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Showing 301 to 320 of 1589 Records
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2022 (7) TMI 1290
Estimation of income - bogus purchases - CIT-A disallowing only 12.5% of the total bogus purchase in the case of the assessee who was engaged in the business of construction activities - HELD THAT:- As CIT(A) correctly held that only the profit embedded in respect of the sale on the purchases in question (bogus) should be brought to tax and not the entire purchases as done by the AO. - he correctly relied on the ratio of CIT Vs. P. Simit Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] wherein held that the entire purchases cannot be added, but only the profit element embedded in such questionable purchases should be added to the income of the assessee. Therefore, the Ld. CIT(A) has restricted the addition to 12.5% of the bogus purchases correctly.
Deduction u/s 80IB(10) - whether ‘substantial compliance’ has been made by the assessee for claiming the exemption/deduction? - admission made in the report by MCGM rejected - HELD THAT:- Applying the principle of ‘substantial compliance’ in the facts of this case it can be seen that the assessee had complied sufficiently the requirement of law as stipulated in section 80IB(10) of the Act and as per the said provision it was bound to complete the building project before 31.03.2012 and it had filed the partial completion certificate in-respect of wing (A & B ) on 12.07.2011 and C wing on 24.12.2011 and thus it is noted that the assessee not only filed the architect certificates of completion of the project Blue Meadow, it also had filed the certificate of structure, the lift certificate as well as NOC of the fire brigade and all these certificates were filed before MCGM by Feb, 2012.
And moreover it is noticed that on 27.02.2012 itself possession of the flats were given to the allottees who had made the full and final payment which fact is evident from perusal of the letter given to the allottees of housing units for possession of the flats and that one hundred twenty one (121) flats/units got occupied at Blue Meadow Project (which were regularised later) and therefore according to us, the legislative intent/conditions stipulated for giving deduction/incentive for developers like assessee u/s 80IB(1) have been sufficiently/substantially fulfilled. Therefore the deduction u/s 80IB(10) should not be denied merely because MCGM did not accept/issue occupancy certificate on 05.01.2012 or before 31.03.2012. - Decided against revenue.
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2022 (7) TMI 1289
Capital Gain - computation of cost of acquisition - bonus debentures or not - re-investment of dividend amount - treating the cost of acquisition of the bonus debentures received in the nature of ‘dividend’ on which dividend Distribution Tax had been discharged as ‘Nil’ while computing the capital gains arising on the sale of these debentures - HELD THAT:- We have noticed that the assessee had made specific submissions explaining the cost of acquisition of the debentures of BDEL but none of the authorities below has dealt with these contentions by way of a speaking order. These contentions have been simply brushed aside and dealt with in a summary manner.
An amount was indeed received on behalf of the assessee and this amount has been reinvested in the debentures. The debentures were not ‘bonus’ debentures and the nomenclature given by the AO is thus incorrect. The taxes were duly paid on the deemed dividend in question, and it did constitute income of the assessee, even though received by a merchant banker on behalf of the assesse.
The scheme under which the amount is received by the merchant banker, on behalf of the shareholders-including the assessee, and reinvested on behalf of these shareholders, is duly approved by the Hon’ble High Court, vide order dated 19th September 2014. The fact of, and bonafides of, the transaction cannot thus be disputed. The amount of Rs. 13,85,580/- so reinvested, out of dividend, was the consideration paid for debentures. In the light of these discussions, as also bearing in mind entirety of the case, we uphold the plea of the assessee that the Assessing Officer erred in declines the claim of the assessee with respect to cost of acquisition in respect of these debentures. The assessee, therefore, must get the relief accordingly. We order so.
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2022 (7) TMI 1288
Validity of assessment u/s 153B - belated notice issued u/s 143(2) - HELD THAT:- In view of the decision of Hon’ble Supreme Court in Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] AO in the instant case has no jurisdiction to make assessment on the basis of belated notice issued under Section 143(2) of the Act. The defect, being substantive, is not curable under Section 292B of the Act. Section 292BB also does not apply as the notice issued under Section 143(2) itself has been issued after limitation period and merely served belatedly. The impugned assessment order culminated from a belated jurisdictional notice is thus nonest and deserves to be quashed. - Decided in favour of assessee.
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2022 (7) TMI 1287
Deduction u/s 80IB - observation of the AO that as the assessee firm had failed to obtain and place on record a certificate from a competent authority that it is a SSI, therefore, for the said reason it was not entitled for deduction u/s 80IB - whether or not the CIT(Appeals) is justified in concluding that as the filing of an ‘audit report’ in Form 10CCB is procedural and directory in nature, therefore, pursuant to filing of the same by the assessee i.e, both in the course of the reassessment proceedings and also in the course of the proceedings before him, no adverse inference qua its entitlement for deduction u/s 80IB was liable to be drawn? - whether the failure on the part of the assessee to file a certificate from the competent authority evidencing that it was registered as a “SSI” would divest its entitlement towards deduction u/s 80IB? - HELD THAT:- As is discernible from Clause (g) of sub-section (14) of Sec. 80IB, the same only contemplates the definition of a SSI i.e an industrial undertaking which as on the last day of the previous year is regarded as a small-scale industrial undertaking under Sec. 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951). As such, what is required is that the stipulations for being regarded as a SSI under the Industries (Development and Regulation) Act, 1951 are required to be complied with and there is no obligation cast upon the assessee to file any certificate from the competent authority that it is registered as a SSI.
Involving identical facts, we find that the assessee’s claim for deduction u/s 80IB was, inter alia, dislodged by the CIT vide his order passed under Sec. 263 of the Act for AY 2009-10. However, on appeal, the Tribunal had vide its order passed [2018 (3) TMI 1937 - ITAT RAIPUR] vacated the adverse inferences drawn by the CIT on the aforesaid count and, had observed, that the registration of the assessee as a SSI was not a precondition for availing deduction u/s 80IB of the Act. Be that as it may, we find that the assessee had vide its letter dated 25.01.2017 filed before the CIT(Appeals) a copy of its registration certificate as a SSI.
No adverse inferences qua the entitlement of the assessee for deduction u/s 80IB could have been drawn, for the reason that the assessee had in the course of the assessment proceedings failed to place on record its certificate of registration as a SSI. We, thus, not finding any infirmity in the view taken by the CIT(Appeals) who had held the assessee’s claim for deduction u/s 80IB of the Act as being in order, uphold his order.
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2022 (7) TMI 1286
Deduction u/s 80IB(10) - AO denying section 80IB(10) deduction holding that the corresponding residential units had built up “BUA” area exceeding 1500 sq.ft. - HELD THAT:- We first of all note that the CIT(A)’s common order herein as followed his conclusion drawn in A.Y. 2009-10’s which has been reproduced in the preceding paragraphs. The same appears to have attained finality as there is no material on record to suggest the contrary. This is coupled with the fact that the corresponding site plan of these four units O1-1, O1-2, O2-1 and O2-2 in issue is on record (page 10) wherein it is clearly indicates that this garden area is meant for the concerned allottees’ exclusive use and ownership and falls within the walls only than any common area not covered u/s 80IB(14)(a) of the Act.
We further wish to reiterate here that legislature has not only defined “inner measurements” of the residential unit “at the floor level” in section 80IB(14)(a) but also the same has to be increased by the thickness of the walls.” It is in this backdrop that this tribunal’s order in Kumar Builders Consortium [2013 (11) TMI 465 - ITAT PUNE] has already decided the issue in Revenue’s favour. We therefore, adopt judicial consistency to affirm both the lower authorities’ action disallowing the assessee’s 80IB(10) deduction claim to this effect.
Assessee had allotted more than one flat to one person i.e. Smt. Sandhya Rakesh Sharma and therefore, the same violates section 80IB(10)(f) - The fact remains that Mr. Jain has neither placed on record the corresponding joint sale deed that Ms.Syamlee only owned or possessed the entire share in Flat I-1 independently. This is in addition to the fact that the Commission’s report in assessee’s paper book dated 22.01.2015 at pages number 1 to 9 held that it had allotted “more than one flat “to Smt.Sandhya Rakesh Sharma and therefore, we find no merit in the taxpayer’s stand. The Revenue succeeds in all of its corresponding substantive ground(s) to this effect.
Assessee’s scheduled date of completion of its residential project “Flora City” was 31.03.2012 whereas the last completion certificate stood issued only on 02.09.2011 which disentitles’ it for the impugned deduction - HELD THAT:- We note that the instant issue is hardly res-integra as this tribunal co-ordinate bench in A.Y. 2009-10 involving Revenue and assessee’s cross appeals [2014 (7) TMI 1366 - ITAT PUNE] rejects the former’s very stand - Revenue is fair enough in not pin-pointing any distinction on facts as well as in law. We thus adopt the judicial consistency to affirm the CIT(A)’s foregoing findings under challenge. This second substantive issue is decided in assessee’s favour.
Assessee’s residential unit(s) sold in the impugned assessment year had not exceeded the prescribed area 1500 sq.ft thereby excluding “terrace” part - HELD THAT:- As it has come on record that the foregoing judicial precedents have already held that such that a “terrace” in a residential unit does not satisfy the section 80IB(14)(a) basic benchmark of “inner measurement” since open to sky. We, thus, adopt the very reasoning mutatis-mutandis to uphold the CIT(A) action deleting the impugned disallowance qua this “terrace” inclusion issue. This third substantial ground canvassed at the Revenue behest stands declined.
Treating the assessee’s alleged “on money’ receipts as eligible for sec 80IB(10) deduction - HELD THAT:- As the assessee is eligible for sec 80IB(10) deduction on proportionate basis only as it has already failed on the foregoing “garden area” and “multiple allotment” issues in preceding paras. We make it clear that it has not filed any evidence on record that the impugned ‘on-money’ pertains to sec 80IB(10)’s eligible units only. Or that the remaining allottees except Smt.Sharma or those having garden area only had paid the entire sum. Faced with this situation, we restore the impugned disallowance on account of the assessee’s failure to prove all the foregoing clinching factual aspects. The Revenue succeeds in all of its corresponding substantive grounds to this effect.
Whether CIT(A) has further erred in granting the assessee’s proportionate sec 80IB(10) deduction regarding the eligible housing units only? - HELD THAT:- Revenue could not pin-point any judicial precedent to the contrary. We accordingly uphold the CIT(A) foregoing directions granting proportionate section 80IB(10) deduction to the assessee. Ordered accordingly.
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2022 (7) TMI 1285
Validity of SCN - 100% EOU - Private Warehouse - Cancellation of licence under Sub Section 2(b)of Section 58 granted to petitioner under Sub-Section (1) of Section 58 of the Customs Act, 1962 - demand of appropriate customs and central excise duties under the Customs and Central Excise Act, 1944 on the capital goods and raw material procured duty free, semi finished and finished goods lying in stock on the date of cancellation of the said licence - HELD THAT:- The entire show cause notice proceeds on the basis of six show cause notices that had been issued to petitioner and an offence have been booked by DRI against petitioner and hence it appears that petitioner has contravened the provisions of Section 71, 72 of the Customs Act, 1962 read with Condition No. 6 of licence dated 14th November 2003 and 18th October 1994. There is nothing more in the show cause notice.
Even in the impugned order which was passed almost more than three months later, there is no reference to any of the orders being passed as suggested by Mr. Kantharia. Even the impugned order proceeds on the basis of show cause notice issued to petitioner which was pending adjudication and the offence that had been booked by DRI which was pending investigation. Respondent No.2 gives finding against petitioner of diverting of goods in contravention of the provisions of Section 71 of the Act and he also relies on certain panchanams. None of these points were mentioned in the show cause notice to enable petitioner to satisfactorily show cause - The points which Respondent No.2 has mentioned in the impugned order do not even find mention in the show cause notice that was issued to petitioner. Issuance of show cause notice is not an empty formality. Its purpose is to give a reasonable opportunity to the affected persons to contend with the allegations in the show cause notice are not correct. The person issuing show cause notice shall inform a person who is likely to be affected by any order proposed to be made about the materials on the basis of which the authority proposes to take action and give a fair and reasonable opportunity to such person to represent his case and to correct or controvert the material sought to be relied upon against him.
If Respondent No.2 was relying on any seizure panchanama or any other material, the same should have been mentioned in the show cause notice issued to afford fair and reasonable opportunity to petitioner to respond. That has not been done. Further, Respondent No.2 for issuing show cause notice has relied upon six show cause notices and an offence booked by DRI but none of these had attained finality. They were pending at various stages. At the time show cause notice in the case at hand was issued there was every possibility that the show cause notices and the complaint on which Respondent No.2 had relied upon to issue show cause notice could have been discharged or withdrawn against petitioner. Thus, issuance of show cause notice itself was premature.
Petition disposed off.
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2022 (7) TMI 1284
Rejection of application for initiation of CIRP - Period of limitation - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - application was required to be filed within a period of three years from the date of default - what is the import of Section 25(3) of the Indian Contract Act, 1872? - whether the period of limitation has been extended in view of Section 18 of the Limitation Act, 1961 with the time-to-time partial payment and admission of debt by the Corporate Debtor? - HELD THAT:- It is an admitted fact that the period of three years had expired from the alleged date of default occurred in the year 1998 but there is no denial to the fact also that the Assignment Agreement was executed on 27.09.2013 between TFCI and the Appellant, assigning their entire debt of the Corporate Debtor and in the said agreement the Corporate Debtor and one Mr. Paresh Shah (as mortgagor) were confirming parties to the Assignment Agreement. As a matter fact, with the execution of the Assignment Agreement dated 27.09.2013, a fresh agreement for the payment of dues came into being and a period of three years began from the said date.
There is no dispute about the fact that the debt has been acknowledged by the Corporate Debtor in its balance sheet for the year 2013-14. The first partial repayment of Rs. 75,00,000/- was made by the Corporate Debtor on 12.06.2015. The finding recorded by the Adjudicating Authority does not talk of this partial payment which acknowledges the debt and extends the period of limitation from the said date i.e. 12.06.2015 for another period of three years.
It is needless to mention that the partial repayment of Rs. 75,00,000/- was made between 27.09.2013 to 27.09.2016 and because of said payment on 12.06.2015 the period of limitation had once again extended upto 12.06.2018. The Adjudicating Authority has further lost sight of the fact that another partial repayment of Rs. 50,00,000/- was made by the Corporate Debtor on 24.06.2018 which means that now the limitation would stand extended for a period of three years up to 24.06.2018. During the period of limitation i.e. 24.06.2014 to 24.06.2018 the Corporate Debtor vide letter dated 05.12.2016 confirmed and acknowledged its entire debt due and payable to the Appellant and as a result thereof, the limitation was extended from the said date i.e. 05.12.2016 to 05.12.2019. The Adjudicating Authority has only referred to the letter dated 05.12.2016 in Para VII of the impugned order to hold that Section 18 of the Limitation Act, shall not be applicable because the acknowledgement was made on 05.12.2016 which was beyond the period of three years from 27.09.2013. Thus, the Adjudicating Authority has committed error in appreciating the facts available on record in coming to the conclusion which is apparently contrary to the record.
There are no hesitation to hold that the Adjudicating Authority has committed a patent error of law and fact while passing the impugned order, which deserves to be set aside - the matter is remanded back to the Adjudicating Authority to consider and decide the application filed under Section 7 of the Code in accordance with law - appeal allowed by way of remand.
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2022 (7) TMI 1283
Rejection of application for initiation of CIRP - Failure to invoke arbitration clause - Consequence of acknowledging the debt in the minutes of meetings of corporate debtor - Period of limitation - Financial Creditors - existence of debt and dispute or not - HELD THAT:- Both the sub-contract which has been brought on the record clearly indicate that financial liability taken by the Appellant as well as the Corporate Debtor towards carrying out the project was divided and all those financial liabilities were towards the completion of the project. There was no disbursement of the loan for the time value of money which is essential requirement for a debt to be treated as financial debt under Section 5(8) of the IBC.
The minutes of meeting dated 16.03.2018 on which Counsel for the Appellant has much relied admits the liability of the Corporate Debtor to make the payment. The mere fact that the Corporate Debtor has admitted liability to make payment in its minutes of meeting does not change the character of the transaction into a financial debt. In Clause 18 of the contract contains arbitration clause, for settling amicably by mutual consultation and thereafter approaching the arbitration as per Arbitration & Conciliation Act, 1996. The Appellant ought to have taken recourse to Clause 18 of the Sub-Contract Agreement dated 07.03.2017 and these issues could not have been decided in IBC proceedings. The Adjudicating Authority has rightly held that it was not financial debt and rejected Section 7 Application.
There is no error in delivering the judgment invoking Rule 151 of the NCLT Rules, 2016 due to absence of Technical Member who has already agreed with the judgment - Appeal dismissed.
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2022 (7) TMI 1282
Rejection of confirmation of scheme for reduction of share capital proposed by the Appellant Company - reduction of this Share Capital was approved unanimously by the Shareholders by way of a Special Resolution - Section 421 of the Companies Act, 2013 - HELD THAT:- It is seen from the record that the Reduction of the Share Capital was approved by the Shareholders of the Appellant Company unanimously by way of a Special Resolution with the objective of reducing the overall weighted average cost of Capital and improving the earnings per share. In IN RE: RECKITT BENCKISER (INDIA) LIMITED [2005 (5) TMI 665 - DELHI HIGH COURT], the Hon’ble Delhi High Court has upheld the view that the question of reduction of Share Capital will be treated as a matter of domestic concern i.e., it is the decision of the majority which prevails. If majority by Special Reduction decides to reduce the Share Capital of the Company, which also has the right to decide as to how this reduction should be carried into effect - This Tribunal in RHI INDIA PRIVATE LIMITED, RHI CLASIL PRIVATE LIMITED, ORIENT REFRACTORIES LIMITED VERSUS UNION OF INDIA [2021 (1) TMI 725 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI], has held that it is not for the Courts to reject Schemes on grounds not required to be delved into for the determination of the Scheme
In the instant case, admittedly, the reduction of this Share Capital was approved unanimously by the Shareholders by way of a Special Resolution.
It is seen from the record that the Company has complied with all the statutory requirements as per the directions of the Tribunal and has also filed necessary Affidavits to that effect. It is also pertinent to mention that none of the Creditors objected to the reduction of the Capital. Section 66(1)(b) of the Act enables a Company to reduce its Share Capital ‘in any manner’ provided it is approved by the majority of Shareholders through a Special Resolution.
The Appellant Company operates a 15MW power generating station and supplies electricity to GUVNL under a long-term PPA and is a ‘going concern’. Having regard to the fact that the Appellant had deposed in a Clarificatory Affidavit regarding its financial position which is not in the negative and also that the reduction of the Share Capital was approved by the Shareholders of the Appellant Company unanimously by way of a Special Resolution and that the Creditors of the Company have also not objected to the same and further that this reduction does not cause any prejudice to any class of Creditors, it is opined that the ratio laid down by the Hon’ble Madras High Court in IN RE: PANRUTI INDUSTRIAL CO. (PRIVATE) LTD. [1959 (9) TMI 59 - MADRAS HIGH COURT], and is applicable to the facts of the attendant case and hence, this Tribunal is of the considered view that the reduction of the Share Capital, as approved by the majority of Shareholders by way of a Special Resolution, be confirmed and the proposed Minutes be approved.
This Appeal is allowed and the Order of the NCLT is set aside.
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2022 (7) TMI 1281
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Pre-Existing Dispute between the parties prior to the issuance of the Demand Notice under Section 8 of the Code, or not - HELD THAT:- A perusal of the Ledger Account for the period 01.04.2016 to 31.03.2017 shows that the Debit Notes were issued by the Respondent Company to the Appellant Company contemporaneously. This Bench has perused the Debit Notes dated 23.01.2017, 31.12.2015 and 26.11.2015, wherein it is clearly specified that the debit note is being raised on account of ‘bad and rejected material’ dispatched by the Appellant Company.
The Hon’ble Supreme Court in MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [2017 (9) TMI 1270 - SUPREME COURT], has observed A dispute does truly exist in fact between the parties, which may or may not ultimately succeed, and the Appellate Tribunal was wholly incorrect in characterizing the defense as vague, got-up and motivated to evade liability.
Merely because there were settlement talks between the parties it cannot be construed that the debt is ‘due and payable’ as envisaged under the Code, specifically keeping in view the ratio of the Hon’ble Supreme Court in Mobilox Innovations Private Limited - In their Reply to the Section 8 Notice, the Respondent Company has clearly raised a dispute and the material on record evidences that the Debit Notes were raised on account of rejection of poor quality material and therefore we are of the considered view that there is a plausible contention which requires further investigation and that the ‘Dispute’ is not a patently feeble legal argument or an assertion of fact unsupported by evidence.
This Tribunal is satisfied that the ‘dispute’ truly exists in fact and is not spurious, hypothetical or illusory - there are no substantial grounds to interfere with the well-reasoned Order of the Adjudicating Authority.
Appeal dismissed.
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2022 (7) TMI 1280
Dissolution of the Corporate Debtor - Section 59 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- A bare perusal of the material available on record shows that the partners of the LLP has taken a conscious decision for closing down the partnership, because the LLP was incorporated for the object as stated hereinabove and the applicant is not carrying any business for the several past financial years due to availability of no business opportunities in India. Thus, the partners have unanimously proposed to liquidate the LLP by invoking the provisions of voluntary liquidation under Section 59 of the Code.
From the perusal of the record of the case, it is seen that the Liquidator, after his appointment has duly performed his duties and completed necessary formalities to complete the liquidation process of the applicant LLP, which has been averred in the present petition and, thus, the liquidator has prayed for an order from this Tribunal to dissolve the applicant LLP.
Apart, as per record of the present case, it is seen that the LLP is not found involved in such kind of business activities, which are detrimental to the interest of public at large. Further, it is not the case that the proposed liquidation may affect adversely to its partners or is contrary to the provisions of law - The present application deserves to be allowed for the proposed Liquidation/Dissolution of the LLP.
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2022 (7) TMI 1279
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - quantum of operational debt - HELD THAT:- The operational debt of Rs. 17,13,326/- towards the outstanding rentals (including CAM, AHU, Electricity) of Elante store claimed by the applicant cannot be considered as supply of goods or rendering of any services and thus, cannot fall within the definition of Operational Debt as envisaged under the Code, 2016. Further, whether or not the alleged amount of Rs. 17,13,326/- towards the outstanding rentals (including CAM, AHU, Electricity) of Elante store, to be reimbursed by the respondent corporate debtor would be an issue of trial between the parties.
Alleged dispute in respect of the interest amount - HELD THAT:- Since the principle amount due and payable towards the secondary sale is well above the minimum threshold of Rs. 1 Crore as stipulated in Section 4 of the Code, 2016, we are not inclined to indulge in the exercising of quantifying the operational debt.
Pre-existing dispute - HELD THAT:- In order to substantiate the plea of preexisting dispute between the parties, the respondent corporate debtor has stated contentions in its reply along with relevant documents including e-mail correspondences exchanged between the parties, ledger account for the year 2017-2019, copy of corporate debtor reply dated December 01, 2019 to the legal notice dated September 13, 2019 issued by the applicant intimating the applicant about the existence of dispute between the parties with regard to fulfillment of obligations as specified in the term sheets dated 02.09.2017, short supply of stocks, existence of outstanding debt - The Hon'ble Supreme Court in catena of Judgements has laid down the principle that pre-existing dispute which may be ground to thwart an application under Section 9 has to be real dispute a conflict or controversy, a conflict of claims or rights should be apparent from the reply as contemplated by Section 8(2). The Corporate Debtor is not to raise bogie of disputes but there has to be real substantial dispute. The existence of dispute when the Demand Notice was issued is mandatory condition for exercising jurisdiction to reject the Application by the Adjudicating Authority as is referred to in sub-section (5) of Section 9. The statute uses the expression 'existence of a dispute'.
There exists a pre-existing dispute with respect to the store located in Elante Mall, Chandigarh and Pavilion Mall, Ludhiana as far as initiation of proceedings by Operational Creditor against the Corporate Debtor is concerned.
Petition dismissed.
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2022 (7) TMI 1278
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- Upon appreciation of the documents placed on record to substantiate the claims, this Adjudicating Authority is of the view that there is a pre-existing dispute. As per the records shown by the Corporate Debtor, the work of the Operational Creditor has not been satisfactory despite repeated requests for rectification by the Corporate Debtor. Infact, the issue of polishing of the stone floor has remained unresolved. It appears that the Operational Creditor is using this forum as a recovery mechanism for retention money which is not the purpose or intention of the IBC 2016.
Additionally, the threshold requirement for debt default given under S. 4 of the Insolvency and Bankruptcy Code 2016 is not satisfied in this case.
Application dismissed.
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2022 (7) TMI 1277
Revision u/s 263 - Entitlement to claim interest as deduction u/s. 24(b) - HELD THAT:- Assessee availed loan from Reliance Home Finance Limited for Rs.8,68,50,000/- and paid interest thereon @ 12.50%. Admittedly, the said borrowed loan was paid to statutory tenants in pursuance of relinquishing deed dated 05-04-2011. The PCIT held the interest paid on such borrowed amount does not fit into provisions of clause (b) of section 24.
Assessee purchased the said property in the year 2001 and the relinquishment agreement at Page 56 shows that the assessee as “landlord”, therefore, as rightly pointed by the PCIT, the claim of the assessee is not entitled to claim interest as deduction u/s. 24(b).
On perusal of the assessment order dated 31-12-2015 clearly shows there was no discussionor reference to deduction claimed and how deduction is allowed - AO had wrong assumption of facts and by applying incorrect law without due application of mind allowed claim of interest paid on borrowed capital u/s. 24(b) - Therefore, in our opinion, the PCIT correctly exercised its jurisdiction in holding the assessment order dated 31-12-2015 is erroneous and prejudicial to the interest of Revenue. Thus, we do not find any infirmity in the order of PCIT and it is justified and the grounds raised by the assessee are dismissed.
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2022 (7) TMI 1276
Seeking grant of Bail - wrongful availment of Input Tax Credit - fake firms or not - Compounding of Offences - HELD THAT:- This court finds that documentary evidences collected by the department has already been placed before the court. Applicant has been found to be dealing with 18 non existent firms and their details have been furnished in the complaint. Their registrations have already been cancelled. The applicant's case is that at the time of business with the aforesaid firms they were duly registered and allegation that firms were fake is yet to be proved.It has not been explained how applicant will tamper with the evidence or influence the witnesses. Merely because of seriousness and magnitude economic affect the bail cannot be denied to the accused. Applicant is not stated to have any criminal antecedents. He is not shown to be habitual offender.
Section 138 of the Act makes provision for compounding of offences under the Act, even after the institution of prosecution, on payment by the person accused of the offence, such compounding amount in such manner as may be prescribed. The compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences, on payment of compounding amount as may be determined by the commissioner, the criminal proceeding already initiated in respect of the said offence shall stand abated - the Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant.
Keeping in view of evidence on record regarding complicity of the accused, larger mandate of the Article 21 of the Constitution of India and the dictum of Apex Court in the case of DATARAM SINGH VERSUS STATE OF UTTAR PRADESH AND ANR. [2018 (2) TMI 410 - SUPREME COURT] and without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail.
Let the applicant be released on bail on his furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned subject to conditions imposed - The bail application is allowed.
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2022 (7) TMI 1275
Cancellation of registration of petitioner - request for revocation is not filed within the statutory limitation of 90 days - time limitation - HELD THAT:- It is seen that the petitioner during the Covid-19 pandemic period had not filed his returns and thereafter, he had not conducted any business so that he filed only nil returns.
Further this case is quite similar to the cases of the petitioners in TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST), THE ASSISTANT COMMISSIONER (CIRCLE), SALEM BAZAAR. [2022 (2) TMI 933 - MADRAS HIGH COURT]. There some of the petitioner had filed an appeal beyond the period of limitation either for filing application for revocation of cancellation, while some of them had directly filed a writ petition against the order cancelling the registration. While some of them filed appeal beyond the statutory period of limitation, there was further delay in filing the writ petition. However, considering the over all facts and circumstances of the case, it was held that no useful purpose will be served by keeping those petitioners out of the Goods and Services Tax regime, as such assessee would still continue to do business and supply goods/services.
The writ petition is allowed.
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2022 (7) TMI 1274
Profiteering - supply of Power Bank Portronics Power Slice 10 - benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in the price - contravention of section 171 of CGST Act - Penalty - HELD THAT:- A plain reading of Section 171 (1) of the CGST Act, 2017 indicates that it deals with two situation:- one relating to the passing on the benefit of reduction in the rate of tax and the second about the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the record that the Central Government, on the recommendation of the GST Council vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018 had reduced the GST rate on “Power Bank” from 28% to 18% w.e.f. 01.01.2019. Therefore, the Respondent is liable to pass on the benefit of the above tax rate reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the DGAP has carried out the present investigation w.e.f. 01.01.2019 to 31.03.2019.
It has been established that the Respondent has increased the base price of the product i.e. Power Bank, despite the reduction in the GST rate from 28% to 18% during the period 01.01.2019 to 31.03.2019. Thus, the benefit of reduction in the GST rate has not been passed on to the recipients by way of commensurate reduction in the prices by the Respondent, in terms of Section 171 (1) of the CGST Act, 2017 during the above period. It is also clear that the Respondent has not passed on the benefit amounting to Rs. 96,354/- (inclusive of GST) to his customers/ recipients. Thus the profiteering is determined as Rs. 96,354/- as per the provisions of Section 171 read with Rule 133 (1) of the CGST Rules 2017 and accordingly the Respondent is directed to commensurately reduce the prices of his product i.e. Power Bank in line with the provisions of Section 171 (1) read with Rule 133 (3) (a) of the CGST Rules 2017.
Penalty - HELD THAT:- Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171 (1) which have come in to force w.e.f. 01.01.2020. by inserting Section 171 (3A). Since, no penalty provisions were in existence between the period from 01.01.2019 to 31.03.2019 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively.
This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
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2022 (7) TMI 1273
Profiteering - Construction Service supplied by the Respondent - Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price - contravention of section 171 of CGST Act - Penalty - HELD THAT:- The Authority finds no reason to differ from the detailed computation of profiteering in the DGAP’s Report or the methodology adopted. The Authority finds that the Respondent has profiteered by an amount of Rs. 20,57,207/- during the period of investigation i.e. 01.07.2017 to 30.04.2020. The Authority determines an amount of Rs. 20,57,207/- (including 12% GST) under section 133 (1) as the profiteered amount by the Respondent from his 1061 home buyers (as per Annexure A to this Order), including Applicant Nos. 1 to 4, which shall he refunded by him along with interest @ 18% thereon, from the date when the above amount was profiteered by him till the date of such payment, in accordance with the provisions of Rule 133 (3) (b) of the CGST Rules 2017. This amount profiteered is Rs. 1,581/- (including GST) in respect of the Applicant No.1, Rs 316/- (including GST) in respect of Applicant No. 2, Rs 1,166/- (including GST) in respect of Applicant No. 3, and Rs 1,239/- (including GST) in respect of the Applicant No. 4.
Interest - HELD THAT:- The Respondent is also liable to pay Interest as applicable on the entire amount profiteered, i.e. Rs. 20,57,207/-, for the project ‘Shriram Summit'. Hence the Respondent is directed to also pass on interest @18% to the customers/ flat buyers/ recipients on the entire amount profiteered, starting from the date from which the above amount was profiteered till the date or passing ant payment, as per provisions of Rule 133 (3) (b) of the CGST Rules, 2017.
Penalty - HELD THAT:- t has also been found that the Respondent has denied the benefit of additional ITC to his customers/recipients in contravention or the provisions of Section 171 (1) of the CGST Act. 2017 and resorted to profiteering and hence, committed an offence under section 171 (3A) of the CGST Act, 2017. Therefore, the Respondent is liable for the imposition of penalty for the period 01.01.2020 to 30.04.2020 under the provisions of the above Section. Accordingly, a Notice he issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.
This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
Application disposed off.
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2022 (7) TMI 1272
Reopening of assessment u/s 147 - notice u/s 148A(b) - contention raised by petitioner is that there is no escapement of income which can form basis for proceeding against the petitioner also non considering objections submitted by the petitioner in response to notice under Section 148A(b) - HC held there is no reason to warrant interference by this Court in exercise of the jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority - HELD THAT:- Having heard learned Senior counsel appearing for the petitioner and on carefully perusing the material available on record, we see no reason to interfere at this stage.
However, all contentions of the petitioner are left upon to be urged at the appropriate stage - The Special Leave Petition is, accordingly, disposed of on the aforestated terms.
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2022 (7) TMI 1271
Tax Collection at Source (TCS) - Addition u/s 206C(6)/206C(7) - Tribunal held that Swan timber is different from timber when there is no distinction drawn under Section 206C except in the case of timber obtained under forest lease - liability under Section 206C of the Act does not arise in case of traders in Sawn timber - HELD THAT:- The effect of the said provision continue to remain the same even after the amendment in the year 2003 wherein the proviso stood substituted. However, this condition was inserted by way of sub-Section (1A) of the Act which states that notwithstanding anything contained in sub-Section (1) of Section 206C(1), no collection of tax shall be made in the case of a buyer who is a resident in India and if such buyer furnishes to the person responsible for collecting tax, a declaration in writing to the effect that goods referred to in Column 2 of the table contained under Section 206C(1) are to be utilized for the purposes of manufacturing, processing or producing articles or things and not for trading.
Thus, if the timber is being sized, sawn into logs of different dimensions and shapes in activities carried on saw mills authorised by the Government, it would amount to a different produce. Even in respect of timbers which are procured as described in table, if it is used in the process of manufacturing, the provision of Section 206C(1) of the Act would not be applicable due to the fact that the product ceased to be a forest produce.
As mentioned earlier, the facts in the case of Y. Moideen Kunhi & Ors. (1985 (11) TMI 58 - HIGH COURT OF KARNATAKA AT BANGALORE] are different from the case on hand as the question in the said case was whether sawing of timber logs into different sizes, planks, beams would amount to manufacture within the meaning of Section 2(f) of the Central Excise and Salt Act, 1944. In the instant case, we are considering the effect of a special provision namely, Section 206(C) of the Act and the said decision cannot be applied to the case on hand.
For all the above reasons, we agree with the ultimate conclusion arrived at by the tribunal in dismissing the appeal filed by the revenue but for the reasons assigned by us in the earlier paragraphs. In the result, the appeal filed by the revenue is dismissed.
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