destroy the economic fabric and financial ediflce of the State. Such crimes have the tendency to degrade and defy the faith of the public in law and order situation as it tantamount to a serious blow to its economic/financial condition.
It is incumbent upon the Court, who deals with the application for grant of bail, to exercise its power and discretion on the basis of the material put forth by the prosecution and would also be subject to the necessity shown by the prosecution for seeking custody as per the culpability and complicity of the particular accused for proving the deep involvement of each accused and unfold and unearth the modus operandi in the embezzlement in order to drive a conclusion about the involvement of each of the accused person. On the application for bail being fled, the CBI has opposed the release of the Applicants on the ground that the Applicants are influential and affluent persons and the probable witnesses are the employees and grave apprehension is expressed that if the Applicants are released on bail, they may influence the witnesses and tamper the evidence. It was urged before the Court that keeping in mind the grave offence, discretionary power to grant bail shall not be exercised.
Dispensation of arrest at the stage of investigation need not continue throughout and in particular, when the offence made out against the Applicants has now clearly emerged in the charge-sheet as a grave economic offence and, the witnesses who will participate in the trial apparently surfacing, the Applicants do not deserve their release on bail.
Application dismissed.
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2021 (9) TMI 1448
TP Adjustment - Comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee into business of software development, technical services and other related services need to deselected as comparable.
Working capital adjustment - A reading of Rule 10B(1)(e)(iii) of the Rules read with sec. 92CA of the Act, would clearly shows that the net profit margin arising in comparable uncontrolled transactions has to be adjusted to take into account the differences, if any, between the international transaction and the comparable uncontrolled transactions, which could materially affect the amount of net profit margin in the open market.
Chapters I and III of OECD Transfer Pricing Guidelines contain guidelines on comparability analyses for transfer pricing purposes. Guidelines on adjustments to be provided is found in paragraphs 3.47-3.54 and in the Annex to Chapter III. The guidelines must be followed for computing arm's length principle, and for comparing comparable uncontrolled transactions. Reasonably accurate adjustments should be made to eliminate effect of any such differences.
Accordingly we direct Ld. AO/TPO to grant working capital adjustment in accordance with law.
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2021 (9) TMI 1447
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- This Bench did not find any reply filed by Corporate Debtor from the record. However, the Corporate Debtor submitted written argument/submission and also Sur-Rejoinder dated 12.04.2019. The contents and the substance of the written submissions and the sur-rejoinder are nothing but repetition. The Corporate Debtor both in the written submission and the Sur-Rejoinder raised several issues with regard to the status of account, withholding and misrepresentation of facts, delay in arranging funds and noncooperation by the Financial Creditor, violation of RBI guidelines/directives so on and so fore which are not at all relevant for the purpose of disposal of the above Company Petition.
The Corporate Debtor paid an amount of 50,000/- on 13.10.2017 which was also confirmed by the Corporate Debtor through their reply dated 04.12.2017 raising objection to the possession notice issued by the Financial Creditor under SARFAESI Act. The Corporate Debtor also addressed letter dated 24.02.2016 confirming the LC outstanding dues and LG outstanding dues. The above Company Petition being filed on 31.10.2018 is well within limitation - the only legally sustainable plea of limitation raised by the Corporate Debtor in the sur-rejoinder and written submission is liable to be rejected and accordingly rejected.
Upon perusing the material available on record, this bench is of the considered opinion that the Financial Creditor has successfully proved the existence of debt and default and the debt is also within limitation. The Financial Creditor has also suggested the name of proposed Interim Resolution Professional in part-3 of the Petition along with his consent letter in Form-2. Thus, the present Company Petition satisfies all the necessary legal requirements for admission.
Petition admitted - moratorium admitted.
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2021 (9) TMI 1446
Provisional attachment order - the said order elapsed after the expiry of the 180-day period, i.e. in June, 2021 itself - Section (5(1) r/w Section 5 (3) and Section 8 (3) of the Prevention of PMLA Act, 2002 - HELD THAT:- It is evident that the Division Bench is already seized of the question as to whether the 180-days validity period of provisional attachment orders, as contemplated under Sections 5(1), 5(3) r/w Section 8(3) of the PMLA, 2002 has to be treated as sacrosanct in the light of the orders passed by the Hon’ble Supreme Court in Suo Moto W.P. (C) No. 3/2020 [2020 (5) TMI 418 - SC ORDER] extending the period of limitation on account of COVID 19 pandemic and the consequent lockdown.
In the present case, though the proceedings before the Adjudicating Authority ought to be permitted to continue and culminate in a final order, the said order ought not to be implemented till the question of law pending before the learned Division Bench is finally decided in LPA No. 362/2020.
It is, accordingly, directed that while the Adjudicating Authority will be at liberty to conclude the adjudication proceedings, in which, the petitioner will render its full cooperation; and the final order, as and when passed by the Adjudicating Authority, will not be implemented without the leave of the Court - List on 15.12.2021.
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2021 (9) TMI 1445
TP Adjustment - Comparable selection - HELD THAT:- We direct exclusion of Persistent Systems Ltd., Larsen & Toubro Infotech Ltd. and Infosys Ltd. & Infobeans Technologies Ltd. from the final list of comparables.
We restore I2T2 India Limited, Evoke Technologies Limited and Melstar Information Technologies Limited to the file of AO/TPO for examining it afresh.
Working capital adjustment - We find merit in the submissions made by Ld. A.R. Accordingly, we restore this issue to the file of AO/TPO with the direction to grant working capital adjustment.
Transfer pricing adjustment should be restricted to the value of international transactions only - There is merit in the said contention as the whole purpose of transfer pricing exercise is to determine the Arms length price of international transactions. Accordingly we direct the AO/TPO to restrict the transfer pricing adjustment to the value of international transactions only.
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