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Showing 141 to 160 of 2170 Records
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2019 (4) TMI 2038
Deduction u/s. 80IA - assessee was having captive power plant - profit in respect of sale of steam to process was disallowed which was in turn confirmed by the Ld. CIT(A) - HELD THAT:- We find no infirmity in the order passed by the Ld. CIT(A) in deleting such addition made by the Ld. AO following the decision taken by his predecessor in the earlier year [2018 (1) TMI 1667 - ITAT AHMEDABAD] in allowing the deduction u/s. 80IA of the Act taking in consideration of the judgment passed by the Co-ordinate Bench a discussed above, hence the same is confirmed. Revenue’s appeal is found to be devoid of any merit and hence dismissed.
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2019 (4) TMI 2037
Seeking withdrawal of petition - Assignment of Debt - COC is not constituted and the Applicant and the Corporate Debtor have agreed to negotiate and restructure the loan - HELD THAT:- The IRP has filed memo that he has no objection for withdrawal of this Petition.
This case is a fit case for the Adjudicating Authority to invoke Rule 11 of NCLT Rules and accordingly this application is allowed and the Order of CIRP passed in this Petition is recalled and the IRP is discharged from his duties.
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2019 (4) TMI 2036
Smuggling - Gold Bars - whether the indisputable fact that the Advisory Board as also the detaining authority had failed to consider the order of revocation of the detention order of the co-detenu in the same transaction viz., Annexure-1 in Ext.P6 passed in relation to Shahbas, is fatal to the order confirming the detention of the detenu and whether it is sufficient to vitiate the same? - HELD THAT:- Evidently, in the case of Sri.Shahbas, the co-detenu of Sri.Abulais, the order of revocation of the order of detention was passed pursuant to the receipt of an opinion from the Advisory Board that in respect of Shahbas there is no sufficient ground for detention. The question whether the order passed by the Government revoking the order of detention is communicated to the Advisory Board or not would got no insignificance for the simple reason that the very opinion in the case of Sri.Shahbas in the same transaction was given by the Board itself. When in the case of a co-detenu in the same transaction an opinion was given by the Advisory Board, when it takes up the case of another detenu involved in the same transaction, the Board was bound to consider its earlier opinion in regard to the co-detenu. Shortly stated, in this case, despite the communication of Annexure-1 in Ext.P6 pertaining to the co-detenu the Advisory Board had failed to take it into consideration in its true perspective.
In the contextual situation, it is all the more relevant to note that even going by Ext.P2, Sri.Shahbas is the head of 'MPC General Trading LLC' that is involved in smuggling activities and it was his detention, in the same transaction, that was revoked as per Annexure-1 of Ext.P6. Non-consideration of all the aspects by the Government, they are sufficient to hold Ext.P8 order confirming the order of detention, as vitiated. Once it is found that Ext.P8 order whereby Ext.P1 order was confirmed is vitiated owing to non-consideration of Annexure-1 in Ext.P6, Ext.P8 order is liable to be interfered with.
The impugned order is set aside - Petition allowed.
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2019 (4) TMI 2035
Seeking provisional release of the seized goods - refund of the seizure value - Section 110(A) of the Customs Act, 1962 - HELD THAT:- In contempt proceedings no direction can be issued, it shall be appropriate to leave it open to the wisdom of the Tribunal to interpret order regarding the refund of the seizure value. Tribunal is expected to dispose of the application as shall be filed by the petitioner preferably within a period of thirty days.
Contempt proceedings are, accordingly closed.
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2019 (4) TMI 2034
Smuggling - Currency - Appellant emphasized that the High Court has fallen into error in holding that recovery of counterfeit currency was effected from the residence of the Appellant - ingredients of Section 489B and 489C of the Indian Penal Code have been established or not - whether the Appellant is justified in contending that the High Court fell into error in holding that the recovery was effected of the counterfeit currency from the residence of the Appellant? - HELD THAT:- When a person is named as an Accused in First Information Report, he would stand in the shoes of an Accused person. Does not the marginal note of Section 161 of the Code of Criminal Procedure confine the power to the Police Officer to examine the witnesses and will it be denied to him qua a person who is already named as an Accused? These questions are no longer res integra. In NANDINI SATPATHY (SMT.) VERSUS P.L. DANI [1978 (4) TMI 236 - SUPREME COURT] a Bench of three learned Judges was dealing with a case which arose from proceedings initiated against the Appellant therein Under Section 179 of the Indian Penal Code and it was held that The Privy Council and this Court have held that the scope of Section 161 does include actual Accused and suspects.
Proceeding on the basis that it is a confession by a co-accused and still proceeding further that there is a joint trial of the Accused and that they are Accused of the same offences (ignoring the fact that other Accused are absconding and Appellant appears to be proceeded against on his own) and having found that there is no recovery from the residence of the Appellant of the counterfeit notes and that there is no other material on the basis of which even a strong suspicion could be aroused, it is mandate of the law that requires to free the Appellant from being proceeded against.
Appeal allowed.
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2019 (4) TMI 2033
Validity of assessment order - suppression of turnover - TNGST Act - HELD THAT:- The Tribunal while reversing the order, committed a serious error in stating that when notices were issued to the persons who have obtained quotation, they did not appear and did not give any reply either accepting that they have purchased material from the petitioner or denied having purchased material from the petitioner, therefore concluded that the quotations have fructified into sale. The finding rendered by the Tribunal is absolutely incorrect and the finding referred by the First Appellate Authority is fully justified and there were no grounds to reverse such a finding.
The order passed by the Tribunal is set aside and the order passed by the First Appellate Authority is restored - Petition allowed - decided in favor of petitioner.
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2019 (4) TMI 2032
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - time limitation - existence of debt and dispute - HELD THAT:- From the record we find that invoices were also issued on 1st April, 2017, which shows the total amount payable including service tax for the year 2017-18, Swachh Bharat Cess and Krishi Kalyan Cess, totalling ₹ 5,57,959/-. It appears that the Adjudicating Authority failed to consider the aforesaid documents attached with Form-5 and came to a wrong conclusion that the application under Section 9 is barred by limitation - It is true that Limitation Act, 1963 is applicable in terms of Section 238A of the I & B Code.
Part I of the Schedule relates to filing of suits, money suits, etc. If the claim is barred by limitation then a person can take plea that "there is no debt payable in law". In the present case, as we find that the invoice raised on 1st April, 2017 is more than Rupees One Lakh and a suit if filed will not be barred by limitation, the Corporate Debtor cannot take plea that the amount is barred by limitation - The Adjudicating Authority before passing the impugned order dated 26th June, 2018 had issued notice to the Corporate Debtor but the Corporate Debtor failed to appear. In the present case also, the notice on Corporate Debtor having returned undelivered, we directed the Appellant to take publication of notice in the Newspapers intimating the Corporate Debtor the next date of hearing.
Matter remanded to the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench to admit the application under Section 9 after notice to the Corporate Debtor to enable the Corporate Debtor to settle the matter in the meantime - appeal allowed by way of remand.
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2019 (4) TMI 2031
Seeking direction to first respondent, not to cause any physical, mental or verbal harassment to the petitioner during the pendency of investigation in the proceedings - also direction is sought against the first respondent to re-record the statement to be tendered under Section 50 of the Prevention of Money Laundering Act and conduct the proceedings in camera and in the presence of an advocate appointed by the petitioner - Whether the presence of a lawyer is required at the time of enquiry, as sought for by this petitioner? - HELD THAT:- Section 50 make it clear that powers are conferred on the authorities to summon persons whose attendance is necessary to give evidence or produce any record during the course of investigation or proceedings and such persons, so summoned have to appear before the Officer and to state the truth of the subject of the summons. Such authority is also empowered to impound records. Therefore, there is no quarrel about the competency and power conferred on such authority to summon a person and enquire. Sub-Section 4 of Section 50 specifically indicates that every proceedings under Sub-Sections 2 and 3 shall be deemed to be a judicial proceedings within the meaning of Section 193 and section 228 of the Indian Penal Code. Therefore, it is apparent that summoning a person and enquiring him under section 50 of the said Act is in the nature of a judicial proceedings, within the meaning of Section 193 and Section 228 of the Indian Penal Code - it is apparent that the proceedings under Sub-Sections 2 and 3 of Section 50 of the said Act is a judicial proceedings before the Court of justice, though such proceedings is not taking place before the Court of Justice.
The respondents have categorically admitted in the counter that the persons who were summoned under Section 50 of the said Act is only for the purpose of collecting evidence and to know the complicity of the persons so summoned to the crime and that, only after collecting evidence and statements from the persons so summoned and if it is established after completion of investigation that the person is involved in the crime of Money Laundering, he will be treated as an accused and prosecution complaint will be filed against him. Therefore, there is no dispute to the fact that at the time of making an enquiry under Sections 50(2) and 50(3) of the said Act, the persons so summoned, unless are found to have been involved in the crime of Money Laundering, cannot be treated as an accused at the stage of enquiry itself.
Further, it is to be noted that Section 30 of Advocates Act, 1961, which deals with right of Advocate to practise, specifically entitles every Advocate whose name is entered in the State roll, as of right to practise, including before any person legally authorised to take evidence. When such being the right conferred on the Advocate, the respondents cannot curtail such right, if the petitioner seeks such assistance. But at the same time, it should also be borne in mind that presence of such lawyer should not be a hindrance to the enquiry either by his interference with queries or by his prompting the person, who is being examined, to say this way or that way. If that is permitted then it would defeat the very object and purpose of enquiry.
The petitioner must be permitted to have his choice of lawyer to be present along with him at the time of interrogation/enquiry, however, by making it clear that such lawyer should sit within a visible distance but beyond hearing distance.
Whether the statement already recorded from the petitioner's have to be eschewed and consequently, whether the first respondent should be directed to re-record the statement from the petitioner in the presence of an Advocate? - HELD THAT:- When retraction has already taken place, the law will have to take its own course to decide about the veracity of the statement already obtained from the petitioner and the effect of such retraction, at the appropriate time, during the proceedings. However, if the petitioner needs to appear for any further enquiry, in view of the facts and circumstances and the findings rendered by this Court, the first respondent shall permit the lawyer to be present with the petitioner at the time of interrogation, however, making it clear that such lawyer should be made to sit at visible distance at the back of the petitioner but beyond hearing distance from the place of interrogation. In other words, the seating arrangement of the petitioner and his lawyer should be made in such a way that both should not have eye contact with each other.
Petition disposed off.
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2019 (4) TMI 2030
Declarations of undisclosed income - Income Declaration Scheme, 2016 - extension of time for making payment of the third installment sought - HELD THAT:- Leave granted.
The appellants were to pay the balance of 50 per cent of the Income Declaration Scheme, 2016, by 30.09.2017. However, by inadvertence, there was a short delay ranging from 9 to 12 days.
Given the facts of these cases, we find that these are genuine cases and this short period of delay ought to be condoned. Pursuant to our orders dated 04.02.2019 and 07.02.2019, the requisite amount together with interest of 12 per cent per annum has already been deposited. The respondents are directed to accept this amount within a period of one week from today.
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2019 (4) TMI 2029
Allegation of fraud, misappropriation, falsification of records and conspiracy - private complaint filed under Section 156(3) of Cr.P.C - HELD THAT:- Admittedly, there is a dispute between them regarding the management which has culminated into MOU, later not honoured by both the parties. The 1st petitioner has made a specific declaration that it has become invalid. In the said circumstances, when any member of the company has any grievance or complaint about oppression or mismanagement, he should have resorted to an application to the tribunal as contemplated under Section 241 of the Companies Act-2013 - Chapter XIV of the Companies Act-2013, provides for remedy. Under Section 206 of the Companies Act-2013, the Registrar of the Company, based on the information received by him can seek for explanation, production of document and conduct enquires. If the Registrar is satisfied on the basis of information available with him or furnished to him or on a representation made to him by any person that the business of a company is being carried on for a fraudulent or unlawful purpose or not in compliance with the provisions of this Act, he can proceed with inquiry.
From the reading of the complaint, it is alleged that the petitioners herein have committed Act of omission and commission and concealment to deceive the complainant/2nd respondent who is one of the shareholders. In such circumstances, the Act provides for him to inform the matter to the Registrar under Section 206 of the Companies Act-2013 who in turn will conduct enquiry. If the enquiry conducted by the Registrar discloses material for further investigation, he under Section 210 of the Companies Act-2013, can report to the Central Government to conduct investigation into the affairs of the Company.
This Court of the opinion that the complaint under Section 156(3) of the Cr.P.C before the Judicial Magistrate and seeking registration of the complaint by the Inspector of Police, CCB, Coimbatore, itself an come out of malafide intention to pressurize the petitioners to part away their right of Managing the Company - The complaint on the file of the 1st respondent cannot be probed effectively since it involves intricate facts on accountancy and auditing. Except forensic audit conducted into the affairs of these Companies held by the 1st petitioner and the 2nd respondent, the truth will not come to light.
This Court directs the Registrar of Companies to take note of the complaint and cause inquiry, not only the affairs of M/s. M.C. Spinners Pvt Ltd., but also all the other sister concern, in which the 1st petitioner and 2nd respondent are involved and file its report to the Central Government for further action - Petition allowed - decided in favor of appellant.
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2019 (4) TMI 2028
Failure/negligence to disclose the assets before the Liquidator - HELD THAT:- The private respondent Nos. 28 to 31 is directed to submit affidavit before the Official Liquidator with regard to the assets of M/s. Greenage Food Products Ltd. ( in liquidation).
The said respondents are presently in correctional home, Superintendent of concerned correctional home shall ensure that they are able to affirm/notarise the affidavit within the correctional home. Respondent Nos.18 to 31 shall submit affidavit disclosing particulars of the assets held by them individually and/or by their Companies (except M/s. Pincon Spirits Ltd. and M/s. Greenage Food Products Ltd.) before this Court on the next date of hearing.
The matter is adjourned for four weeks.
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2019 (4) TMI 2027
Maintainability of petition - availability of alternative remedy of appeal - Section 35 of the Finance Act, 1994 - HELD THAT:- Against the order impugned the petitioner has a statutory remedy of filing an appeal before the Commissioner. It is open to the petitioner to file an appeal as provided under the Act itself within a period of two months - In case, the petitioner files an appeal as per the provisions of the Act, the same may be decided and disposed of in accordance with law.
We are not inclined to interfere in this matter in view of a recent supreme Court decision in the case of AUTHORIZED OFFICER, STATE BANK OF TRAVANCORE AND ANOTHER VERSUS MATHEW K.C. [2018 (2) TMI 25 - SUPREME COURT], wherein it has been held that where the statutory remedy is available the writ jurisdiction should not be allowed to be invoked under Article 226 of the Constitution of India, unless there is an exceptional circumstance to call for interference at this stage.
Petition disposed off.
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2019 (4) TMI 2026
Classification of supply - forgings - whether the manufacture of tooling kit for further manufacture of forgings is to be treated as a separate supply or it may be said that manufacture of tooling kit is only incidental to the ultimate supply of forgings? - amount recovered from Indian customers after the manufacture of tooling kit is excisable to CGST and SGST or IGST - whether amount recovered from foreign customers after the manufacture of tooling kit can be treated as export and thus, zero rated?
HELD THAT:- On going through the application and other documents submitted by the applicant as well as the view of the applicant, it is observed that the applicant is engaged in manufacture of forgings. For manufacture of forgings the applicant manufacture capital goods namely tools, dies and mould, generally known as the tooling kit based on the drawing and design specifications given by each customer and the charges incurred for the manufacture of this tool kit is borne by the customer. This agreed charge has been recovered from their customer by raising separate invoice which is reflected in the copy of invoice, submitted by the applicant.
The legal provisions as stated above, it is clear that the liabilities of tax arise on the date of issue of invoice by the supplier with respect to the supply. In the instant case, the applicant has issued separate invoice to their customers to recover the agreed amount for manufacture of tooling kit, which is treated as a supply of the goods as per Paragraph 1 of Schedule II of the Act. Hence, the manufacture of tooling kit for further manufacture of forgings is to be treated as a separate supply and chargeable to GST.
The amount recovered from foreign customers after the manufacture of tooling kit can be treated as export and thus, zero rated. The view if the applicant, in this regard, is that since the supply of forgings to a foreign customer involves movement of forgings to a place outside India, the supply shall be treated as an export of forgings further, since the amount recovered after manufacture of tooling kit is incidental to such export of forgings, the amount so received is actually a consideration for export of goods. Hence, the amount so received shall also be zero rated as the export of forgings attracts zero rated under Section 16 of the IGST, Act.
Thus, it is clearly established that the amount recovered from foreign customers after the manufacture of tooling kit cannot be treated as export, hence no question of zero rated arises.
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2019 (4) TMI 2025
Transfer of shares - seeking restraint on Respondents from selling, encumbering, transferring or mortgaging the assets of the Respondent No. 1 company, land and other assets of the Respondent No. 1 company including advance given against the properties or creating any third party rights - HELD THAT:- It is directed that the respondents to comply with the aforesaid directions. It is made further clear that the petitioner shall not deal with the assets of the respondent company.
List on 17.05.2019.
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2019 (4) TMI 2024
Murder - demand of Dowry - High Court has not examined the reasons on which the order of acquittal was passed - Sections 498A, 307 read with 149 of the Indian Penal Code and Section 4 of the Dowry Prohibition Act, 1961 - HELD THAT:- The High Court has not committed any error in holding the Appellant - original Accused No. 1 guilty for the offence punishable Under Section 302 of the Indian Penal Code. In the present case, there is a dying declaration given by the deceased which has been proved and supported by the independent witnesses, metropolitan magistrate (PW28), it has been established and proved by examining the medical officer and even the medical officer certified that the patient was conscious and coherent and fit state of mind to give the statement.
The dying declaration involving the Appellant came to be established and proved by the prosecution, by examining the doctor as well as the metropolitan magistrate who record the dying declaration. Despite the above overwhelming evidence in the form of medical evidence as well as the dying declaration and the deposition of the metropolitan magistrate, the learned trial Court discarded the same on some minor contradictions/omissions - The Appellant - original Accused No. 1 was last seen in the house and immediately on the occurrence of the incident he ran away. Thus, it is opined that the approach of the trial Court was patently erroneous and the conclusions arrived at by it were wholly untenable.
Whether solely on the ground that the High Court has not examined the reasons on which the order of acquittal was passed and convicted the Accused by interfering with the order of acquittal passed by the learned trial Court, the same is further required to be interfered with by this Court? - HELD THAT:- An identical question came to be considered before this Court in the case of UMEDBHAI JADAVBHAI VERSUS THE STATE OF GUJARAT [1977 (12) TMI 149 - SUPREME COURT]. In the case before this Court, the High Court interfered with the order of acquittal passed by the learned trial Court on re-appreciation of the entire evidence on record. However, the High Court, while reversing the acquittal, did not consider the reasons given by the learned trial Court while acquitting the Accused. Confirming the judgment of the High Court, this Court observed and held that the High Court would give due importance to the opinion of the Sessions Judge if the same were arrived at after proper appreciation of the evidence. This Rule will not be applicable in the present case where the Sessions Judge has made an absolutely wrong assumption of a very material and clinching aspect in the peculiar circumstances of the case.
The approach of the trial court was patently erroneous and the conclusions arrived at by it were wholly untenable - the interference by the High Court in the appeal against the acquittal of the Appellant and recording the finding of his conviction for the offence Under Section 302 of the Indian Penal Code, on consideration of the evidence, is justified. The judgment under appeal does not warrant any interference.
Appeal dismissed.
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2019 (4) TMI 2023
Seeking grant of regular bail - conspiracy to systematically upturn the establishment to cause secession of J & K from the Union of India - framing of charges - accused guilty of offence - Sections 120B, 121 and 121A of the Indian Penal Code (IPC) and Sections 13, 16, 17, 18, 20, 38, 39 and 40 of the Unlawful Activities (Prevention) Act, 1967 - HELD THAT:- A priori, the exercise to be undertaken by the Court at this stage-of giving reasons for grant or non-grant of bail-is markedly different from discussing merits or demerits of the evidence. The elaborate exa mination or dissection of the evidence is not required to be done at this stage. The Court is merely expected to record a finding on the basis of broad probabilities regarding the involvement of the Accused in the commission of the stated offence or otherwise. From the analysis of the impugned judgment, it appears that the High Court has ventured into an area of examining the merits and demerits of the evidence. For, it noted that the evidence in the form of statements of witnesses Under Section 161 are not admissible. Further, the documents pressed into service by the Investigating Agency were not admissible in evidence.
Once charges are framed, it would be safe to assume that a very strong suspicion was founded upon the materials before the Court, which prompted the Court to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged against the accused, to justify the framing of charge. In that situation, the Accused may have to undertake an arduous task to satisfy the court that despite the framing of charge, the materials presented along with the charge-sheet (report Under Section 173 of Code of Criminal Procedure), do not make out reasonable grounds for believing that the accusation against him is prima facie true. Similar opinion is required to be formed by the Court whilst considering the prayer for bail, made after filing of the first report made Under Section 173 of the Code, as in the present case.
The High Court ought to have taken into account the totality of the materials/evidences which depicted the involvement of the Respondent in the commission of the stated offences and being a member of a larger conspiracy, besides the offence Under Section 17 for raising funds for terrorist activities - the Court may release such Accused on bail only if it is of the opinion, on perusal of the case diary and/or the report made Under Section 173 of Code of Criminal Procedure that there are "no reasonable grounds" for believing that the accusation against such person is prima facie true. Conversely, if in the opinion of the Court, there are reasonable grounds for believing that the accusation against such person is prima facie true, the question of granting bail would not arise as the bar under the first part of the proviso of no bail in such cases would operate.
There are force in the argument of the Appellant that the High Court, in the present case, adopted an inappropriate approach whilst considering the prayer for grant of bail. The High Court ought to have taken into account the totality of the material and evidence on record as it is and ought not to have discarded it as being inadmissible. The High Court clearly overlooked the settled legal position that, at the stage of considering the prayer for bail, it is not necessary to weigh the material, but only form opinion on the basis of the material before it on broad probabilities. The Court is expected to apply its mind to ascertain whether the accusations against the Accused are prima face true - it is deemed proper to reverse the order passed by the High Court granting bail to the Respondent.
The impugned judgment and order is set aside - the order passed by the Designated Court rejecting the application for grant of bail made by the Respondent herein, is affirmed.
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2019 (4) TMI 2021
Permission for withdrawal of petition - writ petitioner has informed him that the parties had entered in to a settlement - HELD THAT:- The learned counsel for the writ petitioner states that, nothing survives in the writ petitions and he has got instructions to withdraw the writ petitions. Accordingly, the writ petitions are dismissed as withdrawn.
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2019 (4) TMI 2020
Validity of Reopening of assessment u/s 147 - notice u/s 148 was not issued at the correct address of the assessee and the same could not be said to have been issued within the outer time limit provided u/s 149 of the Act which was 31/03/2015, being the expiry of 6 years from the end of relevant AY i.e. 2008-09 - HELD THAT:- Upon combined reading of Section 149 & Section 148, we find that notice could not be issued to the assessee beyond a period of 6 years from the end of relevant AY which, in the present case, expired on 31/03/2015.
Section 148 mandates revenue to serve upon assessee the requisite notice before proceeding to make any assessment / reassessment or re-computation.
Upon careful perusal of chronology of events as enumerated in the preceding paragraphs, we find that there was no service of notice u/s 148 by the revenue on assessee in the present case and the primary condition to invoke reassessment jurisdiction, against the assessee, remained unfulfilled. The non-service of notice, in our opinion, was not merely a curable procedural defect but primary requirement under law, without fulfilment of which the revenue could not be empowered to trigger re-assessment proceedings against the assessee.
Thus we hold that in the absence of service of notice u/s 148, reassessment jurisdiction as acquired by Ld. AO could not be sustained in law which left us with no option but to quash the reassessment proceedings. - Decided in favour of assessee.
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2019 (4) TMI 2019
Seeking grant of anticipatory bail - Sections 420, 467, 468, 472, 120-B of IPCsubmission is that when the police made a request for remand of the said accused, nothing has come on record to nominate the petitioner in the present FIR and relies upon the remand papers - HELD THAT:- Learned State counsel, on instructions from Inspector Ramjeet Singh, has not disputed the factual position and states that the petitioner is no more required for any further investigation.
This petition is allowed and the interim bail granted to the petitioner is made absolute.
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2019 (4) TMI 2018
Income accrued in India - amount received by the assessee from rendering services in India - whether is not in the nature of fees for technical services? - scope of expression 'make available' - India–Netherland DTAA - whether the services rendered by the assessee to HIPL under the management service agreement is purely managerial in nature so as to take it out of the purview of fees for technical services as defined under Article–12(5) of the India–Netherland Tax Treaty? - As services rendered by the assessee is not purely managerial but has the trappings of technical and consultancy services as well, whether in the absence of satisfaction of the make available clause the fees received can be treated as fees for technical services? - HELD THAT:- As seen from definition of fees for technical services under the tax treaty, managerial service is not included under the definition of fees for technical services. Therefore, though some services rendered by the assessee may have the trappings of technical or consultancy service, however, the core activity of the assessee under the agreement is, providing managerial services. That being the case, the amount received by the assessee from HIPL cannot be treated as fees for technical services under Article–12(5) of the India–Netherland Tax Treaty. More so, when the Assessing Officer has not demonstrated what amount can be attributed towards technical or consultancy service.
The expression ‘make available’ not only would mean that recipient of the service is in a position to derive an enduring benefit out of utilization of the knowledge or knowhow on his own in future without aid of the service provider, but such technical knowledge, experience, knowhow, skill, etc., must remain with the recipient even after expiry of the contract. It has further been held that the technology will be considered to have been made available when the person acquiring the service is able to apply the technology independently. Therefore, to come within the purview of fees for technical services under Article–15(5) of the India–Netherland Tax Treaty, rendering of services and making available of technical knowledge, experience, knowhow, skill, etc., have to take place simultaneously.
AO has failed to demonstrate through any material brought on record that while rendering services to HIPL, the assessee has made available any technical knowledge, experience, knowhow, skill, etc., enabling HIPL to apply such technology independently. Rather the facts on record if considered vis–a–vis the service agreement would clearly reveal that while rendering services, the assessee has not made available any technical knowledge, experience, knowhow, skill, etc., to HIPL for its independent use. - no infirmity in the order of the learned Commissioner (Appeals) in holding that the amount received by the assessee from HIPL is not in the nature of fees for technical services, hence, deleting the addition made by the Assessing Officer. - Decided in favour of assessee.
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