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Showing 181 to 200 of 1471 Records
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2022 (1) TMI 1294
Rejection of application as premature - seeking initiation of Corporate Insolvency Resolution Process against the Guarantor - Section 95(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Adjudicating Authority erred in holding that since no CIRP or Liquidation Proceeding of the Corporate Debtor are pending the application under Section 95(1) filed by the Appellant is not maintainable. The Application having been filed under Section 95(1) and the Adjudicating Authority for application under Section 95(1) as referred in Section 60(1) being the NCLT, the Application filed by the Appellant was fully maintainable and could not have been rejected only on the ground that no CIRP or Liquidation Proceeding of the Corporate Debtor are pending before the NCLT.
The Application filed by the Appellant under Section 95(1) of the Code is revived before the NCLT which may be proceeded in accordance with the law.
Appeal allowed.
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2022 (1) TMI 1293
Dishonor of Cheque - resignation of petitioner much prior to the issuance of alleged cheque - vicarious liability of the directors - HELD THAT:- As rightly submitted by the learned counsel for the respondent, that the documents themselves are disputed and merely because the submissions are made before this Court, the same cannot be relied upon, without proving the authentication as required under law. The documents that have to be proved before the Court for reliance. Therefore, the contention that the petitioner has resigned much prior to the issuance of alleged cheque dated 07.07.2015 or not to be seen only in trial Court. Further, in the very resignation letter, he has stated that he is the Executive Chairman of the first accused/Company at the earlier point of time. Therefore, the facts which are disputed by the other side cannot be dealt with by this Court, as it is for the petitioner to establish the same before the trial Court.
This Court is of the view that the petitioner is one of the Executive Directors in the affairs of the Company. The respondent-Bank pleaded that the cash credit facility has been extended from time to time to the accused persons, who are in-charge of the Company. Merely on the ground that in the pleadings with regard to role played by each of the Directors, is not stated as strictly as required under law, the entire proceedings cannot be quashed.
This Criminal Original Petition is dismissed.
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2022 (1) TMI 1292
Approval of the Resolution Plan - section 30(6) read with section 31(1) of the Insolvency and Bankruptcy Code, 2016 and regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) - HELD THAT:- The Resolution Plan has been approved with 100% voting share. As per the CoC, the plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the plan effective after approval by this Bench.
The Resolution Plan is in accordance with sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. No circumstances exist that militate against grant of approval for the Resolution Plan.
As far as the question of granting time to comply with the statutory obligations/seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code.
The resolution is approved - Resolution Plan as approved is binding on the Corporate Debtor and other stakeholders involved so that the revival of the Corporate Debtor can come into force with immediate effect - moratorium shall cease to have effect.
Application allowed.
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2022 (1) TMI 1291
Reopening of assessment u/s 147 - reopening beyond period of 4 years - mandation to get prior approval of the Commissioner of Income Tax - HELD THAT:- This Court had an occasion in similar circumstances to quash an identical notice under Section 148 of the IT Act by its order [2019 (12) TMI 829 - ORISSA HIGH COURT].
Notice issued u/s 148 which has been challenged as been stated that the notices had been issued after obtaining “necessary satisfaction of the Jt. CIT Range-I, Cuttack” whereas the Officer authorized to record the necessary satisfaction had to be the Chief Commissioner of Income Tax / Commissioner of Income Tax.
As in each of the above cases, the impugned notice under Section 148 of the IT Act is hereby quashed.
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2022 (1) TMI 1290
Income accrued or arised from the business connection in India - Fee for freight/logistic support services - Whether was in the nature of fee for technical services/fee for included services - HELD THAT:- As decided in assessee own case for Assessment Year 2010-11 [2020 (10) TMI 654 - ITAT DELHI] services rendered by the assessee do not fall within the purview of managerial , consultancy or technical services. The payment for freight and logistics cannot be treated as technical services. Similarly, the provisions of Section 9(1)(i) are not attracted in this case as no income has accrued or arised from the business connection abroad in India. The explanation states that only that part of income from business operations can be said to be accruing or arising in India only if it is relatable to the carrying of operations in India. Thus, the payment received by the assessee neither falls under Section 9(1)(i) or Section 9(1)(vii).
Reimbursement of Global Account Management (“GAM”) charges treating the same in the nature for fee for technical services/fee for included services - HELD THAT:- Revenue has not disputed the fact that the Co-ordinate Bench for Assessment Year 2010-11 [2020 (10) TMI 654 - ITAT DELHI] held that business operations of the assessee, we hold that the services rendered by the assessee do not fall within the purview of managerial , consultancy or technical services. The payment for freight and logistics cannot be treated as technical services. Similarly, the provisions of Section 9(1)(i) are not attracted in this case as no income has accrued or arised from the business connection abroad in India. The explanation states that only that part of income from business operations can be said to be accruing or arising in India only if it is relatable to the carrying of operations in India. Thus, the payment received by the assessee neither falls under Section 9(1)(i) or Section 9(1)(vii).
Disallowance of reimbursement of lease line charges holding that the amount is in the nature of royalty - HELD THAT:- As in assessment Year 2004-05 in the assessee’s own case wherein the issue was decided in favour of the assessee by the Co-ordinate Bench of Tribunal.
Levying surcharge and education cess - Addition u/s 40(a)(ia) - HELD THAT:- As relying on Sesa Goa case [2020 (3) TMI 347 - BOMBAY HIGH COURT]. we find that the legislature, in Section 40(a)(ii) has provided that “any rate or tax levied” on “profits and gains of business or profession” shall not be deducted in computing the income chargeable under the head “profits and gains of business or profession”. There is no reference to any “cess”. Obviously therefore, there is no scope to accept Ms. Linhares's contention that “cess” being in the nature of a “Tax” is equally not deductable in computing the income chargeable under the head “profits and gains of business or profession”. Acceptance of such a contention will amount to reading something in the text of the provision which is not to be found in the text of the provision in Section 40(a)(ii). - Decided in favour of assessee.
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2022 (1) TMI 1289
Validity of Faceless Assessment - whether the respondent authority have followed the due procedure of law as envisaged under Section 144B(7) (vii) and section 144B(7)(xii) of the Act, while passing the impugned final assessment order dated 12.08.2021? - HELD THAT:- It transpires from the record that on earlier occassion pursuant to the detail submissions made on 10.04.2021, AO had given option vide notice dated 23.04.2021 for video conference hearing.
Because of technical glitches, the video conference hearing as scheduled could not be conducted and it was thereafter that the AO had once again addressed notice dated 04.06.2021 thereby offering opportunity to the writ applicant/assessee to activate the video conference request. Even in the affidavit-in-reply filed by the Deputy Commissioner of Income Tax, Circle – 1(1)(1), Vadodara, the stand of the respondent authority is that the assessee was requested to respond for video conference activation by 09.08.2021 and has further confirmed that the writ applicant had activated the video conference on 09.08.2021 and had requested for hearing on 16.08.2021.
Thus, we have no hesitation in holding that inspite of specific request for personal hearing being requested by the writ applicant, the respondent authority without adhering to such request having proceeded to pass final assessment order, is in clear violation of the aforesaid statutory scheme and is therefore, held to be null and void and is hereby quash and set aside.
In the result, the writ application succeeds. The matter is remanded back to the Assessing Officer and the Assessing Officer is hereby directed to grant an opportunity of personal hearing to the writ applicant by way of video conference.
12. In the result, the writ application succeeds. The matter is remanded back to the Assessing Officer and the Assessing Officer is hereby directed to grant an opportunity of personal hearing to the writ applicant by way of video conference. It is expected of the authority to serve advance notice giving 15 days time to the writ applicant while fixing date of personal hearing and thereafter, will be at liberty to pass a final assessment order in accordance with law.
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2022 (1) TMI 1288
Maintainability of appeal - legality of SCN - HELD THAT:- The authorities have considered the factual aspects of the matter and recorded a clear finding that the two show cause notices pertain to entirely different allegations. The said finding need not be deviated.
The civil appeal is accordingly dismissed.
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2022 (1) TMI 1287
Approval of Resolution Plan - commercial wisdom - avoidable transactions - Fraudulent trading or wrongful trading - Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 (I&B Code) - effect of Venus Judgement [2020 (11) TMI 850 - DELHI HIGH COURT] - HELD THAT:- The observations of the Hon'ble Delhi High Court in Venus Recruiters that the benefits of avoidance transaction should be given to the creditors were when the relevant Resolution Plan did not provide any provision dealing with the treatment of recoveries arising from Resolution Plan. However, per contra in the instant case Resolution Plan specifically provides for treatment of recoveries arising out of or avoidance transactions. Further, Venus Recruiters do not deal with the situation when the COC gives up the proceeds of avoidance transactions to the Resolution Applicant in exchange for a higher upfront amount - We are fully convinced with the argument advanced by the Appellants Counsel that the ratio of the 'Venus Recruiters' case applies to the facts of this case. Further, the ratio laid down by the Hon'ble Delhi High Court is that of the constitutional court directly answering the issues before the NCLT was binding on the AA/ NCLT.
Based on the different judgements of the Hon’ble Supreme Court, it is undisputed that NCLT/NCLT has to adopt a hands-off approach and should not undertake a judicial review of the COC’s commercial wisdom exercised. However, the question arises as to what can be considered commercial wisdom. Commercial wisdom is not defined anywhere. What would be treated under commercial wisdom can be inferred from the powers given to COC under the code. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the Corporate Debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximize the value of its assets; and that the interests of all stakeholders including operational creditors have been taken care of.
In case of Ngaitlang Dhar v. Panna Pragati Infrastructure Pvt. Ltd., 2021 [2021 (12) TMI 793 - SUPREME COURT] Hon’ble Supreme Court has observed that under Section 61(3)(ii) of the IBC, an appeal would be tenable if there has been a material irregularity in exercise of the powers by the RP during the corporate insolvency resolution period. It is trite law that ‘commercial wisdom’ of the CoC has been given paramount status without any judicial intervention for ensuring completion of the processes within the timelines prescribed by the IBC. It has been consistently held that it is not open to the Adjudicating Authority (the NCLT) or the Appellate Authority (the NCLAT) to take into consideration any other factor other than the one specified in Section 30(2) or Section 61(3) of the IBC.
In the instant case, respondents claim that Section 66 of the insolvency and Bankruptcy Code 2016 does not impede the resolution applicant's rights to avail the proceeds from the avoidance applications. Indeed, this Code does not have any provision restricting the resolution applicant to avail the benefits of avoidance proceedings initiated under Section 66. However, if there is no restriction, it can’t be presumed that the code authorises the resolution applicant for the same.
Whether the stipulation of future recoveries from Section 66 avoidance applications being retained by the Successful Resolution Applicant’s amounts to illegality or whether the same is within the commercial domain of COC? - Whether the same can be treated under the rights of commercial wisdom of the COC? - HELD THAT:- It is important to mention that Sections 66 and 67 of the Insolvency and Bankruptcy Code 2016 deal with wrongful trading. Sub-section 2 of Section 66 provides that where the adjudicating authority has passed an order either under Sub-section 1 or 2 of Section 66 of the Code, in relation to a person who is a creditor of the Corporate Debtor, the Adjudicating Authority may by order direct that the whole or any part of the debt owed by the Corporate Debtor to that person and any interest thereon shall be ranked in order of priority of payment under Section 53 after all other debts owed by the Corporate Debtor - The phrase "in relation to a person who is a creditor of the Corporate Debtor" and the other expression "shall rank in the order of priority of payment under Section 53" used in Sub-section 2 of Section 67 of the Insolvency and Bankruptcy Code indicate that recoveries from avoidance transaction should be distributed among the creditors in order of priority given under Section 53 of the Code. Therefore, it cannot be the discretion of the Committee of Creditors to negotiate the terms against the statutory provision of the Code. However, language erred in Section 67 indicates that recoveries made under Section 66 could go only to the creditors of the Corporate Debtor.
FROM TIME TO TIME, the US courts have observed that any recovery from avoidance actions must be equitably distributed to the debtor's creditors, according to the dictates of the code.
The only judgment that squarely covers the facts of the present case is the Venus Judgement of the Delhi High Court. Therefore, the contention that the Venus Judgement is not applicable or is distinguishable is incorrect and an afterthought - Admittedly in the instant case, the Administrator under statutory duties under Regulation 36B of the CIRP Regulations requested for Resolution Plan (RFRP). It was provided in the RFRP that any transaction is avoided or set aside in terms of Sections 43, 45, 47, 49, 50 or 66 of the Code, and any amount is received by the 1st Respondent, Resolution Applicant or the Corporate Debtor; such sums shall be for the benefit of the CoC. In response to the said RFRP, four entities expressed interest in submitting the Resolution Plans.
Before approving the Resolution Plan, the Adjudicating Authority was obligated to test the Resolution Plan in terms of Section 30 (2) of the Code. In the instant case, the Administrator referred the matter to COC to decide on the applicability of the Venus judgement of Delhi High Court in providing the outcome of avoidance transactions to the Successful Resolution Applicant. Adjudicatory power could not have been delegated to the CoC. The Adjudicating Authority has not taken any decision about the applicability of the Venus judgement on the issue of providing the outcome of avoidance transaction to the resolution applicant. The Adjudicating Authority has stated that “as far as the claims of avoidance transactions, COC has consciously decided that the money realised through these avoidance transactions would accrue to the members of the CoC - factual factors such as the kind of transactions being provided, party funding the action, assignment of claims, and creditors affected by transaction or trading may be considered when deciding on the distribution of recoveries. Thus it was recommended that instead of providing anything prescriptive in this regard, the decision on the treatment of recoveries might be left to the adjudicating authority.
The term in the Resolution Plan that permits the Successful Resolution Applicant to appropriate recoveries, if any, from avoidance applications filed under Section 66 of the Code ought to be set aside. The Resolution Plan be sent back to the CoC for reconsideration on this aspect - Appeal allowed.
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2022 (1) TMI 1286
Violation of principles of natural justice - Seeking participation in the CoC of DHFL - rejection by the Adjudicating Authority/NCLT holding that the Appellant is not entitled to attend the meetings of the Committee of Creditors as member of the erstwhile Board of Directors - Section 60(5) of the Insolvency and Bankruptcy Code, 2016.
Is there a difference between the 'supersession of Directors' under the RBI Act and the 'suspension of Directors' under the Code?
Whether a 'Superseded director', who had vacated office on supersession of Board under RBI Act, is entitled to the notice of CoC meeting and has the right to participate in the meeting of the CoC?
HELD THAT:- The Resolution Plan deliberately deals with confidentiality provisions requiring all parties involved in the resolution process to keep the Information provided therein confidential. Further, the Appellant submitting that the Resolution Plan may become public after its approval by the learned tribunal does not justify overriding the confidentiality provisions. Allowing such parties to receive a copy of the Resolution Plan would not only jeopardise the revival and Resolution in the form of successful implementation of the Resolution Plan for the corporate debtor but also set a dangerous precedent where any party would seek a copy of the Resolution Plan that the COC has already approved - It is important to mention that CIRP Regulation 36(4) imposes a duty on the RP to share the Information Memorandum with the members of CoC after an undertaking of confidentiality of Information. However, the Appellants are not a member of CoC, and they have been removed from the erstwhile Board of DHFL and have vacated the office before initiation of CIRP of the Corporate Debtor. Therefore, they are not entitled to participate in the CoC meetings or share the documents.
Section 45-IE (4)(a) of the RBI Act provides that upon making an order of supersession of the Board of Directors of a non-banking financial company, Director shall from the supersession of the Board of Directors vacate their offices. After vacation or removal from the office of the Director, the said person cannot claim their entitlement to participate in the CoC of the Corporate Debtor. A removed Director from the Board of Directors cannot interfere in the Company's affairs per contra a suspended Director always remains on the erstwhile Board of the Company and assist the IRP/RP as per requirement - the Appellant, erstwhile Directors, who have vacated the offices are also not entitled to share any document. However, the copy of the Resolution Plan after approval from the Adjudicating Authority can not be treated as a confidential document. Therefore, after final approval of the Resolution Plan, its certified copy may be issued as per Rules.
The impugned Order needs no interference - Appeal disposed off.
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2022 (1) TMI 1285
Dishonor of Cheque - legally enforceable debt or not - rebuttal of presumption under Section 139 of the N.I.Act - burden to prove - Power of review - whether this is a case where the Appellate Court is required to exercise the discretion because of miscarriage of justice in case of acquittal, whether it enjoys full power of review evidence? - whether the notice issued is invalid in wake of the part payment made by the respondent as the payment sought is in excess of the amount due? - HELD THAT:- The Court is empowered to exercise appellate jurisdiction of reverting judgment and need not send the matter for retrial, by considering the evidence by proper weightage and consideration. In the instant case also, as an Appellate Court, this Court can consider these parameters and arrive at consideration other than what the Trial Court did. What is vital to be considered here is that in a prosecution under the NI Act, once the cheque is dishonoured, demand of notice within a stipulated time period is must and at the time of trial, the statute has provided presumption under the law and concept of reverse burden.
In case of MS NARAYANA MENON @ MANI VERSUS STATE OF KERALA & ANR. [2006 (7) TMI 576 - SUPREME COURT], the Court considering the issue of presumption under the NI Act held that the Court needs to presume the negotiable instrument for consideration unless existence of consideration is disproved. It has further held that unless, on consideration of matter before it, the Court either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. The Court held that the initial burden of proof is on the accused to rebut the said prosecutions by raising a probable defence.
The burden of proof on the accused is not heavy. It need not disprove the prosecution’s case in its entirety beyond reasonable doubt.
As the essential ingredient of Section 138 are of the drawing of the cheque by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, on presentation of the cheque by the payee or the holder in due course, the return of the cheque unpaid by the drawee of the bank for want of insufficient fund obligates issuance of a written notice to the drawer of the cheque within 15 days. Failure of the drawer to make the payment to the payee would amount to his not having fulfilled the liability of the drawer of the cheque as to the amount of the money and as in the matter on hand, the part payment had already been made, the Trial Court rightly held that the part payment made by the respondent ought to have been reflected in the notice issued by the appellant - In the instant case, as the amount of cheque is higher than the amount which actually was due to the appellant, the Court has chosen to hold that the statutory notice issued for demand of return of cheque was not a valid notice and an omnibus notice for not having recognized the payment made.
This appeal deserves no indulgence at the hands of this Court.
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2022 (1) TMI 1284
Reopening of assessment u/s 147 - scope of mandatory procedure prescribed u/s 148A - relation between Relaxation Act, 2020 and Finance Act, 2021 - enhanced/reduced time limit specified in Section 149 - initiation of reassessment proceedings prior to coming into force of the Finance Act, 2021 - substitution made by the Finance Act, 2021 - legality and validity of only the Explanations to the two Notifications, being Notification No.20/2021 dated 31st March, 2021 and Notification No.38/2021 dated 27th April, 2021, issued by Central Government in exercise of powers vested under Section 3(1) of Relaxation Act, 2020 - HELD THAT:- As the impugned notices in the present matters have been issued post 31st March, 2021 without following the procedure prescribed in the substituted Sections 147 to 151 w.e.f. 01st April, 2021, the present matters are covered by the judgment passed by this Court in the case of Mon Mohan Kohli vs. Assistant Commissioner of Income Tax & Anr.[2021 (12) TMI 664 - DELHI HIGH COURT].
Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void
Consequently, the impugned reassessment notices issued under Section 148 of the Income Tax Act, 1961 are quashed and the present writ petitions are allowed. If the law permits the respondents/revenue to take further steps in the matter, they shall be at liberty to do so.
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2022 (1) TMI 1283
Classification of the APU Off Combo Unit proposed to be imported - to be classifiable under Customs Tariff Heading/HSN Code 8803 30 00 as ‘Other parts of aeroplanes or helicopters’ under the general description ‘Parts of goods of Heading 8801 or 8802’ or not? - HELD THAT:- In this case, it has been indisputably brought out and amply illustrated that the clearly defined function of an APU off combo unit is only as a replacement of a part of aircraft, i.e., it’s APU. By combining several functions into a single unit, the Unit is clearly customized for use only with aircrafts. Therefore, it is reasonable to hold that the Unit can only be regarded as a part of aircraft which replaces the on-board APU and contributes to operational efficiency and eco friendliness. The only function of the Unit that is clearly defined is its function as the substitute to the APU, i.e., substituting an aircraft part.
The GPU has an inbuilt computer system which synchronizes with the aircraft mechanism and which also activates the computer operations in the aircraft. The GPU cannot be used as a normal generating set in view of its inbuilt configuration, which facilitates only functions of aircrafts - The HSN General Explanatory Notes to Chapter 88 lay down that, ‘Subject to the provisions of the Notes to Section XVII, it also covers parts of such equipment. The relevant Section Notes have already been discussed above and the conclusion thereof is that the Unit under consideration, based on its design and intention to be used solely as a source of power and preconditioned air to stationary/parked aircrafts, merits classification under Chapter 88 of the Customs Tariff.
Note 3 to Section XVII states that references in Chapters 86 to 88 to “parts” or “accessories” do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part or accessory. The Unit can only be termed and considered as a part of aircraft which replaces the on-board APU and is suitable for use solely and principally with aircrafts falling under Chapter 88 and is not hit by the exclusion provision of the notes to Section XVII.
Thus, APU OFF combo unit merits classification under chapter sub-heading 8803 30 00 of the First Schedule to the Customs Tariff Act, 1975.
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2022 (1) TMI 1282
Refund claim - rejection on the ground that the appraising group did not agree with the new classification claimed by the appellant, and also alleged deficiency that the appellant have failed to submit reassessed bill of entry - HELD THAT:- The Revenue have entertained the refund claim and have adjudicated the same by holding that the goods in question - PPE equipment or personal protection outfits have been rightly classified under CTH 6203 49 90. Thus, the order-in-original dated 19-2-2019, is in the nature of reassessment order. It is further found that the Assistant Commissioner (Refunds) have passed order in a mechanical way, by simply accepting the advice of the Appraising Group showing total non-application of mind.
The order of Commissioner (Appeals) is erroneous and misconceived wherein he observed that the refund claim is not entertainable for want of reassessment of the Bill of Entry in question - admittedly Revenue have been accepting the classification of the same goods under CTH 6210 10 00 both prior to and subsequent to the Bill of Entry in question. Thus, the whole exercise of Revenue in rejecting the refund is perfunctory and bad, and at the same time a colourable exercise of power.
The appellant is entitled to refund of the excess amount of duty paid erroneously of Rs. 12,24,224/- - appeal allowed - decided in favor of appellant.
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2022 (1) TMI 1281
Reopening of assessment u/s 147 - statutory obligation of observing the formality of Section 148A not complied with - HELD THAT:- It is an admitted position and undeniable fact that in this case statutory formalities of Section 148A of the Income Tax has not been observed by the AO before issuing notice u/s 148 and the learned Counsel for the petitioners in support of his contention has relied on my own order passed in Bagaria Properties and Investments Private Limited & Anr. vs. Union of India & Ors. [2021 (8) TMI 788 - CALCUTTA HIGH COURT] which is on the same fact and same issue where Income Tax Authorities had not complied with statutory obligation of observing the formality of Section 148A of the Income Tax Act, 1961.
We direct the respondents to file affidavit-in-opposition by 10th January, 2022. Petitioner to file reply thereto, if any, by 13th January, 2022. List the matter for hearing on 17th January, 2022.
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2022 (1) TMI 1280
Reopening of assessment - Necessity to issue copy of the reasons based on which notice under Section 148 was issued - HELD THAT:- We are not inclined to interfere in our jurisdiction under Article 226 of the Constitution of India.Petition dismissed.
Considering the reply that is filed, we direct respondents to provide a copy of the reasons based on which notice under Section 148 was issued, within 4 weeks from today.
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2022 (1) TMI 1279
Money Laundering - proceeds of crime - international Hawala transactions - Seeking proper investigation under Section 5 read with Section 3 of the PMLA and Section 83 of the CGST Act by a Special Investigating Team (SIT) etc. - HELD THAT:- In the complaints referred in the present petition, investigations by the Income Tax Department, DDGI and DRI have been conducted, however, as regards SFIO there is no investigation carried out. As per the affidavit filed on behalf of the SFIO since under Sections 210, 212 and 213 of the Companies Act, the Central Government has to direct investigation into the affairs of the company and since no such direction has been received, the SFIO cannot investigate the affairs of the company. The Central Government, which has been impleaded as respondent no.1, Ministry of Corporate Affairs will treat the present petition as a representation and consider whether any direction is required to be issued to the SFIO for investigating the offences in terms of Sections 210 and 212 of the Companies Act and a report in this regard be filed before the next date of hearing.
Status Report in sealed cover in respect of the inquiry being carried out by the ED be placed on the record of this Court before the next date of hearing.
List on 30th March, 2022.
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2022 (1) TMI 1278
Seeking grant of Bail - smuggling - Heroine - contraband item or not - seeking bail on the ground that the quantity of contraband is less than commercial and rigours of S. 37 of NDPS Act do not apply and also on medical ground of suffering from acute diabetes - HELD THAT:- Section 2 (vii-a) of the NDPS Act defines commercial quantity as the quantity greater than the quantity specified in the schedule. Section 2 (xxiii-a) defines small quantity as a quantity less than the quantity specified in the table of the NDPS Act. The remaining quantity falls in an undefined category, generally called an intermediate quantity. All Sections in the NDPS Act, which specify an offence, also mention the minimum and maximum sentence, depending upon the quantity of the substance. The commercial quantity mandates a minimum sentence of ten years of imprisonment and a minimum fine of Rupees One hundred thousand, and bail is subject to the riders mandated in S. 37 of NDPS Act. When the quantity is less than commercial, the restrictions of Section 37 of the NDPS Act will not attract, and the factors for bail become similar to the offence regular statutes.
While considering each bail petition of the accused with a criminal history, it throws an onerous responsibility upon the Courts to act judiciously with reasonableness because arbitrariness is the antithesis of law. The criminal history must be of cases where the accused was convicted, including the suspended sentences and all pending First Information Reports, wherein the bail petitioner stands arraigned as an accused - The petitioner is not entitled to bail, looking at the previous criminal history. However, the petitioner’s counsel had sought bail also on medical grounds. The State did not dispute the critical medical condition of the petitioner. It has been argued that the petitioner is a severe diabetic patient with swelling on his left leg, which may result in its amputation, and he wants to get treatment at his efforts.
Given the nature of allegations and the other circumstances peculiar to this case, the petitioner shall surrender all weapons, firearms, ammunition, if any, along with the arms license to the concerned authority within 10 days from today and inform the Investigator about the compliance. However, subject to the Indian Arms Act, 1959, the petitioner shall be entitled to renew and take it back in case of acquittal in this case.
This bail is subject to the petitioner joining investigation and fully cooperating with the investigating agencies. Failure to do so shall ipso facto result in its withdrawal - Petition allowed.
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2022 (1) TMI 1277
Issuance of lookout circular against the petitioner - service of requisite notice under Section 41A of the Cr.P.C. - HELD THAT:- It is informed on behalf of the Union of India i.e. the respondent no.1 that there was no request received by the Union of India for issuance of any lookout circular qua FIR No.85/2021, PS Guntur.
The respondent no.2 shall seek instructions in relation to the aspect of any requirement of any lookout circular in relation to FIR No.346/2021, PS Guntur with a copy thereof being placed on the record and the copy of FIR No.85/2021, PS Guntur be also placed on record by the State of Andhra Pradesh.
The matter in the circumstances, be re-notified for 18.02.2022.
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2022 (1) TMI 1276
Disallowance of Deduction u/s 80IA - assessee is not engaged in the business of infrastructure facilities and the assessee in fact a contractor, - HELD THAT:- We find that this issue has been adjudicated in favour of the assessee and the deduction has been held to be allowable vide the orders of the Co-ordinate of the ITAT for the A.Ys. 2000-01, 2001-02, 2003-04 [2019 (11) TMI 270 - ITAT DELHI] , 2005-06 [2020 (1) TMI 1606 - ITAT DELHI] as held that According to the assessment order, copies of all the agreements were before Assessing Officer yet assessing officer chose to make sweeping observation that the assessee is not developer. Such sweeping and bald assertion cannot be approved by us. Therefore, taking into the facts of the present case, we are the considered view that appellant is entitled to claim deduction 80IA, which was wrongly denied. We set aside the order of the ld. CIT (Appeals) and direct the Assessing Officer to allow deduction - Decided in favour of assessee.
Disallowance u/s 14A r.w.r. 8D - AO has disallowed an amount u/s 14A out of the total administrative and operative expenses - HELD THAT:- As decided in own case [2020 (1) TMI 1606 - ITAT DELHI] Rule 8D of the Rules has been held to be applicable from Assessment Year 2008- 09. Therefore, for the year under consideration, there is no formula to compute the disallowance. However, at the same time, we are of the view that reasonable expenditure should be disallowed for earning exempt income. Though the Assessing Officer has attributed the administrative expenses on the ratio of the tax free income to total receipts and computed the disallowance but we are of the opinion that such computation is on the higher side. Thus we hold that Rs.20 lacs be treated as expenses incurred in earning of the exempt income.
Disallowance of Prior Period Expenses - As argued that the expenses have been crystallized and fully allowable - HELD THAT:- Since, this expenditure is specific to this year, in the absence of any details produced before the revenue authorities, the claim of the assessee cannot be allowed. In the interest of justice, we hold that this is a fit case to remand this issue to the file of the Assessing Officer with directions to the assessee to submit the details of the AO and claim the deduction in accordance with the provisions of the Act.
Income through PE & 115 JB - AO disallowed on account of corporate office expenses which have not been deducted by the assessee while computing profit from foreign entities - HELD THAT:- The taxation law in India follows the credit method for reliving the burden of double taxation. Therefore, appellant ought to have included the overseas income against which credit for taxes paid overseas should have been availed. Therefore, the income received from foreign projects required to be included for taxation purposes under normal provisions of the IT Act and credit for taxes paid in the host countries i.e. Malaysia of Malaysian Ringgets after converting the same in Indian Rupees as on 31.03.2006 should be allowed.
CIT(A) has also held that this amount is required to be taxed both under normal provisions and MAT provisions. This issue has been adjudicated by the Tribunal in [2019 (11) TMI 270 - ITAT DELHI] and allowed in favour of the assessee.
Provision of maintenance - CIT(A) deleted the addition holding that the assessee has been claiming that provision for maintenance has been made taking into account contractual provision, operating turnover of the year, type of project period of maintenance and other relevant factors - HELD THAT:- At the time of completion of the contract, liability arises in the hands of the appellant company to provide free maintenance to the various contractees for the period specified in the agreement. This liability arises at the time of the completion of the project itself and obviously the expenditure required can only be estimated on the basis of past experience, nature of the contract, type of the project and turnover of the appellant in that particular year. The appellant claimed that estimate has been made on best estimated basis based upon the experience in the construction industry. Therefore, the objection of the Assessing Officer that the liability has not arisen during the year as it has been quantified on estimated basis is not correct. It is also a fact not disputed by the Assessing Officer in the assessment order that all along the provision for maintenance of expenses have been allowed to the appellant company except the disallowances made in A.Y. 1985-86 and 1995-96.
We find that the similar matter of provision for maintenance stands adjudicated by the Co-ordinate Bench of the Tribunal. The assessee has been providing for expenses to be incurred on demobilization, maintenance and other expenses since by inception of the Company.
Nature of expenditure on Technical Know-how - capital or revenue expenditure - HELD THAT:- The assessee furnished detailed ledger account in this regard before the Ld. CIT(A) who held that it is evident that these expenses are regular business expenses which are incidental to the business of the assessee and in no way provide any enduring benefit to the assessee. Therefore, applying the ratio laid down by the Hon’ble Supreme Court in the case of M/s Empire Jute Co. Ltd. [1980 (5) TMI 1 - SUPREME COURT] the addition made by the AO in this regard is deleted by the ld. CIT(A) correctly.
Allowability of CSR Expenses - HELD THAT:- This is a straight issue supported by the provisions of the Income tax Act supporting the claim of the assessee. The Explanation 2 to section 37(1) of Income Tax Act 1961 was inserted in Finance Act 2015 with regard to the disallowance of CSR expenses and it does not have retrospective applicability. Hence, appeal of the assessee on this ground is allowed.
Advances Written off - HELD THAT:- CIT(A) allowed an amount pertains to TDS credit which could not be availed and written off and confirmed an amount Spent on account of expenditure incurred by the assessee in connection with the joint venture. This amount pertains to the expenses incurred by the assessee for the Joint Venture wherein the expenses had to be irrecoverably written off. This is a sunk cost to the assessee which has been spent from the accounts of the assessee. Hence, the amount is eligible to be written off and to be claimed. In the result, the appeal of the assessee on this ground is allowed.
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2022 (1) TMI 1275
TP Adjustment - Comparable selection - functional dissimilarity - HELD THAT:- Companies functionally dissimilar with that of Assessee ITES segment need to be deselected from final list.
Also if a company is making profit in any one of the 3 immediate preceding years, then it should be considered as a comparable.
Re-characterizing certain trade receivables as unsecured loans and computing notional interest on such trade receivables - main contention of the ld. AR is that deferred receivables would not constitute a separate international transaction and need not be benchmarked while determining the ALP of the international transaction - HELD THAT:- We are of the opinion that deferred receivables would constitute an independent international transaction and the same is required to be benchmarked independently as held in PCIT v. AMD (India) Pl. Ltd. [2018 (8) TMI 2094 - KARNATAKA HIGH COURT]
Once we have held that the transaction between the assessee and AE was in foreign currency with regard to receivables and transaction was international transaction, then transaction would have to be looked upon by applying the commercial principles with regard to international transactions and accordingly proceeded to take into account interest rate in terms of London Inter Bank Offer Rate [LIBOR] and it would be appropriate to take the LIBOR rate + 2%. For this purpose, we place reliance on the judgment of the Bombay High Court in the case of CIT v. Aurionpro Solutions Ltd.[2017 (6) TMI 1087 - BOMBAY HIGH COURT] It is ordered accordingly.
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