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Showing 201 to 220 of 1486 Records
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2020 (3) TMI 1286
Prayer for withdrawal of application - Section 12A read with 30A of the IB Code - HELD THAT:- In view of the settlement between the parties and on filing application under Section 12A, the prayer of withdrawal of application is allowed. Accordingly, moratorium so granted under Section 14 of the IB Code ceased to have effect and IRP is discharge from the duties. The Operational Creditor is directed to clear the dues of IRP as on today. It is submitted by the Learned Lawyer for the Operational Creditor that they have already cleared the dues of the IRP - The Adjudicating Authority do not find any impediment in allowing the petition so filed by the Operational Creditor under Section 12A of the IB Code through IRP, duly executed by way of an affidavit.
The instant application allowed and stand disposed-off as withdrawn.
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2020 (3) TMI 1285
Seeking exclusion of period of 60 days on account of legal proceedings in the Resolution Process - section 12, Sub-Section 3, Proviso 2 of the IBC, 2016 & R/w Rule 11 of the NCLT Rules, 2016 - HELD THAT:- The total time permissible under Code viz. 180+90 days, was going to expire on 22nd March, 2019. The record shows that there is no substantial work done in the CIRP process in the case except filing one Application or the other seeking various reliefs from the Adjudicating Authority. There are hardly realisable assets standing in the name of Corporate Debtor. And the Contention of Applicant that he would take appropriate action, if 60 days further time is granted is without any basis, and permissible 270 days have already been exhausted without doing any substantial work in CIRP. The Applicant has not furnished any material to show as to how State Government freezes the Property of Corporate Debtor, and what enquiry/investigation was conducted before etc. He cannot threaten the Officials of State Govt. with Contempt, without citing any substantial material, as they are also discharging their statutory deities under Law. There would be no useful purpose to grant further time as asked for. The instant Application is totally misconceived, and the grounds mentioned in the application are baseless, and untenable, and they are liable to be rejected.
In terms of Section 33 of Code, if no Resolution Plan is received within stipulated period as per law, under sub-section (6) of Section 30 or reject Resolution Plan, the Corporate Debtor has to be liquidated as per extant provisions of Code. Therefore, it is necessary to pass an order placing Corporate Debtor under Liquidation. In order to pass an order of Liquidation, it is necessary to appoint Liquidator. Therefore, the COC & AR are directed to suggest suitable Liquidator to appoint.
Application rejected.
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2020 (3) TMI 1284
Lower rent income in Return of Income - as argued by assessee actual rent income earned and accrued to Appellant has been shown in Return of Income and no further addition is called for - HELD THAT:- AR placed reliance on assessment framed u/s. 143(3) r.w.s. 147 for AY 2010-11 on 21/10/2013 to submit that a new MOU was entered into between the co-owners on 21/10/2011 wherein the assessee and Mrs. Lataben paid a sum of ₹ 35 Lacs to Mrs. Chaulaben D. Doshi which would substantiate the fact that the money was advanced by Mrs. Chaulaben D. Doshi to facilitate the purchase of property and therefore the right of Mrs. Chaulaben D. Doshi and Mrs. Darshnaben A. Patel was undisputed. Considering the same, the proportion of rent as offered by respective co-owners were accepted by Ld. AO.
DR submitted that the said assessment was framed after the date of impugned order and further the issue of TDS credit would require to be reappreciated.
Upon due consideration of factual matrix, the bench formed an opinion that considering the assessment framed for AY 2010-11 which is subsequent to the date of impugned order, it would be in the fitness of things to restore the matter back to the file of Ld. CIT(A). Therefore, the matter stand remitted back to the file of Ld. CIT(A) for re-adjudication.
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2020 (3) TMI 1283
Violation of Listing Agreement read with Section 21 of the Securities Contracts (Regulation) Act - penalty of ₹ 30 lakh has been imposed on the appellants - HELD THAT:- There is no allegation that the results are not disclosed. Hence the alleged violation is in terms of only some variations which are about 10% of the reported net profits for the financial year 2010- 11. The explanation furnished by the appellants is in terms of mistakes committed in terms of minor heads /sub-heads. Given that, there is no allegation of non reporting and, therefore, the appellants had complied with the mandatory requirement of Clause 41 we give benefit of doubt to the appellants in terms of the explanation provided and do not intend to impose any penalty on this ground.
We do not agree with the contention of the appellants as regards inordinate delay in the proceedings since we note that the appellants are also partly responsible for the delay in completing the investigation by not providing all the details / information sought by SEBI from October 2012 till July 2015. As explained in the aforesaid paragraphs, the contention of the appellants that substantive compliance of Clause 36 of the Listing Agreement has been made cannot be accepted since important / material information relating to transferee entity (IKAB), a related party, its affiliation to the appellants as a group entity, the detailed consideration of the transactions, etc. were either not disclosed or disclosed after considerable time.
Therefore, the finding in the impugned order that the appellants have violated the true spirit of Clause 36 cannot be faulted. Similarly, the submission that Clause 50 is not violated because SEBI has no mandate on the accounting standards has no merit. A reading of Clause 50 makes it clear that the stated accounting standards have to be mandatorily followed by a listed entity. Accordingly, we uphold the finding in the impugned order that the appellants have violated Clause 36 and Clause 50, alongwith the stated accounting standards.
While upholding the impugned order partially, we are also of the considered view that the penalty imposed on the appellants needs to be reduced. Therefore, some of the disclosures were made by the appellants and, therefore, it is a case of partial disclosure rather than non-disclosure; delay on the part of the respondent in completing the proceedings and the benefit of doubt given to the appellants on one of the alleged violations, we reduce the penalty imposed on the appellant No. 1 from ₹ 20 lacs to ₹ 10 lacs and on appellant Nos. 2 and 3 from ₹ 5 lacs each to ₹ 3 lacs each thereby reducing the total amount of penalty from ₹ 30 lacs to ₹ 16 lacs. The appellants are directed to pay the penalty amount within four weeks from the date of this order.
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2020 (3) TMI 1282
Condonation of delay - delay of 1250 days - Whether the assessees’ failure to file the appeals in time is supported by sufficient cause so as to condone the delay of 1250 days in filing the appeals? - HELD THAT:-. The Madras High Court considered an issue in the case of Sreenivas Charitable Trust v. Dy. CIT [2005 (10) TMI 36 - MADRAS HIGH COURT] and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression "sufficient cause" should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay.
We have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay has to be condoned.
Question of condonation of delay is a factual matter and the result would depend upon the facts of the case and the cause shown by the assessee for the delay. It has also been opined that generally delays in preferring appeals are required to be condoned in the interest of justice, where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay. In view of the foregoing, we are of the view that the assessees have shown sufficient cause for the delay in filing the appeals before the Tribunal. Accordingly, we condone the delay of 1250 days and admit the appeals for adjudication.
Sale of Agricultrual land - Admission of additional ground - HELD THAT:- Purpose of assessment proceeding is to tax/assess the taxable liability/income of the assessee correctly in accordance with law and if the assessee is entitled to certain relief, deduction or benefit, the assessee should not be denied or deprived of it, even if the claim pertaining to the same is made for the first time before the Tribunal during pendency of appeal before it. In the present case, the issue raised in additional ground is legal issue which goes to the root of the matter and for deciding the legal issue no new facts are required to be considered as all the facts are already recorded in the orders of the authorities below. In view of the matter, we do not find any force in the argument of the Ld. DR that the assessees cannot raise the additional ground on the simple reason that it was not challenged before the Assessing Officer. We, therefore, admit the additional ground and restore the issue to the file of the Assessing Officer for verification and fresh adjudication on the legal issue raised by the assessee.
On merits, the facts of the case have already been narrated in the affidavits filed by the ld. AR which is not required to be reiterated. Since we have admitted the appeals for adjudication, the additional ground raised by the assessee which goes to the root of matter which was not at all raised before the lower authorities on earlier occasion needs to be remitted to the file of the Assessing Officer for fresh consideration. The Assessing Officer has to go through the relevant title deed, notifications etc. so as to decide whether the land sold by the assessees is agricultural land or not. Thus, the additional ground of appeals is partly allowed for statistical purposes.
Since we have remitted the additional ground to the file of the Assessing Officer for fresh adjudication, at this stage, we refrain from going into main grounds.
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2020 (3) TMI 1281
TP adjustment on corporate guarantee - HELD THAT:- It is stated that the TPO, in the consequential proceedings, has accepted 0.92% as the ALP corporate guarantee commission. Following the earlier order of ITAT, we remit the issue for the assessment year before us also to the AO/TPO and direct the AO/TPO to adopt the same rate of commission for the corporate guarantee as decided in the earlier assessment years.
Levy of interest u/s. 234B and 234C - HELD THAT:- This issue is also remitted to the file of AO to give consequential relief, if any to the assessee. In the result, appeal of assessee is treated as allowed for statistical purposes.
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2020 (3) TMI 1280
Addition u/s 56 - interest earned on bank deposits treated as income from other sources - HELD THAT:- Assessee was having its own fund of ₹ 5 crores, which was not sufficient enough to provide the security deposit to GVISPL. Thus, the borrowed fund was utilised by the assessee for furnishing the security deposit. AO did not disturb the interest expense claimed on such borrowed fund which was not capitalised as the cost of the project but the interest income from such borrowed fund which was placed as the security deposit by the assessee with GVISPL was treated as income from other sources and not as part of the project. As found by the Tribunal as well as the CIT(A) that Assessing Officer could not have treated interest expense and the interest income differently arising from the same fund. When the Assessing Officer was satisfied with regard to the utilisation of the fund, he ought to have considered the interest income and interest expenses arising from the same fund at par.
Assessing Officer could not have treated interest income as income from other sources on one hand and treated interest expenses as part of the project cost.
Both the CIT(A) and Tribunal have rightly come to the conclusion that the interest income earned by the assessee is inextricably linked with the project as both interest expenses and interest income are arising from the same borrowed fund.
Interest income on the fixed deposit placed with the Bank for issuance of bank guarantee - HELD THAT:- Reliance placed by the Assessing Officer on the decision of the Supreme Court in the case of Tuticorin Alkali Chemicals [1997 (7) TMI 4 - SUPREME COURT] would not be tenable because in the said decision, the Supreme Court has held that if the idle fund of the assessee is invested for the purpose of earning interest income, such income would be treated as income from other sources.
Considering the concurrent findings of fact arrived at by the CIT(A) and the Tribunal that the interest income earned by the assessee on the security deposit kept with GVISPL is directly and inextricably linked with the project, the project cost is to be reduced to that extent as the assessee has borrowed funds for placing such security deposit and interest expenses incurred for such borrowed funds are capitalised. Therefore, we are of the opinion that in the facts of the case, the question No.1 proposed by the Revenue cannot be termed as a substantial question of law.
Disallowance on account of CENVAT credit - assessee in its audited financial statements has shown an unutilised CENVAT credit as on 03.02.2011 and claimed that such CENVAT credit pertains to the services received by the assessee and does not pertain to inventories as envisaged under the provision of Section 145A - HELD THAT:- Both CIT(A) and the Tribunal have arrived at findings of fact that the assessee was following the method of valuation consistently and there was no dissatisfaction of the Assessing Officer about the correctness of the books of accounts of the assessee and the assessee has been recording his transaction of purchase, sales and valuation of inventories net of CENVAT. Consequently, if the inventory of the closing stock is enhanced by the amount of CENVAT credit attributable to it, then the amount of corresponding purchase is also required to be increased by the said amount, which would result into tax neutral exercise.
In view of the above concurrent findings of fact arrived at by the CIT(A) and Tribunal, we are of the opinion that the addition made by the Assessing Officer on account of CENVAT credit is rightly deleted as the assessee has consistently followed the valuation method of net of CENVAT Credit and the addition of CENVAT Credit would also require adding of the CENVAT credit in the purchases, resulting into tax neutral exercise.
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2020 (3) TMI 1279
Grant of deduction u/s 80P(2)(a)(i) - interest income earned from the investments - HELD THAT:- In the present case, the assessee has earned income from the investment made with nationalized banks. Therefore, such income will not qualify for grant of deduction under section 80P(2)(a)(i) as well as under section 80P(2)(d) because it is not from cooperative society.
If the component of income does not qualify for grant of deduction under section 80P(2)(a)(i), then such income should be computed on net basis; any expenditure relatable to earning of such income is to be allowed before calculating exclusion of such amount for the purpose of 80P(2)(a)(i) - Since interest income earned by the assessee was treated to be "income from other sources" under section 56, then, the assessee can claim deduction under section 57 - we direct the AO to allow expenditure for earning such interest income.
AO has to determine the net interest income earned by the assessee after giving set off expenditure, and only thereafter that net income has to be excluded from the admissibility of deduction under section 80P(2) of the Act. Grounds of appeals of the assessee are partly allowed for the statistical purpose.
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2020 (3) TMI 1278
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The petitioner has admittedly acknowledged the receipt of complaint dated 28.12.2018, agreed to take back the unused material of 9116.4 kgs. On perusal of the records it is also found that both the parties have exchanged number of emails regarding quality of the material, debit note raised on the petitioner by the respondent and rate of interest charged.
On perusal of the records it is also found that against the defective material supplied by the petitioner, respondent had issued debit notes - In the instant application, from the material placed on record by the respondent, it is evident that there is/are pre-existing dispute regarding quality of the material supplied by the operational creditor and, therefore, the instant petition is not maintainable.
The Adjudicating Authority is of the considered view that the instant application devoid of merit and as such is not maintainable on the very reason that there is/are pre-existing disputes with regard to the quality of goods supplied - Application dismissed.
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2020 (3) TMI 1277
Maintainability of appeal - low tax effect - Appeals filed by the Revenue Department as dismissed as withdrawn, however the liberty was granted to the Revenue Department to seek recall of the order, in case it realized that the captioned appeal falls within the exceptions as prescribed in the Circular No. 03/2018 and/or having involved the tax effect more than ₹ 50 Lakh - Revenue department sought recall of the order of the tribunal on the ground that the captioned appeals fall under the aforesaid exception as the addition was based on penny stock.
HELD THAT:- On specific query, Ld. AR Sh. Ashwani Kalia along with Mr. Kapil Aggarwal Ld. Chartered Accountants does not controvert the findings of the CBDT and/or claim of the revenue and expressed no objection to recall of the order 23-08-2019 [2019 (8) TMI 1621 - ITAT AMRITSAR]under challenge as requested in the instant miscellaneous applications.
Considering the peculiar facts and circumstance, as the case of the assessee falls under the exception in view of the CBDT clarification dated 16.09.2019 and ends of justice, recalling of the order dated 23rd August, 2019 passed by the Co-ordinate Bench is warranted, hence ordered accordingly. Miscellaneous Applications filed by the Revenue Department stands allowed.
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2020 (3) TMI 1276
CENVAT Credit - input services - appellant has created a single Integrated Product Development Organisation Unit (IPDO) at Bachupally to undertake research and development activities of their products, it caters to the requirements of various manufacturing units of the appellant - extended period of limitation - HELD THAT:- Pharmaceutical industry is a specialised industry distinct from other industries. Not only is the manufacturer required to manufacture the correct drug but is also required to make it of the requisite quality and standards. Further, a manufacturer is also required to obtain the necessary clearances and certifications from the authorities before the product can be marketed. Without any of these activities, the product cannot be manufactured and sold. Therefore, for a marketable pharmaceutical product to come into existence, the certifications and quality control are absolutely essential. Further, pharmaceutical industry is one which involves a lot of research and development which distinguishes the product of the manufacturer from those of others.
The services used in the R&D have a direct nexus with the manufacture of the final products. It is not necessary that the pharmaceutical industry has a complete R&D facility in each of its manufacturing units. In order to economise and benefit from the economies of scale, R&D units are set up as independent units for serving various manufacturing units of the manufacturer. In such a case, the services availed in the R&D units have a direct nexus to the manufacture of the products in various units. If the assessee is registered as an input service distributor, the CENVAT Credit availed on the services used in the R&D unit can be distributed to various manufacturing units. The appellant has just done that.
This view is consistent the view taken by the Tribunal Allahabad in the case of Jubiliant Life Sciences Ltd. [2017 (8) TMI 358 - CESTAT ALLAHABAD] and upheld by the Hon’ble Apex Court.
The impugned orders are unsustainable and need to be set aside - Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 1275
Approval of scheme of amalgamation - Section 230-232 of the Companies Act, 2013 read with Attendant Rules of the Companies (Compromise, Arrangement and Amalgamation) Rules, 2016 - HELD THAT:- The date of hearing of the petition filed by the petitioner for the approval of the Scheme is fixed on 08.04.2020.
Notice of the hearing shall be advertised in the Newspapers, namely, Mahanagar Times, Jaipur Edition (vernacular) and Indian Express, Jaipur Edition (English) not less than ten days before the aforesaid date fixed for hearing.
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2020 (3) TMI 1274
Insurance claim - accident of an insured vehicle - driver did not have a proper driving licence at the time of the accident - directions to the Respondent/Insurance Company to pay the Insured declared value - liability of the Insurance Company when the driver of the offending vehicle possessed an invalid/fake driving licence - what is the extent of care/diligence expected of the employer/insured while employing a driver? - HELD THAT:- In the case of United India Insurance Co. Ltd. vs. Lehru & Ors. [2003 (2) TMI 497 - SUPREME COURT] a two Judge Bench of this court has taken the view that the Insurance Company cannot be permitted to avoid its liability on the ground that the person driving the vehicle at the time of the accident was not duly licenced. It was further held that the willful breach of the conditions of the policy should be established.
As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority.
While the insurer can certainly take the defence that the licence of the driver of the car at the time of accident was invalid/fake however the onus of proving that the insured did not take adequate care and caution to verify the genuineness of the licence or was guilty of willful breach of the conditions of the insurance policy or the contract of insurance lies on the insurer - While hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the Insurance Company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, if the Insurance Company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.
In the instant case, the Appellant/Complainant had employed the Driver, Dharmendra Singh as driver after checking his driving licence. The driving licence was purported to have been issued by the licencing authority, Sheikh Sarai, Delhi, however, the same could not be verified as the concerned officer of the licencing authority deposed that the record of the licence was not available with them - The driver had been driving competently and there was no reason for the Appellant/Complainant to doubt the veracity of the driver’s licence. In view of above facts and circumstances, the impugned judgment is not liable to be sustained and is hereby set aside.
Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 1273
Order passed by the ld. CIT(Appeals) ex-parte - dismissing the appeal of the assessee for non-prosecution - HELD THAT:- CIT(Appeals) has not given proper and sufficient opportunity to the assessee of being heard before dismissing the appeal for non-prosecution vide his impugned order passed ex-parte and there is a clear violation of principle of natural justice. Keeping in view this submission made by the assessee in the light of the facts of the case as evident from record, find merit in this contention raised by the assessee. Even the ld. D.R. has not raised any objection in this regard. Moreover, the ld. CIT(Appeals) as per the provisions of sub-section (6) of section 250 was required to dispose of the appeal of the assessee vide an order in writing stating the points for determination, the decision thereon and the reasons for the decision.
The impugned order passed by the ld. CIT(Appeals) does not comply with these requirements. Therefore, consider it fair and proper and in the interest of justice to set aside the impugned order passed by the ld. CIT(Appeals) ex-parte dismissing the appeal of the assessee for non-prosecution and remit the matter back to him for disposing of the appeal of the assessee afresh on merit in accordance with law after giving proper and sufficient opportunity of being heard to the assessee. Appeal of the assessee is treated as allowed for statistical purposes.
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2020 (3) TMI 1272
Investment in silver bars - characterization of income - capital gain or business income - plea of the appellant that the silver trading transaction entered by the appellant is "Adventure in the nature of Trade." and hence allowable as business loss - HELD THAT:- This is a solitary transaction under taken by the assessee in investing in silver bars and the assessee has neither invested in silver bars prior to this solitary transaction nor invested later in silver bars post completion of this transaction of sale of silver bar on 16.02.2020.
As based upon entire material on record, said investment made by the assessee is not a business transaction but rather it is an investment made by assessee to earn capital gains and the same is to be considered for taxation under the head 'Capital Gains'. As observed that the assessee is a company and not an individual and there is no question of any personal loss in the case of the company as it could not been shown that this transaction is for the benefit of the Directors or the shareholders and hence we held it to be capital investment, income and loss are to be brought to tax under the head 'capital gains'.
So far as locker rent is concerned, the assessee is a corporate entity and it is claimed that the documents and other valuables were kept in the locker for safe custody. We accept the contention of the assessee as the assessee is in business of builders and dealing with valuable property documents which needs safe keeping and we also accept the same keeping in view smallness of the amount.
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2020 (3) TMI 1271
Claim of deduction u/s. 54F - proportionate deduction - According to the Ld. counsel, the amount of deduction can be restricted to the amount of capital gain or the cost of new property, whichever is less, only under the provisions of Section 54 and not under Section 54F - HELD THAT:- The entire amount of deduction calculated on proportionate basis is fully eligible to be claimed as deduction from capital gains. As noted that this issue has been considered exactly on identical facts in the case of Humayun Suleman Merchant [2016 (9) TMI 70 - BOMBAY HIGH COURT]
Assessing Officer has rightly restricted the disallowance to the extent of investment made by the assessee in purchase of new asset and thus rightly computed the exemption U/S. 54F of the Act, proportionately to the amount invested - no infirmity in the orders of the lower authorities and accordingly uphold the same.
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2020 (3) TMI 1270
Entitled for the benefit of the donation made to “SHG & PH” u/s 35(1)(ii) - donations made to the institution “SGH & PH” and “NCT” - HELD THAT- Regarding the donations made to “SGH & PH” it is the undisputed facts that at the relevant time of donation to “SHG & PH”, the institution was approved u/s 35(1)(ii) though such approval has been withdrawn on a later date by the Government by issuing notification. Thus, the assessee cannot be denied the benefit of deduction provided u/s 35(1)(ii) merely on the ground that the approval was withdrawn by the Government on a later date. We place our reliance on the order of this tribunal involving identical issue which has been decided in favour of the assessee in the case of ACIT v/s M/s Thakkar Govindbhai Ganpatlal HUF [2019 (7) TMI 1559 - ITAT AHMEDABAD].
We disagree with the finding of the authorities below. Accordingly we hold that the assessee is entitled for the benefit of the donation made to “SHG & PH” u/s 35(1)(ii) of the Act.
Regarding the donation made to the “NCT”, we note that the benefit of the deduction under section 35AC of the Act was denied to the assessee on the reasoning that the trustee of such trust in the statement given under section 133A during the survey operation has admitted the fact the NCT is engaged in the activity of providing the accommodating entries to the parties.
Admittedly there was no cross-examination provided to the assessee of the trustees who have admitted to be engaged in providing accommodating entries. Thus the question arises whether the assessee can be denied the benefit of the deduction under section 35AC on the basis of the statement recorded during survey operation which were not cross verified despite the request was made to the AO by the asssessee. In our considered view the answer stands in favour of the assessee.
The statement recorded during survey operation cannot be used against the assessee until and unless it is cross verified in view of the judgment in the case of CIT v/s Chartered Speed Pvt. Ltd [2015 (3) TMI 809 - GUJARAT HIGH COURT]
Revenue has not brought any tangible material suggesting that the donation paid by the assessee to “NCT” has come back to it in the form of cash. Thus in the absence of necessary documentary evidence, we are not inclined to confirm the order of the authorities below.
We set aside the finding of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
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2020 (3) TMI 1269
Notice u/s. 143(2) r.w.s. 263, (wrongly typed as (143(3) in grounds) on a dead person for taking up the assessment - assessee challenged the notice issued on a dead person and invalid as not curable mistake u/s. 292B or section 292BB - HELD THAT:- In the instant case, the assessee had expired before passing the order u/s. 263 dated 20.10.2016. This fact is evident from the order passed u/s. 143(3) on 16.09.2014 which was passed in the name of Sri Deverasetty Ravikumar, Legal Representative of Late Sri D.V. Subba Rao.
CIT passed order u/s. 263 on a dead person, which is also invalid. In the order u/s. 263, the Ld. CIT has set aside the assessment order passed u/s. 143(3) r.w.s. 263, with a direction to redo the assessment after giving opportunity to the assessee - order u/s. 143(3) dated 16.09.2014 was set aside by order of 263. For initiation of reassessment proceedings, the AO required to issue notice u/s. 143(2) which the AO has issued in the name of dead person. Initiation of proceedings u/s. 143(2) on a dead person is bad in law and makes the assessment also invalid.
In the instant case, there is no dispute that the notice u/s. 143[2] was issued on a dead person and the order u/s. 263 was also passed on a dead person. Therefore, taking consistent view, we hold that the issue of notice u/s. 143[2] on a dead person is invalid and renders the assessment made u/s. 143[3]r.w.s.263 void-ab-initio. Accordingly, we quash the notice u/s. 143[2] and the consequent assessment made u/s. 143[3] r.w.s. 263 and allow the appeal of the assessee.
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2020 (3) TMI 1268
Rectification of the Register of Members of the Respondent Company - Restraint on Respondent Company from holding the Annual General Meeting or Extraordinary General meeting - Recovery of rental dues - auction of shares - Whether the Company by exercising paramount lien can sell off the shares of a shareholder for recovering the dues? - HELD THAT:- The Respondent Company in the instant petition will fall under the category of “unpaid seller” who can exercise the above rights only. Nothing more. It is settled law as decided by the Hon’ble Supreme Court of India in its judgement in Triveni Shankar Saxena Vs State of UP and Ors. [1991 (12) TMI 285 - SUPREME COURT] a lien is only a right to retain which is rightfully and continuously in possession belonging to another until the claims are satisfied. It can be acquired either by contract or by operation of law. It is the right of retention of goods - in the absence of delineated process to exercise paramount lien, the Respondent Company can exercise lien to the extent of retention of goods; in this case shares which can be extendable payable to the shareholder - thus respondent have no right to unilaterally sell the shares which are in possession of the shareholder, without the consent.
Whether the action of 1st Respondent Company is backed up by any contractual agreement to recover the ‘rental dues’ by auctioning the shares? - HELD THAT:- Any of the unilateral action by one party, will not bind the others and will be set aside. Further the contention that the shops are under benami holding and not conforming to the Income Tax Act is not supported by any valid notice from income Tax authorities or any credible report to support this argument. Even if we go by submissions of learned PCS for respondents, we have not come across any steps taken by the respondent company to regularise the position in respect of the shops which are the property of respondent Company. During the arguments the bench asked to the PCS representing the company whether the company has taken any steps to get the shop vacated by the occupants for their rental arrears. The respondents submitted that they have not taken any action in this regard.
Whether due process is followed by the Company in auctioning and allotting the shares to a 3rd party? - HELD THAT:- The Articles of Association of the company is silent about the process to be followed to ensure paramount lien. However, in the Respondent Company, the lien was exercised for recovery of rental dues by auction the shares. Here the Respondents exercised right to lien to recover the arrears of rent from the shareholder who has not agreed to execute rental/lease agreement - In the instant petition, the Respondent auctioned the shares without the consent of shareholders and without original shre certificate and transfer form in their possession. The earlier action appears to the illegal and not as per the Companies Act 2013.
The company has no right to auction and allot the shares to the third parties ignoring the right of fully paid up shareholders. The rental dues claimed by the respondent company is not supported by rental/lease agreement which is agreed by shareholder - petitioner is declared as the legitimate equity share holder - the register of members of the Respondent Company to be rectified by re-entering the total number of equities shares belonging to the petitioner in the share register of the company and order to restore the total shareholding of the petitioner as it is existed prior to 08.02.2019 forthwith - Respondent Company is restrained from conducting tender for sale of 200 shares from allotting or effecting transfer of any shares belonging to the petitioner without his express consent to any members or non-members till rectification of share register.
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2020 (3) TMI 1267
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - whether the amount claimed from the Respondent Corporate Debtor Company by the Applicants is a financial debt or not? - HELD THAT:- "Financial Debt", to the extent relevant for the purpose of this case, is defined in Clause (a) of sub-section (8) of Section 5 of the Code. It says, "financial debt" means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes money borrowed against the payment of interest.
his Adjudicating Authority is satisfied that,
a) Existence of debt is above Rs. One Lac;
b) Debt is due and defaulted;
c) Default has occurred on 31 st August, 2017;
d) Petition has been filed within the limitation period as the date of default is 31 st August, 2017 and the petition has been filed on 09.09.2019 i.e. within three years of the default.
e) Copy of the Application filed before this Tribunal has been sent to the Corporate Debtor. The application filed by the Petitioner under Section 7 of Code is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process against the Respondent Corporate Debtor Company.
Petition admitted - moratorium declared.
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