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Showing 141 to 160 of 1721 Records
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2019 (6) TMI 1583 - MADRAS HIGH COURT
Levy of Excise Duty - additional manufactured Castings - Excise Duty upon the cost of free Moulds supplied by BEML stood paid already for the prescribed number of castings manufactured by the assessee and supplied back to the BEML - HELD THAT:- The order passed by the Learned Tribunal is a non-speaking order and except relying on the Larger Bench decision, the Tribunal failed to appreciate the contention in a proper perspective and the finding as to whether any additional Excise Duty is payable by the assessee or not is based on factual aspects, the Tribunal ought to have been undertaken this exercise and after considering the objections of the assessee in this regard and giving reasons for arriving such a conclusion, ought to have demanded the additional Excise Duty, if any.
Therefore, without expressing any opinion on the merits of the case, we are inclined to set aside the order passed by the Tribunal and remand the matter to the Tribunal for deciding the appeal of the assessee again, in accordance with law preferably, within a period of six months from today - Appeal allowed by way of remand.
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2019 (6) TMI 1582 - ITAT DELHI
Exemption u/s 11 - exemption u/s 12A - denial of exemption as activities of the assessee involve rendering of services in relation to carrying on of commerce or business and hence, proviso to Section 2(15) is clearly application in the case of the assessee - HELD THAT:- Hon’ble Delhi High Court in assessee’s own case vide judgment dated [2011 (10) TMI 173 - DELHI HIGH COURT] has held that there is no case made out by the Revenue that the surplus are being appropriated by any individual or by a group of individuals and hence restored the exemption granted u/s 12A of the Act to the assessee. There is a clear finding by the CIT(A) that the assessee has not generated any surplus for anyone - Members or Non-Members.
there has never been any dispute as to the continuation of the same set of facts in all these years, right from the AY 1990-91 at different level either it is at the first appellate authority stage or the Tribunal or the Hon’ble High Court, the consistent view has been that the assessee is a charitable institution and its income has to be computed u/s 11, 12 & 13 of the Act. Unless and until, any change in the fundamental facts is brought on the record, we find it difficult to take a different view for this assessment year. Our this view is well fortified by the decisions of the Hon’ble Jurisdictional High Court in the assessee’s own case for the earlier assessment year so also the consistent view taken by the Tribunal for the AYs 2008-09 and 2009-10. - Decided in favour of assessee.
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2019 (6) TMI 1581 - KARNATAKA HIGH COURT
Jurisdiction - petition and petitioners under different state - non-compliance with Section 202 of Cr.P.C. - allegation is that Magistrate was required to postpone the issue of process and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding in the matter, which was not done in the present case - HELD THAT:- Dealing with Section 202 of Cr.P.C Hon'ble Supreme Court of India in ABHIJIT PAWAR VS. HEMANT MADHUKAR NIMBALKAR AND ANOTHER [2016 (12) TMI 1774 - SUPREME COURT OF INDIA] has held that Admitted position in law is that in those cases where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, it is mandatory on the part of the Magistrate to conduct an enquiry or investigation before issuing the process.
Matter is remitted to the learned Magistrate to proceed in the matter after compliance of the requirements of Section 202 of Cr.P.C. - petition allowed by way of remand.
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2019 (6) TMI 1580 - AUTHORITY FOR ADVANCE RULING, HARYANA
Input Tax Credit - pre-engineered structures which is movable in nature and accounted as “Plant and machinery” and not capitalized as an immovable property - Section 16 of CGST Act - HELD THAT:- Section 16 (a) of the Act provides for eligibility of Input Tax Credit. It reads as “in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed” - Section 17 of the GST Act deals with Apportionment of credit and blocked credits. Section 17 (5) (d) reads as “goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business”.
As per the definition of goods some movable property is excluded from the category of goods whereas at the same time, some immovable properties are treated as goods. But the terms movable and immovable property have not been defined under the GST Act. In laymen terms, any goods that can moved is a movable property and which cannot be moved is immovable property - As per the definition of immovable property contained in the General Clauses Act and the Transfer of Property Act, it is clear that things attached to the earth or permanently fastened to anything attached to the earth is immovable property. Anything imbedded in the earth or attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached, qualifies to be attached to the earth.
Further, when any object is said to be embedded in earth, it does not mean that a part of it is to be inserted/ put deep beneath the earth by digging the earth for several meters. For laying any foundation especially in case of area of considerable dimension as in case of a warehouse, the top soil has to be removed, surface has to be leveled and some part of foundation stone always rests with in the earth. So this contention of the applicant that the support base of the warehouse made of PES neither attached to nor imbedded in the earth is rejected.
Non-permanent nature of the PES structure - HELD THAT:- It has already been discussed that the degree and nature of annexation is vital to the decision whether a property is a movable property or an immovable property. In the case of applicant, the warehouses are rented out to industrial consumers and manufacturers. These warehouses cover considerably large area and caters to the need of business which in terms requires permanence and stability. So, it cannot be said that the warehouses constructed/ erected by way of fixing pre-engineered structures is non-permanent in nature.
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2019 (6) TMI 1579 - SUPREME COURT
Appointment of technical members in the Bench of the National Company Law Tribunal (NCLT) at Ahmedabad - grievance of the petitioners was that their matter was being heard by a Bench in which there was no technical member - HELD THAT:- Ms. Meenakshi Arora, learned senior counsel has raised the issue that despite judgment passed in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 1508 - SUPREME COURT], it is not the Law Ministry but the Ministry of Corporate Affairs which is ordering the appointment of the members of the NCLT.
We are not going into that question in this case and leave it open for decision in an appropriate case - Application disposed off.
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2019 (6) TMI 1578 - ITAT CHENNAI
Delay in E- filing Appeal - Appeal filed manually - show cause notice has been issued to the assessee on 30.11.2018 asking why the appeal should not be dismissed as it was not filed under e-filing - HELD THAT:- Assessee had replied and the reply was rejected and the manual appeal was filed by the assessee is treated as void, ab initio and the delay in filing of the appeal in respect of e-filing was not condoned and the appeal was dismissed in limine.
Under similar circumstances, in the case of Shri G.P.Saravanan [2019 (5) TMI 1847 - ITAT CHENNAI] it was held that when the assessee has filed an appeal manually and also e-filing for such appeal would related back to the original date of filing of appeal manually and consequently, it cannot be held that there was a delay in filing of the appeal.
Thus as assessee has filed its appeal manually on 25.04.2016 and has e-filed the same on 12.01.2019, the said e-filed appeal would in fact relate back to the date of filing of the appeal manually on 25.04.2016. This being so, we are of the view that the order of the Ld.CIT(A) is unsustainable and consequently, set aside the same and the issues in this appeal are restored to the file of the Ld.CIT(A) for adjudication on merits.
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2019 (6) TMI 1577 - ITAT MUMBAI
TP Adjustment - TPO proceeded to amend the list of comparables and finally came with the list whose operating margin had a mean of 20.59% - assessee in this regard submitted that it has a margin of 19.80% on its exports - TPO held that assessee's contention to consider the export segment is rejected and entity level margins of the assessee was considered to find the arm's-length price of international transaction - HELD THAT:- The only objection was that segmental accounts were not audited and that proper allocation keys were not submitted. However this has been duly countered by the learned counsel of the assessee by submitting that allocating the common expenses to the export segment by whatever key the result would compare favourably with the arithmetic mean of the operating margin of the comparable's selected by the transfer pricing officer.
There is a marked distinction between supporting order of the AO/TPO by the Departmental Representative on one hand and finding flaws in the order of the AO/TPO in an attempt to show that the AO/TPO failed to do what was required to be done by him. In our considered opinion if the learned Departmental Representative is allowed to fill in the gaps left by the AO/TPO it would amount to conferring the jurisdiction of the CIT u/s 263 to the Departmental Representative, which is not permitted by the statute. Let us take another situation. Suppose a particular deduction is permissible on the cumulative satisfaction of three conditions. The AO examines the case and finds the very first condition as tacking. Without examining the fulfillment or otherwise of the other two conditions, he rejects the claim, in that case if such first requirement is subsequently found to be fulfilled in the appellate proceedings, the Departmental Representative can very well point out to the tribunal that the other two conditions were a/so not fulfilled.
As held by the authorities below that proper allocation keys of common expenses between export and other segment have not been provided. In this connection assessee has submitted that if the common expenses are allocated by applying any of the keys the operating margin of the export segment would compare favourably with the operating margin of the comparables. This proposition has not at all been rebutted by the authorities below. The learned departmental representative also could not dispute the above proposition. However learned departmental representative has tried to make out a new case by making a submission that the matter may be set aside to TP.
Authorities below objected to comparability of assessee's export segment with the comparable selected by the TPO only on account of their observations regarding absence of proper allocation key. It was never their case that there is lack of comparability. Learned departmental representative is well within his rights on supporting the order's of the authorities below. However he cannot argue that the transfer pricing officers action is incomplete and therefore the issue needs to be set aside so that the transfer pricing officer can be given a second innings. Such a view was rejected by the ITAT in the case of Maersk Global Services Centre (I) P. Ltd. [2014 (8) TMI 1099 - BOMBAY HIGH COURT] above, which was duly upheld by the honourable jurisdictional High Court.
We find cogency in assessee's submission that the operating margin of the export segment of the assessee can be compared with the profit margin of the comparables selected by the transfer pricing officer by any allocation key selected. The TPO is directed to examine the veracity of this submission and delete the adjustment on account of arm's length price, if the result compares favourably.
We find cogency in assessee's submission that the operating margin of the export segment of the assessee can be compared with the profit margin of the comparables selected by the transfer pricing officer by any allocation key selected. The TPO is directed to examine the veracity of this submission and delete the adjustment on account of arm's length price, if the result compares favourably.
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2019 (6) TMI 1576 - BOMBAY HIGH COURT
Benefit of concessional rate of the Central Sales Tax - Issuance of C-form - natural gas purchased by the petitioner from the supplier/dealer in the State of Gujarat used/to be used in manufacturing of Float Glass - HELD THAT:- At this stage, we dispose of this petition by directing the Commissioner of Sales Tax (respondent no.2) to dispose of the petitioner's representation after granting a personal hearing to the respondent within a period of four weeks from the date this order is uploaded.
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2019 (6) TMI 1575 - ITAT DELHI
Late filing fee u/s 234E - Delay in filing TDS return - assessee company filed returns of TDS in form No. 26QB for the 3rd quarter of 2014 on 27/12/2014, whereas the due date of filing of the said return was on 07/06/2014 and, thus, there was delay of 203 days - whether the return was processed prior to 01.06.2015 or not? - HELD THAT:- As held in SRI. FATHERAJ SINGHVI [2016 (9) TMI 964 - KARNATAKA HIGH COURT] that when the statute confers no express power under section 200A before 01.06.2015 on the authority either to compute and collect any fee under section 234E, the demand for the period before 01.06.2015 could not be sustained.
We feel it appropriate to restore the issue in dispute to the file of learned CIT(A) to ascertain the date of processing of return and provide a copy of the said order of processing to the assessee and decide the issue in accordance with law after affording adequate opportunity of being heard to both the parties - Appeal of the assessee is allowed for statistical purposes.
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2019 (6) TMI 1574 - ITAT MUMBAI
Bogus expenditure/Donation - addition of donation being given to charitable trust on the ground that on the search of the said charitable trust it has been found that it has been incurring only bogus expenditure - HELD THAT:- It is undisputed that assessee has submitted the receipt for the donation. The same has been paid by banking channel. There is no evidence on record that the same amount has been received back by the assessee from the said charitable trust. In these circumstances in this addition is solely based on surmise and conjecture and not sustainable in law. Assessee’s appeal stands allowed.
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2019 (6) TMI 1573 - ITAT AHMEDABAD
Disallowance u/s 40(a)(ia) - non-deduction of TDS on payment made to the Markeing Agencies towards sales promotion expenses, payment made to Krishna Clearing Agencies and Maheshwari Enterprise respectively towards Transportation charges and payment made towards consultancy charges - HELD THAT:- As decided in SMT. KANTA YADAV [2017 (5) TMI 1565 - ITAT NEW DELHI] disallowance u/s 40(a)(ia) to be restricted to 30% of the addition as considered the amended provisions of section 40(a)(ia) of I.T. Act - thus we set aside and modify the orders of the authorities below and direct the Assessing Officer to restrict the addition to 30% of the total addition made on account of deduction of TDS u/s 40(a)(ia) of the Act. - Decided against revenue.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As appellant has submitted that it had earned exempt income in the form of dividend and had suomoto made a disallowance which in any case exceeded the exempt income. Hence, no further disallowance was justified. It is seen in the case of Chudgar Ranchhodlal Jethalal [2015 (4) TMI 437 - ITAT AHMEDABAD] has held that the disallowance cannot exceed exempt income. In the facts of the case and judicial decisions in this regard, the addition made by the Assessing Officer is deleted and the disallowance is restricted to the amount of exempt income. - Decided against revenue.
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2019 (6) TMI 1572 - SC ORDER
Admissibility of petition - Appellant submitted that ‘Securities and Exchange Board of India’ having already taken action against the ‘Corporate Debtor’, the application u/s 7 was not maintainable - whether contesting Respondent is ‘Financial Creditor’ or not - Section 7 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Resolution professional may continue to perform his functions. Only grant stay of the direction of the NCLT in so far as it has directed SEBI to hand over the title deeds to the resolution professional. It is further made clear that the SEBI shall not in any manner create any encumbrance on the properties held by them by virtue of the title deeds.
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2019 (6) TMI 1571 - ITAT SURAT
Capital gain computation - AO referred the matter to DVO - determination of valuation of the property as on 01.04.1981 in terms of provisions of section 55A - CIT(A) not treating the reference to DVO u/s 55A as illegal & uncalled for - whether CIT(A) erred in confirming the reference to DVO as rightly made by AO as per the amended provision u/s 55A w.e.f.? 01/07/2012? - CIT-A treating the registered valuer’s report as fallacious & erroneous - cost of acquisition wherein the assessee has substituted the cost of acquisition with the FMV as on 01.04.1981 at ₹ 380/- per sq.mtrs and the DVO has valued the property’s FMV as on 1.04.1981 at ₹ 10.19 per sq.mtr - HELD THAT:- The transaction of sale of land has taken place during the financial year 201112 relevant to Assessment year 2012-13, therefore, the amended provisions of section 55A(a) would not be applicable and one shall be guided by the erstwhile provisions of section 55A(a) of the Act.
In order to refer the matter to the valuation officer as per erstwhile provisions of section 55A(a), in the instant case, there is no dispute that the liability towards the capital gains has arisen during the year as the transfer of the land has happened during the year. There is also no dispute that cost of acquisition as substituted by the assessee with fair market value as on 1.4.1981 is based on and in accordance with the estimate made by the registered valuer.
In the instant case, the value of the land shown by the assessee as on 1.4.1981 based on the registered valuer report is considered, it would reveal that the same was in fact even higher than the value subsequently determined by the valuation officer and therefore, the Assessing Officer was not empowered to refer the matter Therefore, without going into the merits of the basis of valuation so adopted by the registered valuer and subsequently by the department’s valuation officer, in absence of a valid reference to the valuation officer, the addition so made under the head “long term capital gains” so far as it relates to cost of acquisition as substituted by fair market value as on 1.4.1981 is directed to be deleted. In the result, the appeal of the assessee is allowed.
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2019 (6) TMI 1570 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA BENCH
Restoration of the name of the appellant Company on the Register of Companies - Section 252(3) of the Companies Act - HELD THAT:- A careful evaluation of the revenue generated for the financial years starting from the financial year ending 31.03.2013 onwards, it is understood that the company was not generating any income till the financial year ending 31/03/2016. However immediately before the date of struck off the appellant company, it was doing some kind of business and income seen generated from the Financial year ending 31/03/2017. As per the balance sheet it is also understood that the company is doing cash transaction too. However, when asked about non-production of Bank Statement, the Ld. Pr. CS appearing for the appellant submits that the company has no bank account at all. So, also no valid explanation given on the side of the appellant as to the non-filing of Income Tax Returns. Even in the absence of production of statement of bank account and income tax return the appellant company is found begun operation, evidencing generating income.
An opportunity is to be given to the appellant company as a going concern. However, no valid explanation forthcoming as to non-filing of the balance sheets and annual returns for more than 5 years and no valid explanation given for operating the company without maintaining any account in the bank. The explanation that the person, who was dealing with the compliance as is required under the Companies Act, 2013, has left the company without intimation, being found unacceptable in the absence of any supporting evidence. Non-filing of the Annual Returns and Financial Statements cannot be held as due to inadvertent mistake on the side of the appellant.
The appellant company's name being found to be restored the DIN of the Company is to be activated upon the restoration of the name of the appellant company - Appeal allowed.
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2019 (6) TMI 1569 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt or not - account was classified as NPA - time limitation - ex-parte order - HELD THAT:- The petitioner-financial creditor had disbursed money to the respondent-corporate debtor. Though a considerable long period has lapsed the amount due has not been repaid back to the financial creditor- petitioner. It is accordingly held that the respondent-corporate debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one lakh.
After a conjoint reading of Section-7 of the Code along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, we are satisfied that a default has occurred and the application under sub section 2 of Section 7 is complete. The name of the IRP has been proposed and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional.
Petition admitted - moratorium declared.
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2019 (6) TMI 1568 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Maintainability of petition - time limitation - revocation of CIRP process in progress - whether an application is entertainable before this Bench after the petition has been admitted by this Bench and when CIRP is in progress? - HELD THAT:- On careful reading of Section 60(5) of the Code, it is no doubt true that jurisdiction has been conferred upon this Adjudicating Authority to entertain or dispose of an application against the corporate debtor or by the corporate debtor, but it does not mean that this jurisdiction conferment is to re-examine the admission order already passed by this Bench.
It is a settled preposition of law unless review power is conferred upon any authority, no forum is competent enough to review final orders. Though it is an admission order in respect to initiation of CIRP, it is a final order. For this order being final, this Adjudicating Authority will not have any jurisdiction to re-open the order under the cover of Section 60(5) of the Code.
This is a provision conferred upon jurisdiction upon the Adjudicating Authority to examine the applications that are filed either by the Corporate Debtor or corporate person or any other person in respect to the issues that have come up during the CIRP or during liquidation but not to assail the admission order already passed - As to review jurisdiction is concerned, it is a statutory right that is given to the Court, therefore, Court especially the Adjudicating Authority cannot assume or appropriate jurisdiction which has not been explicitly provided under the Code. For review jurisdiction not being given, section 60 (5) of the Code cannot be read as the provision providing review jurisdiction to this Bench. Therefore, we are of the view that this application is bereft of any jurisdiction.
Application dismissed.
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2019 (6) TMI 1567 - ITAT MUMBAI
TP Adjustment - comparable selection - assessee had selected TNMM as the most appropriate method for determining ALP - HELD THAT:- The assessee renders software development services in the field of telecom and communication segments to its parent AE Uniwiredsoft USA. The conceptual framework, technical specifications and basic design for development of software is provided by Uniwiredsoft, USA to the assessee and on the said design and specifications, assessee designs, develops and tests the software.
The assessee has entered in to an agreement with the AE for provision of software development service in the nature of providing roaming solutions. The assessee operates as a software development service provider for which it earns remuneration at cost plus 15% markup from its AE. Thus companies functionally dissimilar with that of assessee need to be deselected from final list.
E-Infochips Ltd. is not comparable to the assessee, which is mainly engaged in providing software development services to its AE, hence, we direct the AO/TPO to exclude E-Infochips Ltd. from the list of comparables.
Wipro Technologies Limited (Wipro) has generated its entire revenue pursuant to the master service agreement having its huge scale of operation as compared to taxpayer and the fact that the taxpayer is a routine captive service provider, the ld. CIT (A) has rightly excluded.
E Zest solutions Ltd. exclude the same on the ground that it is providing high end technical services and as such, is a KPO and not a software development company.
C G VAK Software & Exports Ltd. (‘CG VAK’) - TPO as well as the DRP were erred in excluding CG VAK Software and Exports Ltd. from the list of final set of comparables even though there is no adverse remark about functional similarity between two companies, hence we direct the TPO to include CG-VAK Software and Exports Ltd. in the final set of comparables for determination of arithmetic mean margin to benchmark international transactions with its AE.
R Systems International Ltd.- TPO has accepted this company as comparable in earlier AY 2010-11 and later AY 201213. Therefore, we are of the considered view that when functions carried out by this company are similar to the functions carried out by the assessee and also the TPO accepted this company in earlier years and subsequent years, there is no reason for the TPO to exclude this company for the year under consideration without their being any change in facts and circumstances. DRP after considering relevant facts has rightly directed the TPO to include R Systems International Ltd. in the final set of comparables for determination of Arm’s Length Price of international transactions with AE. We are inclined to uphold the findings of Ld. DRP and dismissed the appeal filed by the Revenue.
Interest receivables from both AE as well as non-AE for delay in receipt of sale proceeds - HELD THAT:- In absence of any findings as to the fact that the assessee has allowed undue benefit to the AE by extending credit period for realisation of sundry debtors and such extension of credit period benefits the AE, no adjustment could be made under the TP provisions of the Act to benchmark interest receivables on hypothetical or notional basis because late realisation of export receivable /sundry debtors cannot be considered as advancing loans and advance to the subsidiary or AE.
This finding is fortified by the decision of in the case of CIT vs Indo American Jewellers Ltd.[2013 (1) TMI 804 - BOMBAY HIGH COURT]where it was held that there was complete uniformity in act of assessee in not charging the interest from AE as well as non-AE debtors for delay in realisation of export proceeds, then no adjustment could be made towards interest on delayed realisation of sundry debtors in course of TP proceedings. Therefore,we are of the considered view that the AO as well as the DRP were erred in benchmarking interest receivables on delayed recovery of sundry debtors from AE, hence, we direct the AO to delete adjustment made towards interest receivable on sundry debtors.
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2019 (6) TMI 1566 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Financial Debt - Financial Creditor - HELD THAT:- Even without any element of 'assured return' an allottee in the real estate project has to be regarded as a 'Financial Creditor'. The petitioner eminently fulfills the condition - The amount has been raised from the petitioner/allottee under a real estate project. In such a situation not only the debt has a commercial effect of borrowings and come within the scope of 'financial debt' but also the petitioner is covered by the definition of expression 'financial creditor' - petitioner being financial creditor can invoke Corporate Insolvency Resolution Process under Section 7 of the code against the respondent corporate debtor in case of default in repayment of financial debt.
It is clear that applicant-financial creditor has disbursed the money to the respondent corporate debtor as consideration for purchase of a commercial space. Though a considerable long period has lapsed even the principal amount disbursed has not been repaid by the respondent corporate debtor as per the terms of the Assured Return Agreement. It is accordingly held that respondent corporate debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one Lakh. Thus, the petition warrant admission as it is complete in all respects.
Petition admitted - moratorium declared.
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2019 (6) TMI 1565 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Financial Debt - Financial Creditor - HELD THAT:- The expressions "Financial Creditor" and "Financial debt" have been defined in Section 5 (7) and Section 5 (8) of the Code and precisely "Financial debt" is a debt along with interest, if any, which is disbursed against the consideration for time value of money.
In the present case applicant sole proprietor had disbursed the loan amount of ₹ 43,00,000 directly in the bank account of the corporate debtor through RTGS. The corporate debtor had executed MOU in favor applicant for repayment of the loan amount with additional amount of ₹ 5,00,000/- as consideration against the time vale of money. The corporate debtor in order to secure its debt also issued two cheques in favour of applicant. It is thus seen that the loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover, the debt claimed in the present application includes both the component of outstanding principal and the consideration amount - thus, not only the present claim comes within the purview of 'Financial Debt' but also the applicant can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code.
An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least 1 lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable - It is thus seen that the applicant 'financial creditor' has placed on record evidence in support of the claim as well as to prove the default - The corporate debtor is entitled to point out to the Adjudicating Authority that a default has not occurred; in the sense that a debt, which may also include a disputed claim is not due i.e. it is not payable in law or in fact. However, despite service respondent preferred to remain absent and the claim of the petitioner remained undisputed.
It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the loan and has committed default in repayment of the outstanding loan amount. The availed loan having not paid in full as per the mutually agreed contract, the default of debt is apparent.
The present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt - in terms of Section 7 (5) (a) of the Code, the present application is admitted.
Application admitted - moratorium declared.
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2019 (6) TMI 1564 - ITAT MUMBAI
Reopening of assessment u/s 147 - admission of additional ground - formation of belief about escapement of income - HELD THAT:- In view of the decision of Hon’ble Supreme Court in the case of National Thermal Power Corporation [1996 (12) TMI 7 - SUPREME COURT] and in the interest of substantial justice, we admit the Additional Grounds of appeal and the parties were allowed to argue the appeal on merits of the case.
The facts of the case are that the assessee belongs to Harshad Mehta Group and was notified under the Special Court (Trial of offences relating to transactions in Securities) Act, 1962. AO observed that the assessee did not file the return of income in time for the year under consideration as provided u/s.139(1).
The incorrect fact being the return not having been filed by the assessee. As pointed out that even if it is accepted that incorrect noting about the absence of return filed was not the only basis for formation of belief, the AR relied upon the judgment of the Hon'ble Gujarat High Court in the case of Sagar Enterprises [2001 (12) TMI 18 - GUJARAT HIGH COURT] to contend that in such a situation also, the recording of reasons is untenable. The Hon'ble Gujarat High Court noted that once there was a factually incorrect basis about the formation of belief about escapement of income, such reasons could not be taken to be valid even if the alternate reasons relied upon may be correct.
As per the Hon'ble High Court, in such a situation it could not be said with certainty as to which factor weighed with the Assessing Officer to form a belief about escapement of income. Thus,recording of reasons is based on an incorrect assumption of fact, the same invalidates the formation of belief envisaged under Section 147/148 of the Act. As a consequence thereof, the assumption of jurisdiction under Section 147/148 of the Act is untenable and is liable to be set-aside - assumption of jurisdiction under Section 147/148 of the Act is untenable and is liable to be set-aside. Appeal of the assessee is allowed.
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