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Showing 221 to 240 of 2364 Records
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2018 (7) TMI 2148
Depreciation on Goodwill and Non-compete Fees - Whether the consideration paid by the assessee included consideration towards restraining the seller to carry on a similar business for a period of 8 years - HELD THAT:- A payment made towards non-compete fees pursuant to a composite agreement, by virtue of which the transferor was restrained from the using same trade mark, copyright etc., has to be read as a supporting clause to transfer of copyright and patents transferred as intangible assets in terms of Sec. 32(1)(ii) of the Act. Our aforesaid view stands fortified by the judgment of the Hon‟ble High Court of Madras in the case of Pentasoft Technologies Ltd. Vs. DCIT [2013 (11) TMI 1057 - MADRAS HIGH COURT] as not being persuaded to subscribe to the claim of the revenue, had concluded that the payment made towards non- compete fees under an agreement should be read as a supporting clause to the transfer of the copyright and patents to strengthen the commercial right, which was transferred in favour of the buyers. The High Court holding that the assessee would be entitled for claim of depreciation under Sec.32(1)(ii) as regards the payment made towards non-compete fees pursuant to a composite agreement - Also see Ingersoll Rand International Ind Ltd.[2014 (6) TMI 934 - KARNATAKA HIGH COURT] - Decided against revenue.
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2018 (7) TMI 2147
Exemption u/s 11 - assessee was carrying on business of sale and purchase of residential plots and commercial properties by auction and earned huge net profit during the year under consideration, which was in the nature of trade, commerce and business and did not fall within the meaning of words “the advancement of any other object of general public utility” u/s 2(15) - HELD THAT:- Appellant-revenue did not dispute that the issues raised in this appeal are covered by the decision of this Court in The Tribune Trust Vs. Commissioner of Income Tax and another and Commissioner of Income Tax (Exemption) Vs. Improvement Trust, Moga [2017 (1) TMI 53 - PUNJAB AND HARYANA HIGH COURT] where the similar issues have been decided against the revenue and in favour of the assessee.
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2018 (7) TMI 2146
Amount debited from the current account of the Corporate Debtor subsequent to the declaration of moratorium - HELD THAT:- In the present case we do not intend to go into question as to when the order of moratorium was received by the Bank. Even if it is assumed that it was received by the Bank on 19.12.2017, it was not open to them to debit any amount from the account of the Corporate Debtor subsequent to order of moratorium. Further, as the order of moratorium came into its effect immediately i.e. on 15.12.2017, the date of receipt of order has no relevancy with the same.
Once Resolution Plan is approved or rejected by the Adjudicating Authority under Section 31 of I&B Code and as the order of moratorium comes to an end, it is always open to the Bank to rewrite its ledger book including accrued of interest and may debit the amount as recorded in a separate record/ ledger.
The Resolution Professional is directed not to withdraw any amount during Resolution Process except for day to day functioning of the Corporate Debtor to ensure that the Corporate Debtor remains ongoing concern - Appeal disposed off.
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2018 (7) TMI 2145
Dishonor of cheque - existence of legally enforceable debt or not - Section 138 of NI Act - HELD THAT:- In order to attract Section 138 of the Negotiable Instruments Act, the ingredients of Section 138 have to be established primarily by the complainant by pleading in the complaint with regard to the existence of any legally recoverable debt or liability on the part of the accused. Even a semblance of doubt is raised with regard to the existence or non existence of legally recoverable debt, then also it should be established during the course of trial by means of pleading the facts and leading evidence. It is the defence taken up by the accused that there was no legally enforceable debt, and further that, it is not only the defence, but also the court has to examine whether on complete reading of the complaint itself whether any offence u/s.138 of the Negotiable Instruments Act is constituted or not. It is a very well recognized principle of criminal jurisprudence that, if on plain and meaningful reading of the complaint or the FIR, the allegations made in the complaint or in the FIR do not constitute any offence or under any penal law for the time being in force, the continuation of such prosecution amounts to abuse of process of law. Therefore, the court has to examine without reference to the defence of the accused on the basis of the complaint itself whether there existed ingredients of Section 138 of the Negotiable Instruments Act.
It is clear from the complaint averments that it is the case of the complainant that, the complainant has a son by name B. Sharath, the accused and complainant were known to each other since long. The complainant met the accused and in fact the accused had assured to provide a job to his son in HAL factory. In this context, the accused had requested the complainant to pay an amount of ₹ 10 lakhs and he demanded the same for the purpose of providing a job to the son of the complainant. In this context, it is stated that, on various occasions, the complainant has paid some amounts to him. As the accused could not get the job to the son of the complainant, the complainant approached the accused. Then the accused again demanded for further amount for making payment to the Officers. As per the demand, the complainant paid amount to him. In total, lot of amount has been paid to the accused for the purpose of securing job to the son of the complainant. As the accused was not able to secure the job in HAL to the complainant's son, the complainant demanded for repayment of the money. In that context, it is said that on 1.5.2009, the accused issued a cheque bearing No.262871 for a sum of ₹ 10 lakhs and on presentation of the said cheque it came to be dishonoured on the ground of 'funds insufficient'. After complying the other provisions of Section 138 of the Negotiable Instruments, it appears the complaint came to be lodged - It is seen that, there are absolutely no allegations whatsoever that the accused has taken this money as a loan or a debt or as a liability at any point of time. It is clear cut case of the complainant that, he has paid money for the purpose of securing job for his son, even without examining whether the accused has got any authority to provide job to his son or not and what is the procedure that is required to be followed by the HAL factory for the purpose of selecting any candidate for the purpose of providing any job. Therefore, without examining anything, the complainant himself has entered into a void contract with the accused and paid money as against the public policy for illegal purpose.
Section 138 of the Negotiable Instruments Act mandates that, there should be an existence of legally recoverable debt and in order to attract Section 138 of the Negotiable Instruments Act, the party has to plead with regard to the existence of legally recoverable debt. If he pleads with regard to the existence of the legally recoverable debt u/s.138 of the Act, then only presumption u/s.139 of the Act can be raised in favour of the complainant - even considering the provisions of Section 139 of the Negotiable Instruments Act, there is no question of accused rebutting the presumption unless the presumption is raised in favour of the complainant. If the court for any reason comes to the conclusion that the ingredients of Section 138 of the Negotiable Instruments Act, are not made out, the court cannot take cognizance of such matter, and for the purpose of calling the accused to appear before the court and contest the proceedings.
The learned Magistrate in fact at the time of taking cognizance of the private complaint has to examine meticulously the contents of the complaint. It is more than several times made clear that when ever a complaint is filed, the learned Magistrate has to look into the complaint, he should not mechanically take cognizance or refer the matter to the police for investigation. The learned Magistrate has to look into the complaint averments for the purpose of ascertaining whether the court has got jurisdiction to try that matter. Secondly, the contents of the complaint even meaningfully understood allegations made therein constitute any offence. Only for those offences, where the allegations constitute offence the Magistrate is entitled to take cognizance and proceed with the matter.
Petition allowed.
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2018 (7) TMI 2144
Stay on invocation of the ‘Performance Bank Guarantee - stand of the ‘Resolution Professional’ is that the ‘Performance Bank Guarantee’ cannot be invoked during the ‘Moratorium’ - HELD THAT:- From sub-section (31) of Section 3, it is clear that the ‘security interest’ do not include the ‘Performance Bank Guarantee’, therefore, we hold that the ‘security interest’ mentioned in clause (c) of Section 14(1) do not include the ‘Performance Bank Guarantee’. Thereby the ‘Performance Bank Guarantee’ given by the ‘Corporate Debtor’ in favour of the Appellant- ‘GAIL (India) Ltd.’ is not covered by Section 14. The Appellant- ‘GAIL (India) Ltd.’ is entitled to invoke its ‘Performance Bank Guarantee’ in full or in part - If it is invoked, the Appellant will inform it to the ‘Interim Resolution Professional’ who will maintain the record and make it clear that the ‘Performance Bank Guarantee’ in full or part has been invoked by the Appellant which should also be brought to the notice of the ‘Resolution Applicant(s)’.
Appeal allowed.
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2018 (7) TMI 2143
Rectification of mistake - Estimation of income - Unexplained cash credit - net commission estimation @ 0.10% - HELD THAT:- Tribunal has given direction to exclude transfer entries/returned cheques/inter bank transfers in assessee’s bank account whereas the issue on the assessment by estimation of income on the remaining amount was inadvertently omitted. Thus there is a mistake to this extent in the order [2017 (1) TMI 1728 - ITAT MUMBAI]
Now we direct the assessee to exclude the returned cheques/RTGS/inter bank transfers in assessee's bank account and assess the income by way of estimating the commission on the remaining amount after applying the decision of the co-ordinate bench of the Tribunal in the case of Ramesh Kumar vs. ACIT in [2015 (5) TMI 385 - ITAT MUMBAI]. The order of the Tribunal stands amended and modified to that extent.
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2018 (7) TMI 2142
Valuation of imported goods - consignment of pre-workout Food Supplements from Dubai - rejection of declared value - enhancement of value based upon NIDB data - HELD THAT:- Revenue in their Memo of Appeal has not disputed the transaction value and has not adduced any evidence to show that the price paid for the consignment of imported goods was more than the transaction value.
It is well settled law that enhancement cannot be done based upon the NIDB data, unless the transaction value is proved to be incorrect. Inasmuch as there is no evidence for rejection of the transaction value, we find no reasons to interfere in the impugned order of Commissioner (Appeals).
Appeal dismissed.
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2018 (7) TMI 2141
Disallowance u/s 14A read with Rule 8D - adjustment of suo-moto disallowance - HELD THAT:- The fact that the assessee claimed net expenditure of ₹ 12.16 Lacs during impugned AY remain undisputed. Against the same, the disallowance worked out by Ld. AO was ₹ 374.14 Lacs which was not, at all, justified.
CIT(A) has restricted the same to ₹ 12.16 Lacs, which is fair & logical. Upon perusal of Tribunal’s order for AY 2008-09, we find that the suo-moto disallowance as made by the assessee has been accepted by the Tribunal. Following the same, the matter for AYs 2009-10 & 2011-12 has been remitted back to the file of Ld. AO for re-adjudication in terms of ratio of Tribunal’s decision for AY 2008-09.
Upon due consideration of factual matrix, we see no reasons to interfere with the order of Ld. first appellate authority. - Decided against revenue.
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2018 (7) TMI 2140
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - Whether as per Circular of RBI dated 12.2.2018 read with newly inserted sections 35AA and 35AB of Banking Regulation Act, 1949, the Applicant Bank before initiating insolvency proceedings, has to first finalise and implement a resolution plan within the specified timelines to be counted from the reference date to be notified by RBI? - HELD THAT:- Present proceedings are instituted under the Insolvency and Bankruptcy Code, 2016 and time is the essence of the Code, timelines are provided under the code for various actions in terms of days and same was held by Hon’ble Apex Court in its Judgment Mobilox Innovations Private Limited vs Kirusa Software Private Limited [2017 (9) TMI 1270 - SUPREME COURT].
Impugned Circular is addressed to banks, it is in the nature of “Guidelines” and does not in any manner restrict any proceeding being filed by any financial creditor under the IB Code. Further section 238 of the IB Code provides for overriding effect of the IB Code over all other laws (including the RBI circulars) - As per IBC, before admission, we are required to look into completeness of the application in terms of Section 7 and rules made thereunder and minimum default of one lakh rupees has occurred.
A perusal of the application filed by Financial creditor is in conformity with the provision of Section 7 of the Code and Rules applicable. Record of default for the Corporate Debtor, as on 11th July 2018, as available on the Credit Repository of Information on Large Credits (CRILC) (as set up by the Reserve Bank of India) has been filed.; the letters and e-mail from the Corporate Debtor to the Financial Creditor admitting their debt and default constitute the other evidences of debt and default filed along with the Section 7 Application - Hence, default has occurred, which meets the requirement of Section 3(11) & (12) of I & B Code.
The present application filed by the Financial Creditor for initiation of Corporate Insolvency Resolution Process as per the I & B Code, 2016 which is found complete therefore deserves admission - application admitted - moratorium declared.
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2018 (7) TMI 2139
Submission of Resolution Plan - section 60(5) of I&B Code, 2016 - HELD THAT:- Regulation 36A has recently been amended (03.07.2018). Subclause(6) of 36A mandates the RP to reject the EOI received after the time specified in the invitation. In this case, last date of submission of EOI was 30.05.2018 and the last date of submission of RP was 18.06.2018. Admittedly, the applicant did not submit EOI on or before 30.05.2018 and the RP on or before 18.06.2018. The reason for non-submission of EOI in the plan is not at all convincing.
Whether the authority while invoking its jurisdiction under section 60(5) of the Code can direct the RP to consider the applicant's plan? - HELD THAT:- The CIRP period of 180 days would be completing on 05.09.2018. No doubt it can be extended further for 90 days but it can be done only if COC desires. The broad object of the Code is that for insolvency process of Corporate Persons in time-bound manner for maximization of value of assets of such person. In this case, the RP has already received three plans. In order to have maximization of the value of assets of the Corporate Debtor on competitive basis, I feel that the RP should be directed to consider the applicant's plan also because CIRP period of 180 days is yet to be completed and more particularly, even further period of 90 days is still at the hands of the COC.
The RP is directed to receive the Resolution Plan of the applicant for consideration of COC. The plans to be submitted on or before 30.07.2018. The applicant to pay cost of ₹ 1,00,000/- by cheque/Demand Draft to be drawn on account of the Corporate Debtor which is being operated by the Resolution Professional and RP shall use that amount as resolution cost - Application allowed.
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2018 (7) TMI 2138
Stay the implementation, operation and execution of the Order - restraint on the respondent from enforcing coercive recovery of the demand - HELD THAT:- It is directed that there shall be stay of implementation, operation and/or execution of the order passed by the Commissioner, Service Tax, Ahmedabad, dated 29.12.2008 – Order in Original, confirmed by the CESTAT, during the pendency and final disposal of Tax Appeal on condition that the applicant/ appellant shall deposit 25% of the demand with interest as on today with the Department, to be deposited within a period of four weeks from today.
It goes without saying that the aforesaid shall be without prejudice to the rights and contentions of the respective parties in the main Tax Appeal - Application disposed off.
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2018 (7) TMI 2137
Estimation of income - Non rejection of books of accounts - CIT (A) is not justified in directing the A.O to estimate the gross profit at 12.61% as against 20% adopted by the learned A. O - appellant has maintained the books of accounts which are audited u/s.44AB - HELD THAT:- We find that the High Courts in the matter of CIT v. Anil Kumar & Co. [2016 (3) TMI 184 - KARNATAKA HIGH COURT], CIT v. Symphony Comfort System Ltd [2013 (10) TMI 258 - GUJARAT HIGH COURT] and PCIT v. Marg Ltd [2017 (7) TMI 823 - MADRAS HIGH COURT] have held that no addition can be made on estimated basis without rejecting books of account of assessee.
AO estimated the income based on the information obtained from KSBCL authorities disclosing the percentage of profit on sale fixed by the Karnataka government. It is not the case of the AO that the books were not properly maintained. Not even a word has been whispered by the AO that the books were not in accordance with the method of accounting, or were incorrect / incomplete. In our view, the laws commands us to set aside the assessment made on the basis of estimation, if the AO made the estimation without rejecting the books of account. - Decided in favour of assessee.
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2018 (7) TMI 2136
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of dispute or not - main plea taken by the Appellant is that there was an existence of dispute between the Operational Creditor and the Corporate Debtor - HELD THAT:- There was no dispute in existence prior to the 1st demand notice issued under Section 8(1) of the I&B Code and the Corporate Debtor disputed the claim about quality only after issuance of 1st demand notice, therefore, after withdrawal of 1st application under Section 9 on technical grounds and issuance of fresh demand notice, the application under Section 9 filed by Respondent was maintainable.
Appeal dismissed.
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2018 (7) TMI 2135
Disallowance of expenditure u/s 14A invoking Rule 8D - non recording of satisfaction - HELD THAT:- AO without recording required satisfaction on "having regard to the accounts of the Assessee, as placed before him, it is not possible to generate the requisite satisfaction with regard to the correctness of the claim of the Assessee", had invoked and applied Rule 8D as a mandatory provision applicable in all cases of exempt income. Action of the AO was contrary to law and, therefore, there is no merit in the present appeal.
We have not affirmed and accepted the view expressed by the Commissioner of Income Tax (Appeals) that provisions of Section 14A and Rule 8D cannot be invoked in case the assesesee was an investment company, or the shares were procured for the purpose of the strategic investments, in view of the decision of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] - Appeal is dismissed in limine.
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2018 (7) TMI 2134
CENVAT Credit - capital goods - plant, structures, embedded to earth - angles, joists, beam, channels, bars, flats which go into fabrication of such structures - HELD THAT:- There are no legal and valid ground for interference.
SLP dismissed.
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2018 (7) TMI 2133
Maintainability of application - initiation of CIRP - Default in the payment of interest and principal amount - account of the corporate debtor was classified as NPA - Section 13(2) of the SARFAESI Act, 2002 - Section 7 of I&B Code - HELD THAT:- The evidence of default has been furnished in Part IV of Form 1 and the account is stated to be classified as NPA on 30.08.2017. The bank account statements maintained as per the provisions of Bankers Books Evidence Act, 1891 are stated to be attached as Annexure 1/6 of the petition. The computation chart as required in Col.2 of Part IV of Form 1 has been filed by diary No.710 dated 12.03.2018 as discussed above. Therefore, this defect was also removed. The name of the resolution professional proposed to act as Interim Resolution Professional has been proposed in Part III of Form 1 and Form 2 has also been filed - the requirement of Rule 4(3) of the Rules regarding forwarding copy of the petition to the corporate debtor has also been met in the present case.
The contention of the corporate debtor that the present petition is not maintainable and the re-structuring proposal is required to be first considered cannot be accepted - the application submitted by the operational creditor is complete in all respects and there is no defect pointed out by the corporate debtor. It is also proved that payment of the unpaid operational debt has not been made.
Application admitted - moratorium declared.
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2018 (7) TMI 2132
Validity of SCN - Levy of penalty under section 271(1)(c) of the I.T. Act, 1961 - under which limb of Section 271(1)(c) of the I.T. Act, the penalty proceedings initiated, is not mentioned in the SCN - concealment of income/furnishing inaccurate particulars of income - Addition on account of deemed income - HELD THAT:- The show cause notice issued before levy of the penalty is bad in law as it did not specify under which limb of Section 271(1)(c) of the I.T. Act, the penalty proceedings under section 271(1)(c) of the Act had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - The issue is covered in favour of the assessee by the Judgment of the Hon’ble Karnataka High Court in the case of COMMISSIONER OF INCOME TAX, BANGALORE AND THE INCOME TAX OFFICER, WARD-6 (3) , BANGALORE VERSUS M/S SSA’S EMERALD MEADOWS [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] and confirmed by Hon’ble Supreme Court in the case of COMMISSIONER OF INCOME TAX & ANR. VERSUS M/S SSA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SC ORDER]. Therefore, the entire penalty proceedings under section 271(1)(c) of the Act are vitiated and penalty is liable to be cancelled.
Addition on account of deemed income - HELD THAT:- The addition on account of purchases made at the lesser value of the Circle rate is introduced into the Act in Section 56(2)(vii)(b) w.e.f. 01.04.2014, which is applicable for the first time to the assessment year under appeal. The addition is made by the A.O. on account of deeming provisions. The A.O. has not brought any positive evidence on record to show that assessee has concealed the particulars of income or furnished inaccurate particulars of income - In the similar circumstances, in case of addition made under section 50C of the I.T. Act, the ITAT, Delhi-B Bench in the case of THE INCOME TAX OFFICER WARD-28 (4) , NEW DELHI VERSUS SHRI AJAY SHARMA [2017 (11) TMI 1909 - ITAT DELHI] confirmed the Order of the Ld. CIT(A) in cancelling the penalty.
This is not a fit case for levy of the penalty - appeal allowed - decided in favor of assessee.
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2018 (7) TMI 2131
Maintainability of application - initiation of CIRP - Operational Creditor or not - Section 5(7) read with (8) of the ‘I&B Code’ - HELD THAT:- We are not expressing any opinion with regard to such issue as to whether Appellant is ‘Financial Creditor’ or not, as the claim was not filed under Section 7 of the ‘I&B Code’. If the Appellant feels that it was the case under Section 7 and wrongly filed application under Section 9 it may move in accordance with law before the Adjudicating Authority who may decide such claim independently uninfluenced by the impugned order dated 16th May, 2018.
Appeal disposed off.
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2018 (7) TMI 2130
Disallowance u/s 14A read with Rule 8D - inclusion of investments to be considered for computing average value of investment which yielded exempt income during the year - HELD THAT:- This Tribunal is of the considered opinion that only those investments which yielded exempted income alone has to be considered for the purpose of disallowance under Rule 8D(2)(iii). Therefore, we are unable to uphold the orders of the authorities below. Accordingly, the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter and restrict the disallowance in respect of such investments which yielded the exempted income, and which does not form of total income alone has to be considered for disallowance. Appeal of the assessee is allowed for statistical purposes.
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2018 (7) TMI 2129
Maintainability of Appeal against ITAT order - substantial question of law or not - Tribunal applying turnover filter and excluding 6 comparable chosen by the Transfer Pricing Officer - Tribunal holding that Foreign Exchange Fluctuation gains are required to be added to operating revenue - Tribunal confirming the order of DRP with regard to holding that working capital adjustment has not been provided as it is negative impact and as such DRP’s direction to grant risk adjustment - ITAT directing the TPO to examine the financials of some companies and adopt a threshold limit of 15% of RPT as the basis for rejecting comparable companies - HELD THAT:- Controversy involved herein is no more res integra in view of the decision of this Court in M/s.Softbrands India Pvt. Ltd. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT]wherein it has been observed that unless the finding of the Tribunal is found ex facie perverse, the Appeal u/s. 260-A of the Act, is not maintainable.
A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of provisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial question of law. On the other hand, the appeals of the present tenor as to whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise to any substantial question of law.
The present appeals filed by the Revenue do not give rise to any substantial question of law
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