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Showing 241 to 260 of 1396 Records
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2021 (4) TMI 1156
Capital gain on sale of land - nature of land sold - treatment to assessee’s land sold as a capital asset - HELD THAT:- No merit to accept the foregoing Revenue’s argument as the amended Section 2(14) Explanation (iii) clause(b) reads ‘as the Central Government may having regard to the extent and scope for, urbanization of’ that area and other relevant consideration, specify in this behalf notification in the official gazette’.
It therefore emerges that once the amendment to the above statutory provision came vide Finance Act, 2013 w.e.f. 01-04-2014 the assessee’s case would continue to be governed by the earlier un-amended provisions as we are in AY.2011-12. This is also not the Revenue’s stand that assessee’s land(s) deserved to be treated as a capital asset as per the unamended proviso since covered by any notification issued in this behalf from the Central Government. I therefore direct the Assessing Officer to delete the impugned long term capital gain addition on this count alone.
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2021 (4) TMI 1155
Fringe benefit tax on account of expenditure pertaining to staff towards electricity consumption - statutory obligation to provide electricity to the employees at their residential premises as per National Coal Workers' Agreement - HELD THAT:- On going through the above agreement entered into between the representatives of Central Trade Unions with Hon’ble Minister of Coal & Mines and Secretary, Govt. of India, Department of Coal & Chairman, Coal India ltd. on 12th January, 2004, we find that the CBDT has not been recognized the said agreement and, therefore, this agreement cannot override the income-tax Act, which is enacted by the Parliament.
The above agreement is not statutory and only a facility provided to the employees in a particular sector. In view of the above discussion, we do not find any infirmity in the orders of the CIT(A) in confirming the order of the AO wherein the AO has made an addition in the hands of the assessee towards Fringe benefit tax on account of expenditure pertaining to staff towards electricity consumption and upholding the orders of CIT(A) in all the appeals under consideration, we dismiss the grounds raised by the assessee in all the AYs under consideration.
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2021 (4) TMI 1154
TP adjustment in respect of Specified Domestic Transactions (SDT) - whether AO/TPO/DRP has erred in law and in facts by determining an adjustment to specified domestic transactions (SDT) by applying provisions omitted from statute book. - HELD THAT:- As following the binding decision rendered by Hon’ble High Court of Karnataka in the case of Texport Overseas P Ltd [2017 (12) TMI 1719 - ITAT BANGALORE] we hold that the reference to the TPO in respect of specified domestic transactions mentioned in clause (i) of sec.92BA is not valid, as the said provision has been omitted. Accordingly, we direct the AO to delete the addition relating to specified domestic transactions made u/s 92CA of the Act.
As pointed out by Ld D.R, the co-ordinate bench, in the case of Texport overseas P Ltd, has restored the matter to the file of the A.O. with the direction to examine the claim of expenditure in accordance with the provisions of section 40A(2) of the Act. Following the same, we restore this issue to the file of the AO with the direction to examine the claim of expenditure mentioned above in terms of the provisions of section 40A(2) of the Act.In the result, the appeal of the assessee is treated as allowed for statistical purposes.
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2021 (4) TMI 1153
Interest subsidy received by the appellant under Technology Upgradation Fund Scheme (TUFS) for Textile and Jute Industries - MAT computation u/s 115JB - reducing the amount of subsidy from the book profit while computing u/s 115JB - HELD THAT:- As relying on own case [2019 (2) TMI 1888 - ITAT AHMEDABAD], we consider that issue raised in grounds no. 1 to 1.3 as above covered in favour of the assesse after following the decision of Co-ordinate Bench as supra that the interest subsidy is required to be treated as capital receipt of non-taxable nature. Therefore, similar to the direction laid down by the Co-ordinate Bench for A.Y. 2012-13, we restore this issue to the file of the A.O. for verification and to exclude the subsidy from the ambit of taxation as directed in the decision of the Co-ordinate Bench. Therefore, these grounds of appeal of the assessee are allowed for statistical purpose.
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2021 (4) TMI 1152
Disallowance u/s 14A - AO noticed that assessee has made huge investments in shares and securities, but did not make suo moto disallowance of any expenses relatable to exempt income and hence, invoked Rule 8D of Income Tax Rules, 1962 and computed disallowance - CIT-A deleted additions made towards disallowance u/s.14A by holding that when there is no exempt income earned for the relevant assessment year, then there cannot be any disallowance relatable to such exempt income - HELD THAT:- The issue of disallowance of expenses relatable to exempt income u/s.14A, in a situation where there is no exempt income earned for the relevant assessment year has been subject matter of deliberations by various High Courts, including the case of M/s. Redington India Ltd. [2017 (1) TMI 318 - MADRAS HIGH COURT] in the light of the provisions of section 14A of the Act, where it was clearly held that provisions of section 14A r.w.r 8D cannot be made applicable in a vacuum i.e., in the absence of exempt income.
The Hon'ble Supreme Court in the case of CIT vs. Chettinad Logistics Pvt.Ltd. [2018 (7) TMI 567 - SC ORDER] has upheld the findings of the Hon’ble Madras High Court that section 14A cannot be invoked, where no exempt income was earned by the assessee in the relevant assessment year. In this case, the learned CIT(A) has recorded categorical finding that the assessee has not earned any exempt income for the relevant assessment year. Therefore, we are of the considered view that findings recorded by the learned CIT(A) in light of the decision of Hon’ble Jurisdictional Madras High Court in the case of M/s. Redington India Ltd. Vs.Addl.CIT (supra) is in accordance with law and does not call for any interference. - Decided in favour of assessee.
Disallowance of depreciation of plant and machinery - AO disallowed depreciation claimed on plant and machinery on the ground that although plant and machinery was installed and commissioned before 30.03.2013, but the same has not been put to use in the business of the assessee - HELD THAT:- In this case, on perusal of various details filed by the assessee including commissioning report of plant and machinery, we find that all plant and machinery were acquired and installed before the end of the financial year. In fact, the assessee has placed on record production details of finished goods from newly installed plant and machinery. Assessing Officer has erred in disallowing depreciation on plant and machinery on assumption and surmises that in one day so much units of finished goods cannot be produced without understanding fact that in one day so many lakhs of units can be produced depending upon installed capacity of the plant and machinery.
In this case, the observations of the Assessing Officer that so much units cannot be produced in one day was nothing but assumption or surmises, but not based on any facts and figures. Therefore, we are of the considered view that on this ground depreciation claimed on plant and machinery which were installed and put to use in the business of the assessee cannot be denied. Be that as it may, even assuming for a moment, the asset was not put to use in the business of the assessee, but when the plant and machinery is installed and ready for use in the business for the relevant assessment year, then claim of depreciation can be allowed. There is no error in the findings recorded by the learned CIT(A) to delete disallowance of depreciation on plant and machinery. - Decided in favour of assessee.
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2021 (4) TMI 1151
Rectification u/s 254 - HELD THAT:- Having gone through the order of the Tribunal and also the grounds of appeal raised by the Revenue, we find that there is an inadvertent mistake in disposing of the appeal of the Revenue by not dealing with all the grounds raised by the Revenue.
Since all the grounds were not adjudicated, we deem it fit and proper to amend last line of para No.6 of the ITAT order.
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2021 (4) TMI 1150
Reopening of assessment u/s 147 - addition u/s 68 - Bogus LTCG - HELD THAT:- From the details furnished by the assessee before the Assessing Officer as well as before the learned CIT(A), find the assessee has demonstrated that he had sold 15,000 shares of M/s. DMC Education Ltd., during the A.Y. 2011-12 for a consideration and after deducting the purchase cost of ₹ 60,000, shares of which were acquired in A.Y. 2006-07 (5,000 shares) and subsequent bonus shares, the assessee after deducting the purchase cost and transfer expenses had declared Long Term Capital Gain of ₹ 1,29,903/-. Therefore, once, the assessee had declared such income and claimed the same as exempt, the Assessing Officer without verifying the return and without independent application of mind could not have reopened the assessment on the basis of report from the Investigation Wing, which is on account of borrowed satisfaction and not independent application of mind. Thus, find merit in the argument of the learned counsel for the assessee that such reopening is based on wrong appreciation of facts and on borrowed satisfaction.
It has been held in various decisions that when the reopening of the assessment is based on incorrect or wrong appreciation of facts, such reopening is not in accordance with law. It has also been held in various decisions that when the reopening is made on the basis of report of the Investigation Wing and without independent application of mind by the Assessing Officer to the return field by the assessee, such reopening of assessment is also not in accordance with law and has to be quashed.
Since, in the instant case, the Assessing Officer has acted mechanically on the basis of report from the Investigation Wing and without independent application of mind and the reopening of assessment is on wrong appreciation of facts, therefore, such reopening of the assessment, in our opinion, is not in accordance with law. - Decided in favour of assessee.
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2021 (4) TMI 1149
Right to apply u/s 241 of Companies Act - petitioners do not hold minimum percentage of shareholding in the capital of the Respondent No. 1 on which is require to file a petition - whether this Tribunal can exercise its discretion which is vested with it in terms of the provisions of Section 244 of Companies Act, 2013? - HELD THAT:- From the perusal of Section 241, it is noted that as per proviso to Section 244(1), the word "may" has been used as regard to waiver of all or any of the requirements specified in Clause (a) or Clause (b) so as to enable the members to apply under Section 241 of Companies Act, 2013. Clause (b) is not applicable as Respondent no. 1 is having a share capital. As far as the fact of the petitioners are not having requisite number shareholders or holding not less than one tenth of issued share capital are concerned, there is not dispute that the petitioners, in application filed under Section 241 of Companies Act, 2013, do not meet these criteria. Further, there is no dispute as regard to payment of amount of calls on such of shares or of other sums due on their shares.
We have to look whether the applicants have made out an exceptional case for waiver of all or any of the requirements specified in Clause (a) of sub-section 1 of Section 242 of Companies Act, 2013? In this process, in our considered opinion, it is inevitable that the merits of the application field under Section 241 of the Companies Act, 2013 may have to be considered. Having said so, we, however, make it clear that this is to be done just to meet the object and criteria laid down in Section 244 of Companies Act, 2013 and views expressed on the merits for this purpose cannot be considered or treated as views expressed by this Authority which may amount to determination of the main dispute either against or in favour of either parties. Keeping this limitation or factor, in our mind, the facts relied on by the petitioners for getting the waiver, we state that these pertain to siphoning off funds through Shell Companies promoted by Respondent no. 2.
On a query from this Bench whether any material or resolution exists in records or otherwise which defines such distribution of responsibilities between two Managing Directors in terms of provisions of Companies Act, 1956 or Companies Act, 2013. However, no material has been brought on record to this effect. It has also been claimed by the Respondent No. 1 and 2 that even the transactions made basis for filing an application under Section 241 of Companies Act, 2013 pertain to a period much prior to three years from the date of filing of that petition, hence, the petition filed under Section 241 of Companies Act, 2013 has as such barred by limitation. It is also noted that Respondent No. 1 company is a listed company and more than 6,000 (six thousand) shareholders are member of the company and none of them has joined the petitioners.
The petitioner cannot be absolved from responsibilities of such alleged transactions of siphoning off or fraud, though, he may not be involved actively. Since, he was the Chairman and Managing Director and many of such transactions required the approval of the Board of Directors or otherwise also it cannot be said that the petitioner No. 3 did not have any knowledge thereof. It is also a settled judicial principle that one who is seeking some exemption or waiver means that he is invoking the principle of equity, therefore, the integrity of such person should be above board and atleast it should not be under cloud. Even otherwise, in case of allegations of nature involved in petition filed under Section 241 of Companies Act, 2013 cannot rule out of possibility of collective involvement of people at the helm of affairs. Thus, considering the submissions made by all the sides and material on record, we hold that the petitioner has not been able to establish a case which may pursued us to accede to his request of waiver of company as specified under Section 244(1)(a) of the Companies Act, 2013.
Application dismissed.
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2021 (4) TMI 1148
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Service Providers or not - existence of debt and dispute or not - HELD THAT:- There is a thin line of difference with regard to the provisions of Section 3(16)(e) of the Code and with regard to the business activities of the Respondent. Section 3(16)(e) of the Code, envisages that the term "Financial Services" shall include rendering or agreeing, for consideration, to render advice on or soliciting for the purposes of (i) buying, selling, or subscribing to, a financial product; (ii) availing a financial service; or (iii) exercising any right associated with financial product or financial service whereas the Respondent being engaged/involved in Stock Broking business is directly dealing in the shares, securities, derivatives, etc. on behalf of its clients including the Applicant rather than only rendering advice or soliciting or agreeing in that regard. Hence, it can be said that the Respondent is covered under the purview of the Corporate Debtor and cannot be considered as the Financial Service Provider since it is directly dealing with the financial products and not only rendering advice or soliciting or agreeing in that regard.
The amount of debt payable by the Respondent - Corporate Debtor is more than the statutory limit prescribed under the provisions of the section 4 of the Insolvency and Bankruptcy Code, 2016 as on the date of filing of the application i.e. 22.07.2019 - The Applicant has furnished the copy of Written Communication of the Proposed Interim Resolution Professional - CA Prakash Udhawdas Tekwani in Form - 2 in terms of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
From the material placed on record by the Applicant, this Adjudicating Authority is satisfied that the application is complete in all respects and the Corporate Debtor has committed default in paying the dues to the Applicant - Petition admitted - moratorium declared.
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2021 (4) TMI 1147
Dissolution of Corporate Debtor - assets of the Corporate Debtor have been fully liquidated - Section 54 of the Insolvency and Bankruptcy Code, 2016 (IB Code) r.w. Regulation 14 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- Considering the facts and invoking various provisions of the Law, and finding that the assets of the Corporate Debtor have been fully and completely liquidated to the satisfaction of the Creditors, there remains nothing to keep the Corporate Debtor/Company alive.
The Corporate Debtor stands dissolved from the date of this order as per the Section 54(2) of the Insolvency and Bankruptcy Code, 2016 - application allowed.
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2021 (4) TMI 1146
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time Limitation - HELD THAT:- Contention raised by the corporate debtor in respect that Mr. Manish Narayan Saboo is not authorized by the board of the corporate debtor for filing the present application is not valid.
The contention of the corporate debtor in respect that the present application is barred by limitation is also not valid. The first invoice was raised on 27.02.2016, and the last invoices raised on 20.07.2016, and the present application was filed before this authority on 14.02.2019 which is well within the limitation, i.e. 2 years 11 months, and 18 days. It is also noted that the ground raised by the corporate debtor that there is a pre-existing dispute because goods supplied by the operational creditor to the corporate debtor were defective as alleged. This ground is baseless as there being no supporting documents. If there was any pre-existing dispute that must be raised before filing this present application. In the present application, no other document is produced on record by the corporate debtor to prove the preexisting debt - There can so many reasons for rejection of goods by a third party and there is no such condition between Operational Creditor/Corporate Debtor that payment would be refunded only after goods are accepted by the client of Corporate Debtor. The corporate debtor further relies upon the letter issued by the M/s. General Polytex on 24.09.2019 which has been issued after filing the present application in respect that the goods supplied by the operational creditor were defective. It is also not indicated that the alleged facts were communicated to the operational creditor. An averment made by the operational creditor can't be sustained without any cogent evidence. Hence, this contention of the corporate debtor is also rejected.
The present application is defect-free and complies with the relevant provisions of the IB Code and Rules formed thereunder - Application admitted - moratorium declared.
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2021 (4) TMI 1145
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is found that the petitioner has filed all the documents and the petition is complete in all respect. Service is complete. That, the petitioner received the last payment on 25.04.2018, therefore, the date of default is 25.04.2018 - On perusal of the record it is also found that the instant petition filed by the applicant is well within limitation and there is no pre-existing dispute regarding the operational debt from the side of the corporate debtor.
The documents produced by the operational creditor clearly establish the 'debt' and there is default on the part of the Corporate Debtor in payment of the 'operational debt' - this adjudicating authority is of the considered view that operational debt is due to the Applicant and it fulfilled the requirement of I & B Code. No dispute has been raised by the respondent at any point of time. That, Applicant is an Operational Creditor within the meaning of Section 5 sub-section 20 of the Code. From the material on record, petitioner is able to establish that there exists debt as well as occurrence of default and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force.
It is evident that the corporate debtor has committed default in payment of operational debt and, therefore, it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - petition admitted and the moratorium is declared for prohibiting all of the following in terms of sub-section (1) of Section 14 of the Code.
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2021 (4) TMI 1144
Seeking withdrawal of application which was filed for initiation of CIRP against Corporate Debtor - Section 12A of the Insolvency and Bankruptcy Code 2016 read with Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- The Adjudicating Authority may allow a withdrawal application admitted under Section 7, 9 or 10 on an application made by the applicant with the approval of the 90% of the voting share of the CoC. Therefore, to file an application under Section 12A, the applicant is required to fulfill two conditions i.e., first, the application must be filed by the applicant on whose prayer the application under Section 7, 9 or 10 is admitted and secondly, it must be approved by 90% voting share of the CoC. The application for withdrawal application admitted under Section 7, 9 or 10 shall be filed by the applicant - Similarly, Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 provides that an application for withdrawal under section 12A may be made to the Adjudicating Authority before the constitution of the committee, by the applicant through the interim resolution professional and after the constitution of the committee, by the applicant through the interim resolution professional or the resolution professional, as the case may be.
Mere reading of the provisions shows that under Section 22(2) of the IBC, 2016, the committee of creditors, may, in the first meeting, by a majority vote of not less than sixty-six per cent of the voting share of the financial creditors, either resolve to appoint the interim resolution professional as a resolution professional or to replace the interim resolution professional by another resolution professional. Whereas under Section 27(2) there is a provision for replacement of Resolution Professional, who was appointed under Section 22, with another Resolution Professional by a vote of sixty-six per cent of voting share of the CoC. Therefore, Section 27 of the IBC, 2016 has a provision for replacement of Resolution Professional, who was appointed under Section 22 of the IBC. Hence, Section 27 is not applicable in this matter, because prayer is for the replacement of the IRP not the RP.
Mr. Arun Jain IRP neither submitted the explanation as sought for nor filed the Affidavit. All this shows that the IRP not only failed to perform the duty of initiating CIRP of the CD but also disobeyed the directions given by this Adjudicating Authority. The non-initiation of CIRP of the Corporate Debtor is a serious dereliction of duty on the part of the IRP and for which apart from the contempt proceedings, disciplinary proceeding must be initiated against the IRP - in sequel to the above, by exercising the power under Rule 11 of the NCLT Rules, 2016 read with directions given by the Hon'ble NCLAT in the Company Appeal No. 166/2020 in para 7 of the order, we hereby appoint Mr. Shiv Nandan Sharma, Registration No.-IBBI/IPA-001/IP-P00384/2017-18/10641, Email id: [email protected]. Mobile No. 9540000212 as an IRP from the panel communicated to this Adjudicating Authority by IBBI - Mr. Shiv Nandan Sharma is directed to take the charge of the CIRP of the CD with immediate effect. The Court Officer will immediately inform the IRP so appointed by all modes.
Application disposed off.
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2021 (4) TMI 1143
Recovery proceedings for recovery of loan - Corporate Debtor failed to make repayment of its dues and has been declared as Non Performing Asset - It was submitted by the Learned Senior Counsel for the Applicant that the Applicant being a secured creditor has expressed his willingness to stand outside the purview of liquidation proceedings under Section 52 of IBC, 2016 - Effect of amended Regulation 21A of the IBBI (Liquidation Process) Regulations, 2016 which came into force on 06.01.2020, retrospective or prospective - possession of the entire Unit VII comprising of 164.05 acre, when they purportedly have security interest over only 85 acre of land.
Whether the amended Regulation 21A of the IBBI (Liquidation Process) Regulations, 2016 which came into force on 06.01.2020 can be given retrospective effect? - HELD THAT:- The IBBI vide its Circular No. IBBI/LIQ/024/2019 dated 26.08.2019, upon saddled with queries from the stakeholders with respect to the applicability of the amended regulations to the Liquidation process, has clarified that the Amended Regulations are not applicable to the Liquidation Processes, which had commenced before coming into force of the said Amended Regulations and that they are applicable only to the Liquidation processes, which commenced on or after the said Amended Regulations came into force. Thus, this circular amply clarifies the issues as to the prospective applicability of the Amended Regulations to the Liquidation process of the Corporate Debtor - since the Liquidation process in relation to the Corporate Debtor has commenced on 25.04.2018, the IBBI (Liquidation Process) Regulations, 2016, which was prevalent at that point of time only will apply to the facts and circumstances of the present case.
Whether the Applicant is entitled to claim the possession of the entire Unit VII comprising of 164.05 acre, when they purportedly have security interest over only 85 acre of land? - HELD THAT:- Once the Secured Creditor has expressed his willingness to stand outside the liquidation process, the Liquidator cannot have any hold over the said property and as such the property over which the secured creditor exercises his security interest would not form part of the 'Liquidation Estate' and the Liquidator is duty bound to hand over the physical possession of the said property to the Secured Creditor. However, it is to be noted here that to enforce the 'security interest' under Section 52(1)(b), the Creditor must either have 'exclusive charge' or 'sole first charge', which would enable it to enforce its 'security interest' - in view of the documents not being placed on record in order to substantiate the fact as to which property the Applicant is having 'exclusive charge' and 'sole first charge', this Tribunal hereby directs the Liquidator to identify the properties over which the Applicant is having 'exclusive charge' or 'sole first charge' and to hand over the physical possession of the same to the Applicant in order to exercise their security interest. It is also made clear that the properties over which the Applicant is having 'second charge' or 'pari passu' charge is to be held within the possession of the Liquidator and necessarily the said property forms part of the 'Liquidation Estate'.
Application disposed off.
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2021 (4) TMI 1142
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational creditors - existence of debt and dispute or not - HELD THAT:- It is not in dispute that applicant was serving as General Manager of the Corporate Debtor. This fact is further supported by Form-16 issued under the provisions of Income Tax Act, 1961 which confirm the quantum of salary. It is also not in dispute that reply to notice of demand issued under Section 8 of IBC, 2016 has not been given. Such notice has been delivered and notice to that effect has been put on record, hence, for this reason alone this application can be admitted. Further the debt is due and payable because it is not barred by limitation nor it is premature. No dispute prior to issue of notice under Section 8 of IBC, 2016 exists as evident from the material on record. A default has occurred in payment thereof. The outstanding amount is more than ₹ 1,00,000/-, being threshold limited to admit the petition filed under Section 9 of IBC, 2016.
Application admitted - moratorium declared.
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2021 (4) TMI 1141
Addition as headless deemed income - Unaccounted income u/s. 68 to section 69D - Appellant had disclosed the same as undisclosed stock as evident from profit & loss account, stock record etc. - CIT(A) held that the value of excess stock found during survey was not to be assessed as business income u/s. 28 - HELD THAT:- As stated provisions of section 115BBE, it is noticed provision of section 115BBE(2) has been inserted by the Finance Act 2016 w.e.f. 01.04.2017 which specifically say that no deduction in respect of any expenditure or allowance or set off any loss shall be allowed to the assessee under any provision of the act in computing his income referred to in clause (a) of sub-section (1). In sub-section (2) of section 115BBE as introduced by Finance Act, 2012 only disallowance of expenditure or other allowance was considered against unaccounted income u/s. 68 to section 69D but business loss was not covered. It is only by Finance Act, 2016 w.e.f. 01.04.2017 it is inserted in the provision to deny benefit of set off of any loss.
Therefore, in the case of the assessee, if we reduce the business income then we shall arrive at loss In that case the amount of ₹ 50,00,000/- will become taxable under the head “income from other sources”. But a set off of business loss of ₹ 49,70,470/- shall become allowable since the provision to deny set off of loss is introduced w.e.f. 01.04.2017 in section 115BBE of the Act. Even under these circumstances also, the assessee will derive the gross total income of ₹ 29,530/- . Since the case of the assessee is pertained to assessment year 2015-16, therefore, in the light of the above facts and findings, the appeal of the assessee is allowed.
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2021 (4) TMI 1140
TDS credit u/s 199 - AO disallowed the assessee's claim on credit of TDS on the ground that the Subscription Charges were not offered to tax in the return of income - assessee contended that it is only a collection agent for M/s.Sun TV Network Limited and that the corresponding subscription income derived from pay channels stood accounted/offered as income in the hands of M/s.Sun TV Network Limited - AO held that the TDS credit relevant to subscription charges could not be allowed in the assessee's hands in view of proviso 1 & 2 to Section 199 of the Income Tax Act - assessee strenuously contended that the amounts received by them from various Cable Operators cannot be construed as their income, but represents the income of their principal viz., M/s.Sun TV Network Limited - HELD THAT:- As per Section 199(2), credit for TDS can be allowed only when the corresponding income is offered for taxation in the year in which such TDS is claimed and deduction of TDS was allowed without the corresponding income being declared in the Profit and Loss Account.
As per the Agreement entered into between the respondent and M/s.Sun TV Network Limited and for practical purposes, the invoices were raised by them on various Cable Operators and the TDS certificates were issued by the payers (i.e.) the Cable Operators in the name of the respondent – assessee, the respondent is entitled to claim the credit for the TDS certificates. Merely because the income has been offered and processed in the hands of M/s.Sun TV Network Limited, credit for TDS deducted in the name of the respondent – assessee cannot be denied. It is not in dispute that the respondent – assessee has remitted the entire gross amount received from the Cable Operators to M/s.Sun TV Network Limited.
The amount remitted by the respondent to M/s.Sun TV Network Limited includes the amount of TDS deducted by the Cable Operators at the time of payment made by them to the assessee - in lieu of the services rendered by the respondent – assessee, they are entitled to receive the fixed commission.
Since tax has already been deducted and paid to the Government at the time of making collections, the assessee is entitled to get credit of the same while receiving the commission income. M/s.Sun TV Network Limited had engaged the services of the respondent for collection of Subscription Charges against the commission. However, the Cable Operators, at the time of payment of subscription, deducted the tax at source and remitted the remaining amount to the assessee. The subscription collected by the assessee cannot be construed as its income and hence, the same is not taxable in the hands of the assessee. Further, the amounts collected by the assessee are credited to separate account viz., “Subscription Charges”. The said account was debited at the end of the Financial Year when the amounts are paid to M/s.Sun TV Network Limited. Since the subscription collected by the assessee from various Cable Operators are not the income of the assessee, the same were not shown in the Profit and Loss Account. The subscription amount is the income of M/s.Sun TV Network Limited and as such, the same is taxable in the hands of M/s.Sun TV Network Limited. The levy of tax on the respondent – assessee would amount to double taxation.
As rightly contended by the learned senior counsel appearing for the respondent, since the amended provision Rule 37BA(2)(i) came into effect only on 01.11.2011, the same is not applicable to the cases on hand. Appellate Tribunal was right in holding that the assessee is eligible for TDS credit.
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2021 (4) TMI 1139
Levy of penalty u/s 271 (1) (c) - Appellant has not established reasonable cause for the non submission of the returns within the time prescribed u/s 153(1) - Scope of amendment to Explanation 3 to Section 271(1)(c) - whether the Income Tax Appellate Tribunal was correct in upholding the orders of the Assessing Officer who in fact had 'allegedly' given retrospective effect to Explanation 3 to Section 271(1)(c)? - HELD THAT:- It is not the case of the appellant that he had filed the Income Tax Returns for all the three years namely 1999-2000, 2000- 2001 and 2001-2002 within the specified period as mentioned in sub section 1 of Section 153 of Income Tax Act. As such the due dates for filing these returns were 31.10.1999, 31.10.2000 and 31.10.2001 respectively. While this being so, these returns were filed on 07.04.2005, 15.06.2005 and 19.12.2005 respectively for the assessment years. These filing of returns were also subsequent to the issue of notice dated 23.12.2004 under Section 148 of the Act after the survey under Section 133-A of the Act. It is also pertinent to mention that the survey under Section 133 A of the Act was conducted subsequent to which the audit of accounts was completed and the consequent Income Tax Returns were filed. Explanation 3 to Section 271(1)(C) is categorical as to where concealment of income can be deemed. Moreover, in the instant case the Income Tax Appellate Tribunal observation is significant.
It is not also the case of the appellant that the Income Tax Returns were filed before the amendment to Explanation 3 to Section 271(1)(c) was brought in. Therefore, there is no substance in the contention of the learned counsel for the appellant in claiming that the said amendment has been applied retrospectively. Interestingly, the learned counsel for the appellant has tried to take shelter that the words "Who has not previously been assessed under this Act" which was a part of the Explanation 3 to Section 271(1)(C) prior to 01.04.2003 and omitted thereafter stating that he was an existing assessee even prior to the amendment and therefore the amended explanation was not applicable to him. However, this point has already been dealt with and clarified and needs no further elaboration. Appeal dismissed.
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2021 (4) TMI 1138
Offence under SEBI - complainant foisting vicarious liability upon the accused No.1 - criminal breach of trust of the complainant and sold its shares to their own Company - HELD THAT:- After applying a ratio laid down by the Hon’ble Supreme Court in the case of Iridium India Telecom Ltd. [2010 (10) TMI 85 - SUPREME COURT] it is clear that, the accused No.1-Morgan is a necessary party for proper adjudication of the complaint. It is to be noted here that, the Letter of Pledge (Agreement) dated 7th March, 2000 is executed by the Authorized Signatory of the complaint on behalf of it, in favour of the accused No.1 company and therefore also impleadment of Morgan (A-No.1) is necessary for proper adjudication of the present complaint. The contention that, the accused No.1 is being foisted with vicarious liability, is the defence and a specious plea raised by the said accused. The accused No.1 will have to prove the said defence at the time of trial by leading cogent and plausible evidence in that behalf. The aforestated deliberation leads to draw an irresistible conclusion that, the accused No.1 company is a necessary and relevant party to the said complaint and it cannot be dropped from the present proceedings at its inception.
The accused with dishonest intention have committed criminal breach of trust, deceived the complainant and have committed the act of cheating against it. In view thereof, the complainant succeeds.
In view of the statement made by the complainant in the present proceedings that, the complainant hereinafter will not pursue application of Section 15-HA of the SEBI Act in the said complaint, Section 15-HA of SEBI Act is dropped from the Order dated 22nd March, 2017 passed below Exh-1 in CC No.56/SW/2011. The Order dated 22nd March, 2017 passed by the learned Magistrate is modified to that extent only.
In view of the above, Writ Petition filed by the complainant are allowed.
The present complaint filed in the month of February, 2011 by the complainant, is pending on the file of learned Metropolitan Magistrate, Railway Mobile Court, Andheri, Mumbai for last more than 10 years. In view thereof, learned Magistrate seized of the said complaint is directed to expedite hearing of the said complaint and to make an endeavour to dispose off the same within a period of one year from the date of receipt of present Order. It is needless to mention that, the period during which the smooth functioning of the concerned Court is paralyzed or affected due to the present pandemic situation, will be excluded from computation of the said period of one year.
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2021 (4) TMI 1137
Levy of CGST and SGST - Supply of branded packaged rice or not - assessment based on quantity of rice found in the godown - HELD THAT:- The officials of GST department had carried out a surprise visit to the premises of the petitioner- company from where several incriminating documents and sizable quantity of packaged rice were seized. The invoices and other sales details established that for the period under consideration, the petitioner had supplied rice in packages of 25 kg each which carried the brand name Aahar Normal, Aahar Gold or Aahar Premium. Sizable quantity of such packaged branded rice was also seized from the premises. It was on the basis of such materials that the adjudicating authority came to the conclusion that the petitioner was engaged in supply of packaged branded rice. The Appellate authority confirmed the finding of the adjudicating authority and dismissed the Appeal of the petitioner. The authorities did not accept the petitioner’s ground of the seized rice being only for the internal use and purposes.
There are no error in the view of the authorities. Firstly, the conclusions of these authorities are based on assessment of materials on record. Secondly, the seizure of sizable quantity of packaged branded rice was an indication of the petitioner dealing in such product. Thirdly, the tax is not demanded on rice stored and seized but on the quantity of rice already supplied which was assessed from the bill books and invoices seized from the premises of the petitioner-company. Further, the petitioner’s defence that the quantity of rice lying in the godowns was merely for internal use was also not backed by any evidence. Close to three thousand bags of rice were found lying in the godown. The petitioner’s bare contention that it was not meant for supply but only for internal purposes of grading the rice or part of the stock was lying because of quality disputes, was not backed by any evidence and was therefore correctly not accepted by the authorities. Lastly, the petitioner’s contention that the brand was not a registered brand and therefore the petitioner had no liability to pay tax also was rightly not accepted - The brand names under which the petitioner was selling the rice may not have been registered, nevertheless it could lead to an actionable claim in a court of law. In order to avoid inviting liability of tax, the petitioner had to forgone such actionable claim which also the authorities found the petitioner had not done.
Petition dismissed.
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