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Showing 261 to 280 of 2006 Records
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2018 (4) TMI 1750
Validity of order u/s 143(3) read with Section 144C in the name of an amalgamating company even after the date of amalgamation as per the specific provisions contained in section 170(1) - HELD THAT:- Preliminary issue involved in this case relating to the validity of the assessment made in the name of the amalgamating company being a non-existent entity is squarely covered in favour of the assessee by the various decisions of the Hon’ble Delhi High Court relied upon and atleast there of such decisions are rendered after taking into consideration the provisions of section 170(1) and 170(2).
We therefore find no merit in the contention raised by the Ld. D/R in support of the revenue’s case by relying on provision of section 170(1) and since the decision in the case of the assessee on a similar issue has been rendered by the Tribunal for AY 09-10 by relying on the said decisions of the Hon’ble jurisdictional High court, we respectfully follow the same and quash the assessment order passed by the AO u/s 143(3) read with section 144C by holding the same to be invalid for having made in the name of a non-existent company. Additional ground raised by the assessee in this appeal is accordingly allowed.
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2018 (4) TMI 1749
Disallowance of advertisement and publicity expenses - Allowable revenue expenditure u/s 37(1) - AO observed that it had gifted freebies to the medical practitioners - HELD THAT:- Physicians samples are necessary to ascertain the efficacy of medicine and introduce it in the market for circulation and it is only by this method the purpose is achieved. In such cases giving a physician samples for reasonable period is essential to the business of manufacture and sale of medicine. It is only if a particular medicine has been introduced by the market and its uses are established then giving of free samples could only be the measure of sale/ promotion and development would thus be hit by subsection (3A). Said decision no way prohibits the nature of expenditure which has been incurred in the case of the assessee. Therefore, such a reference to a Hon’ble Apex Court decision is not germane to the issue involved. Thus, in our opinion, the aforesaid decision of this Tribunal PHL PHARMA P LTD. [2017 (1) TMI 771 - ITAT MUMBAI] is clearly distinguishable and cannot be held to be applicable and also we have already given our independent finding as to allowability of expenses in the hands of the assessee as business expenditure.
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2018 (4) TMI 1748
Maintainability of application - initiation of CIRP - Corporate Debtor - commitment of default - outstanding-financial debt or not - HELD THAT:- Due to the default of repayment of loan the IDBI Bank issued a "Notice of recalling" loans dated 12th June.?014. In the said "Notice of recall" the loan agreements entered into and various facilities granted along with Rupee Term Loan agreement was discussed and finally communicated that since the default of non-payment committed by the corporate debtor, the Bank has become entitled to "Recall" its entire Principal amount and Interest-amount outstanding against the Debtor.
All the facts have duly established the Debt due against the "Financial Debtor" as well as the default committed in non-payment.
Since the 'default' in repayments is established, the Petition deserves to be "Admitted" - petition admitted - moratorium declared.
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2018 (4) TMI 1747
Addition u/s 40A(2)(b) - payment to the persons specified - computing the profit of the Joint Venture @4% of the gross receipts - HELD THAT:- It is an admitted position that the AO made the addition by invoking the provisions of Section 40A(2)(b) of the Act which are applicable to the expenses considered to be excessive or unreasonable having regard to the fair market value of the goods/services or facilities for which the payment is made. However, in the instant case, the AO estimated the profit of the assessee and determined the income, nowhere he doubted the expenses incurred by the assessee. Therefore, AO was not justified in making the addition by invoking the provisions of Section 40A(2)(b) of the Act which are applicable to the expenditure and not to the receipts and the ld. CIT(A) rightly deleted the same. - Decided in favour of assessee
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2018 (4) TMI 1746
Maintainability of appeal - Liquidation proceeding - Insolvency and Bankruptcy Code, 2016 - it was alleged that without following the procedure for resolution process, the impugned order of liquidation has been passed - HELD THAT:- From the record, we find that the Directors have not cooperated with the Resolution Professional. The title deeds of the properties belonging to the ‘Corporate Debtor’ and other records were not supplied to the ‘Resolution Professional’.
The resolution process started on 23rd August, 2017 and 180 days expired on 19th February, 2018. Taking into consideration the fact already 180 days has completed and the Directors were not co-operating with the ‘Resolution Professional’ or ‘Committee of Creditors’, the Adjudicating Authority had no option but to pass order in accordance with Section 3 of the I & B Code, we find no merit in the appeal.
Appeal dismissed.
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2018 (4) TMI 1745
Rectification of mistake u/s 254 - contention of the assessee that in view of this clear finding of the Tribunal that the direction of DRP is very cryptic, the matter should have been restored back to the file of DRP and not to file of AO/TPO - HELD THAT:- As relying on IBM India Pvt. Ltd. Vs. Addl. CIT [2013 (12) TMI 1539 - ITAT BANGLORE] there is no apparent mistake in the Tribunal order because the matter was not restored back to the file of DRP but was restored back to the file of AO. Considering these facts along with the entire facts of the present case, we find that there is no apparent mistake in the Tribunal order which can be rectified u/s. 254(2)
Comparable selection - Tribunal discussed regarding comparables of ITES segment without giving final finding in respect of IT segment - HELD THAT:- We find that there is apparent mistake in this para of Tribunal order and hence, we rectify the same.
Para 13 of impugned Tribunal order should be read as under -
"Learned DR of the revenue could not point out any difference in facts. Therefore, respectfully following these two tribunal orders, we hold that the four comparables i.e. 1) Bodhtree Consulting Ltd.,
2) Tata Elxsi Ltd., 3) Persistent Systems Ltd. and 4) Infosys Ltd. in IT segment should be excluded from the final list of comparables of IT segment and in ITES segment, we uphold the exclusion of 1) Accentia Technologies Ltd., 2) Infosys BPO Ltd., 3) Cosmic Global Ltd. and 4) Eclerx Services Ltd. Remaining grounds on TP issues are rejected as not pressed as no argument was advanced on that account."
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2018 (4) TMI 1744
Addition on unaccounted investment - block assessment proceedings - HELD THAT:- Tribunal held and observed that in the loose papers found during the search, the name of the assessee nowhere appeared. During the search, the statements of the representatives of Bhavya Group were also recorded, who had denied the contents of the documents impounded.
The Tribunal noted that against Bhavya Group, in respect of the notice found in such papers, no account was taken. In view of such facts, the Tribunal concluded that the papers merely contained some notings but, in any case, did not involve the assessee. The issue is purely factual in nature. No question of law arises
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2018 (4) TMI 1743
Revision u/s 263 - allegation of accommodation entry taken from S K Jain Group of concerns case was reopened u/s 148 with the prior approval of the CIT - AO has not taken into consideration the material seized during the search in the case of Sh. S. K. Jain. - HELD THAT:- When we asked the specific query about whether the present directors of those companies were called for and given a statement, the Ld. AR submitted that most of the companies whom shares have been given the current directors were not given statements but the past directors have given statements. The case laws cited by the Ld. AR will not be applicable in the present case as the facts in the present case are different.
Pr. CIT has properly invoked the provisions of Section 263 and there is no procedural lapse on the part of the Pr. CIT. In fact, the Assessing Officer though reopened the assessment proceedings did not made any inquiry and there is no mention of the same in the Assessment Order itself which proves that the order is passed without making inquiries or verification which should have been made by the Assessing Officer. Thus, it is prejudicial to the interest of the Revenue and there is loss of revenue. The Pr. CIT after issuing the Show Cause Notice u/s 263 of the Act given ample opportunity to the Assessee for explanation and dealt with the reply/details filed by the assessee in proper manner. Thus, proper opportunity was given by the Pr. CIT to the assessee during the proceedings u/s 263 of the Act. See DENIEL MERCHANTS P. LTD. & ANOTHER VERSUS INCOME TAX OFFICER & ANOTHER [2017 (12) TMI 476 - SUPREME COURT]
In the present case the Assessing Officer has though rightly re-opened the Assessment Proceedings has not properly adjudicated the issue for reopening therefore, the Pr. CIT has rightly invoked Section 263 of the Act and passed the order. Therefore, the Order under Section 263 of the Income Tax Act, 1961 passed by the Principal Commissioner of Income Tax is just and proper. - Decided against assessee
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2018 (4) TMI 1742
TPA - Determination of arm's length price - AO erred in not issuing draft assessment order as per procedure laid down u/s 144C(1) of the Act by issuing the notice of demand u/s 156 of the Act & penalty notices u/s 271(1)(c) and 271AAB along with draft assessment order - HELD THAT:- Various courts have held that such assessment orders to be null and void ab-initio. We have carefully considered the submission and case laws relied. In all the case laws relied on by the assessee, the common mistake made by the AO in those assessments were that AO passed the final assessment order instead of Draft Assessment Order, the courts have held that as per section 144C(1), the AO has no right to pass final order pursuant to the recommendations made by the TPO. Accordingly, the order passed by the AO, thus, lacks jurisdiction.
In the present case, the AO has passed the Draft 'Assessment' but sent demand notice and penalty notices along with the draft assessment order. Since the facts are not identical to the facts of the case laws relied on by the assessee, moreover, the AO has to pass draft assessment order as per provision and was accordingly passed by him. The accompanying notices along with the draft assessment order are only procedural mistakes, it cannot tantamount to passing of final assessment order. Accordingly ground raised by the assessee is dismissed.
Addition in respect of corporate guarantee provided to AE - HELD THAT:- This Tribunal in the case of Four Soft (P.) Ltd. v. Dy. CIT [2014 (4) TMI 285 - ITAT HYDERABAD] agreed with the contention of ld. DR's submission that the corporate guarantee of the nature provided by the assessee is covered under the expanded definition of international transaction post amendment to international transaction. Further, the Hyderabad Benches consistent with the view that corporate guarantee provided by the taxpayer prior to amendment are not international transaction. Hence, it meant that post amendment, corporate guarantee provided by the taxpayer are international transaction. Therefore, corporate guarantee provided by the assessee will fall within the expanded definition of international transaction.
Quantum of guarantee fee to be charged - We are in agreement with the assessee that corporate guarantee is contingent liability, relevant consequence depends upon future event. However, the quantum of exposure should be on the basis of actual exposure. In this case, it is not clear from the document submitted before us the actual exposure. Therefore, we find it appropriate to remit this issue back to the file of TPO/AO to determine the actual exposure of contingent liability for this AY and apply the rate of 0.53% as per the ratio of Glenmark Pharmaceuticals Ltd. [2013 (11) TMI 1583 - ITAT MUMBAI] on the actual contingent liability. It is needless to say that assessee may be given proper opportunity of being heard. Accordingly, ground raised by the assessee is allowed for statistical purposes.
Disallowance of interest expenses on Sham transactions - HELD THAT:- The assessee made certain payments to M/s Silver Point Infratech Ld. during this AY and it claims that these are part of commercial payments on the contract business. There are back to back payments received from contractors and paid to the sub contractors. In this behalf, it has submitted a statement showing the relevant payments. (refer para 18.3). At the same time, we notice that this information was not submitted before the AO and DRP, but, ld. AR claims that these were submitted before DRP. Since these payments were not verified by the tax authorities, we find it appropriate to remit this issue back to AO to verify the claim of the assessee and if it is found that these are back to back payments, received from main contractor and paid to sub-contractor M/s Silver Point Infratech Ltd., the addition made on interest may be deleted - Ground raised by the assessee is allowed for statistical purposes.
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2018 (4) TMI 1741
Maintainability of petition - alternative remedy of appeal - validity of assessment order dated 30. 11. 2017 for the year 2016-17 - HELD THAT:- Since the petitioner did not avail the appeal remedy available under the Statute, this Court would be fully justified in dismissing the writ petition. That apart, the assessment order was passed in November 2017 - However, taking note of the fact that the petitioner paid the entire tax by cheque dated 06. 4. 2018, this Court is inclined to grant one opportunity to the petitioner.
Petition allowed by way of remand.
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2018 (4) TMI 1740
Maintainability of appeal - low tax effect - cascading effect of circulars - Deduction u/s 80-O entitlement - HELD THAT:- As per the Circular/Instruction issued by CBDT, the present Appeal should be not pressed by the Revenue. If, at the time of filing of the Appeal, decision has to be taken whether to file an Appeal or not and the Authority by due application of mind and bearing the two caveats laid down by the Hon'ble Supreme Court, in Surya Herbal Ltd. [2011 (8) TMI 137 - SC ORDER] should take a decision. In cases, where, the Appeals are pending before the Court, appropriate Officer has to take a decision. In the instant case, it appears that, no such specific instruction is issued to Mr.M.Swaminathan, the learned Senior Standing Counsel to withdraw the Appeal, nor, can we compel the learned counsel to withdraw the Appeal.
Having held that the Circular issued by CBDT is applicable to the case on hand and the tax effect being less than the threshold limit prescribed in the Circular. Therefore, we dismiss the present Appeal by applying the law laid down by the Hon'ble Supreme Court, in Surya Herbal Ltd., case (supra), as the two caveats mentioned thereunder does not arise in the instant case.
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2018 (4) TMI 1739
Computation of deduction u/s 10A - HELD THAT:- The assessee had deducted certain expenditure from its export turnover. AO held that it ought to have been deducted from the total turnover and not from the export turnover. ITAT reversed the AO’s determination based upon a decision in the case of ‘CIT vs. Genpact India’ [2011 (11) TMI 119 - DELHI HIGH COURT] . In these circumstances, we are of the opinion that no question of law arises on this aspect
Quantum of the risk adjustment - Dispute Resolution Panel (DRP) had modified from the initial 1% determined by the Transfer Pricing Officer (TPO) - HELD THAT:- ITAT upheld the DRP’s determination holding that the AO had to amend the draft assessment order after the DRP’s adjustment. This Court is of the opinion that there is no infirmity in the order of the ITAT. The DRP’s mechanism is an administrative and corrective process entitling the assessee to insist upon a second look in regard to the issues decided in the TPO’s report. Therefore, its decisions are binding and a part of the decision making process of the AO. Prior to the amendment in 2012, no appeal was made against the determinations of the TRP. In these circumstances, the impugned order cannot be faulted with.
Exclusion of one comparable i.e. Infosys BPO - HELD THAT:- The Court is of the opinion that there is some merits in the Revenue’s submissions.
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2018 (4) TMI 1738
Interest expenditure allowable either u/s 37(1) or u/s 57(iii) - HELD THAT:- In the impugned assessment year, no business has been carried out by the assessee, however, the assessee has not totally closed down its business, therefore, had to incur certain regular expenditure by way of staff salary, maintenance of factory premises, interest of loan, etc. He also found that the genuineness of expenditure incurred was never doubted by the AO. Commissioner (Appeals) concluded that, since, the expenditure incurred was for maintaining the existence of the firm as well as earning of the interest income, it is to be allowed. DR has failed to controvert the aforesaid finding of the Commissioner (Appeals) by bringing material on record. Therefore, we uphold the decision of the learned Commissioner (Appeals) on this issue. Ground no.1 is dismissed.
Addition made on account of long term capital gain - fair market value as on 1st April 198 - AO power u/s 55A to ascertain the fair market value by making a reference to the DVO - HELD THAT:- AO was not authorized under the Act to make a reference to the DVO for ascertaining the fair market value of the property as on 1st April 1981. That being the case, the only alternative left with the AO is to grant the benefit of indexation on account of cost of acquisition as per section 55(2). In the present case, the assessee in exercise of option granted under section 55(2) having adopted the fair market value as on 1st April 1981, the same has to be accepted in the absence of any other value available with the Assessing Officer. To a pertinent question from the Bench the learned Departmental Representative fairly submitted that in case the fair market value of the property as on 1st April 1981 as declared by the assessee is adopted for indexation purpose, resultant long term capital gain will be a negative figure as per the working submitted by the assessee. No infirmity in the order of the Commissioner (Appeals) as it is in conformity with the ratio laid down by the Hon'ble Jurisdictional High Court in Puja Prints [2014 (1) TMI 764 - BOMBAY HIGH COURT] . Thus, we uphold the decision of the learned Commissioner (Appeals) on this issue by dismissing the ground raised by the Revenue.
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2018 (4) TMI 1737
Clandestine removal - steel ingots and rolled products - alleged issuance of invoices for MS Ingots and scrap in the name of various other parties - HELD THAT:- The evidences relied upon by the Revenue are not sufficient to uphold the allegations of clandestine removal - Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1736
Refund claim - mode of export - case of the petitioner is that some of the exports are made by the petitioner directly and in some cases, such exports are made through recognized courier services - validity of Circular dated 17.02.2007.
Rejection of refund on the ground of export of goods - HELD THAT:- Insofar as the petitioner's provisional refund claim in connection with the exports directly made is concern, clearly the authorities committed an error in rejecting such claim. This issue does not require any elaborate discussion.
Refund claim - exports made through couriers - HELD THAT:- Though we share anxiety of the department that the refund of taxes can be granted only after proper proof of the export of the goods, we cannot appreciate the insistence of the department to stick to procedure laid down way back in the year 2007. More than a decade has passed since then. In a fast moving world with new modes of communication, transportation, technology coming up every other day, it is expected that the department finds proper solutions to the new emerging situation.
Even if we do not expect the department to clear the provisional refund in cases where the documents referred to in said circular dated 17.02.2007 are not produced since the export is made through courier service, such claim cannot be rejected while finally assessing the refund payable to the exporter only on this ground. In other words, as long as there is alternative proof of documentary nature available, the department must consider it, process it and pass suitable order in terms of law in such refund applications.
As per rule 15(7) of the VAT Rules, the refund applications have to be finally processed in three months.
The petitioner's refund claim in cases where the exports were made directly, may be decided without any further delay - impugned order dated 11.12.2017 is set aside - petition allowed.
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2018 (4) TMI 1735
TP Adjustment - AMP expenses addition - HELD THAT:- The issue is covered in favour of the assessee as per the Hon’ble Delhi High Court decision in the assessee’s own case [2015 (12) TMI 1333 - DELHI HIGH COURT] held it did not give rise to a dispute that there is no international transaction involving the Assessee therein and its AEs. In fact each of the Assessees were receiving subsidies/subventions from their respective AEs. The second factor taken note of by the Court is that as BLT was invalidated as a means of determining the existence of an international transaction, the onus was on the Revenue to show the existence of an international transaction. In the present case, the existence of such a transaction was ascertained only by applying the BLT. For the above reasons, the Court is satisfied that the case of the present Appellant would not stand covered by the decision in Sony Ericsson [2015 (3) TMI 580 - DELHI HIGH COURT] Question (i) is accordingly answered in favour of the Assessee and against the Revenue.
Transfer pricing adjustment on account of royalty paid on sales to associated enterprises - HELD THAT:- As decided own case [2017 (5) TMI 469 - DELHI HIGH COURT] Referring to comparative clauses based on the agreement in the case of the assessee and its' sister concern were pari materia and-consequently the payments were revenue in nature.
Disallowance of royalty and technical guidance fee, alternatively made under section 37(1) - HELD THAT:- Respectfully following the decision of the Hon'ble high court in assessee’s own case the disallowance under section 37 (1) on account of royalty and technical guidance fees cannot be upheld. Therefore ground of the appeal of the assessee is allowed accordingly.
Double disallowance of Royalty - payment made by the assessee on account of royalty has already been disallowed by the TPO - HELD THAT:- As per the submissions of the Ld. AR, since the payment of royalty, to the extent of ₹ 76,96,000 has already been disallowed in the transfer pricing order, further disallowance to that extent has resulted in double disallowance of the same amount, which is impermissible under the provisions of the Act. Since the Royalty issue is already decided in ealier Ground this contention of the assessee is accepted.
Disallowance of provision for service coupons - HELD THAT:- In the case of the appellant the provision of after sales services has also been made based on the past business history of the appellant and therefore, it cannot be said that it is made on arbitrary basis. Further the contention of the Id. AO is not correct stating that assessee claims excess expenditure in one year because in the year of sales itself assessee claims the expenditure related to sales and when the liability ceases on completion of time, same is reversed in the profit and loss account and offered as income. Therefore , we are of the view that claim of the assessee for deduction of after sales service expenditure is in accordance with Accounting standard 29 issued by the Ministry of corporate affairs which is mandatorily to be followed by the assessee, further quantification of such expenditure has been made on the basis of the past history.
Disallowance of provision or warranty - HELD THAT:- The warranty provisons were disallowed in subsequent years for 1997- 98, 1998-99 & 2001-02 which was deleted by the Tribunal vide order dated 31/7/2006 since no disallowance of provisions for warranty was made in any of the preceding year and the said provision was consistently allowed by the Revenue due to the decision of the Tribunal. This issue is also covered in favour of the assessee. Ground Nos. 6 to 6.2 is allowed.
Short credit of advance tax - HELD THAT:- It can be seen that short credit of advance tax was not at all verified by the Assessing Officer. Therefore, it will be appropriate to remand this issue to the file of the Assessing Officer for further verification. Needless to say, the assessee be given full opportunity of hearing by following principals of natural justice. Ground is partly allowed for statistical purpose.
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2018 (4) TMI 1734
Validity of assessment u/s 143 (3) read with Section 153 (D) - non-issue of notice u/s 143 (2) - Unexplained cash u/s 69 was added on account of unexplained jewellery and on account of unexplained hundies - HELD THAT:- We find that there was no notice issued u/s 143 (2) prior to the completion of assessment under section 143 (3) of the Act by the AO; that the year under consideration was beyond the scope of the provisions of section 153 A of the Act, it being the search year and not covered in the six year to the year of search as as per the assessment scheme/procedure defined u/s section 153A; that the AO has passed regular assessment u/s 143 (3) of the Act; although the ld CIT has mentioned the section as 143 r.w.s. 153A and that the department had not controverted these facts at the stage of hearing.
It is noted that issue of notice u/s 143 (2) for completion of regular assessment in the case of the assessee was a statutory requirement as per the provisions of the Act and non-issuance thereof is not a curable defect. Even in case of block assessment u/s 158 BC, it has been so held by the Apex court in the case of 'ACIT Vs. Hotel Blue Moon' [2010 (2) TMI 1 - SUPREME COURT]
Assessment order is passes without issue of notice u/s 143 (3) of the Act and this defect can not be cured by taking recourse to the provisions of section 292 BB of the Act.
AO had no valid jurisdiction to pass the assessment order and the very foundation of the assessment proceedings is bad in law.
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2018 (4) TMI 1733
Principles of natural justice - order passed ex-parte - assessment under the Bihar Value Added Tax Act, 2005 - HELD THAT:- Even though the order-sheet indicates that the notice has been served and in spite of telephonic communication being made, the assess is not present, the order further indicates that the assessment order is being passed on the same date i.e. 8.9.2016,but, surprisingly, for a period of 9 months nothing is done and the order of assessment is passed on 12.6.2017. It is a case where the proceedings were to be held on 8.9.2016. The order-sheet indicates that the order has been passed, but the order seems to have been passed on 12.6.2017. If the matter could be kept pending for 9 months before the Assessing Officer, the Officer should have well issued a fresh notice to the assessee to give his say.
It is a fit case where the matter be remanded back to the Assessing Officer for conducting the assessment proceedings afresh in accordance with law - Appeal allowed by way of remand.
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2018 (4) TMI 1731
Direction to Objection Hearing Authority to pass an order within six weeks from the date of filing of objections - HELD THAT:- Learned counsel for the respondent states that he has no objection in case the time period for passing of speaking order is extended by a further period of six weeks. Mr. Rajesh Jain, Advocate states that this is required and necessary for objective and fair decision.
Recording the aforesaid concession given by the counsel for the parties, time is extended by six weeks and the writ petition is disposed of. As already stated in order dated 21st February, 2018, the Objection Hearing Authority would pass a speaking order dealing with the objections and contentions of the petitioner.
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2018 (4) TMI 1730
Whether impugned interim order is in consonance with sub-section (4) of Section 242 of the Companies Act, 2013?
HELD THAT:- If the impugned order is stayed if will amount to grant of final relief, while we are not inclined to stay of the impugned order for the present, give liberty to State Bank of India/ Convenors of Joint Lenders to reach agreement to sale/ sale deed with regard to the mortgaged properties of the Company with any reliable purchaser and will keep the amount in a separate Escrow Account, which shall be subject to the decision of the appeal. If the State Bank of India intends to execute sale deed(s), the parties will co-operate with it.
Post the matter on 18th April, 2018 before the 1 st Court.
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