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Showing 261 to 280 of 920 Records
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2020 (4) TMI 660
Assessment proceedings u/s.153A - Taxation of Long Term Capital Gain - investment made in purchase of new residential house as provided u/s. 54F(1)(a) - HELD THAT:- Similar enhancement of addition has been deleted in original assessment proceedings, therefore, the same addition cannot be roped in the assessment proceedings u/s.153A and hence same is deleted. - Decided in favour of assessee.
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2020 (4) TMI 659
Assessment u/s 153A - absence of issuance of mandatory statutory notice u/s 153C - HELD THAT:- A perusal of the reply received from the Income Tax department by the assessee under RTI Act shows that the AO has categorically given a reply that no notice u/s. 153C was issued for A. Y. 2012-13.
Since the order of the CIT(A) has attained finality as nothing contrary brought to our notice, therefore, the assessment for A.Y. 2012-13 has to be u/s. 153C/153A. Since the AO has not issued the mandatory notice u/s. 153 C as admitted by the AO in his reply to the information obtained by the assessee under RTI Act, therefore, the mandatory procedure prescribed u/s. 153 C has been violated and, therefore, assessment order so passed by the AO is not in accordance with law. Hence, the same has to be quashed. We accordingly hold that the assessment order framed by the AO u/s. 143 (3) / 153 C and 153 A is void ab initio and, therefore, has to be quashed. The ground raised by the assessee is accordingly allowed.
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2020 (4) TMI 658
Short-deduction of TDS - interest u/s 201(1) OR 201(1A) - non-deduction of TDS u/s 194A OR 192 - salary payments of the employees of the assessee that ‘cash medical benefit’ was allowed exemption u/s.10 - AO was of the view that what is contemplated by proviso (iv) to Sec.17(2) was any sum paid by the employer in respect of any expenditure "actually incurred" by the employee on his medical treatment or treatment of any member of his family - HELD THAT:- Assessee was paying medical reimbursement as a component of the monthly payment to the employee and later claiming that it was not perquisite to the extent of ₹ 15,000, the same had to be considered as salary and not exempt perquisite. The reasoning is the same that the payment should not precede the actually incurring of the expenses and it should be only by way of reimbursement. The grievance of the assessee is that there should not be any deduction of TDS on reimbursement of medical allowance and charging of interest thereon.
On perusal of the impugned order CIT(A) observed that the assessee has paid fixed medical allowance and as per the CBDT letter issued to LIC, the exemption of ₹ 15000/- is allowed to reimbursement of actual expenditure. We find that medical allowance is a fixed allowance paid to the employees of a company on a monthly basis irrespective of whether they submit the bills to substantiate the expenditure or not.
Medical reimbursement is a payment made to employees against specific medical bills submitted by them, subject to entitlement. If employees want to claim tax benefit, they should submit bills for the corresponding amount under medical reimbursement. As per the provisions of Income Tax Act, 1961, medical allowance is not categorised as an allowance which bears entire exemption - medical allowance is a fixed pay provided by an employer, and is fully taxable. Employees can claim a tax benefit up to ₹ 15,000/- under medical reimbursement on production of bills and supporting document as per Section 17 (2) of the IT Act, 1961.
Employer has provided fixed medical allowance to his employees - employees have not submitted any bills/vouchers regarding their medical expenses incurred by them. The allowance is exempt to the extent of expenditure incurred by the employees. In the impugned case, there is no any proof of medical expenditure incurred by the employees which is clear from the orders of authorities below.
Assessee also could not substantiate that the employees have spent the allowances received by them for the intended purpose. Therefore, the fixed medical allowance given by the employer is taxable as salary income.
The employer has not been deducted TDS on the fixed medical allowance. CBDT letter relied on by the ld. AR of the assessee has no application on the issue under consideration as the CIT(A) has already dealt the same in the appellate order. The authorities below have decided the issue in detail and accordingly, we uphold the same. - Decided against assessee.
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2020 (4) TMI 657
Extension of Stay - payment in four installments - delay in non-disposal of appeal - HELD THAT:- The Hon’ble Delhi High Court in Pepsi Foods (P) Ltd. Vs. ACIT [2015 (5) TMI 655 - DELHI HIGH COURT] and case of M/s. SAP Labs (I) Pvt. Ltd. Vs. ACIT [2016 (2) TMI 398 - ITAT BANGALORE] has held that, if the delay is not attributable to the assessee, the Tribunal has power to extend the period of stay even beyond the time limit laid down in 3rd proviso to Section 254(2A) .
We, considering the facts and circumstances and the stay petition filed by the assessee, hold that the delay in non-disposal of the appeal is not attributable to the assessee. Hence the balance of convenience lies in favour of the assessee for extending the stay as the assessee has complied with the directions of the Tribunal and the Hon’ble High Court in payment of instalments. Accordingly, we extend the stay of outstanding demand for a further period of six months from the date of this order or disposal of the appeal whichever is earlier - Decided in favour of assessee.
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2020 (4) TMI 656
Condonation of delay - appeal of the assessee was dismissed by the ld.CIT(A) on the solidary ground that the same was not within limitations and assessee had no ‘sufficient cause’ for filing the appeal in time - HELD THAT:- Keeping in view of the decision in Hon'ble Supreme Court in the case of Land Acquison Collector Vs. MST Kitji [1987] [1987 (2) TMI 61 - SUPREME COURT] we find that the assessee had sufficient cause for not filing the appeal in time before the ld.CIT(A). Therefore, considering the reasons as cited in the said application and also keeping in view principles laid down by Hon'ble Supreme Court, we condone the delay in filing the appeal before the ld.CIT(A).
Undisclosed income - set off of shares business loss against the undisclosed income - No claim shall be available for any allowances or expenditure of income referred to any section 68, section 69, section 69A, section 69B, section 69C and section 69D from A.Y. 2013-14 onwards. This amendment being prospective and not retrospective and since the claim raised by the assessee is for the A.Y. 2009-10, therefore, this amendment is not applicable and thus the claim for set off of shares business loss is available to the assessee as benefit provided u/s.71 of the Act may not simply be denied on the ground that the assessee was not able to substantiate his claim for classification under certain head of income. In our view, even if that claim is not substantiated, even then the income can be classified under any other head i.e. the income from other sources and benefit u/s.71 of the Act is also allowable. Therefore, keeping in view of the totality of the facts and circumstances as discussed above and also keeping in view of the decisions as mentioned above, we allow the claim of the assessee for set off of shares business loss against the undisclosed income for the year under consideration, accordingly solitary ground raised by the assessee are allowed.
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2020 (4) TMI 655
Penalty u/s 271(1)(c) - unexplained cash credit u/s.68 - disallowance of expenses - Merely because the assessee could not substantiated his stand of earning income on account of brokerage charges, the same was treated as cash credit u/s.68 - HELD THAT:- AO had made passive disallowance of expenses, without offering any explanation or justification in the same and has not proved beyond doubt any activity of concealment of income on the part of assessee. AO had made arithmetic disallowance without offering any reason, explanation or decision in this regard, In the order of assessment, AO had not provided any reason for disallowance of expenses not even mentioned his express intention to disallow those expenses, thus penalty on the said reason is not imposable.
In the case of DCIT Vs. Kulwant Singh [2019 (4) TMI 1287 - ITAT CHANDIGARH] wherein it has categorically been held that when all the facts with regard to the income were declared in the original return itself, then it cannot be taken as a case of concealment or furnishing of inaccurate particulars of income.
Where the satisfaction of the ld.AO while initiating the penalty proceedings u/s.271(1)(c) with regard to filing of inaccurate particulars of income while making claim of brokerage charges and it was not believed by the ld.AO and the ld.AO has considered the same as cash credit income u/s.68 - we find support from the decision of CIT Vs. Reliance Petro Products [2010 (3) TMI 80 - SUPREME COURT] wherein it has categorically been held that “mere making of a claim, which is not sustainable in law by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee and such claim made in the return cannot amount to be inaccurate particulars. - Decided in favour of assessee.
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2020 (4) TMI 654
Condonation of delay - reasonable cause for filing appeal in delay - HELD THAT:- A delay of the shortest period may be uncondonable due to unacceptable explanation, whereas in certain other cases, delay of a long period can be condoned, if the explanation is satisfactory. However, if no mala-fide can be attributed to the delay, that delay will be condonable. We find that the assessee has shifted from Surat to Banaras, therefore, the assessee has a reasonable cause for filing appeal in delay. Hence, delay is condoned.
Gifts receipt - addition being income in the hands of the appellant - Addition u/s 28(iv) - HELD THAT:- In the light of decision of Nirmala P. Athavale [2008 (2) TMI 651 - ITAT MUMBAI] as held that whether where assessee who was a wellknown social reformer and philosopher having lakhs of followers spread all over world and who used to charge no fee or remuneration from his followers or persons who attended his lectures, had received voluntary gifts of certain sum from his followers in recognition of his personal qualities and noble thoughts, gifted sum could not be termed as benefit or perquisite within meaning of section 28(iv) - Similar finding was rendered in the case of Dilip Kumar Roy v. CIT [1973 (7) TMI 4 - BOMBAY HIGH COURT] whenever an amount is paid as personal gift for personal qualities of assessee and as token of personal esteem and veneration, it cannot be subjected to tax as income arising out of business, profession or vocation. Since, the gift is reflected of ₹ 300000/- reflected in the balance account and others were received from followers, therefore, we are of the considered opinion that the addition is not sustainable and the same is directed to be deleted.
Addition representing 1/4th of expenses of Vrajyatra - HELD THAT:- Evidence is in the form of copy of ledger account, templets and receipts of electricity expenses photocopy etc. and affidavit of Shri Satishchandra and placed at paper book 22 supported the fact that the assessee has undertaken Vraj yatra. Since, the assessee being the pujari and does not know the intricacy of law which does not make that the assessee has not incurred expenditure on the Vraj Yatra. Therefore we are of the opinion that the disallowance of expenses at the rate of 1/4th is deleted.
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2020 (4) TMI 653
Deduction u/s 80IB - eligible housing project - basic condition of obtaining the approval from the local authority for housing project unfulfilled - HELD THAT:- The instant case is not case involving some alterations in the building plan at a later stage but is rather a case where the first building plan approved within the cut off limit has been totally obliterated and stands replaced by building plan. The development permission towards the impugned building plan was applied and taken subsequent to the cut off date.
In the absence of any continuity or integrity between the initial approval and subsequent approval,the date of first approval within cut off limit cannot be reckoned for the purposes of second approval. The basic condition of obtaining the approval from the local authority for housing project in specified time limit thus remains unfulfilled for the housing project in question.
The housing project in Explanation-l(i) is qualified and punctuated by implicit condition. The use of word 'the' preceding the; expression 'Housing project1 is suggestive and indicative of the fact that: the 'Housing project' should be broadly the same. Approval for a giver housing project at the first instance will not grant an indefeasible or vested right under Explanation-l(i) for a altogether new project. There should be some demonstrable and intense relationship between earlier approval obtained in respect of 'housing project' vis-a-vis subsequent approval. The law cannot be surpassed to grant relief.
Nothing turns out on the use of the expression ‘revised permission' by local authority. As noted, the approval for revises housing project has no rational connection with the first housing project for which the approval was initially taken.
As per the express language prodigious benefit offered therein stands forfeited unless a housing project is approved by the local authority before 31/03/2008. In the instant case, the second approval taken for the housing project concerning high-rise building betrays the aforesaid condition outlined. This being so, the ratio of the decisions cited do not govern the issue even on most liberal and utmost considerations. Thus, the action of revenue is found to be in accord with mandate of law. - Decided against assessee.
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2020 (4) TMI 652
Levy of penalty u/s.271B - belated submission of tax audit report - HELD THAT:- Admittedly, tax audit report was filed alongwith return filed in response to show cause notice issued u/s.148 of the Act which means that the Assessing Officer had the benefit of tax audit report and no prejudice can said to have been caused for the Department on account of belated submission of tax audit report. See P. SENTHIL KUMAR VERSUS PRINCIPAL COMMISSIONER OF INCOME TAX-5, CHENNAI [2019 (1) TMI 222 - MADRAS HIGH COURT] - we are of the considered opinion that levy of penalty u/s.271B of the Act is not warranted. - Decided in favour of assessee.
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2020 (4) TMI 651
Rectification u/s 154 - rejecting the claim of deduction u/s.54G on the ground that since there is no claim in the Return for deduction u/s.54G, rectification of the intimation for granting the said deduction u/s.54G does not arise - CIT(A), without considering the written submissions with the enclosures of 105 pages filed before him and without giving adequate opportunity to the assessee, and without notifying that there was a delay of 462 days in filing the appeal etc., dismissed the appeal exparte and also dismissed the appeal on technical ground as the assessee has not attached the order under dispute along with the demand notice and appeal fees paid.
HELD THAT:- CIT(A) dismissed the appeal without giving effective opportunity to the assessee. In the facts and circumstances of the case, we set aside the order fo the learned CIT(A) for a fresh examination. The learned CIT(A) would give an effective opportunity of being beard to the assessee on the issue of belated filing of the appeal. In case, he condones the delay, the ld. CIT(A) would adjudicate the issues on merits. In case, he is not condoning the delay in filing the appeal, after giving effective opportunity, he shall pass a speaking order.
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2020 (4) TMI 650
Disallowance u/s. 14A r.w.r. 8D - investments which yielded exempt income during the year for the purpose of computing average value of investment - HELD THAT:- Following the Special Bench decision in VIREET INVESTMENT (P.) LTD. [2017 (6) TMI 1124 - ITAT DELHI] we direct the AO to compute disallowance u/s. 14A r.w.r. 8D(2)(iii) by considering only those investments which yielded exempt income during the year for the purpose of computing average value of investment and accordingly, recompute the disallowance u/s. 14A r.w.r. 8D(2)(iii).
TDS u/s 195 - disallowance u/s. 40(a)(ia) - fees for consultancy services rendered - DTAA between India and Mauritius/Austria/Germany, - HELD THAT:- Disallowances made towards the payments made to Mr. John Lyons, Mr. Walter Sturmer & Mr. Detlef Hasenfuss, since the relevant materials were not placed before the lower authorities, we deem it fit to remit these issues back to the AO for a fresh examination.
The assessee shall lay relevant materials in support of its contention before the AO and comply with the requirements of the AO in accordance with law. AO is free to conduct appropriate enquiry as deemed fit, but he shall furnish adequate opportunity to the assesssee on the material etc to be used against it and decide the matter in accordance with law.
With regard to the payment to HSBC, we find merit in the submissions made by the Ld. AR for the reason that this issue is covered by Article 11(3) - Since, the assessee has made out of a case under item (c) of Article 11(3), supra, the corresponding grounds of the assessee are allowed.
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2020 (4) TMI 649
Additions u/s. 9(1)(vi) - transfer of technology fee as royalty or technical fee - Software license purchased by the assessee- royalty u/s. 9(1)(vi) - Non deduction of TDS u/s 195 - HELD THAT:- As assessee is engaged in the business of development and export of software, providing CTI (Computer Telephonic Integration), system integration, IT consulting services to customers. The assessee has purchased the copyrighted software license from Acqueon Technologies Inc. USA of Acqueon AiQ and IVR connector as off-the-shelf software and used them to develop application as per the requirements of the customers. Therefore, as held by the M/S. VINZAS SOLUTIONS INDIA PRIVATE LIMITED [2017 (1) TMI 1102 - MADRAS HIGH COURT] purchase of copyrighted articles, does not fall within this scope of section 9(1)(vi) of the Act. The assessee has also consumed them to develop the application and sold them. In the absence of any findings from the Revenue that the Acqueon Technologies Ltd Inc. USA was paid over and above the purchase price, its treatment that the impugned transaction falls u/s. 9(1)(vi) is not valid and hence, the corresponding grounds of the assessee are allowed.
Disallowance of payments of contribution towards PF - sums received by the assessee from its employees towards contribution to PF were made beyond the due date as per PF Act - HELD THAT:- Since the AO has not examined as to whether they were remitted within the due date of filing the return of income u/s. 139(1) of the Act, this issue is remitted back to the AO for examination. If the assessee has remitted the sum before the due date of filing the return u/s. 139(1), the AO shall allow the deduction claimed by the assessee in accordance with the Jurisdictional High Court decision in AIMIL LIMITED [2009 (12) TMI 38 - DELHI HIGH COURT] and M/S. ALOM EXTRUSIONS LIMITED [2009 (11) TMI 27 - SUPREME COURT].
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2020 (4) TMI 648
Revision u/s 263 - character and nature of the subsidy received by the assessee - whether order passed by the AO is erroneous and there is loss to the revenue? - HELD THAT: - AO had made adequate enquiry for the purpose of finding the true character and nature of the subsidy received by the assessee i.e. whether the same was capital in nature or revenue in nature. After making sufficient enquiry, AO allowed the claim of the assessee and held the subsidy to be revenue in nature. It is correct that the AO has not written voluminous order accepting the contentions of the assessee. AO is not required to write detailed order accepting the contentions of the assessee, once the same is in accordance with law.
AO is only required to write decision on contentious issues placed before him and not to write decision on the issues on which sufficient enquiry was made and the AO and after enquiry AO is satisfied that the issue is covered in favor of the assessee in accordance with the provisions of law.
No error in the order passed by the AO once sufficient enquiry were made to the true character of the subsidy received by the assessee - issue of subsidy is squarely covered by the decision of the Hon‟ble Supreme Court in the case of Chaphalkar Brothers [2017 (12) TMI 816 - SUPREME COURT]. In view of the matter, we fail to understand how the order passed by the Assessing Officer can be said to be erroneous and prejudicial to the interest of the revenue - Decided in favour of assessee.
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2020 (4) TMI 647
Addition u/s 80IB(10) - CIT(A) deleting the addition holding that the housing project of the assessee was approved by the Collector Pune not as local authority defined u/s. 3(31) o the General Clauses Act?”- HELD THAT:- Relevant Gat Numbers falls in an area controlled under Maharashtra Land Revenue Code and Maharashtra Regional & Town Planning Act (MRTP), 1966. The Collector has given approval of the permission to convert the land to non-agricultural purpose.
He also issued the permission to construct of residential houses and the said property located at above cited Gat Numbers. While granting the permission, the Collector mentioned the terms and conditions in his permission letter from 1 to 33 where the conditions specify the manner of construction of the building, post-construction of the building, obtaining of the completion certificate etc.
Considering the above finding of the CIT(A) on the issue of allowing of deduction u/s 80IB(10) we are of the opinion that the order of the CIT(A) is fair and reasonable and it does not call for any interference. Thus, the ground raised by the Revenue is dismissed.
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2020 (4) TMI 646
Condonation of delay in appeal before CIT(A) - Appeal after failure to get Rectification u/s 154 - delay of 491 days - HELD THAT:- CIT(A) cannot find fault with the assessee.The assessee exploring an alternate remedy by filing the petition u/s 154 before the A.O. and it was filed within the time limit allowed u/s 154 of the Act. The assessee has said to be not received the order passed u/s 154 by the A.O. Later on, the assessee had applied for certified copy of order passed u/s 154 by A.O., which was duly received by the assessee on 10.11.2017.
Assessee filed appeal before the CIT(A) on 23.11.2017 with a delay of 491 days against the order passed by the A.O. u/s. 143(3) - there was a delay of 491 days in filing the appeal before the CIT(A). Accordingly, find reasonable and sufficient cause for filing the appeal before the CIT(A) belatedly. Therefore, condone the delay of 491 days in filing the appeal belatedly before the CIT(A) and direct the CIT(A) to admit the appeal and decide the same on merits. Appeal filed by the assessee is allowed.
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2020 (4) TMI 645
Valuation - inclusion of royalty in the transaction value - Rule 10 (c) of Custom Valuation Rules, 2007 - HELD THAT:- It is clear that the proceedings in the present case was initiated consequent to the order in review No. 228/DC/SVB/AK/2012-13 dated 18.05.2012 passed by the Deputy Commissioner of Customs GATT Valuation Cell, Mumbai, whereby the Deputy Commissioner ordered for loading of Royalty Amount in the transaction value declared by the appellant. The Said order was appealed against before the Commissioner of Customs (Appeals)-Mumbai-I, who vide order in appeal No. 247-248/MCH/DC/SVB/2013 dated 28.03.2013 upheld the order of the Deputy Commissioner and dismissed the appellant’s appeal.
The CESTAT Mumbai disposed of the appeal in SANDVIK ASIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI [2015 (11) TMI 1504 - CESTAT MUMBAI] where by the appellant’s appeal was allowed by holding that the invoice value is not required to be loaded by including the Royalty and the order of the Deputy Commissioner GATT valuation Cell was set aside.
Appeal allowed - decided in favor of appellant.
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2020 (4) TMI 644
Constitutional validity of section 140(5) of the Companies Act, 2013 - violation of Article 14 and 21 of the Constitution of India - invocation of the section against the ex-statutory auditors - constant evergreening of debts extended to its subsidiary Companies & third parties/companies by IFIN.
Whether S. 140(5) of 2013 Act is unconstitutional? - Whether it is bad as it singles out only the Company Auditors and excludes the directors or the office bearers of the companies from its scope? - Whether it is arbitrary since it does not carry adequate procedural safeguards as contained in Indian Chartered Accountants Act or in S. 132 of the 2013 Act? - principle of double jeopardy.
HELD THAT:- The Parliament in 2013 Act made provision for NFRA to consider the cases of professional misconduct and for a criminal trial under its S. 447, an agency like NCLT formed under S. 408 has been given a power to issue a direction to change the CA. It is also apparent that NCLT has not been given power to debar or disqualify or impose any punishment on such CA - Proviso to S. 132(4)(a) of 2013 Act shows that after NFRA initiates investigation into the professional misconduct, the Institute of Chartered Accountants looses that jurisdiction - NCLT does not & can not inquire into a professional misconduct by the CA as it is not conferred with power to choose the nature of punishment or its quantum.
Section 140(5) is part of the provision (S.140) which deals with the removal of CA or his resignation. Need of special resolution to remove CA or grant of opportunity to him in that connection are part of this scheme. The concerned CA though removed by special resolution or due to his resignation, is not visited thereby with any action for professional misconduct or prosecution for crime or any disability because of that removal or resignation.
Chartered accountant Act takes care of the professional misconducts by CA while 2013 Act vide S. 132, also deals with type of the said misconducts and vide S. 447, takes care of criminal offences. In this backdrop, it is absurd to assume that S. 140(5) again envisages a punishment for a professional misconduct or for crime of fraud - Debarment or disqualification under 2nd proviso to S.140(5) follows automatically due to statutory mandate and NCLT has no option or discretion in that respect.
As professional misconduct & offence are not dealt with by the NCLT, disqualification stipulated in second proviso to S. 140(5) can not be construed as a second punishment for same misconduct & it also does not attract the principle of double jeopardy. As legislative mandate of disqualification in second proviso to S. 140(5) is not a punishment either for the misconduct or the offence, obviously it is added as a measure to achieve a laudable goal - Respondents as also the Petitioners do not dispute that considering the consequences emanating from scheme of S. 140(5), it needs to be strictly construed. It contemplates “change of CA” as a final order. The order therefore must be executable (executory) and if the CA has already ceased to be such CA, that final order can not be passed as he can not be or need not be changed.
The disqualification prescribed in second proviso to S. 140(5) is not for NCLT’s satisfaction of involvement in fraud or offence of fraud or for professional misconduct. As only fact of final order of NCLT ie a direction to change is the triggering point, it can not attract the principles of double jeopardy at all. Such debarment is avoidable - the CA in relation to whom the NCLT proposes to issue a direction to change, may therefore prefer to walk out by resigning thereby not taking the risk of a disqualification. He is expected to show a mature & neutral attitude - Even when Company proposes to pass a special resolution for removing its CA under S.140(1), the CA can avoid it by putting in a resignation. The scheme of S. 140 itself interposes “resignation” procedure between the decision of Company to move such special resolution & further processing thereof. The Parliament has placed sub-sections (2) & (3) regarding the resignation between sub-sections (1) & (4) of S. 140 and there is nothing in law to demonstrate that the CA against whom the special resolution of “removal” is initiated, can not resign. Such resignation does not lead to any debarment or disqualification in his practice as CA.
Status of report under S. 212 submitted by SFIO - HELD THAT:- Section 212(11) obliges SFIO to submit an interim report when so directed by the Central Government. S. 212(12) obliges him to submit the investigation report after completing the investigation. The section does not speak of said report as “final report”. Parties have for convenience coined that phrase since S. 212 (11) uses the word “interim report”.
There is nothing in S. 212 of 2013 Act to demonstrate that interim report under S. 212(11) can not be an investigation report. When the Central Government calls for the interim investigation report, there is nothing in S. 212(14), which prohibits the Central Government from considering it - As the respondents do not plead on affidavit and bring on record the basic facts to indicate a possibility of due application of mind by the authority granting “direction” to prosecute, no disputed question in relation to such process under S. 212(14) of 2013 Act arises before us. As such, there is no scope for claiming that arguments of the petitioners about non-application of mind raise a disputed question which can be examined during trial.
Thus, section 140(5) of the Companies Act, 2013 is not unconstitutional - Direction under S. 212(14) of the Companies Act, 2013 dated 29/05/2019 issued by respondent no. 1 Union of India to respondent no. 2 SFIO is unsustainable and it is quashed & set aside. The consequential prosecution lodged by the respondent no. 2 SFIO vide Cr. Complaint no. CC 20 of 2019 on the file of Special Court (Companies Act) and Additional Sessions Judge, Greater Mumbai; is therefore not maintainable and it is also quashed & set aside - petition is partly allowed.
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2020 (4) TMI 643
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - pre-existing dispute - HELD THAT:- It can be seen that the parties to the contract by their conduct signified their acquiescence in the continuance of the contract. There is an apparent deviation with respect to the contractual obligations regarding completion of Factory Acceptance Test from the side of both the parties which disturbs the existence per-se of the operational debt. It is an accepted principle for a claim in the nature of operational debt that it emanates from the Purchase Order and the terms and conditions contained therein, the Applicant/Operational Creditor appears to have made suppression of such a material document; no mention seem to have been made in the Application submitted by the Operational Creditor.
The suppression of existence of such a Purchase Order appears to be an attempt to camouflage their contractual obligations so as to establish their claim for operational debt. In addition, the Operational Creditor has not completed the process of erection and commissioning so as to make them eligible to claim the operational debt.
There is a deviation with respect to the contractual obligations regarding completion of Factory Acceptance Test from the side of both the parties which disturbs the existence per-se of the operational debt leading to a pre-existence of dispute - Petition dismissed.
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2020 (4) TMI 642
Maintainability of application - initiation of CIRP - Corporate Debtor failed in making repayment of the Cash Credit, Term Loan, BP, Devolved LC facility availed from the Bank - existence of debt and dispute or not - HELD THAT:- The CD has defaulted in making repayment of credit facilities to the Petitioner Bank and the date of default is 28-8-2014. The Statement of accounts submitted by the applicant confirms the default committed by the Corporate Debtor - The Petitioner Bank has filed the petition within the period of limitation, as the date of payment of INR. 3,75,00,000.00 as on 25-1-2018 whereas this petition has been filed by the Financial Creditor on 1-7-2019 - The present I.B. Petition is filed by the duly authorised official of the Financial Creditor in a prescribed format under section 7 of the I.B. Code annexing copies of loan documents confirming the existence of debt due and defaulted and proposed a name of Resolution Professional to act as an Interim Resolution Professional (IRP).
This Adjudicating Authority is satisfied that:
(a) The Corporate Debtor availed the credit facilities from the Financial Creditor;
(b) Existence of debt is above Rs. One Lakh;
(c) Debt is due;
(d) Default has occurred on 28-8-2014;
(e) Petition has been filed within the limitation period as the Corporate Debtor has paid INR. 4,73,50,000.00 on various dates between 4-11-2016 to 25-1-2018 wherein this petition has been filed on 1-7-2019.
(f) Copy of the Application filed before the Tribunal has been sent to the Corporate Debtor and the application filed by the Financial Creditor under section 7 of IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process in respect of the Corporate Debtor.
Petition is admitted - moratorium declared.
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2020 (4) TMI 641
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- In the present case, there is no such dispute as pre-existing, the dispute which was being claimed to be pre-existing by the corporate debtor did not survive - also, the applicant has attached the copy of Bank statements in compliance of the requirement of Section 9(3)(c) of the I&BC 2016.
The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfilment of requirements under section 9(5) of the Code. Hence, the present application is admitted - Application admitted - moratorium declared.
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9911796707
