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Showing 141 to 160 of 1464 Records
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2021 (10) TMI 1325
Maintainability of miscellaneous application - seeking modification of the judgement - seeking modification of the judgement to the extent that the Applicant may demolish a part of tower T-17 - seeking an order of status quo in respect of Towers 16 & 17 in Emerald Court, Plot No. 4, Sector 93A, NOIDA till final orders are passed in the present application - HELD THAT:- The attempt in the present miscellaneous application is clearly to seek a substantive modification of the judgment of this Court. Such an attempt is not permissible in a miscellaneous application. While Mr Mukul Rohatgi, learned senior counsel has relied upon the provisions of Order LV Rule 6 of the Supreme Court Rules 2013, what is contemplated therein is a saving of the inherent powers of the Court to make such orders as may be necessary for the ends of justice or to prevent an abuse of the process of the Court. Order LV Rule 6 cannot be inverted to bypass the provisions for review in Order XLVII in the Supreme Court Rules 2013. The Miscellaneous application is an abuse of the process.
The hallmark of a judicial pronouncement is its stability and finality. Judicial verdicts are not like sand dunes which are subject to the vagaries of wind and weather - A disturbing trend has emerged in this court of repeated applications, styled as Miscellaneous Applications, being filed after a final judgment has been pronounced. Such a practice has no legal foundation and must be firmly discouraged. It reduces litigation to a gambit. Miscellaneous Applications are becoming a preferred course to those with resources to pursue strategies to avoid compliance with judicial decisions. A judicial pronouncement cannot be subject to modification once the judgment has been pronounced, by filing a miscellaneous application. Filing of a miscellaneous application seeking modification/clarification of a judgment is not envisaged in law. Further, it is a settled legal principle that one cannot do indirectly what one cannot do directly.
Application dismissed.
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2021 (10) TMI 1324
Rectification application u/s 154 - seeking credit of taxes deducted at source and issue of the consequential refund (along with applicable interest u/s 244A) due to the Petitioner for assessment year 2016-17 - Petitioner is aggrieved by the inordinate delay on the part of the Respondent No. 1 in disposing of the rectification application dated 15th April, 2021 (which includes continuing grievances from earlier applications dated 10th April, 2018 and 29th January, 2020) filed under Section 154 - HELD THAT:- Mr. Sanjay Kumar, Advocate accepts notice on behalf of respondents. He states that the petitioner’s earlier rectification application dated 10th April, 2018 has already been disposed of vide order dated 23rd March, 2020. He also states that the order dated 23rd March, 2020 is an appealable order.
A perusal of the order dated 23rd March, 2020 reveals that it neither gives any reason nor does it deals with the issue of TDS raised by the petitioner.
Consequently, this Court directs the Respondent No. 1 to dispose of the petitioner’s rectification application dated 15th April, 2021 for the assessment year 2016-17 within six weeks in accordance with law. In the event the order is not complied with, the petitioner is given liberty to file an appropriate application before this Court.
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2021 (10) TMI 1323
Bogus purchases - ad-hoc disallowance to be sustained with respect to bogus purchases - AO has observed 100% of the purchase value to be added to the income of Assessee, CIT(A) has said it should be 15% and ITAT has said it should be 10% - HELD THAT:- First of all, this would be an issue which requires evidence to be led to determine what would be the actual profit margin in the business that Assessee was carrying on and the matter of calculations by the concerned authority. According to the Tribunal, in all such similar cases, it is ranged between 5% to 12.5% as reasonable estimation of profit element embedded in the bogus purchase when material consumption factor do not show abnormal deviation.
Whether the purchases were bogus or whether the parties from whom such purchases were allegedly made were bogus was essentially a question of fact. When the Tribunal has concluded that the assessee did make the purchase, as a natural corollary not the entire amount covered by such purchase but the profit element embedded therein would be subject to tax. No substantial question of law.
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2021 (10) TMI 1322
Transfer pricing adjustment - assessee had opted for MAP proceedings pursuant to Article 27 of Indo-UK DTAA with respect to transfer pricing adjustment from revenue earned by the assessee from its AEs located in UK - HELD THAT:- Following the above order of the Tribunal in the case of J.P.Morgan Services Pvt. Ltd. [2015 (12) TMI 296 - ITAT MUMBAI] we hold the margin adopted for UK transaction, which constitutes almost 83% of the total revenue shall be adopted in other jurisdictional transactions as well. We noticed that the assessee had shown operating / net margin of 15.21% for ITE segments and 15.38% in SWD segments. Therefore, in the facts of the given case, we hold that no transfer pricing adjustment is required.
Disallowance of reimbursement received - assessee had received certain amounts as reimbursement from its AEs towards expat salaries - A.O. decided the issue against the assessee by holding that the assessee has not placed any material on record to show its reimbursement of expenditure towards expat salary - HELD THAT:- AO mentioned that as per provisions of section 144C(13), no further opportunity can be allowed to the assessee. The assessee has very elaborately detailed the nature of reimbursement expenses - The assessee has also furnished the details such as the reimbursement ledger along with sample invoices - The explanation of nature of reimbursements, ledger copies of reimbursement of expenses, sample invoices are also part of assessment records. Therefore, the Assessing Officer’s statement that the details are not available on record, is not correct. Therefore, we restore the issue to the files of the A.O. The A.O. is directed to examine the details which are placed on record such as the reimbursement ledger, sample invoices etc. The A.O. shall also consider the submissions made before the Assessing Officer with regard to reimbursement / recovery of expenses.
Disallowance of vehicle rental expenses - A.O. had disallowed vehicle lease rentals on the ground that payments were made towards purchase of vehicles - HELD THAT:- As decided in own case [2017 (1) TMI 1673 - ITAT BANGALORE] we allow the claim of the assessee regarding lease rentals as an allowable revenue expenditure.
Deduction u/s 10A - Liabilities no longer required written back - HELD THAT:- If the provisions for liabilities made in the last financial year is relatable to the business of the assessee and the same is written back during the year 2008-2009, it will increase the business income of the assessee. It was further directed by the DRP that such increase in income would be entitled for deduction u/s 10A I.T.Act. The A.O., however, rejected the claim of the assessee by holding that the assessee has not placed any evidence on record. It was stated by the A.O. that as per the provisions of section 144C(13) of the I.T.Act, no further opportunity can be allowed to the assessee. Therefore, it is not correct on the part of the A.O. to state that no details are produced. Therefore, we direct the A.O. to examine this issue afresh and also follow the dictum laid down by the judgments of the Hon’ble jurisdictional High Court referred supra. It is ordered accordingly. Hence, ground No.3 is allowed for statistical purposes.
Short grant of TDS - HELD THAT:- DRP in its order had directed the Assessing Officer to verify and give credit for the entire amount of TDS after due verification. On perusal of the final assessment order, it is seen that the A.O. has not examined this issue. Therefore, we restore the issue to the files of the A.O. The A.O. is directed to examine and give due credit of TDS.
Directions to exclude certain expenditure, both from the export turnover as well as from the total turnover, while computing deduction u/s 10A - HELD THAT:- The above issue is no longer res integra as it is settled by the judgment of the Hon’ble Apex Court in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] wherein it was categorically held that when certain expenditure is excluded from the export turnover while calculating deduction u/s 10A of the I.T.Act, the same needs to be excluded also from the total turnover.
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2021 (10) TMI 1321
Insider trading - violation of SEBI (Prohibition of Insider Trading) Regulations - Family arrangement - case of the appellants that family settlements means family estrangement - family arrangements within the family on two occasions there was no estrangement, as can be seen from the facts highlighted by Ld. WTM - appellants were restrained from accessing the securities market, in any manner, for a period of one year - allegations against the appellant Ms. Shivani Gupta and other appellants is that they being insider to two Unpublished Price Sensitive Informations (“UPSI‟ for short) regarding the buy-back of it‟s share by the Company and had traded in the shares while holding theses informations - WTM recorded a finding that the nature of relationship between the parties, their residence at the same address, financial transactions between them as well as the trading pattern of the concerned appellants during UPSI-I & II show that all of them had traded when in possession of both the UPSI, meaning thereby that those UPSI were disseminated to the appellants by Late Padam Chand Gupta and Mr. Balram Garg - HELD THAT:- The facts as highlighted by the Ld. WTM would show that though there was a family arrangements within the family on two occasions there was no estrangement, as can be seen from the facts highlighted by Ld. WTM - Additionally, in our view, the very fact that appellant Shivani had authorized her cousin brother-in-law i.e appellant Amit to trade on her behalf, would belie the case of the appellants that family settlements means family estrangement. It cannot be gainsaid that the appellants are residing at the same address and even appellant Mr. Balram Garg‟s address is “the front side‟ of the premises. The trading pattern of the concerned appellants i.e. withholding of the selling of trade once buy-back talk started within the Company and then again selling spree the shares by them once the buy-back offer was made public till the rejection of the proposal by the State Bank of India was made known to the public, would clearly show that the concerned appellants were aware of both the UPSI.
It is true that there is no direct evidence as to who had disseminated this insider information to the appellants Late Shri Padam Chand Gupta was the father of appellant Mr. Sachin Gupta and father-in-law of appellant Ms. Shivani Gupta and uncle of appellant Mr. Amit Garg. Similarly, appellant Mr. Balram Garg is the uncle of appellant Mr. Sachin Gupta and appellant Mr. Amit Garg. All of them were residing at the same address. Appellant Mr. Sachin Gupta had financial transactions with the Company of which appellant Mr. Balram Garg was Managing Director. Considering all the above facts, on preponderance probability it can very well be concluded that late Padam Chand as well appellant Mr. Balram disseminated both UPSI to the appellants in appeal.
Taking into consideration all these facts, in our view, the appeals lack merit. Hence both the appeals are hereby dismissed.
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2021 (10) TMI 1320
Revision u/s 263 - as per CIT AO has made inadequate enquiry on investment in immovable property - HELD THAT:- Though the copies of sale deeds were not filed before the AO at the time of assessment proceedings, however, the details of the name of persons and the amount along with confirmations were filed and the same are true and correct vis-à-vis the copies of sale deeds placed before us. Therefore, it cannot be said that there was no enquiry on the part of the AO. Even it is not a case of inadequate enquiry also as the assessment proceedings were initiated for the very basic purpose of examining the investment in immovable property and the source thereof. Prima facie, there seems to be proper application of mind by the AO and the same is further verified by the fact that all the alleged persons mentioned in the list above arte the buyers of the property sold by the assessee and the total sale consideration received from all these eight persons duly supported by registered sale deed was utilized for making investment in the immovable property.
As in the instant case, the assessee has sold certain immovable property to eight persons through registered sale deed and received sum of ₹ 50,78,420/-(which includes Cheque of ₹ 2,65,420/- and the remaining amount in cash) and the sale consideration so received was utilized for making investment in immovable property and these details were placed before the AO in the form of list of persons and confirmation letters and after proper application of mind, he accepted the submissions of the assessee, and, therefore, it cannot be said that there was no enquiry or inadequate enquiry by the AO. Appeal of assessee allowed.
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2021 (10) TMI 1319
Assessment u/s 153C - whether assessment has not abated on the date of search and thus has attained finality? - HELD THAT:- The undisputed facts are that a search action under section 153A was conducted on the assessee on 11.03.2014 whereas the return was filed on 29.09.2011 meaning thereby that on the date of search, the assessment has already attained finality and thus has not abated on the date of search. Thus we observe that indisputably the assessment in the instant year has not abated on the date of search. Keeping in view the said facts and circumstances, we are of the considered view that addition to the income of the assessee can only be made on the basis of incriminating materials found during the course of search. In the present case, there is no such incriminating material and therefore, the AO has no jurisdiction to make addition in the unabated assessment.
CIT(A) has passed a very reasoned order by following various decisions including that of CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015 (5) TMI 656 - BOMBAY HIGH COURT] wherein it was held that no addition can be made in respect of assessments which have become final if no incriminating material is found during search. - Decided in favour of assessee.
Disallowance by rejecting the expenses claimed in the P&L account - HELD THAT:- We find that the issue of allowability of indirect expenses incurred by the assessee by way of administrative expenses, selling and marketing expenses have been decided by the lfd CIT(A) as discussed above by following the co-ordinate Bench of the Tribunal in M/s. Hiranandani Palace Garden Pvt. Ltd. [2015 (12) TMI 1649 - ITAT MUMBAI] Accordingly, since the assessee has incurred these expenses under the head administrative expenses, marketing and selling expenses, we are inclined to dismiss the ground raised by the Revenue by respectfully following the decision of the coordinate bench as discussed above. The ground no. 4 is dismissed.
Addition on account of interest income on fixed deposits - HELD THAT:- We find that the issue has been decided by the coordinate Bench of the Tribunal in favour of the assessee in the case of sister concern case M/s. Hiranandani Palace Garden Pvt. Ltd. [2015 (12) TMI 1649 - ITAT MUMBAI] wherein it has been held that interest income from fixed deposits during the intervening period i.e their borrowing and deployment is assessable as business income and thus allowed the appeal of the assessee. Therefore, we do not find any infirmity in the order of Ld. CIT(A) and accordingly the same is upheld on this issue by dismissing the ground No.5 of the Revenue’s appeal.
Addition of preliminary expenses incurred after the incorporation of the company - HELD THAT:- As decided in own case [2015 (10) TMI 2246 - ITAT MUMBAI] allowed the appeal of the assesse on this issue. Accordingly, we do not find any infirmity in the order of Ld. CIT(A) on this issue. However, as pointed out by the Ld. Counsel of the assessee that in the subsequent year the amount was higher, however, requested the Bench that the same amount of ₹ 14,87,380/- may kindly be allowed in this year also. Accordingly, we are inclined to direct the AO to allow an amount of ₹ 14,87,380/-. Consequently, the ground no. 6 is partly allowed.
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2021 (10) TMI 1318
Rectification of mistake u/s 254 - mistake apparent from record - disallowance on service charges expenses - HELD THAT:- Nowhere the Ld. CIT(Appeal) has held the service charges is not allowable for want of furnishing of documentary evidences etc. The only reason for disallowing 25% of service charges expenses is that benefit must have accrued to other parties than the assessee i.e. third parties/bottlers.
In this issue of “service charges expenses”, we have examined that one part of finding by the Tribunal is incorrect to the extent that Sub-ordinate Authorities has not disallowed the “service charges expenses” for want of vouchers/details etc. The other part of finding of the Tribunal wherein it has held that benefit may have accrued to the third parties and hence the disallowance, though it is correct but because of wrong finding of fact on the issue of non-filing of documentary evidences/vouchers, mistake apparent from record has crept in while deciding this issue which makes the entire findings on this issue as incorrect and such findings is thus vitiated. When we had asked the Ld. DR regarding the basis for enhancement of disallowance at 40% from 25% of service charges as evident from the impugned order of the Tribunal vide Para 128 and to this query, DR fairly conceded that there has been no basis given for such enhancement of disallowance at 40% of the service charges. On this count also, a mistake apparent from record has crept in the findings of the Tribunal on the issue of service charges expenses.
We are of the considered view that there is a mistake apparent from record which has crept in the impugned order of the Tribunal while deciding the issue of “service charges expenses” and hence, the grounds only pertaining to “service charges expenses” for the relevant assessment years involved is recalled for fresh adjudication.
Depreciation on coolers - Tribunal suo-moto had gone into establishing whether the assessee was owner of the coolers or not and asking the assessee to justify their ownership over the coolers which as a matter of fact was never a point of dispute for adjudication. The other part of the discussion whether the said assets i.e. coolers were used for the purpose of business of the assessee, the Tribunal has given its justification for its findings and that part is not disputed by the assessee.
That the finding of the Tribunal, once again asking the assessee to establish its ownership on the coolers which was already accepted by the Department was in fact going beyond the scope of grounds of appeal filed before the Tribunal and hence, travelling beyond the jurisdiction as held in the case of Pokhraj Hirachand [1962 (9) TMI 68 - BOMBAY HIGH COURT] wherein held that the ITAT has to confine itself to the subject matter of appeal i.e. grounds of appeal.
Therefore, mistake apparent from record has crept in while deciding the issue of depreciation on coolers. That further, when we observe that a part finding of the Tribunal whether such business assets were used for the purpose of business of the assessee, the Tribunal has given its own analysis, though this part is not disputed by the assessee but because of the fact that on the issue of establishing ownership, the Tribunal has exceeded its jurisdiction, in such scenario, therefore, taking guidance from the decision of Daulat Ram Rawatmull [1972 (9) TMI 9 - SUPREME COURT] the entire findings on this issue gets vitiated and has to be held as incorrect. Therefore, in our considered view, mistake apparent from record has crept in while deciding the issue of depreciation on coolers and therefore, grounds pertaining to depreciation on coolers for the relevant assessment years involved is recalled for fresh adjudication.
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2021 (10) TMI 1317
Validity of E-assessment proceedings - Mandation of providing personal hearing - valuable right - opportunity of hearing through video conferencing could not be afforded to the petitioner on account of failure on the part of the petitioner to submit such request as per the guidelines for personal hearing - HELD THAT:- As notice along with the draft assessment order was given to the petitioner on 04.04.2021, the response to the same was given within two days by the petitioner in the mode as prescribed under the Law. It also filed further reply to the said notice on 08.04.2021 as well as on 15.04.2021 in continuation of the first reply of 06.04.2021. It is also a matter of record that there is no reference of the request made on 07.04.2021 in a subsequent reply made in continuity on the part of the petitioner of 08.04.2021 as well as 15.04.2021. However, that would not in any manner question his conduct of requesting for the personal hearing in as much as that aspect is neither disputed nor belied from the material which is available from the eportal of the Income Tax Department. In fact in the affidavit-in-reply itself there is a reference of such a request made by the petitioner which according to the respondent-revenue is impermissible as he has not exercised the option while responding to the notice and the draft assessment order on 06.04.2021.
According to the revenue, on 06.04.2021 while responding to the request, there would have been a hyperlink AVAILABLE which he ought to have clicked and which he had missed out and therefore, if he makes any subsequent request for the same, the same is not sustainable.
We notice from the clause (xii) of sub-section (7) of Section 144B of the IT Act laying down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centre and the Unit set up in an automated and mechanised environment by the Principal Chief Commissioner or the Principal Director General. There is nothing on the record which insists that on the day on which the reply is given, there is any prohibition to tender the subsequent reply in continuity. It also does not anywhere prohibit making of such a request through the e-portal of the department.
Para-11 of E Assessment Scheme, 2019 notified on 12.09.2019 as modified on 13.08.2020 provides that no personal appearance in the Centre or unit would be there but request for personal hearing can be made by the assessee or his authorised representative in Faceless Assessment Scheme.
Having noticed that it was a time when this regime of faceless assessment had merely begun and there were many hiccups in absence of the revenue having shown that the link was created at the relevant point of time and in absence of any material on that issue, when it recognises the fact that it had received the request of 07.04.2021, there was no earthly reason for it to have ignored it and not to avail the hearing.
As the subsequent Guidelines for personal hearing through the video conferencing recommending dos and don’ts cannot be taken into consideration by this Court for the simple reason that the authority which issued and the date from which they have come into practice is missing. Moreover, it is not even known whether this is for the internal circulation as in the public domain these Guidelines have not come, therefore, what presently would guide the case of the petitioner is the FAQs available for seeking the video conferencing and seeking the adjournment of the video conferencing, we hold that there has been a violation when the modified assessment order was to be passed by making an addition of nearly 107 Crore and when a specific request had gone on the 3rd day of issuance of notice from the petitioner and when the time for framing the assessment was not getting barred, non-availment of the opportunity of the personal hearing surely has resulted into the violation of the principle of natural justice and therefore, the indulgence would be necessary.
According to us, the right of hearing being a valuable right as held by the Apex Court in case of M/s. Escorts Farms (Ramgarh) Ltd.) vs. Commissioner, Kumaon Division, Nainital, U.P. & Ors. . [2004 (2) TMI 683 - SUPREME COURT]and denial of such right being a serious breach of statutory procedure prescribed as also being violation of rules of natural justice, this petition merits allowance.
Therefore, not only on the ground of serious prejudice for want of opportunity of hearing but also when there is a huge additions of tax by way of a draft assessment order, which eventually become the final assessment order, as framed by the respondent on 21.04.2021, this Court needs to interfere in the impugned assessment order along with interference in the consequential demand of taxes and of penalty and the same are quashed and set aside. The matter is remanded back to the Assessing Officer, who shall grant an opportunity of personal hearing to the petitioner by way of the video conferencing and thereafter pass a reasoned order in accordance with law.
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2021 (10) TMI 1316
Classification of goods - networking devices, namely ODU 1, ODU 2, and IDU - two passive antennas - PoE Injector and the two adaptors - Eligibility for benefit of Sr. No. 5 of Notification No. 57/2017-Cus., dated 30.06.2017 and Sr. No. 4 of Notification No. 25/2005-Cus., dated 01.03.2005 - HELD THAT:- From the description of the three network devices, ODU 1, ODU 2, and IDU, as submitted by the applicant, it is clear that they do not transmit radio/video broadcast signals. On the contrary, their function is to extract the content from the hard disk drive or Amazon cloud/internet as per the demand of the user. Therefore, it is clear that the heading 8525 is not an appropriate classification for the network devices in question. The six-digit entry, 851762, which includes `Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus' is a specific entry which satisfactorily encompasses the functions of the three networking devices under consideration.
Passive antennas - HELD THAT:- Keeping in view the functionality, there doesn't appear to be significant difference between the two antennas involved in the present proceedings vis-a-vis the antenna for base stations in the case of Reliance Jio Infocom. In view of the aforementioned line of reasoning, I am inclined to concur with the views of the applicant w.r.t. the issue of classification of the Antenna 1 and Antenna 2 and not inclined to accept the views of the jurisdictional Commissioners of Customs - the views of the Commissioner of Customs, ACC, Mumbai is influenced by the Board's instructions, which was discussed in detail in the Reliance Jio Infocom case and did not find favour. Besides, the views of the Commissioner of Customs, ACC, Mumbai do not take into account the change in the tariff w.e.f. 01.01.2022, which appears to be in compliance of the recommendations of the HS Committee of the WCO. Since, I am inclined to hold the classification of antennas under heading 8517, specifically under sub-heading 85177090, the suggestion of the Commissioner of Customs, Chennai to classify antennas under heading 8529 doesn't appear to have merit since that heading applies to parts suitable for use solely or principally with the apparatus of heading 8525 to 8528.
PoE Injectors - HELD THAT:- Based on the facts that, injectors take a data only connection from a business router or switch and add power via an AC power adapter connected to standard U.S. outlet; that they transmit both the power and the data over an Ethernet cable to a POE-enabled device, such as a camera, an access point or an IP phone; that, injectors are only needed when the source device does not have a POE-enabled output; that, injectors can be used by themselves or with a POE Splitter; that, the POE injectors do not alter the data, they only add power to the transmission cable; that the output is automatically determined based upon the necessary power requirements, up to a maximum of 15.4W, and they are 802.3af compliant; the applicable subheading for the POE Injector (model # IL-P0E150S), and the POE Splitter (model # TL-POE1OR) was held to be 8504.40.8500 in the Harmonized Tariff Schedule of the United States which provides for Electric Transformers, static converters(rectifiers) and inductors - as a means to provide power and to convert AC power supply to DC for usage by the devices, the proper classification of PoE Injector, and Adaptors 1 and 2 would be 85044029 as rectifiers - Since it is held that the PoE Injector is not a device for reception, conversion and transmission or regeneration of voice, images, data etc., the classification of 85176990 suggested by the Commissioner of Customs, Chennai Seaport also doesn't appear to be proper.
Eligibility for benefit of Sr. No. 5 of Notification No. 57/2017-Cus., dated 30.06.2017 and Sr. No. 4 of Notification No. 25/2005-Cus., dated 01.03.2005 - HELD THAT:- The passive antennas with Model Nos. S8RL4H and S8RL4G are classifiable under sub-heading 85177090 and since such antennas are not parts of cellular mobile Phones, the nil rate benefit under Sr. No. 5 of Notification No. 57/2017-Cus., dated 30.06.2017 would be available to the antennas. Sr. No. 4 of Notification No. 25/2005-Cus., dated 01.03.2005 extends exemption to static converters for automatic data processing machines and units thereof, and telecommunication apparatus, other than static converters for cellular mobile phones falling under six-digit entry 850440. In respect of PoE Injector and Adapters 1 and 2, it is held that proper classification is sub-heading 85044090. However, none of these three devices are meant for use in automatic data processing machines or telecommunication apparatus - the relevance of Notification 50/2017-Cus. dated 30.6.2017 to the present proceedings is not understood. None of the eight items under consideration in the present proceedings are classifiable under heading 8537.
Application disposed off.
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2021 (10) TMI 1315
National faceless assessment - Making available the copy of the Video Conferencing which had been recorded on the date on which the hearing had taken place - HELD THAT:- Learned Senior Advocate, Mr. Soparkar has additionally, on instructions, submitted that till the further order of the Court, these FDRs shall not be withdrawn. An undertaking to that effect shall be also filed by the petitioner on or before 21.10.2021.
For now, the matter is being posted on 25.10.2021, accepting the version of learned Senior Advocate with a direction to the concerned bank to be sent through the registry the undertaking given by the petitioner through the learned Senior Advocate for it not to permit the release of FDRs till further order of the Court.
There shall be stay of demand of addition made in the assessment order impugned and the demand of penalty till the next adjourned date. Other and further order with regard to the additional security for protecting the interest of the Revenue shall be passed on 25.10.2021 after hearing both the sides.
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2021 (10) TMI 1314
National faceless assessment - Making available the copy of the Video Conferencing which had been recorded on the date on which the hearing had taken place - Scope of FAQs for seeking VC and seeking VC adjournment - HELD THAT: - We noticed that the answer to the question in the FAQs supplied to us is quite clear that the recording will be made available within a reasonable period, not exceeding the two days of recording. “Recording can be downloaded from the portal through which the video conferencing was held.”
We have noticed that steps have been given to check the recording of the VC, availability and the URL details from which it can be downloaded.
We would like to get more inputs in this regard and know as to whether the recording of VC which had taken place with the petitioner would be available for viewing. If the request had not come on that day itself, because the answer as provided in the FAQs states that providing of such recording would be within a reasonable time, not exceeding the two days of recording. In absence of any further details as to how long such recording would be maintained by the department, the details can be obtained by learned Senior Advocate Mr. Bhatt on seeking necessary instructions in this regard. The said recording of video conferencing if already available on the portal and protected by the password, the details shall be furnished to the Court.
The matter is being posted on the 14.10.2021.
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2021 (10) TMI 1313
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It is on record that the Corporate Debtor was referred to BIFR under Sick Industrial Companies (Special Provisions) Act, 1986 (SICA). The reference of the Corporate Debtor to BIFR was pending until 19th June, 2008. When, as mentioned by the Petitioner, the reference to BIFR in SICA was abated and accordingly ordered by BIFR. Therefore, the Bench is of the view that as per Section 22 of the SICA, 2003, the Petitioner could not have instituted or prosecuted any proceedings against Corporate Debtor from 2003, when the company was referred to BIFR and till June, 2008 when the said reference was abated by BIFR. Thus, the time period between 2003 to 19th June, 2008 as per law would stand excluded while computing the period of limitation for filing the petition - Similarly, for the financial year 1st April, 2018 to 31st March, 2019, the details of debentures issued by UTI is mentioned along with the fact that the same was recalled in the Financial Year 2002-2003. Here, the Bench would like to reiterate that the Petition was filed on 6th November, 2018.
Thus, it is clear that there has been acknowledgement of debt as per the financial filings of the Corporate Debtor with RoC regularly and year after year and thus it would fairly constitute as the acknowledgement under Section 18 of the Limitation Act, 1963.
Petition admitted - moratorium declared.
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2021 (10) TMI 1312
Validity of SABKA VISHWAS(LEGACY DISPUTE RESOLUTION) SCHEME, 2019 - respondents submits that the validity of the said Scheme has expired in May, 2020 and the Scheme in question has no existence and as such there is no scope of granting any relief in the matter - HELD THAT:- Whatever may be the reason, fact remains that the petitioner has allowed the Scheme in question to be expired and approached this court after the validity of the Scheme was expired.
Petition dismissed.
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2021 (10) TMI 1311
Approval of resolution plan - Settlement, compromise or arrangement before the Debenture Holders seeking their assent in terms of the respective Debenture Trust Deeds - negotiations between the Plaintiffs, debenture holders, the company and the resolution applicant/their advisors - 3rd Defendant, the Debenture Trustee, points out that the Debenture Trust Deeds require a meeting to be called in a certain manner - HELD THAT:- Debenture Trust Deed is a contract between the parties to it. They must know the terms of the contract at the time when the execute it. Those terms cannot be later altered except with their consent. The submission by SEBI would amount to saying that a critical term of the contract is always unknown and always liable to change or modification at any given time, conceivably upsetting the entire structure.
SEBI’s regulations all say that they are with effect from a particular date. It is not possible to read them as operating retrospectively. Correctly read, SEBI’s submission is to be understood as meaning that it is the latest of the SEBI resolutions as amended at the time of the Debenture Trust Deed’s execution that must compulsorily be incorporated in the Debenture Trust Deed. This is unexceptionable. But this cannot and does not mean that a later regulation after the Debenture Trust Deed can be retrospectively made to govern the Trust Deed. Between the parties the calling and conduct of a meeting and the voting at it are all governed by the terms of Debenture Trust Deed. There is simply no other way of looking at it.
In view of this, the 3rd Defendant is directed to call and conduct meeting of all the Debenture Holders under all three Debenture Trust Deeds within 30 days of this order ensuring that the calling and conduct of the meeting/s and the voting at such meetings conforms to the terms of the respective Debenture Trust Deeds. At such meeting/s, the 3rd Defendant will place for consideration and approval of the beneficial owners or debenture holders the settlement offer/compromise/arrangement as envisaged in the approved resolution plan and as modified to the extent provided herein above.
If there is any further or later or supplementary trust deed, then the provisions of that supplementary trust deed will also be taken into account. All parties agree and undertake to maintain confidentiality of the settlement and/or compromise and/or arrangement arrived hereto.
In view of the above compromise arrived at between the parties, the suit stands disposed off in these terms. It is made clear that the aforesaid order is passed considering the peculiar facts and circumstances of the present case. It also has consent of all the parties.
As regards SEBI, making it clear that this order will constitute no precedent against SEBI nor will SEBI be held to the terms of this order for other cases. This order is made on the peculiar facts and circumstances of this case. The demand drafts in question are handed over to the Advocates for the Plaintiffs.
Plaintiffs says this order is sufficient to dispose of the Suit itself with all undertakings given to the Court being accepted. So ordered. The suit is disposed of in these terms.
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2021 (10) TMI 1310
Fraudulent Trading or Wrongful trading - whether any fraud is committed with the creditors only which has caused any loss to the creditors and the creditors of the Corporate Debtor ought to have suffered the financial loss arising out of the alleged Fraudulent Trading or Wrongful Trading? - HELD THAT:- The provision of Section 66 deals with fraudulent trading or wrongful trading, therefore, “intent to defraud the creditors” is essential as it is imperative to prove that the business is conducted or a transaction has been made in a fraudulent manner in order to intentionally defraud the creditors of the Corporate Debtor - The Respondent No.1 has also not been able to satisfy the bench with respect to the various cash withdrawal made through the Account of the Janta Co-operative Bank Ltd, who is also Respondent No. 4 in the present application and has been proceeded ex parte. These facts support that there was an intention to defraud the creditors by keeping these assets of the Corporate Debtor beyond the reach of the Creditors or any such person who is entitled to make a claim against the Corporate Debtor - thus, these transactions are covered under the provisions of the 66 of the Code - application allowed.
Appropriate order under Section 44 &46 of the Code - reversal of property gone into preferential transaction and undervalued transaction and vest into the assets of the Corporate Debtor M.K. Overseas Pvt. Ltd. - HELD THAT:- It has been observed that the Sale of the Mumbai Plant could not be realized and hence stands cancelled as the buyer paid ₹ 62.25 lakh and YES bank kept such amount: under lien till the balance amount of ₹ 10.37 crore is received and due to initiation of the CIRP the buyer failed to pay the consideration in full. Hence, the amount was forfeited. It has been observed that the sales of the items of the inventory were made at a price lower than the purchase price paid, consequently such transactions have led to a loss of 4.57 crore and the Respondents have defended some but not been able to provide a satisfactory reason for doing the same - the Corporate Debtor entered into an undervalued transaction at a book loss of ₹ 2.32 crore with respect to the sale of the Daryaganj property vide various sale deeds from February 2018 to May 2019,which is till 4 months prior to the insolvency commencement date of the Corporate Debtor i.e. 19.09.2019 hence, it is within the look back period. Further it has been observed that the sale of the vehicle below the Book value to the extent of ₹ 1.90 Crore has been made from March 2019 to September 2019 which is prior to the insolvency Commencement date of the Corporate Debtor i.e. 19.09.2019 hence, it is within the look back period - the ex-management of the Corporate Debtor were well aware of the fact that an application has been filed and the same is pending for initiation of CIR process against the Corporate Debtor, therefore the ex-management continued with undervalued transaction with respect to sale of the vehicle as some of the vehicles have also been sold after the Application to initiate CIRP of the Corporate Debtor has been filed.
It is directed to the Respondents who were directors/ shareholders of the Corporate Debtor and in control of the Corporate Debtor to retrieve the amounts set off against the benefitted creditors of the Corporate Debtor along with the liabilities assumed/accepted from Al dua processing Pvt. Ltd to the tune of ₹ 0.33 Crore during Financial Year 2017-18 and 2018-19 to the Resolution Professional within 3 weeks from the date of this order - application allowed.
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2021 (10) TMI 1309
Seeking grant of Bail - compoundable offence u/s 138 of NI Act - offence punishable under Sections 132(1)(b) (c)(f)(l) of Central Goods and Services Tax Act, 2017 read with Sub-Section 5 of Central Goods and Services Tax Act, 2017 - HELD THAT:- Having regard to the totality of the facts and circumstances of the case and looking to the custody period as also the fact that conclusion of the proceedings is likely to take some time and without expressing any opinion on the merits of the case, this Court deems it just and proper to grant bail to the accused petitioner under Section 439 Cr.P.C.
Bail application allowed.
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2021 (10) TMI 1308
Seeking appropriate directions for effective implementation of the resolution plan approved by this Tribunal - non-transfer of unpledged equity shares of Bhushan Steels Limited to its wholly owned subsidiary - HELD THAT:- At any stretch of imagination in any of the Option, there remains no vested right of the erstwhile promoter group to hold on to the company in any capacity, let alone as shareholders - In this scenario the attempts on the part of the erstwhile promoter group to remain in the company as shareholders either by interpreting the option 1 or option 2 cannot merit their case, in any manner for the reason they first of all ought not to have been given any place in the company at the time of the approval of the resolution plan.
Assuming for a moment some accommodation was offered by the successful resolution applicant by graciously allowing the erstwhile promoter group to have 2.35 % stake in the company and it does not mean that they can hold on to 2.35 % forever nor can they claim market price for selling of shares - the erstwhile promoter group has no locus standi either to remain in the company or by falsely interpreting the Option 1 or Option 2. Above everything or on the top of it what is required to be understood is that at no point of time it is the understanding of the parties with respect to the approved resolution plan, that the erstwhile promoter group shall continue in the company with their shareholding or alternatively sell the shares at market value.
The plea taken by the Respondent No.2 and 3 that the equal treatment shall be given to the price with respect to Pledge and Un-pledge shares, in terms of Clause 6 of the Resolution Plan, it does not merit consideration since the clause 6 solely deals with the pledged shares - If unpledged shares are allowed to be transferred at the market price, then the same will result in modification in the terms of the resolution plan. Since, the resolution plan has a specific clause dealing with a specified rate INR 2.00 with respect to unpledged shares. Any other interpretation of the same shall result in modification in the terms of the Resolution Plan which is not permissible.
This is a settled piece of legislation in the insolvency domain; once a resolution plan is approved by the Adjudicating Authority all the promoters and stakeholders shall abide by it and not subject to any modifications - After analysing the entire scenario, the fraudulent manner in which the erst while promoter group is acting, only indicates that they would like to take advantage of a false, malicious interpretation of the clauses approved in the resolution plan and unjustly enriched themselves without any basis. In the view of the same, this Bench holds that the erstwhile promoter group has to sell away their shares to the applicant at INR 2/- per share without attempting to misinterpretation of the clauses in the approved resolution plan.
All the respondent no. 1, 2 and 3 are directed to strictly comply with the plan forthwith - application allowed.
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2021 (10) TMI 1307
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:- It is clear that there exist a Debt and Default. The documents relied upon namely letter dated 31.03.2015 annexed as “Annexure F” is a substantial proof that Debt is there when, the Applicants amount was transferred to loan account and subsequently Default is clearly attributable from letter Dated 08.07.2016 Annexed as “Annexure H” - in the lights of the Hon’ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 1508 - SUPREME COURT] upholding the Constitutional validity of IBC, the position is very clear that unlike Section 9, there is no scope of raising a ‘dispute’ as far as Section 7 petition is concerned. As soon as a ‘debt’ and ‘default’ is proved, the adjudicating authority is bound to admit the petition.
The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor.
Application admitted - moratorium declared.
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2021 (10) TMI 1306
Revision u/s 263 by CIT - case of the assessee was selected for limited scrutiny to verify the sales turnover mismatch and expenditure of personal nature - HELD THAT:- Admittedly, the assessee’s case was selected for limited scrutiny for the reason that the assessee had reported higher turnover in service tax return as compared the ITR; the assessee had deposited large amount of cash in saving bank account and there was mismatch in expenditure of personal nature. As pointed out by the ld. counsel in the present case, the AO accepted the return of income filed by the assessee after examining the submissions made by the AR in the light of the documents and details placed on record. Further as pointed out by the ld. counsel the issues examined by the assessee during the limited scrutiny were different from the issues raised by the Ld. PCIT in the impugned order.
This Bench of the Tribunal has already held in the case of Tej Paul Bhardwaj [2021 (5) TMI 485 - ITAT CHANDIGARH] that the ld. PCIT has exceeded jurisdiction u/s 263 of the Act by directing the AO to make fresh assessment on the issues which were not the subject matter of assessment framed in limited scrutiny. Since the issue involved in the present appeal is identical to the issue involved in the case of Tej Paul Bhardwaj vs PCIT (supra), we do not find any reason for taking a different view in this case. Hence, consistent with our findings in the aforesaid case, we hold that the Ld. PCIT has exceeded his jurisdiction under section 263 of the Act by directing the AO to conduct enquiry on the issues which were not the subject matter of limited scrutiny. We therefore allow the appeal of the assessee and set aside the order passed by the ld. PCIT u/s 263 - Appeal of assessee allowed.
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