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Showing 121 to 140 of 2121 Records
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2019 (2) TMI 2010
Initiation of ‘Corporate Insolvency Resolution Process’ against the two ‘Corporate Guarantors’ - ‘Principal Borrower’ is not a ‘Corporate Debtor’ or ‘Corporate Person’ - Section 7 of the ‘I&B Code’ - initiation of the process against two ‘Corporate Guarantors’ simultaneously for the same set of debt and default - HELD THAT:- Appeal is admitted.
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2019 (2) TMI 2009
Deletion of Tax free and First Point Tax Paid goods turnover from the taxable turnover - receipts of hire charges recovered from contractors by appellant falls within ambit of deemed sales as contemplated u/s 2(g)(iv) of the Orissa Sales Tax Act or not - receipt of hire charges of machinery’s from inter-department of the assessee for account purpose is sale to self or not.
Whether the learned Tribunal is justified in not deleting the Tax free and First Point Tax Paid goods turnover from the taxable turnover and as such the order is illegal & arbitrary? - HELD THAT:- The question which has been poised for consideration whether deletion of tax free and first-point tax paid goods from taxable turnover, is warranted or not, on the basis of ratio of Madras High Court does not arise, as there was nothing on record to show that earlier tax was paid or materials to that effect was ever produced before any of the authority. Even if learned Tribunal’s observation on Madras High Court is taken into consideration, the learned Tribunal while considering the law has discussed the judgment of the Hon’ble Supreme Court and has come to the conclusion that no material was produced on record to give any benefit in favour of the assessee.
Whether the learned Tribunal is justified in holding that the receipts of hire charges recovered from contractors by appellant falls within ambit of deemed sales as contemplated u/s 2(g)(iv) of the Orissa Sales Tax Act? - Whether the receipt of hire charges of machinery’s from inter-department of the assessee for account purpose is sale to self as contemplated u/s 2(g)(iv) of the Orissa Sales Tax Act? - HELD THAT:- The questions have rightly been decided by learned Tribunal, wherein it is observed that the contract was not completely placed on record - We need not reproduce the complete reasoning of learned Tribunal, which have been reproduced in the preceding paragraphs. The questions those have been raised by the petitioner are basically emanating from finding of fact and therefore, no question of law arises for our consideration.
In that view of the matter, all reference are required to be answered in favour of the Department against the assessee - tax revision dismissed.
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2019 (2) TMI 2008
Disallowance u/s 40(a)(ia) - Non deduction of TDS on head ‘LFR rent’ - AO noted that assessee has not filed any evidence of TDS deducted on such rent - HELD THAT:- This issue had come up for consideration in the earlier years also, wherein the Tribunal had deleted the said disallowance held that second proviso to section 40(a)(ia) is declaratory and curative in nature and has retrospective effect from 1.4.2005. On a conjoint reading of second proviso to section 40(a)(ia) and first proviso to section 201(1), it becomes graphically clear that if the payee has furnished his return of income under section 139 and has taken into account such sum paid by the payer for computing income in such return of income and has paid income tax thereon, then the payer cannot be treated as assessee in default. A fortiori, no disallowance under section 40(a)(ia) can be made in such circumstances.
Adverting to the facts of the instant case, it is seen that the assessee paid a sum to Bharat Petroleum Corporation Limited. There can be question of suspecting that the BPCL did not include such rental income from the assessee in its return of income. It is, therefore, held that the case of the assessee is covered by second proviso to section 40(a)(ia) and hence the disallowance made cannot be sustained. - Decided in favour of assessee.
Disallowance on account of cash handling expenses - HELD THAT:- Reasoning given by the Assessing Officer that handling of cash is responsible and risky work for which he should have engaged professionals, then he was required to deduct TDS. Such a reasoning for making the disallowance cannot be held to be valid ground, because in the nature of business carried out by the assessee which is selling of petrol and petroleum product from its petrol pump, huge cash is generated throughout the working hours and if assessee is paying cash handling charges to two persons which is in the form of salary, then disallowance cannot be made especially when vouchers for such payment have been produced. Accordingly, respectfully following the order of the Tribunal for the earlier years, we delete the same.
Disallowance on account of remuneration paid to the partners - HELD THAT:- We remit the issue back to the file of the Assessing Officer to see whether similar remuneration paid to the partners have been allowed in the earlier years or in subsequent year or not; and secondly, he should examine the partners’ salary and remuneration are paid in accordance with provision contained in Section 40(b) or not. AO will give opportunity of hearing to the assessee to substantiate is case.
Disallowance of claim of bad debt - AO has disallowed the same on the ground that no documentary evidences have been filed for claim of such and bad debt remained not genuine - HELD THAT:- We find that, nowhere Assessing Officer has disputed the fact that assessee has not written off the bad debts as irrecoverable in the books of account, albeit the case of the Assessing Officer is that Assessee has not produced any documentary evidences that debt has become bad. As stated by the ld. counsel now there is no requirement under the law for the assessee to establish that debt has become irrecoverable and it is enough that the same is written off as irrecoverable in the books of account of the assessee. This has been also clarified by the CBDT Circular dated 30.05.2016 being Circular No.12/2016 [F.No.279/Misc/140/2015-ITJ], wherein the CBDT has clarified that now in the wake of judgment in the case of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT] no appeal should be filed by the Revenue before any Court or Tribunal. Thus, this clarification by CBDT also supports the case of the assessee. Hence, this ground is allowed.
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2019 (2) TMI 2007
Permission for withdrawal of application - grievance of the Punjab National Bank is that Mr. Krishna Kumar Mintri, the shareholder, while settled the claim with the sole financial creditor and other claimants agreed to make payment of fees and resolution cost of the Resolution Professional, as verified and approved by the Committee of Creditors (Punjab National Bank) - HELD THAT:- The issue relating to application of Section 12A and Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 framed by the IBBI fell for consideration before the Hon'ble Supreme Court in BRILLIANT ALLOYS PRIVATE LIMITED VERSUS MR. S. RAJAGOPAL & ORS. [2019 (3) TMI 1016 - SC ORDER] it is clear that Regulation 30A cannot override the substantive provision of Section 12A. The Regulation has to be read alongwith the provision in Section 12A, which contains no such stipulation. No discrimination can be made for withdrawal of an application under Section 7 or Section 9 on the ground that the application was filed before a cutoff date or filed after a cutoff date. Such cutoff date has no nexus with the objective which is to be achieved. The Adjudicating Authority having failed to notice the aforesaid provisions issued long order discussing regulations and provisions of the Code. The Adjudicating Authority should have allowed application of withdrawal filed by the Applicant - Punjab National Bank, the Committee of Creditors having approved the Settlement with 100% voting share.
So far as Resolution Applicant is concerned, they do not have any right to plead merely because they have filed resolution plan, till its approval or rejection by the Adjudicating Authority - the application filed by Punjab National Bank for withdrawal of the application under Section 7 is allowed - petition dismissed.
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2019 (2) TMI 2006
Reopening of assessment u/s 147 - Deduction u/s 10A - failure on part of the assessee in claiming wrongful claim of set off of business loss of ineligible business unit from profits of eligible business units before claiming deduction u/s 10A - HELD THAT:- CIT(A) has held that reopening is not justified. In this view of the matter when the CIT(A) has held that reopening is not justified it is amply evident that if revenue was aggrieved, it should have raised a ground in this regard. A reading of the grounds of appeal mentioned above shows that no ground challenging the ld. CIT(A)’s order on the issue of lack of jurisdiction has been raised before the ITAT.
The adjudication on the merits of the issue is only of academic interest. Hence, holding that ld. CIT(A) has held the assessment to be without jurisdiction and the revenue has not challenged the same, in our considered opinion, the adjudication on merits is infructuous. Accordingly, this appeal by the revenue stands dismissed being infructuous.
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2019 (2) TMI 2005
Seeking direction to COC members to reconsider the Resolution plan - seeking extension of CIRP period and not to consider the request for liquidation filed by Resolution Professional - HELD THAT:- This is an Application filed by Promoter / Director of the Suspended Board of Corporate Debtor M/s Servomax India Private Limited under Section 60 (5) of Insolvency & Bankruptcy Code, 2016 praying for extension of CIRP period for further 122 days stating that the said period was not utilized for CIRP on account of replacement of Resolution Professionals.
As many as 09 CoC meetings were held and meetings were being held regularly since the day of constitution of CoC. No Resolution Plan was approved by the CoC. In fact, on the Application filed by Resolution Professional on the direction of CoC, CIRP was extended by 90 days beyond 180 days. CIRP continued for about 270 days, the maximum period allowed. The CoC has not approved any Resolution Plan. CoC decided before conclusion of CIRP period for liquidation of Corporate Debtor which is also made clear by the Resolution Professional that he would file a separate Application for passing order of liquidation under Section 33 of IBC. The Applicant being Director has no locus standi to seek exclusion of time. Decision is to be taken by CoC with majority if any. The Applicant is only a Director (Suspended Board) - the present Application does not survive. Even otherwise the allegations made by Applicant are found not to be true and correct as Resolution Professional filed sufficient proof that during entire period of CIRP, the proceedings are conducted in accordance with the provisions of IBC, 2016 and Regulations thereunder.
The present Application is filed with a view to prolong the CIRP and it is nothing but misuse of the process, Therefore, the present Application deserves to be dismissed.
Seeking directions to pass Liquidation Order against Corporate Debtor - seeking direction to appoint Resolution Professional as Liquidator - Section 33 (1) (a) and 34 (1) of Insolvency & Bankruptcy Code, 2016 - HELD THAT:- Since no resolution plan is received by the Adjudicating Authority under Section 30 (6) of IBC, 2016, therefore. Tribunal has to pass an order of Liquidation against Corporate Debtor - The Application is allowed and Corporate Debtor M/s Servomax India Private Limited is ordered to be liquidated.
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2019 (2) TMI 2004
Disallowance u/s. 36(i)(iii) - money advanced to the sister concerns - Assessee had diverted the interest bearing borrowing towards interest free loan and advances - Whether assessee had sufficient interest free funds to cover advances given to its associate concerns and no interest bearing fund was advanced to its associate concerns.? - counsel has submitted that the assessee was having total interest free funds and pleaded that no disallowance u/s.36(i)(iii) is called for - HELD THAT:- As counsel has submitted that such fact was categorically pointed out before the assessing officer and the same has not been denied by either of the lower authorities. During the course of appellate proceedings before us these contentions of the ld. counsel was not controverted by the Revenue Therefore, we are of the view that it would be appropriate to restore this issue to the file of the assessing officer to decide de-novo on the points (i) and (ii) as above after affording adequate opportunity to the assessee. Accordingly this ground of the appeal is restored to the file of the assessing officer for deciding afresh as directed above. Therefore this ground of appeal of the assessee is allowed for statistical purpose.
Addition made on account of exchange rate of difference - HELD THAT:- We noticed that the assessee had not filed the impugned ground of appeal before the ld. CIT(A). We have also gone through the form No. 35 filed before the ld. CIT(A) and noticed that neither such ground of appeal reflected in the form No. 35 nor such ground of appeal was adjudicated by the Ld.CIT(A). In the light of the above fact and circumstances this ground of appeal of the assessee stands dismissed.
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2019 (2) TMI 2003
Unexplained Cash deposit in Catholic Syrian Bank - HELD THAT:- The assessee claims that he advanced a sum for purchase and installation of pollution control plant during the assessment year 2008-09. The fact remains that the cheque said to be issued by the assessee was a cash cheque and money was withdrawn on the same day. Therefore, it is not known how Shri S.K. Pandian was able to return the amount in cash as claimed by the assessee. In the absence of any details, the confirmation letter which is now available at page 9, is only an afterthought. When the assessee claimed before the AO that due to death of Shri S.K. Pandian, he could not get any confirmation letter from Shri S.K. Pandian, it is not known how the assessee was able to get the confirmation letter.The entries made in the ledger and other cash book are all afterthought. It is not supporting the case of the assessee. The assessee has no satisfactory explanation for deposit in the bank account. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Unexplained Cash deposit - HELD THAT:- The fact remains that what was paid by the assessee is through cash cheque and money was received across the counter in Catholic Syrian Bank. There is no evidence of making payment to Erode party as claimed by Shri Nagarajan. There is no evidence of return of money by Erode party to Shri Nagarajan. Moreover, whether Shri Nagarajan was able to repay the money to the assessee as claimed? These facts were not established by the assessee. For cash credit, the assessee has to establish the identity of party, creditworthiness of party and genuineness of transaction. In this case, even though the assessee claims that money was paid to Shri Nagarajan, the genuineness of transaction of repayment and creditworthiness of Shri Nagarajan to repay the amount was not established. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Cash deposit - HELD THAT:- It is not in dispute that the assessee claimed before the Assessing Officer that he received a sum from one Shri D. Palanisamy. However, the assessee failed to establish the identity of Shri Palanisamy, creditworthiness of Shri Palanisamy and the genuineness of transaction. In the absence of any details and failure of the assessee to establish the identity of party which is required to be established in respect of cash credit, the CIT(Appeals) has rightly confirmed the addition. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Denial of exemption under Section 54F - HELD THAT:- The sale of property to the extent of ₹ 59,27,500/- is not in dispute. The assessee claimed exemption in respect of the property standing in the name of the assessee’s wife. Now AO found that the assessee’s wife is an independent assessee. She herself claimed exemption under Section 54F in respect of the very same property for investing the capital gain. Therefore, it is not known how the assessee was able to claim exemption under Section 54F for the second time. The matter would stand differently in case the assessee’s wife had not claimed any exemption under Section 54F of the Act for investing her own capital gain. Since the assessee’s wife already claimed exemption under Section 54F of the Act for investing her own capital gain, this Tribunal is of the considered opinion that the Assessing Officer has rightly confirmed the disallowance. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Appeal filed by the assessee is dismissed.
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2019 (2) TMI 2002
Valuation - inclusion of reimbursable expenses paid by the service recipient to appellant in the form of wages to labourers supplied by the appellants in the assessable value - July, 2012 to March, 2014 - HELD THAT:- As per facts on record, appellant provided ‘Manpower Recruitment or Supply Agency Services’ and have paid service tax on the component excluding the wages paid to the labourers. It was the opinion of Revenue that wages paid to the labourers should have been included in the assessable value. Therefore, proceedings were initiated and culminated into passing of the impugned Order-in-Appeal wherein the learned Commissioner (Appeals) has upheld the Order-in-Original wherein the Original Authority has relied on the provisions of Rule 5 of the Service Tax Valuation Rules, 2006 to arrive at the conclusion that wages reimbursed by service recipient to the appellant were liable to be included in the assessable value.
For the period involved in the present appeal is prior to 14 May, 2015 therefore by relying on the ruling of the Hon’ble Supreme Court of India in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT], it is held that since prior to 14 May, 2015 reimbursable expenses were not includible in the assessable value, impugned order is not sustainable.
Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 2000
Interpretation of statute - overriding effect of IBC over SARFAESI Act - When Section 2(e) of the IBC says that the provisions of the IBC are applicable to the personal guarantors to corporate debtor, whether the secured creditor (respondent-Bank) can proceed with the properties of the guarantors (petitioners) under the SARFAESI Act, when the order of liquidation is passed against the borrower-Company by the NCLT as per the provisions of the IBC? - HELD THAT:- In the instant case, the borrower-Company filed a company petition under Section 10 of the IBC before the NCLT, Chennai, vide C.P.No. 64(IB)/CB/2018 for initiation of Corporate Insolvency Resolution Process (CIRP). The NCLT, by order dated 25.01.2018, initiated the CIRP and subsequently, after the period of moratorium of 180 days, ordered liquidation on 06.08.2018. Pursuant to the order of liquidation, one Ms.C.S.Satyadevi Alamuri had been appointed as Liquidator, with a direction that the Company Liquidator shall exercise her powers and duties enumerated under Sections 35 to 50 and 52 to 54 of the IBC read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
Since the liability of the guarantor and principal debtor is co-extensive, it is absolutely not necessary for the Bank to first proceed against the principal debtor and then against the guarantor, and when that being the position, the submission of the learned counsel for the petitioners that the secured creditor has to wait for the completion of the entire sale transaction by the liquidator on the properties of the corporate debtor surrendered by the secured creditor for realising the dues, cannot be accepted - Section 14 refers only to debts due by corporate debtors, who are limited liability companies, and it is clear that in the vast majority of cases, personal guarantees are given by Directors who are in management of the companies. The object of the Code is not to allow such guarantors to escape from an independent and co-extensive liability to pay off the entire outstanding debt, which is why Section 14 is not applied to them. However, insofar as firms and individuals are concerned, guarantees are given in respect of individual debts by persons who have unlimited liability to pay them. And such guarantors may be complete strangers to the debtor--often it could be a personal friend. It is for this reason that the moratorium mentioned in Section 101 would cover such persons, as such moratorium is in relation to the debt and not the debtor.
In the instant case, the secured creditor had surrendered only the properties of the corporate debtor and not the personal properties of the guarantors and hence, the properties of the guarantors stand outside the scope of liquidation. Therefore, there is no law prohibiting the secured creditor to take legal action to recover the amount from the guarantors, without taking action on the borrower. Hence, there is no impediment in the action taken by the secured creditor under the SARFAESI Act as against the personal properties of the guarantors, since the liability of the guarantor is co-extensive. It cannot be said that the principles laid down in the above judgment of the Supreme Court will be applicable only during the moratorium period and not after the order of liquidation. Therefore, we are of the opinion that the respondent-Bank is entitled to initiate the proceedings under the SARFAESI Act as against the personal properties of the guarantors, even when the borrower-Company is under the order of liquidation.
When the properties of the borrower alone are surrendered to liquidation, there cannot be SARFAESI proceedings against the properties of the guarantors, cannot be countenanced. Thus, at the risk of repetition, we state that the respondent-Bank is entitled to proceed under the SARFAESI Act as against the guarantors' properties, even when the borrower- Company is in liquidation process under the IBC - the liability of a guarantor arises as soon as the principal debtor defaults in paying back the loan. It is to be noted that a contract of guarantee focusses upon the breaking of a promise, whereas the IBC focusses upon the existence of a default. Contrary to the proceedings under the IBC which can only be conducted in NCLT, a breach of guarantee contract can be brought into DRT, that too when 'public money' is involved. The rights available to a creditor to proceed against the personal guarantor of a corporate debtor are many-fold, i.e. he can either go to DRT solely for the purpose of debt recovery, or he can file insolvency proceedings against the personal debtor.
The contention of the petitioners that the secured creditor of the corporate debtor has to wait to initiate proceedings under the SARFAESI Act against the personal guarantors till the liquidation process is over, is unsustainable and not supported by any of the provisions of the IBC - Petition dismissed.
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2019 (2) TMI 1999
Levy of GST - Reverse charge mechanism - payment to PWD, Uttarakhand for construction of road - N/N. 13/2017 dated 28.06.2017 - time of supply when advance payment is released to PWD, Uttarakhand - amount deposited with Central Fund i.e Uttaranchal CAMPA and reimbursed by MEA considering as part cost of the road - HELD THAT:- NHPC as the implementing agency delegated the responsibility of completing the project to PWD (construction agency) and a Memorandum of Understanding was made between these two agencies. To implement the project, works contract was allotted by PWD through an open tender to their contractor M/s RG Buildwell Engineering Pvt. Ltd. In view of these facts, it is clear that no GST is payable by NHPC on reverse charge or otherwise on the payments for this project that is/will be made by them to PWD as the issue is squarely covered by the entry serial- 9c of the notification no. 32/2017-CT(R) dated 13.10.2017, as rightly concluded by the Ld. AAR. This issue is not contested by the appellant also. Thus from MEA to NHPC up to the stage of PWD it is an exempt supply between one government entity to other govt entity.
In the present case, M/s NHPC had raised a specific query as to whether they need to pay GST on reverse charge to PWD and to that extent, the ruling was that they are not required to do so. Whether the taxability on provision of works contract will be applicable on the works contract allotted by PWD is not an issue raised in the advance ruling application, Hence, we refrain from going into specifics of the same, thus, without going into the merits, since there was no taxability till the stage of PWD on account of entry 9c of notification 12/2017 as amended time to time, so discussions and findings of the Learned AAR on this issue become irrelevant and hence infructuous and need to be set aside.
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2019 (2) TMI 1998
Addition u/s.68 towards unexplained cash credit - case of the assessee was selected for scrutiny under CASS and statutory notices were duly served upon the assessee - HELD THAT:- The undisputed facts are that the assessee filed copies of confirmations, ledger accounts, bank statements, ITRs, PANs and audited balance sheets and profit and loss accounts in respect of these three parties who lent money to the assessee. The authorities below have only relied on statement of Shri Pravin Kumar Jain that said he and related entities were engaged in providing accommodation entries of which the assessee was one of the beneficiaries without having brought anything to disbelieve and disprove various documents filed by the assessee.
The assessee has filed necessary proofs and documents supporting the borrowings of money and repayment thereof. Under these circumstance, we are not in agreement with the conclusion given by learned CIT(A). Accordingly, by respectfully following the decision of Shreedham Builders [2018 (6) TMI 1282 - ITAT MUMBAI ] we allow the appeal of the assessee.
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2019 (2) TMI 1997
Maintainability of petition - alternate remedy by way of an appeal under Section 17 of the SARFAESI Act - HELD THAT:- The petitioner has not disputed the claim made by the 1st respondent. Infact, they specifically admitted the claim and only sought three months time to settle the outstanding. But inspite of seeking for three months time to settle the outstanding dues as early as on 03.10.2017, it is pertinent to note that even till date, the petitioner has not settled the loan account with the 1st respondent. By their rejoinder dated 19.10.2017, the 1st respondent informed the petitioner that no further time would be granted and that they have taken symbolic possession of the secured asset under the provisions of Section 13(4) of the SARFAESI Act on 11.10.2017.
With regard to the maintainability of the Writ Petition is concerned, it is pertinent to note that under Section 17 of the SARFAESI Act, if the petitioner had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then he could have availed the remedy by filing an application under Section 17(1). The expression “any person” used in Section 17(1) is of wide import. It takes within its fold, not only the borrower, but also the guarantor or any other person, who may be affected by the action taken under Section 13(4) or Section 14. Both, the Debts Recovery Tribunal and the Debts Recovery Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within the fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.
In the case on hand, the petitioner has not approached the Debts Recovery Tribunal, instead, he has directly filed the above Writ Petition challenging the action taken under Section 14 of the Act - In the instant case, since the petitioner is the borrower, they have got remedy by way of an appeal under Section 17 of the SARFAESI Act as against the order passed by the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act. In these circumstances, the present Writ Petition cannot be entertained.
Petition dismissed.
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2019 (2) TMI 1996
Disallowance u/s 14A r/w Rule 8D - assessee had claimed that since shares are held as stock-in-trade as well Free Reserves were utilised for investing in these securities and no interest was payable with respect to investments made in these securities, no disallowance of expenditure incurred in relation to earning of an exempt income is warranted u/s 14A - HELD THAT:- We are afraid that this contention of the assessee cannot be accepted in view of decision of Hon’ble Supreme Court in the case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] wherein it has been held by Hon’ble Supreme Court that the dominant purpose/intention of parties of investing in securities from which exempt income is received, is irrelevant for the purpose of computing disallowance of expenditure incurred in relation to earning of an exempt income as is mandated u/s 14A and Section 14A of the 1961 Act will be applicable wherein expenditure is incurred in relation to earning of an exempt income and the same shall not be allowed while computing income even when investments are made in shares and securities as strategic investments or stock-in-trade.
Assessee has its own interest free funds available with it which are in excess of investments made in shares/securities from which dividend income was received/receivable - We agree with the contentions of the assessee that presumption will apply that assessee invested its own interest free funds for making investments in shares and securities from which exempt income was received and no disallowance of interest expenditure u/s. 14A r.w.r. 8D2(ii) of the 1962 Rules can be made. We have also observed that the assessee has received dividend of ₹ 7,20,212/- which was claimed as an exempt income and admittedly these are mixed use funds which were utilised by the assessee for making investments in shares and securities which yielded exempt income and the Revenue has not brought on record any adverse/incriminating material to rebut the aforesaid presumption or the assessee had borrowed interest bearing funds specifically to make investments in the shares and securities and hence relying on the decision of Hon’ble Bombay High Court in the case of Reliance Utilities and Power Limited [2009 (1) TMI 4 - BOMBAY HIGH COURT] and HDFC Bank Limited [2014 (8) TMI 119 - BOMBAY HIGH COURT] disallowance as was made by the AO u/s 14A of the 1961 Act r.w.r. 8D(2)(ii) of the 1962 Rules stood deleted.
AO erred in making disallowance by invoking provisions of Section 14A of the 1961 Act read with Rule 8D(2)(iii) of the 1962 Rules. The Revenue fails on this issue
Disallowance of indirect administrative expenses to the tune of 0.5% of the average investments held by the assessee -The assessee has not voluntarily made any disallowance of expenditure incurred in relation to earning of an exempt income. The assessee has earned an exempt income by way of dividend income which was claimed as an exempt income in the return of income filed with Revenue. It is admitted by the assessee that AO has recorded satisfaction while applying Rule 8D of the 1962 Rules read with Section 14A of the 1961 Act. Under these circumstances, disallowance of administrative expenses computed @ 0.5% of the average investments amounting to ₹ 2,28,396/- by invoking Section 14A of the 1961 Act read with Rule 8D(2)(iii) of the 1962 Rules cannot be faulted with, which we sustain/confirm by upholding the appellate order passed by learned CIT(A). The assessee fails on this issue. We order accordingly.
Grant of interest free loan and advances - AO was not satisfied with the contentions of the assessee that these interest free loans and advances granted by the assessee were for the purpose of business purposes and the AO was of the view that interest paid by the assessee is to be disallowed to the tune of 15% of the said amount granted by the assessee as interest free loans and advances - HELD THAT:- CIT(A) after relying on few Hon’ble Jurisdictional High Courts judgment correctly held that since interest free funds available with assessee are higher than the interest free loans and advances made by the assessee, presumption will apply that the assessee advanced interest free funds available with it for granting interest free loans and advances - See RELIANCE UTILITIES & POWER LTD. [2009 (1) TMI 4 - BOMBAY HIGH COURT].
Addition towards professional fees paid for arranging loans borrowed by the assessee - HELD THAT:- no evidences is produced to substantiate and justify genuineness of these expenses nor it is substantiated as to why these expenses be allowed in the current year while the loans were purportedly sanctioned in earlier years. The TDS certificates were also not produced before the authorities below and these TDS certificates are produced for the first time before us which have not stood the test of verification by lower authorities. In any case in our considered view merely production of TDS certificates is not sufficient justification to prove genuineness of the expense or to establish that the expenses were incurred wholly and exclusively for the purposes of the business of the assessee. No agreement entered into by the assessee with these two companies are brought on record neither any evidences has been brought on record to substantiate that the services were in fact rendered by these two companies to the assessee in connection with availing of loans by assessee from IIFL and ILFS - we are afraid that the assessee’s contentions cannot be accepted. The assessee fails on this ground.
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2019 (2) TMI 1995
Maintainability of appeal - mandatory requirement of pre-deposit has not been complied with - HELD THAT:- The Post Office report indicates that the communication dated 08 January, 2019 sent by Speed Post on 10 January, 2019 was actually served on the appellant on 18 January, 2019. The Office had also sent a communication dated 30 January, 2019 to the appellant by speed post informing the appellant that the hearing has been fixed for 23 January, 2019. This letter has also been served upon the appellant on 07 February, 2019. Today, neither the Appellant nor his counsel has appeared.
It therefore, transpires that the appellant is not interested in pursuing the appeal as even the mandatory requirement of pre-deposit has not been complied with - appeal dismissed.
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2019 (2) TMI 1994
Listing before another bench - urgency of the matter - HELD THAT:- Since the learned counsel for the petitioner submits that there is some urgency in the matter, therefore, the case be listed today itself, let it be so done subject to orders of Hon’ble the Chief Justice.
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2019 (2) TMI 1993
TP Adjustment - allocation of certain common expenditure - Expenditure incurred as common for two different segments - applicability of head count principle - HELD THAT:- This Court notices that the principle of applying the headcount method has not been universally accepted and was in fact rejected in M/S Continental Carriers vs. Commissioner of Income Tax, New Delhi [2016 (4) TMI 1054 - DELHI HIGH COURT]. At the same time, the Court did say so on the basis that the assessee had not followed the consistent method; and that the issue of allocation of such expenditure was in the context of deduction claimed under Section 80(4).
This Court is of the opinion that the two possible choices, i.e. turnover method as well as the headcount method in the present case was not justified. Concededly, the expenditure incurred by the assessee was common for two different segments. The tax authorities broadly agreed that expenditure could be allocated on the basis of proportionate turnover of the concerned segment. Having done so, the alternative was open to accept one or the other principle. Therefore, the choice of the assessee in relying upon the headcount principle per se could not have been rejected. The question of law, therefore, is answered against the Revenue and in favour of the assessee.
Comparability selection - ITAT has remitted the matter for consideration of one of the comparables i.e. for M/S Indus Technical and Financial Consultants Ltd - The reasoning of the ITAT was that the details on the website, could not be relied upon. It was argued and perhaps quite correctly that this comparable was included by the TPO relying upon the material available at that time from the internet. If such were the decision, the assessee could possibly also have relied upon material similar to such material. In any event, this Court does not propose to pass any final decision on the merits. Pursuant to the remand, it is open to the authorities to take into consideration all the relevant material including credible material available with respect to the comparables in question. The question of law number two is answered accordingly.
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2019 (2) TMI 1992
Seeking order of liquidation in respect of the corporate debtor - appointment of Resolution Professional as the Liquidator - Sections 33(1)(b) (i), (ii), (iii) and 33 (2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In this case the Resolution Professional has furnished his consent as at Annexure RP-2 giving all the necessary particulars and has shown his willingness to be appointed as Liquidator.
Mr. Vinod Kumar Mahajan, Resolution Professional is appointed as the Liquidator for the purposes of liquidation of the corporate debtor in terms of Section 33 (2) of the Code - the corporate debtor M/s Mahabir Techno Limited is allowed to be liquidated - Application allowed.
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2019 (2) TMI 1991
Rejection of the plaint - Rejection on the ground that the plaintiff not having any cause of action and claim in the plaint on the basis of averments made in the plaint being barred by time and plaintiff being not entitled to maintain the suit as a derivative action on behalf of defendant no.5 Umang Realtech Pvt. Ltd. - Order VII Rule 11(a) and (d) CPC - HELD THAT:- Order VII Rule 11 of the CPC application has to be adjudged on the basis of the averments in the plaint and the documents filed therewith and the plaintiff, in the reply cannot improve its case and there is no need for a reply to such an application - The counsel for the plaintiff then seeks adjournment to argue the application.
List on 15th May, 2019.
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2019 (2) TMI 1990
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- There is a debt which was payable and in terms of the settlement it was not paid and, therefore, the application under Section 7 was maintainable.
Learned Counsel appearing on behalf of the group of allottees submits that in their cases also the Real Estate Owner (‘Corporate Debtor) has failed to provide the flats and/or refund the amount. They have jointly applied as ‘Resolution Applicants’ and their ‘Resolution Plan’ is pending consideration. - Appeal dismissed.
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