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Showing 301 to 320 of 1564 Records
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2022 (12) TMI 1264
Exemption u/s 11 - grant of registration u/s.12A(1) denied - Charitable object u/s 2(15) - HELD THAT:- The law requires a conjunctive test whereby objects of the applicant society have to be charitable and genuineness of charitable activities should be established for registration of application u/s. 12A. Mere recital of objects or activities without cogent or corroborative evidence is not sufficient by themselves to enable a registering authority to arrive at the satisfaction mandated by law. In the instant case, the documents on record do not suffice to establish the genuineness of activities. As such the findings of fact regarding its charitable activities or rather the lack thereof arrived at on the basis of the evidence filed and arguments addressed stand uncontroverted. This is fatal to the claim of the applicant.
It is clear that applicant has failed to provide sufficient material to corroborate the charitable nature of the objects and genuineness of the activities. Despite being provided timely opportunity the applicant has not been able to substantiate its claim.
We are unable to accept the applicants claim in absence of sufficient material required for formation of satisfaction. Therefore, no case fit for grant of registration u/s.12A(1) of the Income-tax Act, 1961.
Accordingly, the registration sought by the applicant u/s. 12A(1) of the Income-tax Act, 1961 is hereby rejected. Appeal of the assessee is dismissed.
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2022 (12) TMI 1263
Investment allowance u/s. 32AC(1A) - Investment in new plant or machinery. - AO has disallowed the claim of the assessee on the ground that the assessee has not furnished any explanation nor has it provided any supporting evidence to substantiate its claim - A.O. has disallowed the same on the ground that the assessee company has not earned any trading and manufacturing activity for the year ending 31.03.2017 and that the income from manufacturing and sale of sweets and namkeen is declared as Nil - Also assessee has shown fixed asset under “capital work-in-progress” and has not claimed any depreciation on fixed assets for the impugned year - HELD THAT:- The pre condition for claiming deduction as per the provision of section 32AC of the Act is that the assessee ought to have acquired and installed new assets during any previous year which exceeds Rs.25 crores on or before 31.03.2017. The assessee has in fact furnished copy of certificate of M/s. Khedkar and Associates Consultant P. Ltd. indicating that the said plant and machinery was installed by the assessee on or before 31.03.2017, along with supporting documents. This facts has not been denied by the lower authorities.
The assessee company has commenced sale on 29.04.2017 and state that the said fact is sufficient to prove that the plant and machineries were installed prior to this as it was impossible to commence the sale without preliminary work such as trial production of run, training of personnel, etc. much before the commencement of sale. The A.O. has only relied on the audited profit and loss account which disclosed loss due to excess of expenses and also the audited balance sheet and the return of income. It is pertinent to point out that the provision of section 32AC is a beneficial provision inserted vide Finance Act, 2014 to promote and encourage business of manufacture or production of any article or a thing by way of investment allowance for plant or machinery and for this purpose even the threshold limit of investment was reduced from Rs.100 crores to Rs.25 crores.
This clearly implies that the said beneficiary provision is to be construed so as to entitle the assessee with the benefit of additional deduction. A.O. in the present case has only relied on the audited P & L account, balance sheet and the return of income of the assessee and has not gone beyond to enquire into the credibility of the documentary evidences furnished by the assessee to substantiate its claim. We would also like to place our reliance on the decision of the co-ordinate bench in the case of SNJ Distillers Pvt. Ltd. (supra) which has dealt with the similar issues and has held in favour of the assessee.
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2022 (12) TMI 1262
Penalty imposed u/s 271(1)(c) - addition to the capital of the assessee firm - CIT-A deleted the addition - HELD THAT:- CIT (A) has considered that fact that the first proviso was inserted by the Finance Act 2012 w.e.f 01/04/2013 i.e. A. Y. 2013-14 and therefore, prior to the insertion of first proviso to section 68, the liability of the assesses was limited to establish the identity of the Creditor/Lender/Investor, the creditworthiness and genuineness of transaction, and further the proviso is not applicable to the appellant assessee being a partnership Firm. (Not a company in which the public are substantially interested).
According we find no perversity in the order of the CIT(A) to the facts on record inasmuch as the appellant firm succeeded in proving the three essential ingredients u/s 68 of the act to prove the identity, credit worthiness and the genuineness of the transactions. According, the order of the CIT(A), deleing the impugned addition of Rs.9,80,000/-, is sustained.
Addition on account of transfer of interest-bearing borrowed funds at lesser rate of interest - CIT(A) has rightly followed case of ‘South Indian Bank Ltd. [2021 (9) TMI 566 - SUPREME COURT] wherein it is held that if assessee possesses sufficient interest free funds as against investment in tax free securities, then, there is a presumption that investment which has been made in tax free securities were out of interest free funds owned by the assessee. The case of ‘Principal Commissioner of Income Tax (Central) - 1 vs. NRA Iron and Steel Pvt. Ltd.’ [2019 (3) TMI 323 - SUPREME COURT] relied by the Department is distinguished of peculiar fact of the instant case. Accordingly, we find no infirmity in finding of the Ld. CIT(A) in deleting Addition.
Since the assessee gets relief in quantum appeal, the consequential penalty levied u/s 271(1)(c) is deleted. - Decided in favour of assessee.
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2022 (12) TMI 1261
Addition u/s 68 - unexplained loan - unexplained cash credit - liability on the assessee to provide the identity of the lenders, establish the genuineness of the transactions and creditworthiness of the parties - HELD THAT:- We find that during the remand proceedings, the details such copy PAN, ledger account and confirmation and other detail such as bank statement, audited books were made available before the AO. However, the AO without considering and pointing any deficiency in the above primary document held that the assessee failed to prove the identity of the creditor, explain the genuineness of transaction and establish the credit worthiness of the creditor.
Be that as it may be, the undisputed fact that the loan were received through banking channel and loan has been repaid by the assessee in the subsequent year through banking channel. Also undisputed that the assessee has also paid interest on such loan after deducting eligible tax at source as per the provision of section 194A - Therefore, in our considered view once the amount of loan received through banking channel and repayment of the same along with interest also made through banking channel then the genuineness cannot be doubted.
We hereby held that the assessee discharged the onus cast under section 68 of the Act. Hence, we do not find any reason to interfere in the finding of the learned CIT(A). Thus, the ground of appeal of the Revenue on merit is hereby dismissed.
Unexplained purchases - AO in absence of necessary details and supporting evidences disallowed 50% of purchases - CIT-A sustained part addition of Rs. 1 lakh only - HELD THAT:- Undeniably, the sales cannot be effected without the purchases. In other words the transactions of purchase and sale are contemporary to each other. In the event, if the purchases are doubted then the corresponding sale cannot be assumed to correct which is arising against the purchases.
Gross profit ratio and the net profit ratio of the assessee was improved in comparison to the earlier years. In other words, the revenue in the earlier years was pleased to accept the profitability of the assessee declared by it in the income tax return. Likewise the facts of the year in dispute as well as of the earlier assessment years are identical and no major difference has been pointed out by the AO. Thus, if we disallow the purchases by the amount i.e. 50% of total purchases which will eventually result better profitability but the same will not be acceptable as the gross profit ratio and GP ratio will increase manifold despite the fact that there was no change in the facts and circumstances for the year under consideration as well as in the earlier year.
Assessee has furnished the details of the suppliers and extract 7/12 form of the farmers from whom the purchases of the materials were made. Thus to our mind, the AO before pointing out any defect in the address of supplier furnished by the assessee should have issued at least notices on sample basis in order to verify the veracity of the transactions. But we note that no such power has been exercise by the AO during the remand proceeding. In view of the above and after considering the facts in totality, we do not find any infirmity in the order of the learned CIT(A). Accordingly, we uphold the same. Hence the ground of appeal of the revenue is hereby dismissed.
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2022 (12) TMI 1260
Reopening of assessment u/s 147 - addition u/s 50C - as argued AO relied only on the information received from third party without having any other material on record - HELD THAT:- As submitted that the AO was not having any material other than an information that the assessee has transferred immovable property, hence the reason to believe of the AO for escapement of income was based on borrowed satisfaction.
It is pertinent to note that the assessee had not filed the return of income for the year under consideration. Subsequently the AO received an information from the land Revenue authority that assessee has transferred immovable property. Thus, in the absence of the return of income, the AO had no alternate to verify the veracity of the information received from the land revenue authority whether the assessee has disclosed any income on the transfer of the property. Accordingly, we are of the considered opinion that it cannot be said that the reopening proceedings were initiated on borrowed satisfaction. Thus on this count, the assessee fails.
No valid service of notice u/s 148 - We note that the notice under section 148 of the Act was issued well in time at the address available on record with the revenue Department. The fact that the assessment proceeding initiated was known to the assessee’s father. Merely for the fact that the assessee left home without informing anyone to unknown location the notices issued and duly served on last given address cannot held as illegal/invalid service of notice. See ATULBHAI HIRALAL SHAH [2016 (6) TMI 564 - GUJARAT HIGH COURT].
Thus we hold that the service of notice under section 148 of Act and other subsequent notices cannot held as invalid service of notice, for the reason that the revenue has issue notices on last known address of the assessee. Revenue cannot be held guilty for the fact the assessee has left that place without informing anyone for unknown location. Thus on this count also, the assessee fails.
Capital gain - We note that the property was transferred by the assessee to his mother by way of sale deed no. 3852 dated 13-04-2006 wherein the consideration on the transfer of the property in dispute was duly recorded. There was nothing mention in the sale deed justifying the stand of the assessee i.e. the transfer was in the nature of the gift or without consideration. Accordingly, we hold that there was a valid transfer of the property in the given facts and circumstances within the meaning of the provisions of section 45 of the Act. See PARAMJIT SINGH VERSUS INCOME-TAX OFFICER [2010 (2) TMI 262 - PUNJAB & HARYANA HIGH COURT]
Thus remain no ambiguity that the impugned property transferred by the assessee to his mother for consideration of Rs. 5 Lakh is liable to be brought under the ambit of capital gain. However, the question arise for determination of sales consideration. As the AO has taken consideration as per section 50C of the Act whereas the AR before us has challenged the value adopted by the AO and subsequently sustained by the learned CIT(A). In the interest of justice and fair play, we set aside the issue to the file of the AO to refer the matter to the DVO to determine the value of the property in pursuance to the provisions of section 50C of the Act. Hence the ground of appeal of the assessee is partly allowed.
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2022 (12) TMI 1259
Levy of interest for delay of 1 day in deposit of TDS - Levy of Fee u/s 234E - due to technical glitch the bank could not remit the amount immediately to the account of the department - HELD THAT:- Income Tax Department has authorized certain banks to collect TDS on their behalf. The Bank of Baroda being one of the authorized banks, thus, has acted as an agent of the Income Tax Department. In our view, the moment, the assessee deposited the TDS with the bank, the bank being an agent of the Income Tax Department, the amount is deemed to have been received by the principal i.e. Income Tax Department. The bank has issued letter in this respect that the amount was duly deposited by the assessee before the due date and that there was no default on the part of the assessee.
Though the Income Tax Department and other Government Organisations have shifted to the online system, however, the said system is in the developing stage and often there are technical glitches faced due to which certain acts of uploading of forms etc and as in the present case, the remittance of the amount by the bank to the account of the department are being faced, which are beyond the control of the concerned assessee or the person who is supposed to upload such information, form or to remit the amount, as the case may be. This type of technical glitches is beyond the control of concerned assessee/person for which the concerned assessee cannot be penalised.
The facts in this case are apparent that the assessee had deposited the amount with the authorized bank within the due date, however, due to technical glitch the bank could not remit the amount immediately to the account of the department and there occurred a delay of one day because of which the assessee cannot be burdened with levy of interest u/s 201(1A) - assessee cannot be burdened because of not doing an act which was beyond his control. Even otherwise, as observed above, the Bank has accepted the payment being agent of the Income Tax Department, and the assessee has deposited the payment with the bank before the due date.The impugned levy of interest by the lower authorities is set aside. Appeal of the assessee stands allowed.
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2022 (12) TMI 1258
TP Adjustment - comparable selection - HELD THAT:- We exclude the companies whose turnover is not within the range of Rs.200 crores to 2000 crores.
Exclusion of companies as functionally dissimilar with that of assessee engaged in the provision of software development services to its Associated Enterprise [AE]
RPT filter has to be applied adopting the threshold limit of 15%.
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2022 (12) TMI 1257
TP Adjustment - benchmarking qua AMP expenditure - HELD THAT:- Similar views have also been taken in previous years by this Tribunal [2019 (4) TMI 1774 - ITAT DELHI], wherein this Tribunal has also looked into the all the records and materials including ‘memorandum of understanding for basic transaction entered into between the assessee and its AE dated 01/06/2009’. Therefore, the contention of the Ld. DR that, the Tribunal has not looked into the ‘memorandum of understanding for basic transaction rules” is not correct. In view of the above binding decisions of this Tribunal mentioned supra and in the light of the discussion made above, we are of the opinion that, when there is no international transaction, no separate benchmarking qua AMP expenditure can be made; hence the adjustments are liable to be deleted. Appeal of the assessee is allowed.
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2022 (12) TMI 1256
TP Adjustment - working capital adjustment to be considered for the difference in working capital levels between the comparable companies and the assessee - HELD THAT:- With regard to international transaction of provision of marketing services to Red Hat US, the assessee is seeking for working capital adjustment. We find that the Co-ordinate Bench of this Tribunal in assessee’s own case for A.Y.2016-17 [2022 (2) TMI 1283 - ITAT MUMBAI] had indeed accepted to the plea that working capital adjustment shall be eligible to the assessee and the same shall be reckoned for the difference in working capital levels between the comparable companies and the assessee.
Admittedly, the assessee had indeed furnished the workings for working capital adjustments before the ld. TPO as is evident - We direct the ld. TPO to grant working capital adjustment while determining the ALP of provision of marketing support related services to Red Hat US. The ground No.18 raised by the assessee for A.Y.2012-13 is allowed for statistical purposes.
Inclusion and exclusion of certain comparables - Exclusion of Infobeans Technologies Ltd. from the final list of comparables as it is into diversified services but its segmental financials are not available without which it is difficult to compute the correct profit margin of the relevant segment. So Infobeans is also ordered to be excluded as a comparable being not a comparable to the assessee.
Exclusion of Ingenuinity Gaming Solutions - In absence of segmental data for the software development segment alone, the same cannot be held to be comparable with the assessee in IT segment. Accordingly, we direct the ld. TPO to exclude the same from the list of comparables.
The segmental data for software development services segment alone also was not available in respect of this comparable. Hence, we direct the ld. TPO to exclude this company from the final list of comparables. As stated earlier, once the aforesaid two comparables are excluded and working capital adjustments are given, the ld. AR submitted that it would not be required to go into other grounds as the assessee would be well within the tolerance band of +/-5% range. Hence, the ground Nos.5-7 are not hereby adjudicated and they are left open.
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2022 (12) TMI 1255
Provisional release of the goods - alleged large scale scam involving expensive higher vehicles - HELD THAT:- In the case of SHRI. SURIYA, S/O ARJUNAN VERSUS THE INTELLIGENCE OFFICER, DIRECTORATE OF REVENUE INTELLIGENCE, MUMBAI; THE DEPUTY DIRECTOR, DIRECTORATE OF REVENUE INTELLIGENCE, BENGALURU AND THE COMMISSIONER OF CUSTOMS, JAWAHARLAL NEHRU CUSTOM HOUSE, MAHARASHTRA [2022 (6) TMI 1342 - KARNATAKA HIGH COURT], the High Court of Karnataka has directed the Petitioner therein to deposit 50% of differential duty and execute bank guarantee in respect of other 50%, and execute a bond - In the case of SHRI MURALI B S/O R BHASKAR VERSUS THE INTELLIGENCE OFFICER DIRECTORATE OF REVENUE INTELLIGENCE NHAVA MUMBAI; THE DEPUTY DIRECTOR DIRECTORATE OF REVENUE INTELLIGENCE MANGALORE THE COMMISSIONER OF CUSTOMS JAWAHARLAL NEHRU CUSTOM HOUSE, MAHARASHTRA AND THE DEPUTY COMMISSIONER OF CUSTOMS (SIIB) MANGALURU [2022 (9) TMI 1404 - KARNATAKA HIGH COURT], the High Court of Karnataka has modified the condition of execution of bank guarantee, which is referable to clause 3 in the case at hand.
When the petition was heard yesterday, since the learned Counsel for the Petitioner sought parity with the orders passed by the High Courts of Karnataka and Kerala, the petition was adjourned for the Respondents to take instructions whether these orders have been challenged by the Respondents higher - the Petitioner in this petition has placed on record the details of the vehicle. Nothing is placed on record before us that the Petitioner is involved in the scam. The Petitioner has asserted that the Petitioner is a bonafide purchaser of the vehicle and this assertion has gone uncontroverted.
There are no reason as to why the same view adopted by the High Courts of Karnataka and Kerala should not be adopted for the purpose of granting ad-interim order in this petition. In fact, we are retaining the deposit of differential duty in the first clause and not bifurcating for 50% of the bank guarantee - by way ad-interim order, we direct that clause 3 of the impugned order shall stand suspended if the Petitioner complies with clause nos. 1 and 2 of the impugned order, subject to further order.
Stand over to 9 January 2023.
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2022 (12) TMI 1254
Seeking benefits of the Merchandise Export from India Scheme (MEIS) in respect of 69 (sixty-nine) shipping bills pertaining to shipments made during the period 06.04.2018 to 31.05.2020 - submission of online declaration indicating that it would not avail the benefits of MEIS. In the online form, against the query whether it would avail benefits under the MEIS - It is the petitioner’s case that the Handbook of Procedure is the only procedural guide and would not disentitle the petitioner from availing the substantive benefits of MEIS in terms of the Foreign Trade Policy.
HELD THAT:- This Court is informed that in compliance with the aforesaid order, a meeting of concerned officers was held on 08.12.2022. A copy of the minutes of the said meeting had been handed over to this Court - respondent no.4 shall transmit the corrected bills as decided in terms of paragraph no. 5 of the minutes, as stated above, within a period of two weeks from today. The petitioner’s claim for benefits under MEIS shall be decided within a period of six weeks thereafter.
The petitioner’s grievance in the present petition stands addressed. No further orders are required to be passed in this petition - Petition disposed off.
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2022 (12) TMI 1253
Seeking provisional release of detained goods - Light Melting Iron and Steel Scrap for melting imported at the port of CFS M/s Star Track Terminal Pvt. Ltd. ICD Dadri - prohibited goods or not - stand of the department is that the petitioner is required to deposit the demurage charges and other charges for removal of goods and storage of them in the warehouse in accordance with Section 49 of Customs Act, 1962 - HELD THAT:- In the rejoinder affidavit, the dispute has again been raised with regard to the validity of the order of seizure and action of the respondent authority in seizure of the goods. But nothing has been stated about the process of removal of goods from the container and its storage in the warehouse or inclination to deposit the demurage charges. We, therefore, find that the writ petition is wholly misconceived and hence dismissed.
It is made clear that the dismissal of the present writ petition will not come in the way of the petitioner, in any manner, in case its representative appears before the competent authority to discharge its liability for removal of goods from the containers or any other dispute pending before the investigating authority or adjudicating authority.
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2022 (12) TMI 1252
Revocation of Customs Broker License - rejection of cross-examination - existence of corroborative evidences or not - principles of natural justice - HELD THAT:- This Court finds that insofar as the request for keeping the CBLR proceedings in abeyance until the disposal of the criminal proceedings may not be justified. It is trite law that criminal proceeding, departmental proceeding and civil proceeding are independent, the purpose of each of the proceeding are distinct. The standard of proof, the objectives of the two proceedings are different. Thus the above contention of the Petitioner is liable to be rejected. The departmental proceedings initiated under CBLR need not be kept in abeyance until the disposal of the criminal proceedings - It appears that the request for cross examination has been rejected by giving reasons that are vague in terms of Regulation 17 of CBLR, which sets out the procedure for revoking licence or imposing penalty.
The impugned proceedings rejects the request on the premise that there is no absolute right of cross-examination as there is corroborative evidence, the same appears to be vague inasmuch as what is the corroborative evidence that is available has not been set out, except for a mere assertion, there is no details set out in support thereof - this Court is of the view that Petitioner shall make a request for cross-examination within a period of two weeks from the date of receipt of copy of this order. On receipt of such request, the Inquiry Officer shall examine and dispose of the request keeping in mind Regulation 17(3) and 17(4) of CBLR.
The writ petition stands disposed of.
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2022 (12) TMI 1251
Suspension of Customs Broker License - propriety of the deprivation - Clearance of PVC coated fabric width 54”’ packed in 917 rolls - HELD THAT:- From the statutory prescription, it is abundantly clear that there is no procedural fetter on ordering suspension of licence except for determination of immediacy when enquiry is pending or contemplated against a customs broker; however, continuation of suspension will be maintainable only upon affording opportunity for ‘post-decisional’ hearing in compliance thereof with stipulated timelines. The mandate of process is, invariably, observed in letter but, as it happens all too often, disregarding the harmonious construct of the provision as a whole: that, if inquiry has been only contemplated at the time of suspension, continuation of suspension is contingent upon crystallizing intention to take recourse to regulation 17 of Customs Broker Licencing Regulations, 2018 and that, either during pendency or mere contemplation of enquiry, the consequence of non-suspension outweighs deprivation caused by suspension.
The latitude, and restraint, inherent in the design of regulation 16 of Customs Broker Licencing Regulations, 2018 thus revealed upon careful perusal is made more conspicuous by the appending of the non obstante clause: suspension is not a necessary pre-requisite for initiation of inquiry with intent to revoke licence or impose penalty and, while intention so to do has no bearing on suspension, decision to proceed with enquiry is inevitable precursor for continuation of suspension. It is the latter that we are concerned with in resolving this dispute - The allegation of substitution of samples has not attained final determination as fact and there is no evidence, as yet, linking the appellant to the allegation except by way of vicarious responsibility for misconduct of employee. It may not appear unreasonable for the appellant, as licencee, to be considered as accountable for acts of omission and commission on the part of its employees.
The involvement of an individual, remunerated by the appellant, in alleged substitution of samples drawn by customs authorities was the cause for suspension. The continuation of suspension in the impugned order, sought to be justified by relying on confessional statements, does not go beyond that allegation at this stage. The individual concerned does not possess any status under the Regulations and act of his, in any capacity whatsoever, is beyond the scope of retribution under the Regulations. To foist deprivation of livelihood as licencee merely on inference, lacking legal foundation and devoid of procedural sanctity, is improper and our countenance of such will be approval of misadventure.
The ends of justice can be met only by restoration of the license to the appellant while making it abundantly clear that this restoration will not have any impact on further investigations or further proceedings under the appropriate provisions in Customs Broker Licensing Regulations, 2018 that lies within the empowerment conferred on the licencing authority upon completion of investigation - Appeal allowed.
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2022 (12) TMI 1250
Duty Drawback - Redetermination of export value - rejection of declared value of the goods in the 13 shipping bills - seizure of goods under section 110 of the Customs Act, 1962 - HELD THAT:- It cannot be doubted that under rule 12 of the 2007 Valuation Rules, the adjudicating authority has to first give cogent reasons to reject the declared value and thereafter re-determine it. In the instant case, the adjudicating authority noted only two questions to be answered, namely, re-determination of value of the export goods for drawback purpose and whether the exporter was liable to penalty under section 114 of the Customs Act. The adjudicating authority, after observing that the export goods were over-valued by the exporter with an intent to avail higher drawback, observed that the declared value of the goods attempted to be exported should, therefore, should be rejected under rule 8 of the 2007 Valuation Rules.
The adjudicating authority had to first examine the correctness of the declared value of the export goods and after recording a finding that they were not correctly valued re-determine the value, but this was not done. This mistake has been noticed by the Commissioner (Appeals) in the impugned order.
Appeal dismissed.
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2022 (12) TMI 1249
Recovery of Differential duty - rejection of declared value - levy of penalty under section 112 (a) of the Customs Act - tungsten level in the Steel Bounded Cemented Carbide was mentioned as 8% in the Bill of Entry - HELD THAT:- It is not in dispute that the tungsten level in the Steel Bounded Cemented Carbide was shown by the appellant in Bill of Entry at 8% instead of 75.3%. It is also not in dispute that the level of tungsten in Steel Bounded Cemented Carbide would determine its value. The appellant accepted the test report which determined the level of tungsten in the imported good at 75.3% and also accepted that the value of the goods would be 46.50 US$ per kg instead of 12 US$ per kg. Such being the position, the Commissioner (Appeals) committed no illegality in confirming the demand of differential duty.
There is, therefore, no good reason, and indeed none could be pointed out by learned counsel for the appellant, to reduce the penalty imposed upon the appellant under section 114AA of the Customs Act or reduce the redemption fine under section 125 of the Customs Act.
Appeal dismissed.
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2022 (12) TMI 1248
Maintainability of suit - exclusive jurisdiction of the National Company Law Tribunal - fraudulent transactions - seeking declaration that the recordings of the names of the defendant as holders of shares of and in the defendant no. 4 respectively in the books and the register of the defendant no. 4 are illegal - decree for delivery up and cancellation of the share certificates issued in favour of the defendant - perpetual injunction restraining the defendant and each one of them by themselves or through their respective servants, agents or assigns from exercising any ownership right in respect of the said shares - perpetual injunction restraining the defendant and each one of them either by themselves or through their respective servants, agents or assigns from exercising any voting right in respect of the said shares.
HELD THAT:- The plaintiff has categorically pointed out the fraudulent act of the defendants in paragraph 28 of the plaint and the said fraudulent act is not committed while initiating proceeding before the NCLT. The plaintiff has also prayed for other relief with regard to perpetual injunction relates to the title of share of the plaintiff. Section 58 and 59 of the companies Act, 2013 deals with refusal by company to transfer of shares but in this case before transfer of share it is to be declared that the recording of share in the name of the defendants have been made fraudulently. The specific case of the plaintiff is fraud and the said fraud is to be adjudicated upon adducing evidence by both the parties before the Civil Court only. Section 65 of the Insolvency and Bankruptcy Code, 2016 has no manner of application in the instant case as the challenge is against issuance of shares by the auditor of a company in derogation of his fiduciary with the company and whether the said act of the auditor is in contravention of the provisions of Company Act, 2013 is on act of fraud or not is to be decided by the Civil Court.
This Court finds that NCLT is not competent to enquire into the allegation of fraud specifically when the plaintiff has prayed for declaration of recording the names of defendant no. 2 and 3 as share holders in the books and the register of defendant no. 4 fraudulently and also prayed for perpetual injunction against the defendant nos.1 to 3. Accordingly, the suit filed by the plaintiff is maintainable.
Application dismissed.
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2022 (12) TMI 1247
Seeking dissolution of the company - Section 481 of the Companies Act, 1956 - HELD THAT:- The Official Liquidator, relying upon the auditor's certificate dated 22.02.2022 submitted that no balance is available in the Bank Account of the Company. Moreover, no assets of the Company in liquidation are available. It was submitted that the report may be accepted and appropriate order of dissolution of the Company in liquidation may be passed as prayed for.
Considering the ratio laid down by the Apex Court in the case of Meghal Homes Pvt. Ltd. [2007 (8) TMI 447 - SUPREME COURT], the report deserves to be accepted. The Company, named, M/s. Arya Silk Mills Pvt. Ltd. (In Liquidation) is hereby dissolved under Section 481 of the Act and the Official Liquidator attached to this Court stands discharged and is relieved as liquidator of M/s. M/s. Arya Silk Mills Pvt. Ltd.(In Liquidation) - the official liquidator is also permitted to make payment towards professional fees of Rs.1,500/- to M/s. Naimish N. Shah & Co., Chartered Accountants towards preparation of Auditor’s Certificate from the Common Pool Account maintained by the Office of the Official Liquidator.
The report is allowed.
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2022 (12) TMI 1246
Misuse of own personal purpose and benefit funds of the company and became liable and accountable for money or property of the Company - guilty of misfeasance - breach of the trust - breach of duties - gross negligence - contribution to the assets of the company in liquidation by way of compensation - contribution to the assets of the company in liquidation and to pay official liquidator of the company in liquidation - section 478 read with section 543 of the Companies Act, 1956 - HELD THAT:- Considering the progress of the matter since 2007 till date, it appears that the Official Liquidator is not keen to proceed with the matter and the matter is being adjourned from time to time on one pretext or another. The Income Tax department has already instituted the prosecution which is pending as stated in the aforesaid affidavit filed on 28.11.2022.
The Official Liquidator has also not pursued the matter after filing further report dated 15.09.2011 pursuant to the order dated 20.07.2011 passed by this Court - the application is disposed of due to sheer negligence on part of the Official Liquidator to pursue the same in accordance with law and keeping it pending for more than 15 years on one pretext or another and permitting the respondent to take advantage of delay tactics to see that entire cause of action is frustrated, this Court has no other option but to dispose of this matter because keeping such stale matters pending in the Court would not result into any fruitful action on part of the Official Liquidator.
Application disposed off.
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2022 (12) TMI 1245
Claim of applicant rejected by RP - rejection on the ground that the claim amount is not based on any valid loan agreement - main bone of contention of the Respondent is that there was no payment received by the Corporate Debtor form the Applicant and the books of accounts do not have ledger Account in the name of the applicant, Tulip Trade Link - HELD THAT:- It could be seen that the Applicant has not placed on record any financial contract in order to substantiate the claim filed before the RP. Further, from the submissions made it could be seen that there is no contract/agreement entered into between the parties for the disbursement of the said loan to the Corporate Debtor.
It could be seen that the term financial debt denotes a 'debt' along with interest, which is disbursed against the consideration for the time value of money. In the present case, the amount has been disbursed to the Corporate Debtor, however there is no document placed on record to show as to what is the interest which is agreed between the parties - it could be seen that the Applicant himself has left it to the discretion of this Tribunal to fix the rate of interest, which itself shows that there is no rate of interest agreed between the parties. Further, the Applicant has also not attached the Form 26AS in order to prove that they have deducted TDS. It could be seen that the Applicant has placed on record a letter from its banker viz. Bank of Baroda which states that a sum of Rs. 26,00,000/- has been transferred by way of RTGS to the Corporate Debtor. Thus, the amount has been disbursed to the Corporate Debtor, however the Applicant has miserably failed to establish that the said debt would qualify as financial debt.
It could be seen that there is no dispute between the parties that the amount was received through banking channel. In the said circumstances, we hereby direct the Respondent to admit the claim of the Applicant to the tune of Rs. 26,00,000/- without interest, under the category of other creditors - application disposed off.
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