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Showing 301 to 320 of 1740 Records
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2024 (9) TMI 1442
Accrual of income in India - treatment by the assessee of the Royalty Income received from non-resident OEMs, who have reported their sales from India - Taxability u/s 9(1)(vi)(c) and Article 12(7) of India-US DTAA - HELD THAT:- Respectfully following the decision of the co-ordinate bench [2023 (6) TMI 966 - ITAT DELHI] that ‘when the entire edifice of the present additions made by the Assessing Officer is based on the assessment order passed for the assessment year 2012-13, which now stands reversed by the Tribunal in our view, the addition made by the AO are not sustainable’, this grievance is allowed in favour of the assessee and against the Revenue. Accordingly, we direct the Assessing Officer to delete the additions made u/s 9(1)(vi)(c). Assessee appeal allowed.
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2024 (9) TMI 1441
Rectification u/s 254 - determination of fair market value of shares - whether the workings given by the Department for determination of fair market value of shares could be construed as workings given in terms of Rule 11UA of the Income Tax Rules, 1962? - main contention of the revenue is that these workings were not in accordance with Rule 11UA of the Rules and the Bench had also not directed the Department to furnish the workings in terms of Rule 11UA of the Rules - main contention of the assessee is that the actual consideration received by it should be adopted on sale of shares as against Rs. 131.86 per share determined as fair market value.
HELD THAT:- In the course of original MA proceedings, the assessee had placed on record before this Tribunal, the workings of fair market value of shares as per Rule 11UA of the Rules, wherein, FMV was arrived at Rs. 70.59 by the assessee. Even in the prayer of the assessee in his miscellaneous application which is reproduced supra, we find that the assessee is only seeking to include the fact that the workings were sought to be asked by the Tribunal in accordance with Rule 11UA of the Rules for determination of fair market value while computing capital gains on sale of SBPL shares to understand the intention of this Tribunal as to whether the workings of fair market value of share were called for as per Rule 11UA of the Rules or not.
Tribunal always intended adoption of Rule 11UA of the Rules for determination of FMV of shares and directed the Department to furnish the workings accordingly. But the workings given by the Department to the Tribunal were not in accordance with Rule 11UA of the Rules as it had not considered the figures pertaining to certain intermediary companies. Whereas, in assessee’s wife case i.e. Mrs. Neelu Analjit Singh, who had also sold certain shares along with assessee herein of SBPL, the Tribunal [2019 (12) TMI 1198 - ITAT DELHI] had observed that the valuation of Rs. 131.86 per share adopted by the AO suffered from certain fallacy and the same was not according to Rule 11UA of the Rules. Accordingly, the Tribunal in the case of Mrs. Neelu Analjit Singh directed the AO to verify all the figures from the audited balance sheet of the intermediary companies and compute the fair market value of shares accordingly. AO had passed the giving effect order u/s 254/ 143(3) of the Act dated 12.02.2020 in the case of Mrs. Neelu Analjit Singh, wherein, for the very same shares, the AO by adopting Rule 11UA of the Rules had determined fair market value of SBPL share at Rs. 70.59 per share.
Assessee in its miscellaneous application is only trying to substitute the value of FMV which was arrived at Rs. 131.86 per share by the Tribunal, which contain certain basic fallacies ad admitted by the Tribunal in the case of Mrs. Neelu Analjit Singh vide order dated 19.12.2019 if Rule 11UA of the Rules is adopted. Hence, it purely becomes arithmetical exercise. Accordingly, we have no hesitation to conclude that miscellaneous application of the assessee is only to rectify the arithmetical mistake that had crept in the original Tribunal order dated.
Hence, this miscellaneous application proceedings is effectively meant only to modify the order passed by this Tribunal on 01.12.2017 and not to recall the same. On careful reading of the original appellate order dated 01.12.2017 of the Tribunal, we find that the Tribunal had ultimately sought to determine the fair market value of shares by using NAV method, which is admittedly one of the prescribed methods in Rule 11UA of the Rules. This aspect also goes to prove the intention of the Tribunal beyond reasonable doubt (de hors the observation made in first MA order dated 19.03.2018) that it was always intending to adopting only Rule 11UA of the Rules for determination of fair market value. In fact even in the workings given by the Department at Rs. 131.86 per share, provisions and Income Tax provisions had been added back which itself indicates that even the AO had sought to determine the FMV using Rule 11UA of the Rules only. In our considered opinion, the workings given by the Department before the Tribunal determining the FMV at Rs. 131.86 per share contained certain fallacies as it was not in accordance with Rule 11UA of the Rules, which alone is sought to be modified and rectified in the present miscellaneous application proceedings. Hence, the fallacies contained in the workings of the Department do constitute mistake apparent from record warranting rectification u/s 254(2) of the Act.
Against the original Tribunal order passed on 01.12.2017 in the case of the assessee, the assessee had preferred an appeal before the Hon’ble High Court and the same is admitted. Against the order passed by this Tribunal in the case of Neelu Analjit Singh dated 19.12.2019, the revenue as well as assessee had preferred respective appeals before Hon’ble High Court and the same are already admitted. It was always the case of all the parties before us i.e. Mr. Analjit Singh, Mrs. Neelu Analjit Singh and the Income Tax Department, that Rule 11UA of the Rules cannot be applied for the purpose of section 48 of the Act while computing the capital gains. But Tribunal directed the Department to adopt FMV as per Rule 11UA of the Rules after dismissing the preliminary plea of the assessee that actual consideration received should be considered for computing the capital gains. This preliminary plea is already subject matter of challenge before the Hon’ble High Court. As far as the Tribunal is concerned, since it had adopted two different values as fair market value, the same is sought to be rectified by this present MA proceedings.
We direct the AO to adopt FMV of Rs. 70.59 per share and recomputed the capital gains accordingly in the case of assessee herein. The order dated 01.12.2017 stands modified accordingly.
Miscellaneous Application of the assessee is allowed.
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2024 (9) TMI 1440
Validity of Order Of NFAC, Delhi - Assessment based on non-consideration of Form 10 - Lack of reasoning for additions by AO - Failure to conduct specific inquiry by NFAC - Dismissal of appeal without adjudication on merits by NFAC - HELD THAT:- In the present case, when the detailed written submissions have been filed by the assessee before the NFAC, which has been simply reproduced and held that the assessment order does not need any interference, hence, the entire appeal has been dismissed without even uttering a word into the merits of the case. Such kind of order has to be held perverse, bereft of any findings and bad in law.
Since the NFAC has not adjudicated the issue on merits, we are of the considered view that the matter has to be remanded back to the file of the NFAC for denovo adjudication as per law while complying with the principles of natural justice. The NFAC should also call for a report from the AO regarding Form No. 10 filed by the assessee and if on the basis of Form No.10 and consideration thereof, as whatsoever submissions have been made by assessee, the NFAC finds there is merit in the matter, accordingly, the matter should be disposed off as per law at the same time, the assessee is also directed to comply with the hearing notices as and when called for through submitting relevant documents/evidences before the NFAC. The grounds of appeal raised by the assessee are allowed for statistical purposes.
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2024 (9) TMI 1439
Revision u/s 263 by CIT - disallowing the amount paid on termination of agreement considering it as capital expenditure and disallowing amount paid on termination of License and supply agreement considering it as liquidated damage / penalty in nature and thereby disallowing the same u/s 37 - HELD THAT:- There is no dispute about the facts that the AO had missed to conducted enquiry in certain important aspect before allowing the expenditure as revenue expenditure to the assessee i.e. the AO did not verified the commercial expediency of the various agreement produced before him by the assessee i.e. he did not enquiry as to whether, the L&S agreement novated by SAL in favour of ASPL on 14.11.2011 were on some consideration or not., a) he did not enquiry whether there was any clause in such novated agreement to pay any termination charges or not, b) he did not enquiry why the title of the termination of the L & S agreement dated 31/10/2013 has been titled as “ Asset Purchase Agreement “where as the termination charges paid by the assessee has been claimed as revenue expenditure, c) he also did not enquiry actually who was liable to pay the termination fees, d) he did not make any inquiry, when a total consideration of Rs. 340.45 crores was to be receivable by ASPL from Mylon Ireland on account of L&D agreement, why only Rs. 273,05,47,600/- had been accounted for in the books of ASPL etc. Hence there was lacking on the part of the AO to make proper enquiry before allowing the expenditure as revenue.
On going through the explanation 2 to section 263, which has been inserted w.e.f. 01/06/2015, it is abundantly clear that, if the AO failed to make proper inquiries or verification, then it shall be deemed that the order passed by the AO is erroneous so far as it is prejudicial to the interest of the revenue. Hence under such circumstances section 263 can be invoked.
In our opinion, since the explanation has been made effective from a specific date , it will be applicable to the every order of AO, which has been passed by him w.e.f. 01/06/2015. As the impugned order of the Ld. AO has been passed on 31/01/2018, which is much latter than 01/06/2015, hence the explanation 2 to section 263 of the Act will be applicable on the order passed by the Ld. AO in the case of the assessee.
Once the explanation 2 to section 263 of the Act being applicable on the order passed by the Ld. AO and there is lack of inquiry on the part of the Ld. AO(as discussed above), in our opinion the invocation of section 263 by the Ld. PCIT is justified and the claim of the assessee is not correct. Hence we dismiss these grounds of the Assessee.
Disallowance of termination charges - From Assets Purchase Agreement, it is observed at the top of the page, the title of agreement itself shows that it is an assets purchase agreement. On the same page it has been mentioned that “ the seller shall cede their rights and obligations under the licence agreement and the supply agreement to the buyer pursuant to the terms of this agreement”.
Whereas Section 2.1 at page number 114 talks about purchase of “all the right, title and interest of seller” by the buyer. Section 2.5 at page 114 and 115 talks about the purchase price to be paid in lieu of this assets purchase agreement. Section 3.3 at page number 118 talks about the transfer of assets in the agreement. Hence on the basis of such observation, it is abundantly clear that it was an agreement for purchase of assets and the amount paid under this agreement was on account of the purchase price of the said assets and was not in the nature of termination charges/fees . Hence, we are of the considered opinion that the charges of Rs. 340.45 crores paid by the ASPL to Pfizer are in the nature of capital expenditure and not in the nature of revenue expenditure. Hence we dismiss the ground no. 4 of the assessee.
Disallowance of liquidated damages - There is no dispute about the facts that MLL was not interested to continue the L&D agreement with Fresenius and as per the business need of MLL, the assessee terminated the L&D agreement with Fresenius and was liable to pay the liquidated damages of Rs. 6.19 crores.
It is also clear from the aforesaid portion of submission of the assessee, MLL was not interested to continue the L&D agreement with Fresenius and the ASPL had paid the liquidity damages of Rs. 6.19 crores to Fresenius to protect the business interest of MLL. The payment of liquidated damages made by the ASPL by no means related to the business needs of the assessee. As per section 37 of the Act, the expenditure which is incurred wholly and exclusively for the purpose of business, can only be allowed as business expenditure. Hence we are of the concerned opinion that the liquidated damages of Rs. 6.19 crores paid by the ASPL to Fresenius were not incurred wholly and exclusively for the purpose of business of the assessee and therefore can not be allowed as expenditure to the assessee u/s 37 of the Act.
Decided against assessee.
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2024 (9) TMI 1438
Assessment u/s 153A - incriminating material found during the search action or not? - Validity of additions based on the Departmental Valuation Officer (DVO) report - HELD THAT:- The assessment years beyond six years but not more than ten years can be reopened u/s 153A of the Act only if the AO is in possession of evidence depicting the escapement of income of aggregating Rs.50,00,000/- or more in such relevant assessment years beyond six years from the date of search. These provisions extending the assessment beyond six years and upto ten years put a stringent condition of possession of evidence with the AO of escapement of income of Rs.50,00,000/- or more.
Such provisions extending the scope of assessment beyond six years from the date of search has to be construed strictly and the evidence relied upon by the AO in such assessments of extended period must be a tangible evidence. It has been held time and again by various courts of law that the DVO’s report on standalone basis without any corroborating material cannot be construed as incriminating material and hence the additions solely on the basis of the DVO’s report are not sustainable.
In the case of the assessee, even there is no difference found out between the investment disclosed by the assessee in the books of account as compared to the DVO’s report in respect of property at Leela Bhawan Chowk, Patiala. Under the circumstances, since the evidence relating to the undisclosed investments in respect of “relevant assessment years” as defined in Explanation 1 to 4th Proviso of section 153A(1) was less than Rs.50,00,000/-, therefore, the reopening of the assessment of the “relevant years” was bad in law and the same is hereby quashed. Assessee appeal allowed.
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2024 (9) TMI 1437
Rectification u/s 254(2) - second opportunity to the assessee to raise issues which he had omitted to raise at the time of the original appeal - Tribunal omitted to consider that no status is mentioned in the notice issued u/s 148 and as such the re-assessment for the assessment years 2006-07 to 2009-10 was without jurisdiction and liable to be annulled, as it was a patent mistake apparent on the face of record which deserved to be rectified u/s 254(2)
HELD THAT:- It is fairly clear that none of the issues that are now being agitated in the Misc. Applications were taken up before the ITAT as grounds of appeal in Form 36 or even during the course of arguments before the ITAT during the hearing of ITA [2023 (3) TMI 853 - ITAT ALLAHABAD]. Therefore, there was never any occasion for the ITAT to pronounce judgment on any of the issues that are contained in the Misc. Applications filed by the assessee.
The provisions of section 254(2) are very clear, in that they exist for rectification of any mistake committed by the ITAT in any order passed by it. They do not exist for rectification of mistakes in orders passed by the AO or ld. CIT(A). The proper recourse of action for the assessee in such cases is to either move rectification application before the lower authorities or to file appeals against their decisions before the next higher authorities, including the ITAT.
If the assessee chooses not to agitate any issue before the ITAT during the course of appeal, no mistake would arise in the order of the ITAT, if the ITAT did not adjudicate on such issues. The provision of Misc. Applications u/s 254(2) are also not designed to give a second opportunity to the assessee to raise issues which he had omitted to raise at the time of the original appeal.
Nor do the powers of the ITAT extend to revising their orders upon consideration of new facts or points of law. Accordingly, we are in agreement with the views as expressed by the ld. DR. There being no infirmity in the orders of the ITAT and the issues being raised by the assessee in the Misc. Applications having never being raised earlier, are not fit grounds to recall the order passed by the Hon’ble ITAT in [2023 (3) TMI 853 - ITAT ALLAHABAD] All the Misc. Applications are, therefore, dismissed as non-maintainable.
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2024 (9) TMI 1436
Disallowance of interest - difference between the rate of interest paid on borrowed capital and the rate at which the amount was advanced to the wholly owned subsidiary - as argued merely because the assessee had agreed for the addition before the AO there is no estoppel against law and assessee had sufficient funds of its own - HELD THAT:- We find the assessee in the instant case has advanced the amount to its wholly owned subsidiary which is not in dispute. The Hon’ble Supreme Court in the case of S.A. Builders [2006 (12) TMI 82 - SUPREME COURT] has held that where the funds are advanced by the holding company to its subsidiary and even if interest was not charged, advancing of funds to the wholly owned subsidiary would be for commercial expediency and no disallowance of interest is warranted.
We find the Delhi Bench of the Tribunal in the case of Moonrock Hospitality Pvt. Ltd [2021 (9) TMI 1033 - ITAT DELHI] while deciding an identical issue has held that where assessee had advanced the funds to its wholly owned subsidiary company for the purpose of business, no interest paid on borrowed funds could have been disallowed u/s.36(1)(iii) of the I.T. Act.
Decision of Hon’ble Supreme Court in the case of S.A. Builders [2006 (12) TMI 82 - SUPREME COURT] and the decision of Moonrock Hospitality (P) Ltd. [2021 (9) TMI 1033 - ITAT DELHI] we are of the opinion that no disallowance of interest paid on borrowed funds could have been disallowed. We, therefore, set-aside the order of the CIT(A) and direct the AO to delete the addition. Grounds raised by the assessee are accordingly allowed.
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2024 (9) TMI 1435
Addition u/s. 69A r.w.s. 115BBE - Deposits by the assessee in his bank account during Demonetization period unexplained - HELD THAT:- Section 69A of the Act is not applicable in this case because there are proper entries in the books of accounts of the assessee in relation to cash sale, cash balance and deposit (SBN’s) Bank. It is noted that the sale transaction in cash cannot e taxed u/s 69A of the Act because the sales against cash and deposit of such cash in assessee’s bank account cannot be called unexplained money. It is also noted that cash memos were immediately issued to the buyer and delivery was made immediately against cash SBN’s/ cash and thus sales are recorded properly in the books of accounts.
Lower authorities did not find any defects in the books of accounts and trading. It is also noted that there is no adverse observations in the AO’s order particularly in para 3.5 of assessment order that there has been abnormal increase in cash sales as well as cash balance during the period prior to demonetization period. The Bench noticed that provisions of Section 115BBE are applicable only on the income taxable u/s 68,69,69A,69B or 69D of the Act. Since in this case, the source of cash deposit in bank is income from business and thus Section 115BBE is not applicable.
CIT(A) failed to take into consideration various papers and documents including the under mentioned papers and documents produced/furnished during assessment proceedings before the AO - Assessee has duly discharged the initial burden of proof which lay upon him by explaining that source of SBN’s deposited at Rs. 26.00 lacs during demonetization period is out of cash sales made by him and duly credited the sales in the regular books of account of the assessee. It is also noted that the assessee has given necessary evidence on the basis of its books of accounts, sale/purchase invoice, cash book, journal, ledger bank statements and other relevant records that the cash deposited by him in bank accounts upto 31.12.2016 were out of sale proceeds in cash and the cash in hand as per books of accounts as on 01.04.2016 and cash withdrawals made from the banks before 08.11.2016 and as such the assessee should be deemed to have discharged the primary onus which lay upon him and there after onus is shifted on the department to prove that cash amount deposited in bank represent assessee’s undisclosed income.
AO has fully failed to discharge the burden of proof which squarely lay upon him. Reliance is placed on the judgment of Apex Court in the leading case of CIT vs. Orissa Corporation Pvt. Ltd. [1986 (3) TMI 3 - SUPREME COURT]. Hence taking into consideration the above deliberation, the Bench does not concur with the findings of the ld. CIT(A) and the Ground No. 3 of the assessee is allowed.
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2024 (9) TMI 1434
Classification of imported goods - prohibited goods - whether the goods imported fall under category of silver jewellery which is freely importable or under restricted category of ITC (HS) Code 71069210? - HELD THAT:- The Apex Court in the case of Bilkis Yakub Rasool V Union of India & Others [2024 (1) TMI 1318 - SUPREME COURT] reiterated the principle that the jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the Writ Court must come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief.
The jurisdiction exercised by this court under Article 226 is extraordinary, equitable and discretionary and it was imperative that petitioner must have come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure petitioner is guilty of misleading the Court and his petition should be dismissed at the threshold without considering the merits of the claim. Petitioner having made false averments in the petition that it was a registered partnership firm and reiterating the same during the course of arguments and that also in response to a specific query raised on by the court, in our view, has abused the process of law.
The petitioner is not entitled to the extraordinary, equitable and discretionary reliefs - petition dismissed.
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2024 (9) TMI 1433
Seeking grant of regular bail - smuggling of foreign origin gold - offences punishable under Sections 135(1)(a) and 135(1)(b) of the Customs Act, 1962 - implication and coercion by custom officers or not - HELD THAT:- Considering mainly the facts that petitioners have clean antecedent, nothing has been recovered from the conscious possession of the petitioners, rather the recovery have been made from the vehicle in question and the nature of allegation levelled against the petitioners in the FIR as well as the petitioners’ period of custody, let the petitioners, above-named, be released on bail on furnishing bail bond of Rs. 50,000/- each with two sureties of the like amount each to the satisfaction of the learned Special Judge, Economic Offences, Patna, in connection with Economic (DRI) Case No. 22(O) of 2024, arising out of Unit Case No. 31 of 2023-24, subject to fulfilment of conditions imposed.
Bail application allwoed.
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2024 (9) TMI 1432
Dismissal of petition for discharge filed under Section 245(2) Cr.P.C. - offences under Section 135(1)(a) and 135(1)(b) of the Customs Act, 1962 - improperly imported goods - Seizure of gold bars from possession of petitioners or not - existence of mens rea - HELD THAT:- It is settled law that at the stage of framing charge, the Court has to prima facie consider whether there is sufficient ground for proceeding against the accused and the Court is not required to appreciate evidence to conclude whether the materials produced are sufficient or not for convicting the accused.
It is also settled law that while considering an application seeking discharge from a case, the Court is not expected to go deep of the probative value of the material on record, but on the other hand, the Court has to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged, and for that purpose, the Court cannot conduct a roving enquiry into the pros and cons of the matter and weigh the evidence as if it is a main trial.
Since the gold was seized from the possession of the pillion rider of the motorcycle which was driven by the petitioner, whether the petitioner was also involved in the alleged occurrence, cannot be gone into the present stage and it is a matter for trial.
Though the petitioner has challenged the sanction order on the ground that the sanction was accorded without considering the nature of evidence, the role of the person in the evidence and mens rea of the person, the petitioner has not whispered anywhere, what are the facts that were not considered in the sanction order and that the petitioner has not shown that there is apparent error on the face of the sanctioning order - Moreover, the petitioner has not produced any evidence or materials so as to enable the Magistrate to give a finding that the charge is groundless.
The order dismissing the petition cannot be found fault with. Consequently this Court concludes that the Criminal Revision Case is devoid of merits and the same is liable to be dismissed.
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2024 (9) TMI 1431
Violation of principles of natural justice - respondent did not provide sufficient and reasonable opportunity to the petitioner nor acceded to his request for personal hearing and proceeded to pass the impugned order - issuance of SCN invoking Section 124 of the Customs Act, 1962 - HELD THAT:- A perusal of the material on record will indicate that despite the petitioner making a request for crossexamination of the Deputy Director and for production of documents, the respondent No.2 has proceeded to pass the impugned order, without providing sufficient and reasonable opportunity to the petitioner in this regard. So also, the first appellate authority/respondent No.1 has mechanically/summarily confirmed the order in original despite the petitioner taking up a specific contention that he was deprived of an opportunity of cross-examining the Deputy Director and also producing certain documents.
In order to provide one more opportunity to the petitioner to establish his defence by producing the necessary documents as well as cross-examining the Deputy Director, without expressing any opinion on the merits/de-merits of the rival contentions of the parties, it is deemed just and appropriate to set aside the impugned order dated 09.03.2023, passed by the appellate authority.
Petition allowed by way of remand.
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2024 (9) TMI 1430
Smuggling - Confiscation of prohibited goods - red sanders - penalties u/s 114 of the Customs Act - appellant’s case is that although the Airway Bill was filed in the name of his firm through its courier agency Fedex, he is not responsible because it was filed by his employee Brijlal without his authorisation - HELD THAT:- It is a well established legal principle that for any action of the employee, the employer is responsible. It is not the case that Brijlal filed the Airway Bill on his own account or in the name of somebody else.
The submission of the appellant that he had not authorised Brijlal to file this Airway bill cannot be accepted. An employee works on the directions of his employer and no employer issues written authorisations to his employee to file every paper or document. It is presumed that the employee worked at the behest of his employer unless the contrary is proved. There is nothing on record to show that Brijlal acted on his own, except the unsubstantiated assertion by the appellant.
From the facts of the case, there remains no manner of doubt that the airway bill was filed in the name of the appellant by his employee on his directions and when the consignment was caught, the appellant attempted to shift the blame to his employee. This submission cannot be accepted.
Penalty - HELD THAT:- The appellant also contested the quantum of penalty on the ground that if the penalty imposed on him and the penalty imposed on Fedex are added, they would exceed the limit laid down under section 114 of the Customs Act. This submission is erroneous. Section 114 of the Customs Act lays down the penalty imposable on each person and not the sum of penalties imposed on all persons.
There are no reason to interfere with the impugned order. The impugned order is upheld - appeal dismissed.
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2024 (9) TMI 1429
Classification of importe dgoods - bed sheets - classifiable under CTH 5407 or under CTH 6304? - wilful misdeclaration of the goods - levy of penalties under Section 114A of the Customs Act, 1962 - HELD THAT:- Admittedly, the goods in question are Bed spreads i.e., Bed sheets. Although made of 100% polyester yarn, it does not mean that the article loses its identity as Bed spreads / Bed sheets, which are properly classifiable under Customs Tariff Heading 6304.
It is admitted that the articles which have been imported by the respondents are woven fabric of synthetic filament yarn, but they are Bed spreads / Bed sheets and quantity of the goods in numbers has been described by the respondents. In the circumstances, the merit classification of the impugned goods is under CTH 6304 of the Customs Tariff Act. Therefore, the impugned goods classified as ‘Bed spreads’ (Bed sheets) classifiable under CTH 6304 of the Customs Tariff Act. In view of this, the impugned goods have been correctly classified by the respondents and the same are not liable for confiscation.
The respondents are liable to pay duty by classifying the impugned goods under CTH 6304 of the Customs Tariff Act and no penalty is imposable on the respondents. No redemption fine is payable by the respondents.
The appeals filed by the Revenue are dismissed.
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2024 (9) TMI 1428
Valuation of imported goods - Motor Controller - rejection of declared value - classification of the item imported from CTH 8503 0090 to CTH 8708 9900.
Valuation of goods - HELD THAT:- The assessing officer has rejected the transaction values without any valid basis/reasons and without following the due procedure as laid down under Section 14 and Valuation Rules, especially when there is nothing on record to suggest that the transaction values declared by the appellant were not the price actually paid for the goods when sold for export to India. There is also nothing on record to suggest that the buyer and seller of the goods were related or price was not the sole consideration for sale. Also, it is found that the Department has adduced no evidence that the respondent has paid any amount over and above the invoice value to the foreign supplier. In these circumstances, the enhancement of assessable values by the ld. adjudicating authority is liable to be struck down and set aside and the impugned bill of entry is to be assessed at values declared by the Respondent - the Ld. Commissioner (Appeals) has given categorical findings to reject the enhancement of value by the assessing officer and there are no reason to interfere with the same - the impugned order passed by the Commissioner (Appeals) upheld, accepting the transaction value declared by the Respondent in the respective Bills of Entry.
Classification of the goods imported by the Respondent - HELD THAT:- The Respondent has classified the goods under the Tariff Heading 8503 0090. Customs Tariff Heading 8503 covers “parts suitable for use solely or principally with the machines of heading 8501 or 8502” and Custom Tariff Item 8503 0090 covers “parts of electric motor (other than DC motor)”. The electric motor is classified under the chapter heading 8501. In the Assessment Order, the Ld. Adjudicating authority has observed that the 'Controller' is used for starting and stopping the motor, selecting forward or reverse rotation, selecting and regulating the speed etc. It is observed that all these functions are connected to motor and the 'controller' is principally used with the motor to perform these functions. Thus, the 'controller' imported by the Respondent is rightly classifiable under the chapter 8503.
The controllers are not covered under the CTH 8708 as per the explanatory notes to Section XVII. It is also pertinent to note that the Notes to CTH 8503 covers the parts to be used with motor and as such merits the classification of the goods under CTH 8503. Thus, the goods imported by the Respondent are rightly classifiable under Chapter heading 8503 0090 as claimed by them in the respective Bills of Entry.
The correct classification of the goods in question is CTH 8503 0090. Therefore, hold that the Ld. Commissioner (Appeals) has rightly held the classification of the impugned goods under CTH 8503 0090.
There are no infirmity in the impugned orders and the same are upheld - the appeals filed by the Revenue are dismissed.
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2024 (9) TMI 1427
Valuation of imported goods - old and used worn clothing, completely fumigated - enhancement of value - confiscation - redemption fine - penalty - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [2018 (11) TMI 625 - CESTAT MUMBAI], wherein this Tribunal has observed 'the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. In the light of the admitted failure to comply with the licensing requirements, we uphold the confiscation of the goods under Section 111(d) of Customs Act, 1962. However, it is our opinion that the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5%.'
The redemption fine and penalty imposed on the respondent to the tune of 10% & 5% respectively on the assessed value is sufficient. Therefore, the redemption fine and penalty confirmed by the ld.Commissioner (Appeals) are sufficient to meet the end of justice - there are no infirmity in the impugned order and the same is upheld - appeal filed by the Revenue is dismissed.
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2024 (9) TMI 1426
Oppression and mismanagement - whether the Appellants are entitled to the waiver of requirements under Sections 244(1)(a) and (b) of the CO Act 2013 so that they can apply under Section 241 of the Act for a case of oppression and mismanagement? - HELD THAT:- While dealing with an application for a waiver under Section 244, the NCLT is very much empowered to make a preliminary assessment to determine whether the Petition falls within the purview of Sections 241 and 244. While the NCLAT in the Cyrus Investments [2017 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] case did hold that the merits of the case should not be considered at the waiver stage, but this does not preclude the NCLT from determining whether the Petition falls within the ambit of Sections 241 and 244.
In the instant case, the waiver was refused based on the finding that the Petitioner has no prima facie case as the primary complaint in the petition relates to the directorship of the Petitioner, and hence the complaint is directorial.
The important question is whether such a removal tantamounts to an oppressive or prejudicial conduct. The Hon’ble Supreme Court in Tata Consultancy Services [2021 (3) TMI 1181 - SUPREME COURT] has made it clear that mere removal/termination of the Director cannot be projected as something that would trigger the just and equitable Clause (2) to grant relief under Sections 241 and 242 of the Act. It is noted that the removal of the CEO / Executive Director at the AGM was not a motion by the management of the Company, but by another shareholder of the Company i.e. Respondent No.21.
In this case, it is noticed that there are ongoing complaints and counter-complaints between the Appellants and the Respondents even prior to the filing of the Company Petition. But the Company Petition was filed by the Appellants around the time when a proposal was in circulation for the removal of Appellant No.1 as Director / Executive Director along with a notice for AGM. Even the interim relief sought in IA No. 5855 of 2023 in this Appeal is for staying the decision taken in the Annual General Meeting (AGM) dated 30.09.2023 with respect to removal of the Appellant No.1 as an Executive Director of the Respondent No.1, apart from various other interim reliefs.
Appellant relies upon the conclusion in Cyrus Investments Private Limited vs Tata Sons Limited and Ors. [2017 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], that there is a situation in the instant case also, that until and unless the minority shareholders join together, shareholding will not come up to 10% of the issued share capital of the Company and the threshold for filing a Petition under Section 241 of the Companies Act, 2013 will not be met.
The Appellants with a total shareholding of 5.83%, do not meet the requirement as per Section 244(1)(a) and 244(1)(b). The Appellant’s argument that this case presents exceptional circumstances meriting the grant of a waiver is not convincing. Perusal of the materials on record and the circumstances of the petition and the Appeal do not indicate any exceptional circumstances. The threshold for granting a waiver under Section 244 is high and is intended to be an exception rather than the rule. The NCLT’s decision indicates that the Appellant has not demonstrated such exceptional circumstances that would justify bypassing the statutory requirement of a minimum shareholding for the filing of a petition under Section 241.
The Petition revolves significantly around the Appellant’s removal as a Director and the related grievances. Section 241 is not intended to address such personal grievances, but is meant to protect the interests of the company and its shareholders against genuine acts of oppression and mismanagement. The NCLT was, therefore, correct in refusing the waiver based on its assessment that the Petition does not substantiate a case of oppression and mismanagement as envisaged under the Companies Act.
It is concluded that the NCLT acted within its jurisdiction and in accordance with the principles of law while denying the waiver under Section 244 of the Companies Act, 2013 - there are no infirmity in the orders of the NCLT - appeal dismissed.
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2024 (9) TMI 1425
Maintainability of Section 7 Application - application barred by time limitation or not - relevant date of default - exclusion of period of Limitation as available u/s 22(5) of SICA Act, 1985 - extension of Limitation in pursuance of the Recovery Certificate.
What is the date of default committed by Company, whether 01.06.2019 as claimed in Section 7 Application or the default was committed in the Year 2001 as pleaded by the Company and accepted by the Adjudicating Authority? - HELD THAT:- The Appellant in its Appeal itself claim issuance of recall Notice dated 16.02.2001, which clearly recall the loan and directed the Company to pay within 10 days. The date of default as per the recall Notice is clearly 26.02.2001 - there are no valid reason for mentioning 01.06.2019 as date of default for purposes of IBC. It is well settled that for filing an Application under Section 7, Article 137 of the Limitation Act 1963 is applicable - the date of default in Section 7 was imaginary and without any basis and the date of default is the Year 2001 (26.02.2001).
Whether the benefit for excluding the period of Limitation as available under Section 22(5) of SICA Act, 1985, has been rightly denied by the Adjudicating Authority on account of prosecuting the OA No.03/2002 before the DRT by the Appellant culminating into Recovery Certificate dated 19.10.2006? - HELD THAT:- The Adjudicating Authority did not correctly construed the provisions of Section 22 of SICA Act. The period which is covered by Section 22(1) deserves to be excluded as required by Section 22(5). In the present case, it is not required to express any opinion with regard to proceeding initiated by Appellant by OA No.03/2002 and the legal consequence of the said proceeding. It is however to be noticed that when the Recovery Certificate dated 19.10.2006 was issued, the reference under SICA had already been dismissed on 06.06.2006. Hence, on the date when Recovery Certificate was issued SICA Proceedings were not pending - the Appellant was entitled to exclude the period for the purposes of Limitation which is covered by Section 22(1) and Section 22(5) of the SICA Act and the view taken by the Adjudicating Authority in this regard is not approved in the facts of the present case.
Whether after excluding the period of Limitation as per Section 22 of SICA Act 1985, the Application filed by the applicant was within period of Limitation? - Whether the Appellant is entitled to the extension of Limitation in pursuance of the Recovery Certificate dated 19.10.2006, OTS letter dated 10.01.2008 and OTS letter dated 28.07.2010? Whether the Order of the Adjudicating Authority rejecting the Section 7 Application as barred by time deserves to be interfered with in this Appeal? - HELD THAT:- The date of default being 26.02.2001, Limitation for filing the Section 7 Application under Article 137 started running which came to be arrested by filing the reference by the Company on 12.09.2002. The reference was dismissed on 06.06.2006 thus period from 12.09.2002 to 06.06.2006 needs to be excluded. Appeal having been filed against the Order dated 06.06.2006 on 23.11.2006, which came to be dismissed on 29.09.2010. The said period from 23.11.2006 to 29.09.2010 also needs to be excluded. The period after 30.09.2010 till 04.03.2013 during which the Writ Petition remain pending before the High Court needs no exclusion being not covered by Section 22(1). Further, no exclusion can be allowed after 31.12.2013, when the AAIFR dismissed the Appeal. The period during which the Writ Petition remain pending and the period after 31.12.2013, in which no exclusion is available itself exhaust period of 3 Years for filing the Application under Article 137. On 19.12.2019 when the Section 7 Application was filed the period of 3 Years had already came to an end.
It is need to be seen whether after 27.07.2013, when the period extended under Section 18 of Limitation Act comes to an end, whether there is any other acknowledgement within 3 Years period. The Appellant has relied on the Balance Sheet for the Year 2015-16, which Balance Sheet has been brought on record both by the Appellant and the Company. The Balance Sheet 2015-16 have been signed on 26.09.2016. Thus, acknowledgement if any has to be treated from 26.09.2016, before which acknowledgement 3 Years period from the OTS letter 28.07.2010 has already come to an end. Thus, acknowledgement in the Balance Sheet are after 3 Years of the expiry of the period of Limitation. Thus, in any view of the matter, the Application filed by the Appellant on 19.12.2019, was much beyond period of Limitation which was available to the Appellant to file Section 7 Application.
The Adjudicating Authority did not commit any error in rejecting Section 7 Application filed by the Appellant as barred by time - there is no merit in the Appeal - The Appeal is dismissed.
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2024 (9) TMI 1424
Condonation of 185 days delay in refiling of the Appeal - HELD THAT:- The delay in refiling can be condoned only if the Tribunal is satisfied that there is reasonable and justifiable cause for not refiling the appeal on time. On looking at the sequence of events, it is found that the Appeal was e-filed on 02.12.2023 and defects were intimated soon thereafter by the Registry on 11.12.2023. On perusal of the defect list pointed out by the Registry, most of the defects are minor in nature like lack of pagination, need of rescanning of certain pages of the appeal, correction of index etc. The correction of such defects was by no stretch of imagination of a time-consuming nature. The defects which were indicated by the Registry clearly fell in the routine category which were easily curable. The Applicant has also not indicated any circumstance beyond his control which warranted 185 days to clear the defects. Even the attribution of court vacations as a ground for delay does not cut ice since duration of court vacations are never that long. Clearly therefore, since the time of intimation of defects, the Applicant slept over the defects for nearly six months. No earnest efforts were made by the Applicant to correct the defects. It cannot be the unilateral prerogative of the Applicant to elect when it chooses to cure the defects to get the matter listed. This shows that the applicant was casual, callous and negligent in refiling the appeal - The Applicant cannot be given any indulgence keeping in view that the IBC proceedings have stringent timelines to be followed and the proceedings have to be concluded in a time-bound manner.
Thus, sufficient ground has not been made out for condonation of 185 days delay in refiling of the Appeal. The refiling delay application is rejected - application dismissed.
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2024 (9) TMI 1423
Admissibility of pleadings when respondent does not file a counter affidavit - judicial implications of non filing of a Counter - HELD THAT:- NCLT has recorded that it was conscious of the objection raised by the Appellant in the objection, failure to consider the same and to record specific finding on it, that is, on the facts as pleaded by the Appellant in the Memo of Objection, would render Judgment being perverse and without application of mind especially when the pleadings of the Appellant remain undenied by the Respondent’s Counsel having denied to file a Counter Affidavit, qua the pleadings. Accordingly, the Judgment dated 09.07.2024 as rendered in CP/IB/173(CHE)/2023 would be held to be vitiated, owing to the ground which has been taken by the appellant that even after taking note of the Appellant’s contention raised in his objection dated 14.03.2024, and referring to the same in the body of the Judgment, the Learned Adjudicating Authority has not recorded any, no finding on the same in its judgment.
Even in the light of the Judgment of Mobilox Innovations Private Limited [2017 (9) TMI 1270 - SUPREME COURT], where the guidelines have been framed therein for the purposes of determining an application under Section 9 based on the criteria prescribed therein prior to the imposition of moratorium under Section 14, since the aforesaid factors have not been considered while passing the final judgment, the judgment Impugned will be held as being not in consonance to the provisions contained under Section 424 of the Companies Act and therefore, the initiation of the Section 9 proceedings would be bad and without application of mind.
The Impugned Judgment dated 09.07.2024 as rendered by the National Company Law Tribunal, Chennai Bench in CP/IB/173(CHE)/2023, would hereby stand quashed - the proceedings are remanded back to the Learned National Company Law Tribunal, Chennai Bench, to redecide the matter afresh after considering the rival contentions and particularly in the context of the pleading which has been raised qua the claim which is subject matter of consideration and decide the same on its merit.
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