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Showing 101 to 120 of 1471 Records
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2022 (1) TMI 1383
Oppression and Mismanagement - Fraudulent allotment of bonus shares - issuance of bonus to the shareholders who are nonresidents of India and not to all the shareholders, without the approval of the Reserve Bank of India - HELD THAT:- It is relevant to note that even in mismanagement, oppression, complaint by any of the minority shareholders, the remedy lies under section 241 of the Companies Act for oppression or mismanagement. Only if the Tribunal gives any finding that there are fraudulent activities and fraud has been committed by any person, give cause of action to proceed under section 447 of the Companies Act. Chapter XIV and XVI of the Companies Act are fact finding procedures. If any irregularities which lead to the fraudulent activities of the company found during the inspection as per the procedure, certainly there cannot be any difficulty in lodging any complaint under section 447 of the Companies Act.
hether or not there is mismanagement or oppression, the same cannot be gone into by the Special Court. The Special Court can try the offence on the specific charges. Situation is not ripen for that stage. Only on recording a finding about the fraud committed by the petitioners, the Court can try the offence for specific charges. The criminal Court cannot assume the role of Company Court and investigate the matter. Though much reliance has been placed on the judgment of the Apex Court in the judgment in NATIONAL BANK OF OMAN VERSUS BARAKARA ABDUL AZIZ & ANR. [2012 (12) TMI 965 - SUPREME COURT] to contend that the Magistrate has considered the sworn statement. In the above case, the Apex Court has held that the High Court instead of quashing the complaint should have directed the Magistrate to pass fresh Orders following the procedure under section 202 of Cr.P.C.
In MD. IBRAHIM & ORS VERSUS STATE OF BIHAR & ANR [2009 (9) TMI 922 - SUPREME COURT], the Apex Court has held that in order to attract an offence under section 464 of IPC, a person ought to have made or executed a document claiming to be someone else or authorised by someone else or he altered or tampered a document or he obtained a document by practicing deception, or from a person not in control of his senses. Except contending that resolution and PAS-3form have been manipulated, the nature of alleged manipulations is totally absent. Therefore, the offence under 464 of IPC is also not made out. In such view of the matter, the entire complaint is liable to be quashed. If at all the respondent is really interested to unearth the mismanagement, oppression or irregularities, he ought to have given a complaint before the authorities.
Therefore, it is for the respondent to make necessary complaint to the concerned authorities to conduct enquiry or investigation or inspection in the affairs of the company and take appropriate legal action. By holding, this Court is of the view that the present prosecution is nothing but abuse of process of law and not maintainable.
This Criminal Original Petition is allowed
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2022 (1) TMI 1382
Seeking direction for modification of the Approved Resolution Plan of Respondent No. 2 and 3, in compliance with Regulations 42 and 44 of the liquidation Process Regulation 2016 - Non-deduction of ₹ 34 crores from the final payment to be made to the Applicant/Appellant as per the scheme of distribution from out of the amount under the Resolution Plan - HELD THAT:- It is important to mention that the resolution professional admits in its Reply that it had suggested the COC two options to either treat the illegal recovery is made by the Appellant as interim finance under the IB Code or sent to deduction of the amount of illegally recovered amount by the Appellant, out of distribution amount payable to the Appellant under the Resolution Plan. Accordingly, the COC, upon deliberation, consented to deduction of the said amount from the distribution amount owed to the Appellant under the Resolution Plan submitted by Respondents No. 2 & 3 in the 30th and 31st Meeting of the COC held on 5 February 2020 on 7 February 2020 respectively.
It is further necessary to mention that the Resolution Professional has in its Reply admitted that in terms of duty cost upon him under Sections 20 and 25 of the Code to continue and maintain the business of the Corporate Debtor as a going concern, it had requested the Appellant to continue and sustain the Non-Fund-Based Facility NBF Facility limits at the existing level at being drawn by the Corporate Debtor prior to the insolvency commencement date. The said request was made on account of the business requirement of the Corporate Debtor - It is pertinent to mention that Section 25 of the Code provides the duties of the Resolution Professional. Under Section 25(2)(c), the RP must raise interim finance subject to the approval of the Committee of Creditors under Section 28 of the Code. Further, under Section 20 (2) (1) &(2)(c) of the Code, the IRP/RP is duty-bound to make every endeavour to protect and preserve the value of the property of the Corporate Debtor and manage the operations of the Corporate Debtor as a going concern. For this purpose, IRP/RP is entitled to raise interim finance.
In the instant case, Resolution Professional has admitted that it had suggested the COC two options, to either treat the recovery made by the Appellant as interim finance under IB code or deduct the amount illegally recovered by the Appellant, out of distribution amount payable to the Appellant under the Resolution Plan. Thus, it is clear that RP failed to exercise its jurisdiction to decide the issue of CIRP cost and left it to the CoC to decide whether the amount incurred in keeping the Corporate Debtor as a going concern, by the continuation of letter of credit bank guarantee facility during the CIRP would be treated as interim finance. However, it was the duty of IRP/RP itself to decide the CIRP cost. After that, instead of taking advice from the COC for treating the said expenses as interim finance, he should have obtained sanction from the CoC for making the payment of the expenses incurred during the CIRP.
It is clear that the Appellant never recovered any amount from the payment of ₹ 34 crores, as has been misrepresented by Respondent No. 1. The Adjudicating Authority vide its impugned Order observed that the Appellant has not objected to the said actions of Respondent No. 1 in the COC meetings is contrary to the materials placed before the Adjudicating Authority. Furthermore, the Appellant had refuted the actions of respondent No. 1 vide its Email dated 20 February 2020, which the Adjudicating Authority has overlooked - Appeal allowed in part.
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2022 (1) TMI 1381
Approval of Resolution Plan - adjudicating authority dismissed the application filed by the appellant which was upheld by the appellate tribunal - HELD THAT:- As per Section 31 of the IPC, the Resolution Plan becomes final only after it is approved by the adjudicating authority - reliance placed in the case of GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT] where it was held that After CoC approves the plan, the Adjudicating Authority is required to arrive at a subjective satisfaction, that the plan conforms to the requirements as are provided in subsection (2) of Section 30 of the I&B Code. Only thereafter, the Adjudicating Authority can grant its approval to the plan.
Appeal dismissed.
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2022 (1) TMI 1380
Disallowance of bad debts as conditions laid down in Section 36(1)(vii) r.w.s. 36(2) not satisfied - debts have been taken over from the sister concerns - Tribunal allowed the claim - HELD THAT:- Substantial question of law involved in this appeal has already been considered and decided in favour of the assessee by judgment [2021 (12) TMI 1446 - MADRAS HIGH COURT] as held tribunal has taken note of the position that the Memorandum and Articles of Association permitted the assessee to carry on the business of money lending and the transactions in question have been held to be in the realm of business activity. Decided in favour of assessee.
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2022 (1) TMI 1379
Revision u/s 263 - cancellation of registration for the year when the cancellation order was not available to the AO while passing the order u/s 147/143(3) - HELD THAT:- Tribunal had allowed the assessee’s case following the decision in the case of Commissioner of Income Tax(exemption) Vs. Mukesh Bhansali Charities Trust [2019 (3) TMI 2027 - CALCUTTA HIGH COURT] allowed the assessee’s appeal wherein the Tribunal upheld circular No. 1 of 2011, dated 6th April, 2011 issued by the CBDT and held that Section 12AA(3) is applicable only from the assessment year 2011-12.
We find that the substantial questions of law raised in this appeal are covered against the revenue.
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2022 (1) TMI 1378
Addition u/s 68 - Identity, genuineness and creditworthiness in respect of money received in its books of accounts not proved - main plank on which the assessing officer made the addition was because the directors of the share subscribers did not turn up before him - CIT-A deleted the addition - HELD THAT:- There is no finding of involvement of any entry provider or hawala operator. M/s Anushka Soft-Tel Pvt. Limited is not found to be-part of any group of Companies floated by any entry provider.
A detailed interrogation was conducted by the assessing officer and the director of M/s Anushka Soft-Tel Pvt. Limited has answered all the questions, which show that the director is having full knowledge of operations of M/s Anushka Soft-Tel Pvt. Limited as well as the assessee-company.
The director is not a name lender as generally happens in the case of dummy companies and Shell Company. The statement of the director has not been rebutted or discredited by the assessing officer.
The assessing officer has not made reference to FT & TR nor has he made any investigation / inquiry, in this case. The documents filed reflect that SWEI Inc, is a Company having substantial operating revenues and it has enough shareholders equity to make investment in assessee-company.
Documents also show that the investment has been made through a proper channel of foreign remittances and by following due procedure under FCGPR. The same is also reflected in the balance sheet of M/s SWEI Inc. The assessing officer has not given any contrary finding on any of the documents / details filed. The assessing officer has made addition only in respect of two companies. The assessee has filed basic relevant documents at assessment stage and wherever the Assessing Officer has issued notices, they are complied with and investigations/ examination of director has not thrown up any contrary fact.
All the share applicants are (i) income tax assessee’s, (ii) they are filing their return of income, (iii) the share application form and allotment letter is available on record, (iv) the share application money was made by account payee cheques, (v) the details of the bank accounts belonging to the share applicants and their bank statements, (vi) in none of the transactions the assessing officer found deposit in cash before issuing cheques to the assessee company, (vii) the applicants are having substantial creditworthiness which is represented by a capital and reserve as noted above.
We are not inclined to accept the contention of the AO in any manner and hence the addition so made by assessing officer has been rightly deleted by ld CIT(A) by passing a reasoned and speaking order. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. Decided in favour of assessee.
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2022 (1) TMI 1377
Classification of goods - E-cycle - applicable rate of customs duty on import of the said goods from China - classifiable under sub-heading 8712 00 10 of the Central Excise Tariff or under 8711? - HELD THAT:- Heading 8712 covers Bicycles and other cycles (including delivery tricycles), not motorized. Given that the good in question is admittedly e-cycle, albeit with power less than 250W, it does not prima facie meet the requirement of "not motorized" prescribed in the heading. The alternative heading 8711 covers Motorcycles (including mopeds) and cycles fitted with auxiliary motor, with or without side cars appears more appropriate, given that the e-cycle has a motor, albeit of power less than 250W - the application is more in the nature of a prayer for fiscal indulgence for an innovative and environment friendly mode of individual transport and not for a ruling on classification of the said mode of transport under the Customs Act, guided as it would be as per the laid down provisions of law and jurisprudence. The specific prayer for classification of e-cycle as a non-motorised cycle under heading 8712 and not 8711 is an effort to lend technical wherewithal to the said substantive prayer.
The prayer made in the application is not essentially covered by section 28-H 2 (a) of the Customs Act, 1962 and beyond the scope of powers vested with this Authority. Further, the application, including the revised application, are not in conformity with the procedure laid down in CAAR Regulations, 2021.
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2022 (1) TMI 1376
Exemption u/s 11 - scope and amplitude of the definition “charitable purpose” - correct interpretation of the proviso to Section 2(15) “charitable purpose” - as per revenue assessee is involved in widespread commercial activities in nature of business and the activity of the assessee covered under the provisions of Section 2(15) of the Act and thus, exemption u/s.11 & 12 of the Act is not allowable to the assessee - HELD THAT:- The substantial questions of law raised are no longer res integra in view of the decision of this Court in the case of Ahmedabad Urban Development Authority Vs. ACIT (Exemption) [2017 (5) TMI 1468 - GUJARAT HIGH COURT] - Decided against revenue.
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2022 (1) TMI 1375
Appointments to the Appellate Tribunal under the Prevention of Money Laundering Act - HELD THAT:- Consistent with the orders passed by other Courts, therefore, we will have to grant an order of status-quo in both these matters. There is a dispute between the two sides as to whether possession or has or has not been taken. There are no finding in that regard - It is directed that the present status-quo is to be maintained and no further coercive steps are to be taken against the Petitioners.
Liberty to the parties to apply once the appointments are made.
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2022 (1) TMI 1374
Deduction u/s 10A - deduction u/s. 10A for Bangalore BPO Unit was restricted to total income (under the head business) after set off of losses from other units (10A and non-10A units) - While the DRP accepted the objection of the assessee, the AO in the final assessment order for the first time excluded the loss/profit of section 10A units eligible for deduction at the source level itself, while no such direction was given by the DRP. According to the ld. AR, the action of the AO in the final assessment order is against the mandate of the provisions of section 144C(10) r.w.s. 144C(13) - HELD THAT:- As submitted that the provisions of section 10A are deduction in nature and in the absence of provisions similar to section 80A(2), the entire deduction to be restricted to total income in all the loss/profit of 10A units to be excluded at source level. For this purpose, he relied on the order of Yokogawa India Ltd [2016 (12) TMI 881 - SUPREME COURT] wherein it was held that though section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV and not at the stage of computation of the total income under Chapter VI. Being so, the issue is remitted to the AO to pass consequential order in compliance of the decision above.
Disallowance of provision for litigation under normal provisions of the Act as well as upward adjustment to net profit while computing book profit u/s. 115JB - DR submitted that there is no basis for this provision towards legal fees or out of pocket expenses and the lump sum provision is made without specific production of details of litigation pending at various courts - HELD THAT:- As before us, the ld. AR could not establish that this provision has been made on a scientific basis relating to particular cases pending before various courts and due to particular counsel. As such, we decline to entertain this ground and the same is rejected.
MAT computation - AR submitted that as per Explanation 2(i) to section 115JB of the Act, any reversal out of provision created in earlier year, if the book profit of such year has been increased by those provisions, be reduced from net profit while computing book profit in the year of reversal, if such amount is credited to Profit & Loss account. - HELD THAT:- If the book profit is increased by provision created in that year and on reversal of that provision in the present assessment year, net profit of this assessment year to be reduced so as to compute the correct book profit. With these observations, we remit the issue to the AO for fresh consideration.
Addition u/s. 201(1) & 201(1A) for not withholding tax on payments towards bandwidth and leased line charges - The issue has been settled by the assessee by availing VSVS, 2020 scheme - HELD THAT:- At the time of passing the DRP order, the certificate under VSVS, 2020 was not made available before the lower authorities. Since the issue raised before us is directly related to the issue in the appeal in.[2020 (12) TMI 1375 - ITAT BANGALORE] if the issue was settled by the assessee by availing VSVS, 2020, the assessee is entitled for consequential relief. Accordingly this issue is set aside to the file of AO to consider the VSVS, 2020 scheme availed by the assessee and decide the issue accordingly.
Computing deduction u/s. 10A - HELD THAT:- We are of the opinion that this issue has been decided in favour of the assessee by the judgment of Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] holding that for the purpose of computing deduction u/s. 10A if the export turnover in the numerator is to be arrived at after excluding the communication expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. This has been confirmed by the Hon’ble Supreme Court in the case of HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT].
TP Adjustment - comparable selection - HELD THAT:- Remit this issue in respect of selected comparables to the file of DRP for adjudication of this issue after considering the submissions and case laws cited by the assessee.
Only companies functionally similar to the assessee need to be selected.
Corporate guarantee transaction treated as an international transaction and applying arbitrary rate of 3% as guarantee fee - HELD THAT:- We set aside this issue to the record of the A.O./TPO to recompute the ALP by considering the arm's length guarantee fees at 0.5% and further by providing appropriate adjustment for corporate guarantee received by the assessee from its arm's length.
Reimbursement transactions - TPO proposed to apply CUP method and treat the payment towards the Re-imbursement as NIL and made adjustment in the intragroup payment made by the assessee - HELD THAT:- Before the lower authorities, the assessee has not placed the necessary evidence, as such this issue was decided against the assessee. Before us, it was pleaded that the assessee is in a position to place the evidence to support its claim. Accordingly, the issue is remitted to the AO/TPO to consider the same and decide the issue afresh.
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2022 (1) TMI 1373
Requirement to follow the reservation norms of 2% for the candidates belonging to Scheduled Caste [SC], 31% for the Scheduled Tribes [ST] and 17% for the Other Backward Classes [OBC] for purposes of admission in the University on introduction of the Central Educational Institutions (Reservation in Admission) Amendment Act, 2012.
HELD THAT:- It is no longer res integra that Reports and recommendations made by the Parliamentary Committees/Commissions that precede enactment of a Statute can be used as external aids to interpret the meaning of ambiguous words in a statutory provision wherever considered necessary. It can also be taken note of as to the existence of a historical fact. At the same time, it must be borne in mind that such Reports are not decisive and a Court is free to arrive at a different conclusion based on its own findings and other evidence produced by the parties - It can be discerned from the Statement of Objects and Reasons appended to the Amendment Bill, the background notes submitted to the Standing Committee by the Department of Higher Education and the 234th Report tabled by the Standing Committee in the Parliament that some of the CEIs, in particular those situated in North Eastern States having a predominant tribal population, expressed their inability to reduce the extent of reservation of seats for SCs and STs for ensuring reservation of 27% of the seats for the OBC category, as stipulated in the Reservation Act. It can also be seen that the provisions of the Reservation Act as they stood, exempted CEIs situated in tribal areas referred to in the Sixth Schedule to the Constitution, from making any reservation for SCs and STs, which as a matter of fact, was not the object behind introducing the enactment.
It has been held in the impugned judgment that the Respondent No. 1 - University was correct in calculating the extent of reservation of seats in making admissions to different courses, viz., 31% for ST candidates, 2% for SC candidates and 17% for OBC candidates which is in line with the mandate of the Amendment Act.
Once the two provisos were inserted in Section 3 of the Parent Act by virtue of the Amendment Act, the general norms of reservation as laid down in Clauses (i), (ii) and (iii) of Section 3 of the Parent Act had to be restricted in terms of the said provisos. While the first proviso deals with "State seats", if any, in a CEI situated in tribal areas referred to in the Sixth Schedule to the Constitution, the second proviso addresses a situation where there are no State seats in a CEI and the seats reserved for the SC/ST candidates exceeds the percentage specified under Clauses (i) and (ii) of Section 3 (viz., 15% seats for SCs plus 7.5% for STs, totalling to 22.5% seats) or if the combined seats reserved for the SC and ST candidates exceeds the sum total of the percentage as specified under Clauses (i) and (ii). Two riders have also been dovetailed in the second proviso to Section 3, namely Clauses (a) and (b).
The reference point of the period for determining the reservation quota for OBC candidates must be the same as that of the SC and ST candidates for the simple reason that for working out the reservation quota for OBC candidates would necessarily require one to find out in the first instance, as to what would be the difference between 50% of the annual permitted strength and the combined existing percentage for the SC and ST candidates, as obtained on the date immediately preceding the date of commencement of the Reservation Act. Both the issues are so interlaced that to determine the percentage of reservation for OBC candidates, one would have to undertake an exercise of determining the percentage of seats to be reserved for SC and ST candidates, all within the four corners of the second proviso inserted in Section 3 of the Parent Act - the general Rules of reservation have been encapsulated in Clauses (i), (ii) and (iii) of Section 3 of the Parent Act. But when it comes to CEIs established in States falling under the definition of "Specified north eastern region", categorized in Section 2(ia) introduced by the Amendment Act, the two new provisos appended to Section 3 would govern the norms of reservation which prescribes a different criteria, vis-à-vis the main provision and would apply irrespective of whether they are situated in areas covered by the Sixth Schedule to the Constitution or not.
After amendment of the Reservation Act, the Respondent No. 1 - University had to follow the reservation norms of 2% for SC candidates, 31% for ST candidates and 17% for OBC candidates which is in consonance with the second proviso to Section 3 of the Reservation Act inserted by virtue of the Amendment Act - the present appeal fails and the impugned judgment is upheld - Appeal dismissed.
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2022 (1) TMI 1372
Disposal of the appeal expeditiously - appellant apprehends that proper opportunity of hearing may not be granted to him to place his submission before the appellate authority - petitioner submits that urgency for taking up the writ petition has arisen on account of notice issued u/s 250 by C.I.T (Appeal) dated 17th January, 2022 requiring the appellant to furnish written submission and documents electronically on or before 28th January, 2022 at 03:00 p.m.- HELD THAT:- We have taken note of rival submission of learned counsel for the parties on the limited prayer of the petitioner. The apprehension expressed by the petitioner has been allayed by learned counsel for the Revenue also pointing out to the text of the notice dated 17th January, 2022.
C.I.T (Appeal) appears to be inclined to dispose of the appeal in an expeditious manner and has also asked the appellant to furnish ground-wise written submission along with supporting documentary evidence and clarifications/information etc., as per Annexure. Open for the petitioner to appear before the C.I.T (Appeal) electronically on the date fixed i.e., 28th January, 2022 and if so advised, seek some more time to submit their written submissions/documents.
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2022 (1) TMI 1371
Rejection of the resolution plan submitted by the Applicant - rejection on the ground that the applicant is ineligible to file resolution plan under section 29A of the Code - Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of NCLT Rules, 2016 - HELD THAT:- This Bench is of the opinion that the applicant squarely falls within the definition of Section 29A (b) and is barred to present resolution plan under Section 29A of the Code.
It is further noticed that the Union Bank of India vide its order dated 25.05.2021 categorically held that in terms of RBI master circular that the applicants are wilful defaulters and further that a show cause notice dated 13.11.2019 was served to the borrower/ promoter/ directors/ guarantors. The applicant was provided personal hearing/ opportunity on 08.09.2020 and 24.12.2020.
The finding of the Committee further categorised the applicant as wilful defaulter by diversion/ siphoning off the bank’s fund. The said order was reviewed by the Union Bank of India on 01.07.2021 and the review committee has confirmed the categorisation of applicants as wilful defaulter. The said action of categorisation of wilful defaulter was challenged by way of Writ Petition before the Hon’ble Bombay High Court in SHYAMLAL JAIDEV PANCHMATIYA & ANR. VERSUS UNION BANK PF INDIA & ORS. [2021 (9) TMI 1491 - BOMBAY HIGH COURT].
This Bench has no hesitation to conclude that the CoC has rightly rejected the resolution plan submitted by the Applicant herein and that he is ineligible to submit a plan under Section 29A of the Code - Application dismissed.
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2022 (1) TMI 1370
Seeking liquidation of Corporate Debtor - no resolution plan submitted before the Adjudicating Authority by the Resolution Professional - HELD THAT:- This Bench is satisfied with the reasons that the only Resolution Plan received from the promoter of Corporate Debtor was rejected as the Corporate Debtor was declared as willful defaulter, the ground that no major assets are left in the company and lastly that COC with 100% voting has approved to liquidate the Corporate Debtor, this bench allows the IA No. 173 of 2021 and orders liquidation of Corporate Debtor.
On reading the Application and the documents enclosed therein, for the RP has complied with the procedure laid under the Code read with Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Regulations), this is believed to be a case fit to pass liquidation order under sub-section 1 of section 33 of the Code as no resolution plan has been submitted before the Adjudicating Authority by the Resolution Professional.
It is directed that the Corporate Debtor to be liquidated in the manner as laid down in the Chapter by issuing Public Notice stating that the Corporate Debtor is in liquidation with a direction to the Liquidator to send this order to the ROC under which this Company has been registered - application allowed.
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2022 (1) TMI 1369
TP adjustment - adjustment of Corporate Guarantee - HELD THAT:- As pointed out to us that the issue is squarely covered by a detailed judgment of this Court [2017 (12) TMI 583 - RAJASTHAN HIGH COURT] concerning this very assessee. Under the circumstances these questions are not considered.
Write off of loss on account of investment made in equity shares of one of its subsidiary - HELD THAT:-This issue is covered by a recent order [2021 (12) TMI 1407 - RAJASTHAN HIGH COURT] which also concerned this very assessee held that assessee had made investment in its subsidiary company in order to expand its business with a view to earn higher profit. The investment was thus driven by business expediency. The tribunal therefore committed no error as opined that such investment being in the nature of revenue expenditure was to be allowed under Section 37.
MAT computation - Write off of investment n the subsidiary company for the purpose of computing “book profit” u/s. 115JB - HELD THAT:- Full Bench of the Gujarat High Court in the case of CIT Vs. Vodafone Essar Gujarat Ltd. [2017 (8) TMI 451 - GUJARAT HIGH COURT] held that with insertion of clause (i) to the explanation with retrospective effect, any amount or amounts set aside for provision for diminution in the value of the asset made by the assessee, would be added back for computation of book profit under section 115JB - if this was not a mere provision made by the assessee by merely debiting the Profit and Loss Account and crediting the provision for bad and doubtful debt, but by simultaneously obliterating such provision from its accounts by reducing the corresponding amount from the loans and advances on the asset side of the balance sheet and consequently, at the end of the year showing the loans and advances on the asset aside of the balance sheet as net of the provision for bad debt, it would amount to a write off and such actual write off would not be hit by clause (i) of the explanation to section 115JB.
ITAT justification to remit back the issue of disallowance out of provision for doubtful loans and disallowance out of bad debts provision claimed in MAT to the file of the AO for verification - HELD THAT:- The questions as arise out of the order of the Income Tax Appellate Tribunal remanding certain issues to the assessing officer for fresh consideration. Being a pure remand and we are informed that decisions have also been rendered in such remand, no question of law arises.
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2022 (1) TMI 1368
FCRA registration - Delay opening of an “FCRA bank account” with the State Bank of India - petitioner could not upload the FC-4 Form on the respondent’s portal within the scheduled time period of June 30, 2021 as there was delay in opening the designated account in the main Branch of the State Bank of India, 11, Sansad Marg, New Delhi – 110001 - HELD THAT:- On a specific query to the learned counsel for the petitioner what steps, were taken by the petitioner to open the account, when the concerned amendment was notified on October 7, 2020, the learned counsel for the petitioner seeks some time to take instructions and file relevant documents along with an affidavit.
Noting the said submission, re-notify on March 11, 2022.
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2022 (1) TMI 1367
TP Adjustment - specific domestic transaction as the case is covered u/s 92 BA - HELD THAT:- The undisputed fact is that as per sub-clause (r) of section 92 BA the assessee has undertaken the transaction which has exceeded the prescribed limit. It is also not in dispute that vide Finance Act,2017 w.e.f. 01.04.2017 the said sub-clause (r) of section 92BA has been omitted.
We find that an identical issue came up for adjudication before the coordinate bench, Bangalore in [2017 (12) TMI 1719 - ITAT BANGALORE] held court is to look to the provisions in the rule which has been introduced after omission of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such proceeding will continue.
We, therefore, set aside this issue to the file of the Assessing Officer. The Assessing Officer is required to adjudicate the issue in accordance with law, after affording sufficient opportunity of being heard to the assessee.
Disallowance of deduction u/s 80IA - rate for eligibility of deduction - AR stated that the rate applied by the assessee is not correct and it is the say of the counsel that the rate charged by the electricity board to its consumers should be taken as rate for eligibility of deduction under section 80IA of the Act - HELD THAT:- We are of the considered view that this contention of the ld. counsel for the assessee is correct. The counsel has applied the rate which it has charged to the electricity board whereas the rate should have been the rate charged by the electricity board to its consumers. We, therefore, set aside this issue to the file of the Assessing Officer. The assessee is directed to furnish the rates charged by the electricity board to its consumers and the Assessing Officer is directed to verify the same and decide the issue afresh. Ground No. 4 is allowed for statistical purposes.
Claim of education cess as deductible u/s 37 - HELD THAT:- This issue has been extensively considered by the Hon’ble High Court of Bombay in the case of Sesa Goa [2020 (3) TMI 347 - BOMBAY HIGH COURT] We find that the co-ordinate bench has followed the decision of the Hon’ble Supreme Court in the case of K Srinivasan [1971 (11) TMI 2 - SUPREME COURT] However, the issue before the Hon’ble Supreme Court was whether the surcharge is part of tax or not. Whereas the issue before the Hon’ble Bombay High Court in the case of Sesa Goa [2020 (3) TMI 347 - BOMBAY HIGH COURT] was whether education cess is allowable as expenditure or not. Therefore, the decision of the Hon’ble Bombay High Court is directly on the claim of the assessee and respectfully following the same, we direct the Assessing Officer to allow the claim of deduction in respect of education cess paid by the assessee. Ground number 5 and additional ground is allowed.
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2022 (1) TMI 1366
Validity of bail granted - Drug Trafficking - recovery of substantial commercial quantities of drugs from a rented accommodation - Section 67 of the NDPS Act - HELD THAT:- On carefully perusing the impugned orders passed in each case, it emerges that except for the voluntary statements of A-1 and A-2 in the first case and that of the respondents themselves recorded under Section 67 of the NDPS Act, it appears, prima facie, that no substantial material was available with the prosecution at the time of arrest to connect the respondents with the allegations levelled against them of indulging in drug trafficking. It has not been denied by the prosecution that except for the respondent in SLP (Crl.) No. 1569/2021, none of the other respondents were found to be in possession of commercial quantities of psychotropic substances, as contemplated under the NDPS Act.
It has been held in clear terms in TOFAN SINGH VERSUS STATE OF TAMIL NADU [2020 (11) TMI 55 - SUPREME COURT] , that a confessional statement recorded under Section 67 of the NDPS Act will remain inadmissible in the trial of an offence under the NDPS Act. In the teeth of the aforesaid decision, the arrests made by the petitioner-NCB, on the basis of the confession/voluntary statements of the respondents or the co-accused under Section 67 of the NDPS Act, cannot form the basis for overturning the impugned orders releasing them on bail.
The evidence brought before us against Mohammed Afzal [A-2], respondent in SLP (Crl.) No. 1569/2021, subject matter of the second case i.e., NCB Case FN No. 48/01/07/2019/BZU, who was granted bail vide order dated 08th January, 2020, will have to be treated on an entirely different footing. There are specific allegations levelled against the said respondent regarding recovery of substantial commercial quantities of drugs from a rented accommodation occupied by him pursuant to which he was arrested on 16th June, 2019. This aspect has been completely overlooked while passing the order dated 08th January, 2020 wherein, the only reason that appears to have weighed with the High Court for releasing him on bail is that his case stands on the same footing as A-1, A-3 and A-4 who had been enlarged on bail vide orders dated 11th October, 2019, 16th September, 2019 and 09th September, 2019, in connection with the second case registered by the Department - A-2 cannot seek parity with the aforesaid co-accused and no such benefit could have been extended to him in view of Section 37 of the Act when he was found to be in conscious possession of commercial quantity of psychotropic substances, as contemplated under the NDPS Act.
The bail granted to the respondent-Mohmmed Afzal [A-2] is cancelled forthwith at this stage and he is directed to surrender before the Sessions Court/Special Judge (NDPS) within a period of two weeks, for being taken into custody - Petition disposed off.
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2022 (1) TMI 1365
Disallowance as prior period expenses - as argued expense was paid at a later date due to pending negotiation with the landlord - HELD THAT:- The factum of negotiation between the assessee and the landlord and an agreement towards the revised licence fee as happened in the month of Aug 2009 is clearly borne out of records and the liability towards the rent/licence fee though pertaining to the earlier period has crystallized during the year and is allowable in the hands of the assessee.
We therefore find that these expenses are duly allowable in the hands of the assessee as settled during the year and in any case, there are no changes in the tax rates and thus, no prejudice is caused to the Revenue and as held by the Courts, such an exercise of disallowing otherwise allowable expenses treating as mere prior period expenses will only result in an academic discussion without any tangible results.
Also aforesaid expenses in nature of rental payments are subject to TDS u/s 194I and the provisions of section 40(a) (ia) are equally attracted which provides for the allowability of expenses in the year in which the TDS has been deducted and paid.
In the instant case, it is a matter of record that the assessee has paid and accounted for these expenses in the books of accounts in the financial year relevant to the impugned assessment year and has deducted and deposited TDS in the financial year relevant to the impugned assessment year and not in the earlier assessment year. Therefore, even from the perspective of harmonious construction of all relevant provisions, the assessee deserves an allowance towards these expenses in the year under consideration. Decided in favour of assessee.
TDS u/s 194C - assessee has not deducted TDS under the head “Advertisement and publicity” on certain transactions - Disallowance u/s 40(a)(ia) - HELD THAT:- Assessee has filed relevant invoices/documentation in support of its contentions before the ld CIT(A) and therefore,CIT(A) findings that the assessee has not filed any evidence in support of his contention that the said payment does not require any TDS, is not borne out from the records.
Given that the material available on record has not been examined and no findings on merits of the additions have been recorded by the ld CIT(A) , we deem it appropriate that the matter be set-aside to the file of the ld CIT(A) to examine the same on merits after providing reasonable opportunity to the assessee. The contentions advanced on the merits have been left open and the assessee is free to advance the same before the ld CIT(A) as so advised. In the result, the ground no. 3 is allowed for statistical purposes.
Expenses debited under the head “general charges” - HELD THAT:- Going by the nature of expenses such as assets written off , provisions for expenses and old balances written off , it is prima facie not very clear whether these expenses can be claimed as revenues expenses and allowable under section 30 to 37 of the Act. Since these contentions have been raised for the first time and in absence of any findings of the lower authorities, we deem it appropriate to set-aside the same to the file of the ld CIT(A) who shall examine the aforesaid contentions so raised - ground no. 4 is allowed for statistical purposes.
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2022 (1) TMI 1364
Maintainability of suit - time limitation - whether the plea of the appellant is proved would depend upon evidence adduced at the trial? - HELD THAT:- The course of action which was followed by the learned trial Judge of directing the parties to address arguments on the issue of limitation was irregular. The issue of limitation in the present case would require evidence to be adduced.
Order XIV Rule 2 of the CPC stipulates that when issues of both law and facts arise in the same suit, the Court may dispose the suit by trying the issue of law first. For this purpose, the provision specifies two questions of law, which are (i) jurisdiction of the Court; and (ii) a bar to the suit created by any law for the time being in force.
Before this Court in NUSLI NEVILLE WADIA VERSUS IVORY PROPERTIES & ORS. [2019 (10) TMI 1314 - SUPREME COURT], the issue was whether the issue of limitation can be determined as a preliminary issue under Order XIV Rule 2. The three-judge bench of this court observed that if the issue of limitation is based on an admitted fact, it can be decided as a preliminary issue under Order XIV Rule(2)(b). However, if the facts surrounding the issue of limitation are disputed, it cannot be decided as a preliminary issue.
Since the determination of the issue of limitation in this case is not a pure question of law, it cannot be decided as preliminary issue under Order XIV Rule 2 of the CPC - Appeal allowed.
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