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Showing 101 to 120 of 1415 Records
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2023 (4) TMI 1316
Seeking withdrawal of appeal - full and final settlement of the dues - HELD THAT:- A certificate in Form IV has been issued to the appellant regarding full and final settlement of the dues. The appeal, therefore, stands dismissed as withdrawn.
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2023 (4) TMI 1315
Money Laundering - predicate/scheduled offence - illegal racket of kidney transplantation - offences including the offences punishable under Section 307 of the Indian Penal Code, 1860 and Sections 18, 19 and 20 of the Transplantation of Human Organs Act, 1994 - whether acquittal of the accused i.e., Jeevan Kumar from the predicate offence and quashing of criminal proceedings mentioned above qua the appellant-Rajiv Channa, shall also lead to the cessation of the attachment proceedings? - HELD THAT:- For the commission of an offence of money laundering, the essential preconditions which emerge from the aforesaid provisions are that firstly, it requires an involvement in any process or activity connected with the proceeds of crime; and secondly, projection of the same as untainted property.
The proceeds of crime allude to any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence. It may also include the value of any such property or in cases where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. The Explanation to Section 2(1)(u) of PMLA, 2002 further clarifies that the proceeds of crime would include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a consequence of any criminal activity pertaining to the scheduled offence.
In Nik Nish Retail Ltd. v. Assistant Director, Enforcement Directorate [2022 (11) TMI 1280 - CALCUTTA HIGH COURT], the Calcutta High Court, while dealing with a case where the FIR in respect of the predicate offence was quashed on the basis of settlement has held that the proceedings initiated under PMLA, 2002 provisions cannot stand in isolation in the absence of any scheduled offence.
This Court, in the case of Prakash Industries Ltd. v. Directorate of Enforecement [2022 (7) TMI 877 - DELHI HIGH COURT], has taken a view that once it is found that a criminal offence does not stand evidenced, the question of any property being derived or obtained therefrom or its confiscation or attachment would not arise at all.
A bare perusal of the facts of the present case would show that the Trial Court had already acquitted the appellant-Jeevan Kumar of all the charges framed against him vide judgment dated 22.03.2013 and the same has remained unchallenged by the respondent. Therefore, his acquittal in the scheduled offence breaks the entire chain leading to the other appellants. Moreover, this Court, vide judgment dated 15.01.2024, had quashed the ECIR bearing no. ECIR/07/DZ/2008 alongwith all the consequential proceedings arising therefrom, and the charge framed qua the appellant-Rajiv Channa vide order dated 24.04.2012. Thus, a necessary corollary would be that all the proceedings in furtherance of prosecution, including attachment, would also fall and are therefore, liable to be quashed.
The attachment proceedings in the present case are unsustainable as the appellants cannot be said to be involved in any activity connected with the proceeds of crime - Appeal disposed off.
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2023 (4) TMI 1314
Challenge to impugned assessment order - violative of the principles of natural justice or not - petitioner submits that the issue raised in this petition is squarely covered by a judgment in BAKSHI MOTORS VERSUS ASSISTANT COMMISSIONER (ST) [2022 (12) TMI 1503 - ANDHRA PRADESH HIGH COURT] where it was held that Having found that the petitioner filed this writ petition against the impugned assessment order without availing the alternative remedy available to him, without expressing our view on the merits of the case, we are inclined to dispose of the writ petition affording opportunity to the petitioner to approach the appellate authority.
HELD THAT:- Issue notice returnable within four weeks.
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2023 (4) TMI 1313
Seeking recall of order - power of recall - application filed by the RBI was barred by Section 10A of IBC or not - HELD THAT:- The power of recall can be exercised if there is any procedural error committed by the Court or order was obtained by playing fraud on the Court. The present is not a case where any procedural error has been committed by the Adjudicating Authority by passing the order dated 08.10.2021. Counsel for the Appellant has advanced submission that order dated 08.10.2021 is in violation of principle of natural justice which submission is wholly unfounded.
Bar of Section 10A - submission is that there is apparent error on the record since default noticed in the order was during 10A period but the Adjudicating Authority ignoring the bar of Section 10A has admitted 10A application - HELD THAT:- The present is a case where Appellant exercised its right of appeal and failed. Appellant who have challenged the order on merits in which he has been unsuccessful, cannot be allowed to file an application to recall the order on the same ground on which the appeal was filed by the Appellant. It is true that the Appeals filed by the Appellant were dismissed due to rejection of the application praying for condonation of 321 days’ delay in refiling the appeal but in the recall application, the ground to challenge the order on which appeal was founded are now being agitated in the Appeal - The IBC is a statute which prescribes timelines for completion of the proceedings. The recall applications have been filed after 17 months of admission of application under Section 227 filed by the RBI that too after unsuccessful challenge by the Appellant to the order dated 08.10.2021 before this Tribunal as well as before the Hon’ble Supreme Court. The Adjudicating Authority has correctly observed in the impugned order that there were no grounds made out in the applications filed by the Appellant for recall of the judgment dated 08.10.2021.
Thus, no error was committed by the Adjudicating Authority in rejecting recall applications - there is no merit in the Appeals - appeal dismissed.
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2023 (4) TMI 1312
Seeking for an order for liquidation of the Corporate Debtor (CD) - Section 33(1) read with section 34(1) of the Insolvency & Bankruptcy Code, 2016 - HELD THAT:- The fact remains that there is no resolution plan pending before the CoC and in the 18th CoC meeting, the RP explained to the CoC that in the event, the NCLT, Hyderabad does not accede to the request of granting further extension of 60 days, the liquidation process u/s 33(1) of Code shall commence in line with the order dated 31/12/2020. The ld. Counsel for the petitioner relies on this part of the Minutes of the 18th CoC meeting to contend that resolution of the CoC has to be deemed as being made, since CoC also noted the explanation given by the RP with regard to the liquidation. However, the Hyderabad Bench of NCLT, in the similar circumstances, has ordered for liquidation without the resolution of the CoC for liquidation. The adjudicating authority considered that no resolution plan was pending before CoC and that the adjudicating authority did not receive any resolution plan under sub-section (6) of Section 30 of the I&B Code, 2016.
When under section 33(1)(a), the Adjudicating Authority has power to order for liquidation when no resolution plan is submitted to it, it implies that the Adjudicating Authority has to only see whether any resolution plan has come up before it for approval prior to the order for liquidation under section 33(1)(a). As no resolution plan is received by the Adjudicating Authority, the questions whether CoC has resolved for liquidation or whether there is no coordination between RP and CoC, are immaterial for the Adjudicating Authority to order for liquidation u/s 33(1)(a).
There are no reason to reject the request made by the RP to order for liquidation of the Corporate Debtor - application allowed.
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2023 (4) TMI 1311
Seeking permission to travel for two business meetings and for meeting his daughter in the USA - Ongoing investigations under the Black Money Act and the Potential risk posed by the petitioner's travel, particularly to the USA. - HELD THAT:- Bearing in mind the overall facts and circumstances of this case and the cooperation which has been extended by the Petitioner from time to time in terms of participation in the investigation and the two ld. Division Bench orders, and keeping in mind that the Court has vide three previous orders wherein granted the permission to travel abroad, the Court grants permission to the Petitioner to travel abroad in terms of the itinerary recorded above, subject to the conditions imposed - application disposed off.
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2023 (4) TMI 1310
Taxability of centralized services fee earned by assessee - Tribunal held it not taxable as fee concerns various aspects, such as sales and marketing, loyalty programs, reservation service, technological service, operational service and training programs/human resources - HELD THAT:- Tribunal has noted, that the issue stands covered by the judgment of the coordinate bench in the case of Sheraton International Inc. [2009 (1) TMI 27 - DELHI HIGH COURT]
As in the assessee’s case for other AYs, the coordinate bench has followed the same approach i.e., accepted the ratio of the judgment in Sheraton International Inc. No substantial question of law arises for our consideration.
The appellant/revenue has preferred an appeal qua the judgment rendered by the Division Bench of this Court in Sheraton International Inc., it is made clear, that if the appellant/revenue were to succeed in the said matter, parties will abide by the final decision rendered by the Supreme Court.
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2023 (4) TMI 1309
Seeking grant of bail u/s 439 CrPC - economic offence Or not - Offence punishble under Sections 132 (1) (b), (f), (h), (j), & (l) of Central Goods and Services Tax Act, 2017 - HELD THAT:- It is an admitted position that petitioner had evaded the tax and got the benefit of input tax credit of nearing Rs.88.33 Crores. Hon’ble Apex Court in various pronouncement observed that economic offender should not be dealt as a general offender and in circumstances while granting bail to Vinay Kant Ameta directed him to deposit Rs.200 Crores.
Thus, the bail application is allowed.
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2023 (4) TMI 1308
Revision u/s 263 - proceedings initiated based on a proposal received by the assessing officer - Inadeqaute or no enquiry done by AO - HELD THAT:- We find that the assessing officer has specifically recorded in the assessment order u/s 143(3) that during the course of assessment proceedings, the assessee was asked to explain the books of accounts, bills and vouchers and the authorised representative of the assessee filed the relevant documents in detail with many explanations which were examined by the assessing officer and verified with the books of accounts and the heard copies of the ITR and audited accounts and thereafter, the assessment was completed.
From the notice issued u/s 142(1) it is seen that as many as 21 particulars/documents were called upon to be produced by the assessee of which the document/observations in item No. 20-21 are relevant for the purpose of this case, they being (i) large increase in investment in unlisted equities during the year and (ii) low income in comparison to very high investment.
It is seen that first issue on which the information was called for by the assessing officer has not been taken as a ground by the PCIT while assuming jurisdiction u/s 263. Thus it has to be seen as to whether assessee had furnished the requisite information with regard to the second issue namely low income in comparison to very high investments.
The assessee had placed before the assessing officer many submissions in which the detail explanation has been given with regard to the said issue apart from placing reliance on various decisions of the Hon’ble Supreme Court as well as the High Courts.
Apart from that, a separate reply had also been given dealing with all the twenty-one issues. Thus it cannot be said that assessing officer did not conduct any enquiry in the matter with regard to the issue on which the PCIT had exercised jurisdiction under 263 of the Act.
It may be true that a proposal had been received by the PCIT from the assessing officer. However, solely based on the proposal, action could not have been initiated u/s 263 as the statute mandates that PCIT should enquire and be satisfied that the case warrants exercise of its jurisdiction u/s 263. Such satisfaction should be manifest in the show-cause notice which is issued u/s 263 of the Act.
We find in the instant case the word used by the PCIT is “prima facie”. Thus based on prima facie view the PCIT accepted the proposal of the assessing officer and initiated action u/s 263 of the Act. The decisions of the Hon’ble Courts on the point clearly holds that the satisfaction of the PCIT is essential. Though the Tribunal has knowledge of those facts as also the order sheet maintained by the assessing officer which records that on 19.09.2017 the authorised representative of the assessee had appeared and produced the books of accounts, bills vouchers etc and they were test checked and the case was discussed with the authorised representative of the assessee. If that be so, it could not have been stated that there was any lack of enquiry on the part of the assessing officer. Tribunal also admits that a paper book containing 124 pages of documents were also placed. Thus it is a case where the assessing officer had raised specific query and the case was discussed with the authorised representative of the assessee and thereafter decision has been taken.
Thus in absence of any satisfaction recorded by the PCIT that the order of assessment was both erroneous and prejudicial to the interest of revenue, the Tribunal ought to have granted relief to the assessee and faltered the PCIT for having exercised its jurisdiction. Assessee appeal allowed.
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2023 (4) TMI 1307
Reopening of assessment u/s 147 - nature of expenses - upgradation and development of various softwares - notice issued after a period of 4 years - assessee did not provide any explanation as to why the said expenses should be considered as revenue and not capital expenditure and the assessing officer had recorded reasons - HELD THAT:- After more than 4 years, the only reason for initiating reassessment proceedings is that only 30% to 60% depreciation could be given and rest of the amount is to be taken as capital. This change of opinion cannot be made a ground for reassessment.
Once, the AO had accepted the return and treated above said expenditures as revenue as these were incurred only to facilitate the business of the assessee who is engaged in the business of advertising and marketing communications. Further, the expenditures were disclosed at the time of making original assessment which were rightly treated as revenue. Thus after a period of 4 years, only on account of change of opinion, re-assessment proceedings cannot be initiated. In Kitchen Express Overseas Ltd.'s case [2017 (12) TMI 1127 - GUJARAT HIGH COURT] it has also been held that any expenditure incurred on purchase of software, software developments and services to facilitate existing infrastructure is to be taken as revenue and not capital.
Thus writ petition is allowed and initiation of re-assessment proceedings are set aside on both the counts i.e. delay and merits. Decided in favour of assessee.
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2023 (4) TMI 1306
Money Laundering - Provisional attachment order - predicate offences - subject property is involved in any money laundering activities or not - Section 8(2) first proviso of the PMLA Act - HELD THAT:- The predicate offence in the present case are acts of criminal breach of trust and forgery by the accused persons with respect to the credit facilities provided by the Appellant/Bank between the years 2007-2018. The issue as to whether the commission of the offence between 2007-2018 overlaps or is prior to the creation of mortgage can be adjudicated by the authorities under the PMLA Act and this Court, at this juncture, is not inclined to go into that question. This Court, therefore, does not find any reason to interfere with the order of the learned Single Judge who has also not commented on this question and has left the matter to the authorities under the PMLA Act to consider the issue.
It is well settled that when a statute prescribes a particular mode or a mechanism for adjudication of disputes arising out of that statute, then writ Courts must loathe in interfering the mode prescribed in that stature.
The scheme of the PMLA Act provides for mechanism beginning with a Provisional Attachment Order (PAO) attaching the property which is then confirmed by the Adjudicating Authority under Section 8(2) of the Act. When a property stands confiscated, a trial is conducted by the Special Court and in accordance with Section 8(8) of the Act, the Special Court may direct Central Government to restore such confiscated property. Therefore, this Court is of the view that the Appellant/Bank has an alternate efficacious remedy within the scope of the Act - This Court, therefore, does not find any infirmity in the judgment of the learned Single Judge in relegating the Appellant/Bank to the Adjudicating Authority to ventilate its grievances under Section 8(2) of the PMLA Act and the same does not require interference and is accordingly upheld.
Application dismissed.
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2023 (4) TMI 1305
Validity of Reopening of assessment u/s 147 - claim under CSR (Corporate Social Responsibility) expenses made was otherwise not allowable and as such, the said claim deserves to be disallowed and to that extent, income of the petitioner has escaped assessment - reliance on audit party opinion - HELD THAT:- As a matter of records, the petitioner has made average net loss of Rs. 187.67 crores during three immediately preceding Financial Years and as such, the petitioner was not under obligation to spend any amounts toward CRS by virtue of Section 135 of the Act and as such, the expenditure incurred by the petitioner is not the one which requires disallowance under explanation 2 to Section 37 (1). The expenditure incurred is out of Commercial expenses and is fully allowable and further it is the stand of the petitioner that even it is not the case of revenue that expenditure if any for explanation 2 to Section 37 is not allowable expenditure and as such, the fundamental error appears to have been crept in.
At this stage, reliance which has been made by the learned advocate appearing for the petitioner about the decision passed by the co-ordinate Bench of this Court in the case of Adani Power Maharashtra Limited [2023 (3) TMI 987 - GUJARAT HIGH COURT] where-in also this issue has been the subject matter of consideration and in which notice for re-opening and the order rejecting the objections came to be set aside.
Re-opening on the basis of audit party objection - As submitted that one of the Director of the Company submitted an application u/s 6(3) of the Right to Information Act seeking information as to objection raised by the audit party and the reply of the same was given by assessing officer. The said information was provided in the form of order dated 10.12.2021 issued u/s 7(1) of the Right to Information Act, it appears that step of re-opening is on the basis of the objection raised by the audit party as can be seen from paragraph 3 of the said page 117 in the case of this very petitioner and as such, also when the co-ordinate Bench has dealt with the issue as to whether on the strength of audit objections, re-opening of assessment is permissible or not is clearly clinching the issue raised in the present proceedings and hence, we answer in negative against the revenue.
Re-opening of the assessment is on the basis of the change of opinion - As detailed scrutiny was undertaken and after satisfying himself, the assessing authority has passed an order of assessment wherein neither there is any addition or disallowance of any claim is made and as such, on the basis of the same records, issuance of notice under Section 148 of the Act tantamounts to be on the basis of the change of opinion which is impermissible and since the said issue is now well settled, we may not overburden the present order by incorporating the case law on the subject. On the contrary, we also found from the contents of the objection that all details are consisting to computation of income, profit and loss figures and also tax audit report which are forming part of the assessment records, still in the absence of any tangible material, the respondent authority is trying to take a different view despite the original scrutiny of assessment is done. Under the circumstance, the action sought to be initiated is impermissible and we are of the considered opinion that a case is made out by the petitioner to call for interference. Petition allowed.
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2023 (4) TMI 1304
Direction to transfer Igatpuri Unit to the nominee of the Resolution Applicant M/s Kitply Industries Ltd within 45 (forty five) days - It is specific case of the appellant that the respondent failed to honour agreement and as such number of communications were made to the respondent/corporate debtor either to make payment or the appellant will take back possession of the property in question.
HELD THAT:- Admittedly the property of Igatpuri Unit is in relation to agreement to sale which was entered in between the appellant and Corporate Debtor long back in the year 1998. In terms of the agreement after payment of certain amount within a specified time, possession of land property of Igatpuri Unit was to be handed over to the Corporate Debtor i.e. Kitply Inds Ltd. It was clarified in the agreement as to how rest of amount was to be paid; in which manner and within what time.
It is specific case of the appellant that the respondent failed to honour agreement and as such number of communications were made to the respondent/corporate debtor either to make payment or the appellant will take back possession of the property in question. The record reflects that several opportunities were given for payment of the consideration amount failing which the appellant had communicated that it will terminate the agreement and take back possession of the property in question. However, it continued for several years. Even OTS was also offered. The appellant claims that as per OTS the entire consideration amount was not paid whereas the respondent has taken a plea that though there were two OTS i.e. dated 19.02.2008 and 20.02.2008, the respondent settled the dispute by making payment of Rs. 2 crore and by issuance of NCD of Rs.31 lakhs.
Once it is noticed that title holder of the property in dispute is the appellant, in such situation even after initiation of CIRP neither IRP or RP was competent to control the said property in view of rider as incorporated in Section 18(f) Explanation (a).
Admittedly till date the CD is not title holder of the property in question and dispute comes around the execution of the sale deed. It is admitted that dispute regarding either payment of remaining consideration amount as per sale agreement or non-execution of sale deed arose much before initiation of CIRP in the present proceeding and as such neither RP nor NCLT was having any jurisdiction to deal with such property - If there was still dispute in between parties it was not permissible for the NCLT to direct the appellant for transferring the property of Igatpuri in favour of CD or its nominee. Though it is not necessary to reiterate but it is established that unless in terms of agreement to sale, sale deed is finally executed after accepting full consideration amount, title always lies with the vendor.
The dispute whether agreement to sale which was entered in between the parties in the year 1998 was breached by the appellant or the respondent breached the agreement, may not be examined in a proceeding under the IBC. Such disputes are required to be examined by the court of competent jurisdiction. In view of admitted position that title of the property in respect of Igatpuri Unit still lies with the appellant, the Learned NCLT has committed error in allowing the application filed on behalf of the Respondent in directing for transferring the land in question and as such there is no option but to set aside the impugned order.
Impugned order set aside - appeal allowed.
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2023 (4) TMI 1303
Accrual of income in India - income from business or profession related to PE of the assessee - Fixed place Permanent Establishment ("PE") for business in India, to carry on the business of sale of software, export of goods, reimbursement and Royalty for use of technology and brand - DTAA between India and Ireland - AO proposed for addition of business income related to Permanent Establishment (“PE”) @ 40% - HELD THAT:- Revenue failed to rebut the fact that impugned transaction of sale of software/hardware was undertaken outside India to group company in India and were subjected to transfer pricing scrutiny in the hands of the alleged PE and same was accepted to be at arm’s length price. Therefore, nothing further would be attributable to the alleged PE
Looking to the facts of the present case, we find merit into the contention of the assessee that the Assessing Authority was not justified in making addition in the hands of the assessee when in the case of alleged PE of the assessee, the transactions have been treated to be arm’s length price. Furthermore, the assessee has pointed out that while making addition, the AO has also included the transaction related to hardware whereas allegation of PE is related to software. In the light of the binding precedents, we are of the considered view that the authorities below erred in making the impugned additions. We therefore, direct the AO to delete the same. Ground Nos. 1 to 10 raised by the assessee are hence, allowed.
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2023 (4) TMI 1302
Grant of anticipatory bail - demand of illegal gratification - High Court observed that there is a doubt regarding the acceptance of illegal gratification, as it was deposited in the account of Vardhman in Dhara Angadia firm and there is no evidence with respect to acceptance of the amount by Respondent No. 1.
HELD THAT:- The time-tested principles are that no straitjacket formula can be applied for grant or refusal of anticipatory bail. The judicial discretion of the Court shall be guided by various relevant factors and largely it will depend upon the facts and circumstances of each case. The Court must draw a delicate balance between liberty of an individual as guaranteed Under Article 21 of the Constitution and the need for a fair and free investigation, which must be taken to its logical conclusion. Arrest has devastating and irreversible social stigma, humiliation, insult, mental pain and other fearful consequences. Regardless thereto, when the Court, on consideration of material information gathered by the Investigating Agency, is prima facie satisfied that there is something more than a mere needle of suspicion against the Accused, it cannot jeopardise the investigation, more so when the allegations are grave in nature.
The CBI has produced the case diary which contains the statement made by Smit Thakkar, who handles Dhara Angadia firm. He has clearly stated that Malav Mehta was the owner of Vardhman account and had informed him that 30 lakhs rupees would be deposited in his account on 4th October, 2022, which in turn had to be sent to someone else. The purported recording of conversation between the complainant and Respondent No. 1 wherein Respondent No. 1 thanked the complainant, after the deposit of amount in the Vardhman account, is a reasonable link to connect Respondent No. 1 with the deposit of illegal gratification in Dhara Angadia firm, thereby prima facie showing acceptance thereof.
From the material placed on record, it seems that prima facie, the allegations against Respondent No. 1 cannot be brushed aside lightly at this stage. There appears to be a well-organised syndicate comprising officers and officials of the Income Tax Department, businessmen and Hawala traders, who are in tandem. Such a nexus needs to be unearthed through an unimpaired and unobstructed investigation - It is true that cancellation of bail must be done only for cogent and overwhelming reasons. Nevertheless, setting aside an unjustified order granting bail is distinct from cancellation of bail. This Court would not, invariably intervene into the judicial discretion exercised by the High Court while granting bail to an Accused. All that to be ensured is that the High Court exercises its discretion judiciously, cautiously and strictly in conformity with the basic principles laid down by this Court from time to time in a series of decisions.
Thus, howsoever hard or harsh it may be, the High Court ought to have refrained itself from extending protection against arrest to Respondent No. 1 in exercise of its discretionary jurisdiction Under Section 438 of the Code of Criminal Procedure.
Assuming Respondent No. 1 had some valid apprehensions that the actions of ACB (State Police) were actuated with extraneous reasons, he can no longer say so once the investigation has been transferred to CBI - there are no allegation of personal vendetta, victimisation, bias or ulterior motive against the Central Agency. In any case, CBI is expected to carry out a free, fair and dispassionate investigation with faithful observance to the rights of an Accused, who is subjected to custodial interrogation.
The impugned judgment and order of the High Court dated 19th December, 2022 is set aside and the anticipatory bail application of Respondent No. 1 is dismissed. As a consequence thereto, the order dated 30th December, 2022 passed by the Special Judge, CBI Court No. 3 partly allowing CBI's application for remand is also set aside - appeal disposed off.
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2023 (4) TMI 1301
Revision u/s 263 - as per CIT activity of taking loans not examined by AO - extension of scope of limited scrutiny - queries so raised by the AO during the course of assessment proceedings which was for Limited Scrutiny only to verify the“ Deduction against income from other sources” - HELD THAT:- The assessee had filed, names, complete address, IT PAN of persons to whom said interest paid along with their confirmation letters. The said documents have also been placed on record before us in paper book and all the said details so filed before Revenue Authorities goes to show that those were examined by the AO and accordingly order of assessment accepting the returned income was passed.
Verification of extra interest PCIT raised the issue of non verification of fresh loans by the AO, but in this context we further noticed that the assessee had filed confirmation letters of each of the fresh unsecured loan creditors having complete address and PAN number and that being so, assessee had already discharged his onus to prove the genuineness and identity of the said loan creditors, so the conduct of the assessee cannot be said to be found to be faulty. Even otherwise, the case of the assessee was selected for Limited Scrutiny to verify the “Deduction against income from other sources” only. Therefore, by any stretch of imagination it was out of purview of the AO to verify the fresh loan creditors.
The ambit of the assessment for Limited Scrutiny under CASS was admittedly in relation to the verification of “ Deduction against interest income from other sources” in response to which the assessee had already furnished complete documents relating to interest expenses claimed against the interest income under section 56 of the IT Act under the head Income from other sources. Even otherwise, the AO could not have travelled beyond enquiry into the interest expenses in view of CBDT Instruction No. 7/2014, 20/2015 and 5/2016 and also the CBDT letter dated 30 Nov. 2017 and thus asking for further details was beyond the purview of assessment.
AO made enquiries on the issue and the assessee complied with the enquiry and filed all the required details. Thus, it is not a case where the AO made no enquiry or verification which should have been made. Thus the proceedings under section 263 is a step to start again a second scrutiny/investigation of facts without there being any material to hold even prima facie that the assessment order passed by AO was erroneous which was not valid in the eyes of law.
Thus in case of limited scrutiny, the AO is duty bound to restrict himself to examine the matters for which matter was selected for limited scrutiny and where the AO takes a view and forms a reasonable belief that some other matters are required to be examined, the same will in effect be traversing beyond the scope of limited scrutiny which is not permissible unless the matter is converted into complete scrutiny and which has not happened during the course of present assessment proceedings. Therefore, the issue of activity of taking loans, i.e. how the amount is utilized, what is the rate of interest paid, what is the rate of interest charged, which are held by the ld PCIT as matters not being examined by the AO, are matters which are not part of the reasons for which the case was selected for limited scrutiny, therefore, no fault lie on the part of the AO resulting in order being held as erroneous and prejudicial to the interest of revenue. As far as matters for which case was selected for limited scrutiny for the reason of “Deduction against income from other sources”, the same has been duly examined by the AO - Appeal of the assessee is allowed.
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2023 (4) TMI 1300
Bogus LTCG - exemption claimed u/s. 10(38) on sale of penny stocks - onus to prove - HELD THAT:- As pointed out the investigation did not commence from the assessee but had commenced from the companies and the persons who were involved in the trading of the shares of these companies which are all classified as penny stocks companies. Therefore, the argument of the assessee that the copy of the investigation report has not been furnished, the persons from whom statements have been recorded have not been produced for cross examination are all contention which has to necessarily fail.
If there is information and data available of unreasonable rise in the price of the shares of these penny stock companies over a short period of time of little more than one year, the genuineness of such steep rise in the prices of shares needs to be established and the onus is on the assessee to do so as mandated in section 68. Thus, the assessee cannot be permitted to contend that the assessments were based on surmises and conjectures or presumptions or assumptions. The assessee does not and cannot dispute the fact that the shares of the companies which they have dealt with were insignificant in value prior to their trading.
Until and unless the initial burden cast upon the assessee is discharged, the onus does not shift to the revenue to prove otherwise. It is incorrect to argue that the assessee have been called upon to prove the negative in fact, it is the assessee’s duty to establish that the rise of the price of shares within a short period of time was a genuine move that those penny stocks companies had credit worthiness and coupled with genuineness and identity. The assessee cannot be heard to say that their claim has to be examined only based upon the documents produced by them namely bank details, the purchase/sell documents, the details of the D-Mat Account etc. The assessee have lost sight of an important fact that when a claim is made for LTCG or STCL, the onus is on the assessee to prove that credit worthiness of the companies whose shares the assessee has dealt with, the genuineness of the price rise which is undoubtedly alarming that to within a short span of time.
The transaction of LTCG claimed exempt u/s. 10(38) by the assessee is colourable device in guise of investment in listed shares. Entire transactions were stage managed with object to plough back his unaccounted income in form of fictitious long term capital gain (LTCG) and claim bogus exemption, Assessing Officer was justified in denying exemption under section 10(38) and treating such bogus LTCG in penny stock under purview of unexplained cash under section 68 - Assessee appeal dismissed.
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2023 (4) TMI 1299
Validity of reopening of assessment - petitioner did not take any remedy to challenge the order under Section 148A(d) way-back on 26.03.2022 - HELD THAT:- As we find that the order u/s 148A(d) of the Income Tax Act was passed way-back on 26.03.2022. The petitioner did not choose to challenge this order. Finally assessment order has also been passed on 09.03.2023. This petition has been filed on 31.03.2023.
In the aforesaid circumstances, when the petitioner did not take any remedy to challenge the order u/s 148A(d) when it was passed on 26.03.2022, we are not inclined to exercise our discretion under Article 226 of the Constitution of India to interfere with the order as the petitioner has an alternative and efficacious statutory remedy. All the issues are left open for being considered in the appeal that may be filed by the petitioner.
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2023 (4) TMI 1298
Condonation of delay of 33 days in filing appeal - sufficient reason for delay or not - HELD THAT:- It is evident that no plausible reason has been assigned for delay in filing the appeal. Under provision contained in Section 421 an appeal is to be filed within 45 days, however if further after expiry of 45 days appeal is not filed, then thereafter this tribunal is not competent to entertain the appeal. However, if during extended within 45 days, a party in a position to satisfy the court regarding the reasonable ground for delay, this court may entertain such petition. Considering the statement made in the condonation petition, it is not satisfying that any plausible explanation has been given for delay in filing the appeal. Normally, in condonation of delay application, it is required on the part of the party to explain day to day delay, however, in the present application no such explanation has been given and as such there are no ground to condone the delay.
The appeal stands dismissed on the ground of limitation itself.
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2023 (4) TMI 1297
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of dues or not - Debenture Trust Agreement - Financial debt or not - HELD THAT:- In view of the facts that the 'financial debt' which is proved by the Financial Creditor and the 'default' committed by the Corporate Debtor, this Tribunal is left with no other option than to proceed with the present case and initiate the Corporate Insolvency Resolution Process in relation to the Corporate Debtor. This Application is accordingly admitted in terms of Section 7 of the code.
As a consequence of the Application being admitted in terms of Section 7 of the Code, moratorium as envisaged under provisions of Section 14(1) is declared - application allowed.
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