|
Advanced Search Options
Case Laws
Showing 321 to 340 of 1471 Records
-
2022 (1) TMI 1154
Reopening of assessment u/s 147 - Independent application of mind - introduction towards share capital as well as share premium - HELD THAT:- The various decisions relied on the Assessee in the instant case that the AO has recorded the satisfaction in a mechanical manner without application of independent mind and on borrowed satisfaction do not hold good. In all those cases the reopening had taken place on the basis of search and seizure operation or survey proceedings in the case of entry providers.
There is a case where the survey had taken place in assessee’s own premises and the Director as well as Accountant of the assessee company had failed to provide any evidence regarding introduction of share capital. Further the Addl. CIT while granting approval has also recorded his satisfaction. Under these circumstances, we do not find any infirmity in the order of the CIT(A) in upholding the validity of re-assessment proceedings. Accordingly, grounds raised by the assessee challenging the validity of re-assessment proceedings are dismissed.
There is not a whisper regarding any opportunity to the assessee to substantiate the introduction of ₹ 1 crore towards share capital as well as share premium. The so-called statement of Shri Pramod Kumar Sharma, the entry operator who admitted to have provided entries to the assessee company has not been provided to the assessee nor the assessee was given an opportunity to cross-examine the entry provider Shri Pramod Kumar Sharma. Principles of natural justice demands that the assessee should be given an opportunity to rebut the statement of third party which is the basis for addition and an opportunity to cross-examine the same person, if demanded.
We deem it proper to restore the issue to the file of A.O. with a direction to grant one more opportunity to the assessee to substantiate the introduction of ₹ 1 crore towards share capital/share premium and decide the issue as per fact and law. Needless to say the A.O. shall give due opportunity of being heard to the assessee. Appeal filed by the assessee partly allowed for statistical purposes.
-
2022 (1) TMI 1153
Revision u/s 263 by CIT - Unexplained cash deposit received from various persons - case was selected for limited scrutiny under cash with the reason "large cash deposit in the bank account" - only allegation made by the ld. Pr. CIT that the AO should not have accepted the assessee’s reply - HELD THAT:- Nowhere Ld. PCIT had himself tried to carry out some enquiry at his level so as to prima facie indicate that the explanation as well as the evidences filed by the assessee are not reliable and cannot be accepted specifically when the cash was stated to be received from relatives and agriculturists. AO has accepted certain explanation and was satisfied with the evidence in the form of confirmations from the parties, then it was incumbent upon the ld. Pr. CIT to dislodge and explanation carrying out some verification and enquiry from any of the parties which could have been the basis for justifying that there was lack of enquiry by the AO. The assessment order passed after due verification and examination simply cannot be set aside on the ground that some more or further enquiry should have been done.
One very glaring fact which is evident from the impugned order of the ld. Pr. CIT, (the whole of which has been reproduced above) is that, nowhere the ld. Pr. CIT has held that the assessment order passed by the Assessing Officer is erroneous or prejudicial to the interest of Revenue. The basic requisite condition for acquiring the jurisdiction under Section 263 and cancelling the assessment order is that, the ld. Pr. CIT has to give categorical finding as to how the assessment order is erroneous and not only that, he has to show that it is also prejudicial to the interest of Revenue.
Both the conditions have to be satisfied and is to be specified by the Ld. PCIT, in case he intends to set-aside the assessment order. Once the Assessing Officer has taken a view based on the explanation as well as evidence filed by the assessee, it cannot be the case of lack of enquiry. At the best, it is inadequate enquiry and, therefore, in such a situation the assessment order cannot be cancelled or set aside. Accordingly, we hold that in absence of any charge by the ld. Pr. CIT that assessment order is erroneous and prejudicial to the interest of Revenue, assessment order cannot be set aside and accordingly, the order passed by the ld. Pr. CIT is set aside and the order of assessment is restored. Appeal of the assessee is allowed.
-
2022 (1) TMI 1152
Disallowance u/s 14A r.w.r. 8D - investments generate exempt-income in the form of dividend or share in profit from firm - whether the disallowance is attracted even when the underlying investment has not yielded any exempt-income during the relevant previous year? - CIT-A deleted the addition - HELD THAT:- As section 14A / Rule 8D is not applicable at all if there is no exempt-income earned during the previous year. Reverting back to the facts of the assessee, the parties have openly accepted that there was no exempt-income earned during the year from the underlying investments. Being so, in view of above analysis of legal provisions, we observe that the Ld. CIT(A) has committed no error in deleting the disallowance made by Ld. AO u/s 14A read with Rule 8D. Therefore we dismiss the Ground No. 1 of Revenue.
Not considering the decision of Hon’ble Supreme Court in the case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] - It may be noted that in Maxopp Investment (Supra), the Hon’ble Supreme Court has decided only one specific issue, of course which goes in favour of revenue and against the assessee. The Hon’ble Court had turned down the argument that section 14A and Rule 8D are not applicable where the investment in shares is made as a part of strategic objective - Hence the Revenue is wrong in Ground No. 2 to urge that the Ld. CIT(A) has not considered the decision in Maxopp Investment (Supra). Therefore, this Ground No. 2 of the Revenue is dismissed.
Disallowing additional claim of deduction u/s 32AC - HELD THAT:- We observe that the deduction u/s 32AC is a statutory deduction. Further the purpose of deduction is to incentivize the establishment of new manufacturing industry. Hence it would be better to construe the provision in a holistic manner.
In view of above we accept this claim of assessee. However, since the details of qualifying assets are required to be verified, we send the matter back to the file of Ld. AO. AO shall give an opportunity to the assessee, verify the details of qualifying assets and allow deduction. Therefore, this ground of assessee is allowed for statistical purposes.
New legal claim to be entertained by judicial authorities - deduction of the Cess on income-taxes paid and DDT paid - HELD THAT:- A new legal claim can be entertained by judicial authorities and the decision of Goetze (India) Ltd.2006 (3) TMI 75 - SUPREME COURT does not come in the way. It is for this reason that we admit this claim of assessee. However, since the details of claim is required to be verified, we send the matter back to the file of Ld. AO. AO shall verify the claim having regard to the judicial developments to be placed by assessee before him and take an appropriate conclusion. Therefore, this ground of assessee is allowed for statistical purposes.
-
2022 (1) TMI 1151
Revision u/s 263 by CIT - chargeability of capital gains as per section 45(2) - applicability of sub-section(2) of Section 45 of the Act to the case of the assessee, wherein, the assessee has sold a part of land, which was converted from capital asset to stock-in-trade during the preceding financial period - HELD THAT:- For the purpose of calculation of capital gains u/s 48 the fair market value of the assessee on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. This provision does not provide a situation where the assessee has sold a part of converted capital asset into stock in trade but at the same time, we also observe that it is also not the intention of the legislature that if the assessee is transferring a part of converted capital assets during preceding financial period, then the revenue authorities has to wait till the transfer of entire converted stock in trade for the purpose of taxing capital gains accrued to the assessee on conversion of capital asset into stock in trade.
Respectfully following the principles that the right income should be taxed in the right hands in the relevant financial period, we are of the considered view that in a case also where the assessee transfers a part of converted capital asset then also profits or capital gain would be chargeable to tax in the hands of the assessee partially pertaining to part of land or property sold during relevant financial period and same shall be chargeable to tax in the previous year in which if such part of stock in trade is sold or otherwise transferred by taking a fair market value on the date of such transfer or treatment shall be deemed to be full value of the consideration received or accrued to the assessee, as a result of transfer of capital asset.
In the present case, undisputedly rather admittedly, the assessee has transferred part of converted capital asset into stock in trade during the relevant financial period and the AO has failed to make any enquiry in this regard and to tax the same in the hands of the assessee partially pertaining to the part of land sold during the year. No enquiry has been conducted by the AO during the assessment p;roceedings in this regard, hence, it is clear case of no enquiry.
CIT assumed valid jurisdiction to review the assessment order u/s.263 of the Act and the Pr. CIT was right and brandy in treating the assessment as erroneous so far as prejudicial to the interest of the revenue. We are unable to see any ambiguity, perversity in the order of ld Pr. CIT, which is hereby confirmed. - Decided against assessee.
-
2022 (1) TMI 1150
Addition u/s 68 - unexplained share application money - addition on account of sale proceeds of shares received by invoking the provisions of section 68 of the IT Act on the ground that the existence of the parties at the given address is not verifiable - CIT-A deleted the addition - HELD THAT:- We do not find any infirmity in the order of the CIT(A) on this issue. We find, the ld. CIT(A), while deleting the addition, has relied on his decision for AY 2013-14 in the case of Maurya Udyog Ltd. [2019 (1) TMI 204 - ITAT DELHI] which is the sister concern of the assessee wherein similar additions were also made by the AO on account of sale of shares of the same parties - we uphold the order of the CIT(A) and the ground raised by the Revenue on this issue is dismissed.
Addition on account of unexplained cash - CIT(A) deleted the addition - HELD THAT:- We find, the addition made by the AO in the case of Maurya Udyog Ltd. was deleted by the CIT(A) as facts of the case in hand show that the assessee was never found to be in possession of any real money. The addition having been made only on the strength of some notings found in some file extracted from the computer of Shri Rohtash, clearly establish that the provisions of section 69A of the Act do not apply - there is no mention of the assessee's name in the impugned document. The Assessing Officer has simply assumed that the reference to the impugned amount is in relation to the assessee. In our understanding, no addition can be made on the basis of presumptions and surmises. Assuming, yet not accepting that the amounts were received by the assessee, the same were returned back on the very same date as per Exhibit 85 of the paper book. Even on this count, addition is uncalled for - Decided in favour of assessee.
Unexplained share application money received from non-genuine parties - CIT-A deleted the addition - HELD THAT:- The assessee has established the identity of the share applicants by the KYC particulars forwarded by the assessee's bankers to RBI. Further, the bank has informed the RBI that it has received the proceeds from NRI in the form of inward remittances certificate for each amount received. RBI has noted that the assessee has followed due procedure which is required to be followed for issue of shares to foreign share applicants. Moreover, the Department's query from share applicants during extended period of time barring recorded no adverse remarks. Under these circumstances, we do not find any infirmity in the order of the CIT(A) deleting the addition on this issue. Accordingly, the same is upheld and the ground raised by the Revenue on this issue is dismissed.
-
2022 (1) TMI 1149
Late deposit of Employees Contribution to ESI and EPF - AR submitted that the assessee has deposited employees’ contribution towards ESI and PF though with the delay of few days from the due date mentioned in the respective Statutes, however, the same was deposited well before the due date of filing of return of income u/s 139(1) - HELD THAT:- In the instant case, it is not in dispute that employees’ contribution to ESI and PF had been deposited well before the due date of filing of return of income u/s 139(1) of the Act. We find that the issue is squarely covered by the decisions of the Hon'ble Punjab & Haryana High Court as well as other High Courts such as Hon'ble Himachal Pradesh High Court and Hon'ble Rajasthan High Court. We further note that though the Id. CIT(A) has not disputed the various decisions of Hon'ble High Courts including the decision of the jurisdictional Punjab & Haryana High Court but has referred to the amendment brought in by the Finance Act, 2021.
It is a consistent position across various Benches of the Tribunal including Chandigarh Benches that the amendment which has been brought in by the Finance Act, 2021 shall apply w.e.f. assessment year 2021-22 and subsequent assessment years and the impugned assessment year being assessment year 2019-20, the said amendment cannot be applied in the instant case. Therefore, considering the entirety of facts addition made by way of adjustment while processing the return of income u/s 143(1) so made by the CPC towards the deposit of employees’ contribution towards ESI and PF paid before the due date of filing of the return of income u/s 139(1) of the Act, is hereby directed to be deleted. - Decided in favour of assessee.
Addition on account of provision for gratuity - as submitted that the assessee while filing its return of income has suo-moto disallowed the provision for gratuity and where such adjustment has been made by the CPC while processing the return of income, the same amount to double taxation which cannot stand in the eyes of law therefore, the said addition needs to be deleted - HELD THAT:- It is manifest from the return of income along with the computation of income so filed by the assessee that the provision for gratuity which has been debited in the profit/loss account has been disallowed by the assessee itself and no claim for the provision for gratuity has been made by the assessee while filing its return of income. Therefore, the action of the CPC in disallowing the same will amount to a situation where there is disallowance of provision which has not been claimed at the first place by the assessee and the same will clearly result in double taxation and which cannot be sustained in eyes of law. In the result, the addition so made towards the provision for gratuity is hereby directed to be deleted and the ground of appeal is thus allowed.
-
2022 (1) TMI 1148
Disallowance of deduction u/s 54B - assessee did not file return under Section 139(1) of the Act and he has not deposited the sale proceeds in the capital account - HELD THAT:- The major emphasis of the learned First Appellate Authority is that the assessee should have deposited capital gain in a bank account meant for this purpose; only then he can claim deduction u/s 54B of the Act. In these submissions it would reveal that the assessee has specifically shown the receipt as well as investment for purchase of agricultural land. Both these things have been made almost simultaneously.
Section 54B of the Act authorizes an assessee to claim deduction under this section on an investment made for purchase of agricultural land two years prior to sale of an agricultural land. Similarly, it also authorizes to make investment two years after the sale of agricultural land. The investments of the assessee duly fall in this period. Hence, even if he has not deposited in the capital account, but he has already made investment; therefore, he is entitled for the deduction.
We, respectfully following the decision in the case of CIT Vs Ms Jagriti Aggarwal [ 2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT] allow this appeal of the assessee and delete the disallowance, because the objection of the learned CIT(A) is without any basis. The correlation between the investment and receipt of sale proceeds within the time stipulated in Section 54B of the Act has duly been demonstrated by the assessee. In view of the above, the appeal of the assessee is allowed and the Assessing Officer is directed to grant deduction under Section 54B - Decided in favour of assessee.
-
2022 (1) TMI 1147
TP Adjustment - selection of MAM - granting an internal margin of 23% worked out by the appellant under the Transactional Net Margin Method - CIT(Appeals) directing the AO to apply the internal Transactional Net Margin Method (TNMM) as the most appropriate method (MAM) for benchmarking the international transactions entered into by the assessee with its Associated Enterprise (AE) - HELD THAT:- As identical issue of applying internal TNMM had come up for consideration before the ITAT Bangalore Bench in assessee’s own case for the AY 2010-11 [2015 (11) TMI 1545 - ITAT BANGALORE] we uphold the orders of the CIT(Appeals) applying internal TNMM method for determination of the ALP. We may also observe that the manner of determination of internal margin under the internal TNMM has not been questioned. In these circumstances, we dismiss the relevant grounds of appeal of the revenue.
-
2022 (1) TMI 1146
Contribution for belated payment of employees share of PF & ESIC i.e. after due date specified in respective Act and treated the income of the assessee as per section 2(24)(X) - HELD THAT:- Where there is a delay in deposit of employees contribution to PF/ESIC as per the due date prescribed under the provisions of PF/ESIC but the contribution is deposited before the due date of filing of return of income. No disallowance is called for u/s 36(1)(va) of the Act as held by this Tribunal in the case of M/s Industrial Filters and Fabrics Pvt. Ltd. [2018 (9) TMI 1008 - ITAT INDORE]
We, accordingly set aside the finding of Ld. CIT(A) and delete the disallowance of employees contribution to PF/ESIC and employees contribution to PF and ESIC - Decided in favour of assessee.
-
2022 (1) TMI 1145
Chargeability of Royalty from AEs - International transaction as contemplated u/s 92B - Whether there is no international transaction as contemplated u/s 92CA in respect of the alleged royalty chargeable from three Associated Enterprises (AEs) and consequently the order of the CIT (A) upholding the changeability of royalty from three AEs, as alleged by TPO is arbitrary, unjust and bad in law - assessee allowed its associated enterprises to provide assistance in recruitment and imparting technical know-how, etc. and permitted use of its trademark ‘Dabur’ for sale of products? - HELD THAT:- As regards to agreement with Dabur Nepal Pvt. Ltd. Nepal, it is pertinent to note that the issue stands covered in favour of the assessee by the order of the Tribunal in the asssessee’s own case in [2017 (4) TMI 1521 - ITAT DELHI]for the A.Y. 2006-07, wherein the Tribunal held that no royalty was payable assessee by M/s Dabur Nepal Pvt. Ltd and deleted the addition made by TPO/CIT(A).
The facts in the present assessment is also similar and no distinguishing facts were pointed out by the Ld. DR, therefore, the finding of the CIT(A) that royalty @ 2% is to be charged from Dabur Nepal Pvt. Ltd. is not correct and has to be deleted.
It is pertinent to note that in this year also the AE was not using the technical know-how or R&D support from the assessee, therefore it will be appropriate to charge the royalty @ 0.75% by considering this fact that in the year under consideration the assessee had incurred huge expenses on marketing, advertisement & brand building etc. and that in the preceding year the royalty was although charged @ 1% on the products manufactured without R&D support and technical know-how from the assessee but the aforesaid expenses were comparability less. Thus, royalty to be charged at 0.75% in respect of agreement with Dabur International UAE.
As regards to Asian Consumer Cure Pvt. Ltd. Bangladesh, again it is to be noted that the issue is covered partly in favour of the assessee by the order of the Tribunal in assessee's own case for A.Ys. 2007-08 and 2008-09 in [2021 (2) TMI 1250 - ITAT DELHI] Tribunal held that royally @ 0.75% is to be charged from Asian Consumer Care Pvt. Ltd.
The facts in the present assessment is also similar and no distinguishing facts were pointed out by the Ld. DR or the Ld. AR, therefore, the finding of the CIT(A) that royalty @ 2% is to be charged from Asian Consumer Care Pvt. Ltd., appears to be not correct. Therefore, following the earlier years order by the Tribunal, we are restricting the said royalty to 0.75% in case of Asian Consumer Care Pvt. Ltd., Bangladesh.
CIT(A) sustaining the alleged service fee on account of the corporate guarantee in the case of Dabur Egypt Ltd. on the loans availed from HSBC and NSGB Bank @ 0.50% - The action of the CIT(A) of charging service fee at an ad-hoc rate of 0.513% was not correct and the same has to be restricted to 0.30% as the facts are identical to that of A.Y. 2008-09 and no distinguishing facts were pointed out by the Ld. DR at the time of the hearing. Thus, we direct the Assessing Officer to restrict the service fee @ 0.30%.
Deduction u/s 80IB and 80IC without further allocation of the Head Office expenses to various units - In the present assessment year i.e. 2009-10, the assessee had 9 industrial units undertaking manufacturing of products and all these units are eligible for deduction u/s 80IB/80IC, the details are reproduced in page 12 of the assessment order itself. During the year also the assessee claimed the deduction u/s 80IB/80IC as per the details given. These units are eligible for the deduction u/s 80IB/80IC which is identical to that of earlier years i.e. 2007-08 and 2009-10. Hence, the CIT(A) has rightly allowed this deduction. It is pertinent to note that similar allocation of expenses and depreciation made by the Assessing Officer in A.Y. 2008-09 was also deleted by the Tribunal.
Disallowance of expenses u/s 14A r.w.r. 8D - HELD THAT:- It is pertinent to note that the identical issue of disallowance under Section 14A of the Act in absence of any exempt income has been decided by the Tribunal in the assessee's own case for the A.Y. 2008- 09 [2021 (2) TMI 1250 - ITAT DELHI] - This issue is also covered in favour of the assessee by various decisions of the Hon’ble Delhi High Court wherein it is held that in the absence of any exempt income, no disallowance can be made under Section 14A. Thus, the CIT(A) has rightly deleted the addition of ₹ 5.22 crore under section 14A of the Act. Ground No. 4 of the Revenue’s appeal is dismissed.
Allowability of ESOP expense under Section 37 and Exemption of excise duty embedded in sales of Glucose Unit, Baddi (HP) - HELD THAT:- As in assessee's own case [2021 (2) TMI 1250 - ITAT DELHI] again admitted said additional ground and restored the issue to the file of the Assessing Officer with a direction to adjudicate the issue in accordance with the law.
-
2022 (1) TMI 1144
Revision u/s 263 - addition u/s 14A - CIT disregarded the contention of the assessee by taking view that Rule 8D is mandatory in nature from A.Y. 2008-09 and the AO is bound to compute disallowance as per formulae provided under Rule 8D - HELD THAT:- The assessee has earned exempt income in the form of dividend income of ₹ 202,377/-. Further the AO while passing the original assessment order has already disallowed Rs. ₹ 2,35,039/ under section 14A. Now, it is settled position under the law that disallowance under section 14A must not exceed the exempt income. Thus, the order passed by the AO is not erroneous.
Therefore, the twin condition as enumerated in section 263 of the Act is not fulfilled in the present case, therefore, the order passed by the ld. Pr. CIT is not sustainable in law, which we set-aside. Thus, the assessee succeeded on the primary submissions of the ld. AR of the assessee. - Decided in favour of assessee.
-
2022 (1) TMI 1143
Validity of appeal before CIT-A u/s 246A - Assessability of capital gains in the hands of Individual or HUF - Assessees have contended that the capital gains, if any, is assessable in the hands of the HUF, they filed appeal memo in form No.35 mentioning the Permanent Account Number (PAN) of HUF - CIT(A) noticed that the assessing officer has passed the assessment order in the status of individual, but the assessees have filed the appeals before him mentioning the PAN of HUF, in whose hands there was no assessment order - HELD THAT:- It is an undisputed fact that the assessments have been passed in the individual status of the assessees. However, while filing appeal before Ld. CIT(A), the PAN belonging to HUF status of the assessees has been mentioned. From the grounds of appeal urged before Ld. CIT(A), which is extracted by Ld. CIT(A) in his order, it can be noticed that the assessees have taken a plea that the capital gain, if any, arises only in the hands of HUF. Accordingly, it appears that the PAN of HUF has been mentioned in Form No.35 instead of mentioning the PAN of individual.
In our considered view, in the interest of natural justice, the Ld CIT(A) should not have been too technical and should have allowed the assessees to filed revised Form No.35. Accordingly, we are of the view that these assessees should be allowed to file Form No.35 mentioning the PAN of individual. Further, we notice that the Ld. CIT(A) has not adjudicated the grounds urged on merits. Under these set of facts, we are of the view that all the issues urged before us are required to be restored to the file of Ld. CIT(A) for adjudicating them on merits. Accordingly, we set aside the orders passed by Ld. CIT(A) in the hands of the assessees herein and restore all the issues to his file for adjudicating them on merits. All the assessees are also directed to file revised Form No.35 mentioning PAN of individual status, so that the defect pointed out by the Ld. CIT(A) would get rectified. Assessee appeal allowed for statistical purposes.
-
2022 (1) TMI 1142
Jurisdiction - power of DRI to issue SCN - Proper Officer under section 17, 28 and 28AAA and second proviso of section 124 of the Customs Act, 1962 - undervaluation of the goods - evasion of payment of appropriate duties of customs - HELD THAT:- The Hon'ble jurisdictional High Court in the case of Quantum Coal Energy P. Ltd. [2021 (3) TMI 1034 - MADRAS HIGH COURT] has applied the decision of the Hon'ble Supreme Court to hold that the Show Cause Notice issued by DRI is invalid and the proceedings initiated cannot sustain. The Tribunal in the case of Nitin Jatania vs. Commissioner of Customs (Adjudication), Mumbai [2021 (11) TMI 342 - CESTAT MUMBAI] had occasion to analyse the very same issue as to whether DRI has jurisdiction to issue Show Cause Notice. Applying the decision of the Hon'ble Supreme Court in Canon India Pvt. Ltd. [2021 (3) TMI 384 - SUPREME COURT], the Tribunal held that the Show Cause Notice issued by DRI is invalid.
With regard to the appeal filed by M/s. Mining Machinery Service, the learned counsel for the appellant has submitted that the proprietor of the firm is no more and produced the death certificate dated 17th July 2020. Therefore, the appeal filed stands abated in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982.
The Show Cause Notice having been issued by DRI are ab initio void - Appeal allowed - decided in favor of appellant.
-
2022 (1) TMI 1141
Jurisdiction - power of Principal Additional Director General, DRI to issue SCN - proper officer under section 28 of the Customs Act to issue the notice or not - HELD THAT:- This precise issue was examined by the Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT]. The Supreme Court observed that the nature of the power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import is a power that has been conferred to review the earlier decision for assessment. This power which has been conferred under section 28 of the Customs Act on the proper officer, must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods. Thus, the Additional Director General, DRI did not have the jurisdiction to issue the show cause notice.
The Punjab and Haryana High Court in M/S STEELMAN INDUSTRIES VERSUS UNION OF INDIA AND OTHERS [2021 (8) TMI 1236 - PUNJAB AND HARYANA HIGH COURT] also, in view of the decision of the Supreme Court in Canon India, allowed the Writ Petition and set aside the entire proceedings arising from the show cause notice as the Additional Director General, DRI was not the proper officer.
The show cause notice dated 30.01.2009 issued by the Principal Additional Director General, DRI under Section 28 of the Customs Act is, therefore, without jurisdiction as the said officer was not the proper officer and, therefore all proceedings undertaken by the Department on this show cause notice is, therefore, without jurisdiction. The order dated 29.05.2020 passed by the Principal Commissioner, therefore, cannot be sustained - In this view of the matter, it would not be necessary to examine the issues raised on the merits of the appeal.
Appeal allowed - decided in favor of assessee.
-
2022 (1) TMI 1140
Valuation of export goods - confectionary spare parts - rejection of declared value - redetermination of value for the purpose of claiming export benefit - old and used goods or not - Hawala transactions or not - HELD THAT:- Although in the show cause notice, the description of exported machine is old and used and there is no allegation in the show cause in respect of description of goods. Therefore, the argument of ld.AR is not sustainable.
Only issue is alleged in the show cause notice with regard to the value of export consignment. In the impugned order, there are no whisper about value when the appellant has received the total value of export consignment and there is no allegation that they have received payment through Hawala from the buyer and from the overseas, in that circumstance, how the value of export consignment be rejected.
Shri Anil Kumar Soni, chartered engineer estimated the value of goods of ₹ 55,00,000/- and the value was not accepted by the competent authority and the competent authority again referred the matter to another chartered engineer, who gave the report that the value of goods is ₹ 43,00,000/- and the competent authority is not satisfied with the report and referred the matter to another chartered engineer, who opined that estimated value of export goods is ₹ 38 lakhs. There is no huge difference amongst the three values supplied by the 3 different chartered engineers. On this ground alone, the value arrived by the chartered engineer is to be rejected - No other evidence has been brought on record by the Revenue with regard to the value of export consignment. In that circumstance, the value of export consignment cannot be rejected.
Appeal allowed - decided in favor of appellant.
-
2022 (1) TMI 1139
Seeking grant of Bail - Conspiracy - allegation of a fraudulent Merchanting Trade (MT) business - submission of false/deceptive statements/financials to different Banks to avail credit facility in the form of opening of Letter of Credit - loss to the Public Sector Banks - abuse of applicant's position as promoter/directors of FIL to cause wrongful loss to public sector Banks - HELD THAT:- Applicant had knowingly falsified the books of accounts and the financial statements of FIL deliberately concealing material facts thereby including public sector Banks to fraudulently credit facilities to FIL which ultimately remained outstanding at ₹ 4041 Crores as account of FIL became NPA. Applicant is also stated to be indulged in speculative currency trading unrelated to MT being undertaken by RGC thereby gambling with Banks money which resulted in huge loss. Applicant was instrumental in holding the currency losses in the books of accounts under the garb of debit notes. These debit notes were raised against foreign parties and made part of trade receivable. Later on, these debit notes were adjusted against the payment received from the LC rotated funds. Falsified financial statements of FIL signed by the applicant was filed with ROC and was submitted to public sector Banks depicted false MT trade receivables. The applicant provided false and bogus documents to the Banks.
Abuse of position as promoter/directors of FIL to cause wrongful loss of ₹ 4041 Crores to public sector Banks - HELD THAT:- Applicant utilized the corporate identity of FIL to perpetrate fraud of rotating the funds obtained through Letter of Credits discounting for mopping the interest arbitrage available between LC issuance and discounting charges and that between the interest on fixed deposits. This whole conspiracy was played under the garb of doing MT - The sum and substance of the outcome of the investigation conducted in the matter and the facts mentioned in the complaint for prosecution are that concerned Companies were engaged in fraudulent Merchanting Trade and caused wrongful loss to the Public Sector Bank to the tune of ₹ 7820 Crores approximately applying different modus operandi including siphoning of Bank funds through Merchanting Trade; falsification of financial statement of the Companies involved in the matter by not showing true and fair views.
Considering the role of the applicant as alleged against him, nature and gravity of the offence and also the evidence available on record in support thereof, prima facie, it appears that huge amount received by the applicant through Letter of Credit has become NPA due to nonpayment of advance taken by the Company on account of falsification in the books of account furnished by the company before the Bank concerned, therefore, the allegations levelled against the applicant and the company concerned cannot be overlooked at this stage - this court is further of the opinion that the applicant is not entitled to bail even under Section 439 Cr.P.C. even if the bail application is not tested on the touchstone of twin conditions as enumerated in Section 212(6) (ii) of the Company Act, 2013 for the reason that offence committed by the applicant is an economic offence which affects the economy of the nation.
Application rejected.
-
2022 (1) TMI 1138
Sanction of Scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various notices issued - directions with regard to issuance of various notices also issued.
The scheme is approved - application allowed.
-
2022 (1) TMI 1137
Approval of fair value of Equity share - applicability of Jantri rate - allegation of unrealistic valuation report - buy back of shares - amicable settlement between the parties - Section 421 of the Companies Act, 2013 - HELD THAT:- It is an admitted fact that the MoU was never implemented as seen in para 53 of the final Order dated 13.04.2017. The Impugned Order dated 16.10.2020 has only given an opportunity to the Appellant to sell, have option, quote a face value. As the Order dated 27.09.2019 has attained finality and the Original Order which was appealed to by the Appellant, was dismissed by this Tribunal, we are of the considered view that the contention of the Learned Counsel for the Appellant that the NCLT was traversing behind the decree, is untenable.
It is clear from the submissions that the Appellant was ready to accept the Order given by the first Respondent and a direction was issued to both the parties to file a Joint Affidavit indicating the terms of which they seek to settle the matter jointly. As no settlement was arrived at, despite the fact that the first Respondent wanted to put an end to the dispute, being a Senior Citizen filed an Affidavit that he was ready to sell the share at an average value of the shares as per the Order dated 27.09.2019 and ready to purchase the shares at 5% higher value than the average value of shares as per the Order dated 27.09.2019.
Despite an opportunity given to the Appellant to submit their offer in a sealed cover before NCLT, the Appellants refused to do so. Dissatisfied with that direction, they had approached this Tribunal and further delayed the proceedings on the ground that ‘settlement talks were going on’. Taking into consideration the factual matrix of the matter and that 3 years has lapsed, since the Impugned Order was passed,5 years has passed since the main petition dated 13.04.2017 has attained finality, to avoid any further delay, to put an end to this family dispute, and further having regard to the fact that the Appellant has challenged a reasonable, fair and a judicious Order passed by NCLT; in the interest of justice, we do not find it a fit case to remand the matter back to NCLT for any further evaluation - ‘Mean Value’ as specified in the Order dated 27.09.2019 means ‘average value’ and the Respondent is ready to sell the shares at this average value or purchase the shares @5% higher than the average value. The Appellant is bound by the NCLT Order dated 27.09.2019 which has since attained finality. The Appellant is at liberty to choose either of the options of purchase/sell given by the first Respondent and shall file an Affidavit of compliance before the NCLT within 4 weeks from today.
Appeal disposed off.
-
2022 (1) TMI 1136
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - accrual of right to apply - amount of interest which was payable on 30th June, 2015 was not paid by the Corporate Debtor - time limitation for filing an Application under Section 7 of the Code - Insufficiently stamped documents - admissible evidence or not - HELD THAT:- Section 7 (1) of the Code provides that a Financial Creditor may file an Application for initiating ‘Corporate Insolvency Resolution Process’ against the Corporate Debtor before the Adjudicating Authority when a default has occurred. The definition of Debt under Section 3(12) of the Code the expression used is ‘Default means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not repaid’ - In the present case, non-payment of amount of interest on 30th June, 2015 was non-payment of part of debt since interest was also part of debt. The submissions of Learned Sr. Counsel for the Appellant is agreed upon that there was default when interest was not paid on 30th June, 2015.
When a Financial Creditor has not filed the Application on first default i.e. payment of interest whether he is precluded to file Application for subsequent defaults i.e. when default is committed for an instalment or for whole debt when it becomes due? - HELD THAT:-
The Financial Creditor is at liberty to file Section 7 Application but is neither mandatory nor necessary that on first default Financial Creditor should rush to the Insolvency Court. Financial Creditor may await and give more time to Corporate Debtor to find out as to whether actually the Corporate Debtor has become insolvent and unable to repay the debt and even Financial Creditor ignores non-payment of interest when the Corporate Debtor first defaulted it shall not lose its right to file Application under Section 7 of the Code when default of instalment or whole amount became due. The only statutory requirement is that default as claimed in the Application under Section 7 should be within three years from the date when application is filed under Section 7 of the Code because any default of amount committed before three years of filing of the Application shall become time barred debt and cannot be said to be payable and due within the meaning of Section 3(11) and Section 3(12) of the Code.
Hon’ble Supreme Court of India in B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT] had occasion to consider the law of limitation in reference to Insolvency and Bankruptcy Code and Section 3(11) and 3(12). Hon’ble Supreme Court held that Financial Creditor or Operational Creditor can initiate an application with relation to debt which has not become time barred.
Thus, non-filing of the Application under Section 7 of the Code by the Appellant on default of interest which occurred on 30th June, 2015 shall not foreclose the right of the Financial Creditor to file an Application under Section 7 of the Code when default on first instalment occurred on 30th November, 2015 and when entire loan became due by notice dated 05.01.2017 - Appellant has not claimed in Section 7 Application the amount of defaulted interest on 30th June, 2015. Thus the Application filed by the Financial Creditor under Section 7 claiming amount of default of the first instalment and default of the entire loan which occurred on 30th November, 2015 and 01st February, 2017 was well within time which has been filed on 28th November, 2018. The submission of Mr. Ramji Srinivasan, Sr. Advocate that no date of default has been given in Part-IV of Section 7 Application is not correct when Item 2 of Part-IV is read, it is clear that computation of amount from the date of default as on 31st October, 2018 in tabular form was from 30th November, 2015 thus 30th November, 2015 was clearly indicated as date of default under Section 7 Application.
Insufficiently stamped documents - admissible evidence or not - HELD THAT:- The Supreme Court in N.N. GLOBAL MERCANTILE PVT. LTD. VERSUS INDO UNIQUE FLAME LTD. AND ORS. [2021 (1) TMI 1121 - SUPREME COURT] held under the Maharashtra Stamp Act, 1958 the work order is chargeable to extend stamp duty hence till the stamp duty is paid work order remain enforceable. The present is not a case where proof of financial debt by financial Creditor was only the Facility Agreement dated 22nd May, 2013 and 19th August, 2013, other materials including Registered Mortgage Deed clearly proved the financial debt. Furthermore, present is a case where Corporate Debtor has not denied receiving of Financial Facility as extended by Standard Chartered Bank and there is no denial of disbursement of 5 million dollars in three tranches and there was sufficient material before the Adjudicating Authority to come to the conclusion that default has been committed in payment of debt.
The decision of the Adjudicating Authority that Corporate Debtor has committed default is not vitiated which was fully supported by the materials on record even if Facility Agreement dated 22nd May, 2013 and 19th August, 2013 are ignored. The Corporate Debtor has taken a Financial Benefits from Standard Chartered Bank and obtained disbursal in three tranches of 5 Million Dollar each, which disbursements have not been denied in a pleading before the Adjudicating Authority - The submission of the Appellant that facility agreement being not stamped Section 9 Proceeding ought not to have proceeded has to be rejected - Appeal dismissed.
-
2022 (1) TMI 1135
Maintainability of application - initiation of CIRP - Dishonor of Cheques - cheques were given prior to the Sale Deed - Corporate Debtor failed to make repayment of its dues - Operational Creditors or not - pre-existing dispute or not - whether the claim made by the Respondent is an Operational Debt and the Respondent is an Operational Creditor? - HELD THAT:- The word claim as defined under sub section 6 of section 3 means (a) a right to payment, whether or not, such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured. Further, sub section 11 of Section 3 defined ‘debt’ means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. The word “Operational Creditor” defined under sub Section 20 of Section 5 of I&B Code, 2016, “Operational Creditor” means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred.
In the instant case, the covenants as mentioned in the Memorandum of Understanding dated 08.06.2015 clearly mentions and admits that the payment of ₹ 6 Crores is a liability on the part of the Corporate Debtor for the services rendered. Therefore, the definition of “Operational Debt” clearly attracts in the instant case, since the Respondent had provided services and in consideration thereof the Corporate Debtor admit its liabilities for the said services. Further, the Respondent also clearly fall under the category of “Operational Creditor” since an operational debt is owed to the Operational Creditor.
This Tribunal comes to a resultant conclusion that the Respondent’s claim is an Operational Debt and the Respondent falls under the category of Operational Creditor and there is no pre-existence of dispute. Further, it is not time barred as seen from the Demand Notice issued by the Respondent and reply thereof by the Appellant - this Tribunal hold that the order passed by the Adjudicating Authority has no infirmity or illegality - appeal dismissed.
............
|
9911796707
