|
Advanced Search Options
Case Laws
Showing 321 to 340 of 2056 Records
-
2019 (7) TMI 1737
Oppression and Mismanagement - Seeking suspension of the then Board of Directors of Respondent No. 1 and further seeking restraint on alienation of moveable and immoveable properties of the respondents named therein during the pendency of investigation into the affairs of Respondent No. 1 and its subsidiaries - liability arising out of fraudulent conduct of business as such conduct can be past or present - siphoning of public money - HELD THAT:- Order 1 Rule 10(4) provides that Where defendant is added, plaint to be amended. Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copies of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant - thus, it is clear that Order 1 Rule 10(2) gives discretion to the court to struck out any of the parties of the case or to add any of the party whose impleadment is necessary in order to enable the court to effectually and completely to adjudicate upon and settle all the questions involved in the suit. After passing such order by the court, Rule 10(4) provides that plaint should be amended and copy of the amended plaint to be served.
In the present matter, Union of India has sought impleadment of the proposed Respondents mainly on the ground that in the 2nd SFIO report the role of proposed respondents has been found conniving, colluding with coterie to conceal material information/facts and in fraudulently falsifying the books of accounts and thereby financial statements from FY 2011-12 to 2017-18 - Director (Prosecution) appearing on behalf of Union of India has emphasized that the entire exercise of initiating this public interest petition will be useless unless action is not initiated against the persons who have siphoned of the public money.
It is pertinent to mention that IL&FS (R1) procured funds from the market through short term instruments and invested in its group companies by way of giving long term loans and advances, which was prejudicial to the interest of the group and therefore the financial markets at large. Based on its bogus and fictitious but good credit rating and financial statements, Respondent No. 1 and its key subsidiaries such as IL&FS Financial Services Ltd. (IFIN) and IL&FS Transportation Networks Ltd. (ITNL) raised short term market funding through commercial papers /inter corporate deposits and passed the same to their project SPVs/ group companies (which were unable to raise funds externally), for helping them service their debt obligations. The CoD being fully aware, thereby hid and avoided possible defaults resulting into increasing indebtedness on a standalone basis. This is virtually an act of fraud leading to a spiraling debt of over ₹ 91,000 crores of the IL&FS group.
It is pertinent to mention that in 2nd SFIO Report, no role of Independent director has been specified. Therefore, their impleadment in the case is not justified, at this stage - It is important to point out that on perusal of the facts of the case of Shanta Prasad Chakravarty, it is clear that in that case, some error was pointed out in audit work which was ratified later on, therefore, auditor’s name from the array of parties were struck of by NCLT, Guwahati Bench. That case was based on error committed by auditors and the error was committed by auditors and their bonafide were also verified from the Report which was submitted after the annual financial report. Therefore, the court allowed the application to struck of their name from the array of the parties.
It is pertinent to mention that Order 1, Rule 10 (2) of CPC authorizes the court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added - It is also important to point out that in the 2nd SFIO Report, no role of Independent director has been specified. It is observed from the record that even though Mr. Surinder Singh Kohli, Ms. Subhalakshmi Panse were the Independent Directors, they were also the part of Audit Committee of IFIN.
The petitioner are directed to implead the names of Proposed additional Respondent Nos. 321 to 343 to the Company Petition No.3638/2018 - application allowed.
-
2019 (7) TMI 1736
Input Tax Credit - GST paid on the goods or services i.e. supply and installation of Sewage Treatment Plant, supply and installation of Fire-fighting system, supply of Cable for transmission of electricity, supply of other material for lying of Cable and electrical installations and Laying of Cable and electrical installations for transmission of electricity - Section 17(5) of CGST Act, 2017 - HELD THAT:- All the goods or services or both are covered under works contract and therefore, Input tax credit is not allowed as per Section 17(5)(c) of the CGST Act, 2017 - In the explanation given or the purposes of clauses (c) and (d) of Section 17 (5) of the CGST Act, 2017; it is clear that “construction” includes additions to the extent of capitalisation, to the said immovable property. It means the applicant has constructed a building for the purpose of leasing or renting out the same for running an industry and the goods in question have been added to the building already constructed. Therefore, the Input tax credit is not allowed as per Section 17(5)(d) of the CGST Act, 2017 on all the items in question.
The “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but with some exclusions as above. In the present case the applicant admits that the Sewage Treatment Plant is attached with the civil structure of the building. Thus, it is clear that it is a part of the civil structure of the building and part of the building so constructed. Therefore the applicant’s contention that the Sewage Treatment Plant is covered under the definition of “plant and machinery” is rejected because it is covered under the exclusion (i) of the explanation - as per the definition of goods some movable property is excluded from the category of goods whereas at the same time, some immovable properties are treated as goods. But the terms movable and immovable property have not been defined under the GST Act. In laymen terms, any goods that can move are movable property and which cannot be moved is immovable property.
As per the definition of immovable property contained in the General Clauses Act and the Transfer of Property Act, it is clear that things attached to the earth or permanently fastened to anything attached to the earth is immovable property. Anything imbedded in the earth or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached, qualifies to be attached to the earth - In the present case, the applicant constructed a building for the purpose of leasing or renting out the same for running an industry. The said building is imbedded in the earth as per clause (b) above and the goods in question are attached to the walls or building so imbedded in the earth for the permanent beneficial enjoyment of the building - the contention of the applicant regarding installation of Sewage Treatment Plant and Fire-fighting system to be covered under plant and machinery is concerned, it is stated by the applicant that the same is installed as per statutory requirement. Thus it is clear that these goods have been installed in the building for the permanent beneficial enjoyment of the building - Input tax credit is not allowed as per Section 17 (5) (d) of the CGST Act.
Cable and other material such as PCC Poles, structural steel, cable end kit, HDPE pipes, GO switch etc. - capital goods or not - HELD THAT:- These goods also have been installed in the building for transmission of power from outside sources upto the premises. Thus, these goods are also for permanent beneficial enjoyment of the building. Therefore, Input tax credit is not allowed as per Section 17(5)(d) of the CGST Act.
The Supreme Court in TRIVENI ENGINEERING & INDUS. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2000 (8) TMI 86 - SUPREME COURT] case observed that in order to determine whether an article is permanently fastened to anything attached to the earth, both the intention as well as the factum of fastening has to be ascertained from the facts and circumstances of each case. The Allahabad High Court in THE COMMISSIONER TRADE TAX UP. LUCKNOW VERSUS TRIVENI NL. LTD. [2014 (4) TMI 842 - ALLAHABAD HIGH COURT] has observed that “permanently fastened to anything attached to the earth” has to be read in the context for the reason that nothing can be fastened to the earth permanently so that it can never be removed. If the article cannot be used without fastening or attaching it to the earth and it is not removed under ordinary circumstances, it may be considered permanently fastened to anything attached to the earth.
The ITC of GST paid on the Sewage treatment plant; Fire Fighting System; Cable for transmission of electricity from feeding point to the building; other material such as PCC Poles, structural steel, cable end kit, HDPE pipes, GO switch etc. & Laying of Cable and electrical installations for transmission of electricity is not admissible to the applicant.
-
2019 (7) TMI 1735
Reopening of assessment u/s 147 - addition made u/s 56(2)(viib) - HELD THAT:- gone through the original assessment order and the details filed before the AO during the course of original assessment proceedings and noted that the assessee vide letter dated 17.12.2011 has filed complete details of share premium account and also the valuation report of the assessee company valuing the share premium at ₹ 6400/- per share
The original assessment was passed under section 143(3) of the Act after perusal of the documents as required by the AO with respect to issue of share subscription money received after proper application of mind. We noted that the AO had called for assessee’s explanation on issue, which is in his opinion needed consideration and only after verification of details passed the original assessment order.
Once an assessment is completed under section 143(3) of the Act after raising a query on a particular issue and accepting assessee’s reply to the query, the AO had no jurisdiction to reopen the assessment unless and until there is additional information/tangible material before the AO to come to the conclusion that there is an escapement of income.
This issue has been dealt in by Hon’ble Bombay High Court in the case of Godrej Agrovet Ltd [2010 (2) TMI 27 - BOMBAY HIGH COURT] wherein it is held that the Assessing Officer cannot act in excess of the restrains on his jurisdiction to reopen an assessment in exercise of the powers under section 147 read with section 148 - Decided in favour of assessee.
-
2019 (7) TMI 1734
Classification of goods - Seat adjuster - to be classified under Chapter 8708 at Serial No. 170 of Notification No. 1/2017- Central Tax (Rate) dated 28.06.2017 or under Chapter 9401 at Serial No. 435A of Notification No.1/2017- Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017? - HELD THAT:- Seat adjuster helps the driver and co-passenger to get into the most comfortable leg position inside the car by using it to move the seat forward and backward as per their convenience to maintain safe posture and position while driving. It helps in adjusting the position of the seat. Additionally, ‘seat adjuster’ contains necessary safety features to protect the occupants in case of a collusion/accident. These are the features of the product ‘Seat adjuster’ and it does not seem to be a part of a seat - The Applicant themselves changed the classification of ‘seat adjuster’ from HSN 9401 to HSN 8708 with effect from April 1, 2019 and paid the applicable GST from November 2017. It seems that the applicant took a right step as a measure of caution and to avoid interest liability.
The seat adjuster would be accessories to the motor vehicle and would merit classification under chapter heading 8708, because they are fitted in the motor car for adjustment of the seats for the convenience and comfort of the passangers. Chapter heading 8708 covers parts and accessories of the motor vehicles of headings 8701 to 8705.
-
2019 (7) TMI 1733
Penalty u/s 271(1)(c) - defective notice - non specification of charge - HELD THAT:- As decided in SMT. BAISETTY REVATHI [2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT] when the proceedings are penal in nature, resulting in imposition of penalty ranging from 100 per cent to 300 per cent of the tax liability, the charge must be unequivocal and unambiguous. When the charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, the revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club both by interjecting one or between the two.
Considering the above factual and legal discussions narrated above, in our view the penalty order levied by assessing officer and confirmed by ld CIT(A) is not sustainable on factual as well as on legal aspect. Therefore, we direct the assessing officer to delete the entire penalty levied under section 271(1) (c) - Decided in favour of assessee.
-
2019 (7) TMI 1732
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of default or not - Dishonor of Cheque - non-compliance with the terms of the amicable settlement - post dated cheques issued against the payment of the claim made by the petitioner - HELD THAT:- The default stands established and there is no reason to deny the admission of the petition. It is needless to say that if any payment has been made that will be looked into by the Resolution Professional. CS Mr. Vekas Kumar Garg, having registration no. IBBI/IPA-002/1P-N00738/2018-2019/ 12291with the Address:- D-4 B, First Floor Ramprastha, Near Raghunath Temple, Ghaziabad (Uttar Pradesh) -201011, is appointed as IRP who has filed his declaration in accordance with Rule 9 of Adjudicating Authority Rules and he is to act as an IRP by performing all his duties.
Te provisions of Section 7 (2) and Section 7 (5) of IBC have been complied the requirements of Section 7 of the Code for initiation of Corporate Insolvency Resolution Process stand fulfilled and accordingly the present petition is admitted - petition admitted - moratorium declared.
-
2019 (7) TMI 1731
Entitled for deduction u/s 80P on account of addition u/s. 68 - HELD THAT:- Since the assessee’s business is to accept deposits and lend advance inter alia with other activities, we are inclined to hold that income resulting on account of addition made u/s. 68 cannot be considered as income derived from business though it is income of the assessee. Even if the addition is made u/s. 68, it does not necessarily follow that such credit represents business income of the assessee as a general practice unless there is clear evidence that it represents business receipts. In the present case, it relates to granting of deduction with regard to profit/grain derived from business and unless it is proved that it is from business, deduction u/s. 80P cannot be granted. The contention of the assessee is not acceptable in view of the clear provisions of section 80P of the Act and the impugned additions cannot be said to be business receipts.
Merely because the assessee is running a business in which are found certain unexplained cash credits, it does not necessarily follow that such credits represent suppressed business receipts and there would be no error of law in regarding the unexplained cash credits as income of the assessee from some independent and unknown sources unless there are strong reasons for connecting the unexplained cash credits with known sources of income of the assessee, there would be no alternative to treating them as income from other sources.
Reliance is also placed on the judgment of Deviprasad Viswanath Prasad [1968 (8) TMI 5 - SUPREME COURT] wherein it was held that when the assessee pleads that the impugned cash credits came out of suppressed profit, it is for him to prove that it is so. If these receipts are allowed by treating as business receipts, then the assessee will be entitled to set off of business expenditure against these receipts which is not permissible. The assessee's business is to accept deposits and lend advance inter alia with other activities. Being so, we are inclined to hold that the assessee is not entitled for deduction under section 80P of the Act on account of addition u/s. 68 of the Act. Thus, this ground of appeal of the assessee is partly allowed for statistical purposes.
-
2019 (7) TMI 1730
Money Laundering - proceeds of crime - contention of the applicant is that the name of the applicant has surfaced in the statement of Vikram Dixit @ Vinny Sodhi who has stated that he has given ₹ 40,000/- to the applicant by cheque which has been treated as proceeds of the crime by investigating agency - HELD THAT:- Without expressing any opinion on the merits of the case and considering the nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence, reasonable apprehension of tempering of the witnesses and prima facie satisfaction of the Court in support of the charge, the applicant is entitled to be released on bail in this case.
Let the applicant be released on bail on his furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned with the conditions imposed - Application allowed.
-
2019 (7) TMI 1729
Deduction u/s 80P - interest income earned - HELD THAT:- Assessee a cooperative society is eligible for deduction u/s.80P(2)(d) of the Act in respect of the interest income earned by the assessee from either any other cooperative society or from a cooperative bank. Grounds raised by the assessee are allowed. See KSHATRIY GADKARI MARATHA COOPERATIVE CREDIT SOCIETY LTD. [2019 (4) TMI 1932 - ITAT MUMBAI] and KALIANDAS UDYOG BHAVAN PREMISES CO-OP SOCIETY LTD. [2018 (4) TMI 1678 - ITAT MUMBAI] - Appeals of the assessee are allowed.
-
2019 (7) TMI 1728
Reopening of assessment u/s 147 - Non disposing off appellant’s objections - HELD THAT:- The fact that the assessee had raised objections against the reopening of the assessment and the same was not disposed-off by Ld. AO, remain uncontroverted. Nothing on record would establish that the assessee’s objections against reopening of assessment were ever considered and rejected by Ld. AO at any point of time, during reassessment proceedings.
Thus the action of Ld. first appellate authority in upholding the reassessment proceedings, could not be said to be in accordance with law. Therefore, we quash the reassessment order - Decided in favour of assessee.
-
2019 (7) TMI 1727
Attachment of properties - release of attached assets of the ‘Corporate Debtor’ - overriding effect of IBC over PMLA - declaration of ‘Moratorium’ for prohibiting some of the action - the decision in the case of VARRSANA ISPAT LTD. VERSUS DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT [2019 (5) TMI 1468 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI] challenged where it was held that As the ‘Prevention of Money Laundering Act, 2002’ relates to different fields of penal action of ‘proceeds of crime’, it invokes simultaneously with the ‘I&B Code’, having no overriding effect of one Act over the other including the ‘I&B Code’, there are no merits in this appeal.
HELD THAT:- Impugned Order upheld - appeal dismissed.
-
2019 (7) TMI 1726
TP Adjustment - adjustment to the arm's length price of international transaction with the Associated Enterprises (AEs) relating to export of finished goods - Whether or not learned DRP is empowered under the Act to enhance the income in respect of a transaction for which neither any variation has been proposed in the draft order nor the assessee has raised any objection? - HELD THAT:- In respect of an assessee availing the DRP route, power of enhancement would be restricted only to the variations objected to by the assessee. In our humble opinion, this cannot be the intention of the legislature while enacting the provision of section 144C(8) of the Act. The power of enhancement conferred upon the DRP under section 144C(8) of the Act cannot be interpreted in a manner to restrict it only to the variations objected by the assessee - any interpretation of section 144C(8) of the Act leading to curtailment of DRP's power of enhancement would defeat the purpose for which section 144C(8) was enacted. - Explanation brought to section 144C(8) of the Act does not expand the scope of the main provision, but only clarifies it and brings to the fore the intention of the legislature for enacting such provision.
Identical view was expressed by the tribunal also in case of M/s. Hamon Shriram Cottrell Pvt. Ltd. v/s ITO [2014 (1) TMI 69 - ITAT MUMBAI]. In our view, the aforesaid decisions of the Tribunal clearly clinch the issue in favour of the Revenue. In view of the aforesaid, we hold that learned DRP has validly exercised its power under section 144C(8) of the Act. Ground no.2.2 is dismissed.
Whether the internal TNMM, as applied by learned DRP to determine the arm's length price of the export of HPC and beverages to the AEs, is the most appropriate method? - On a perusal of learned DRP's directions, it appears, learned DRP has not at all considered the objections of the assessee in an objective manner. In fact, the segmental results of AE and non-AE segments furnished by the assessee have been rejected by learned DRP on the flimsy ground that the auditor's certificate showing such segmental results is not acceptable since he had not initially audited the books of account of the assessee. What was required to be examined by learned DRP is the correctness of assessee's claim and not who has audited the books of account of the assessee. Further, learned DRP has not provided any valid reason why the benchmarking done by the assessee under external TNMM is not acceptable. Merely because the assessee had entered into transactions both with the AEs and non-AEs, it does not render applicability of external TNMM redundant.
While in the transactions with the AEs creation of market and the end users is not the responsibility of the assessee but in the transaction with non-AEs, it is the responsibility of the assessee to create and maintain the market and end users. Thus, it affects the FAR profile materially which ultimately would have an impact on the profitability. It is quite noticeable, various submissions made by the assessee regarding non-applicability of internal TNMM have been disregarded/ignored by learned DRP without proper examination. Similarly, learned DRP has not provided any valid reasoning why external TNMM is not applicable.
Though, we hold that external TNMM applied by the assessee has to be treated as the most appropriate method in the given facts and circumstances of the case, however, since neither the Transfer Pricing Officer nor learned DRP have examined the acceptability or otherwise of the comparables selected by the assessee, we restore the issue to the Assessing Officer to examine this aspect and determine the arm's length price accordingly after due opportunity of being heard to the assessee.
Notional interest on overdue receivables from the AEs - HELD THAT:- As a matter of policy, the assessee does not charge any interest on overdue receivables either from the AEs or non-AEs. Further, the contention of the assessee that it is a debt free company has not been controverted by the Department. It is also a fact that the assessee raises invoices on the AEs at cost plus 9%. Thus, it can be said that in the mark-up charged, the assessee has factored in the interest element on the overdue receivables. In these circumstances, applying the ratio laid down in the decisions relied upon by the learned Sr. Counsel for the assessee, we are of the view that no adjustment on account of notional interest on overdue receivables from the AEs should be made. Accordingly, we delete the addition. Grounds raised are allowed.
Adjustment to the arm's length price on account of payment of royalty/fee for services - HELD THAT:- While examining the royalty payment in case of Hindustan Unilever Ltd. in assessment year 2013-14, the Transfer Pricing Officer has accepted royalty paid to the AE to be at arm's length. Similarly, in the order passed under section 92CA(3) of the Act in respect of AE, the Transfer Pricing Officer has accepted the royalty payment to be at arm's length. That being the case, the arm's length price of royalty payment at the hands of the assessee cannot be determined at nil. In any case of the matter, it is not disputed that the assessee is remunerated by the AE on cost plus mark-up basis. That being the case, royalty paid to the AE forms part of the cost base of the assessee on which it has charged mark-up @ 9%. In the aforesaid circumstances, if the payment of royalty to the AE is disallowed by determining the arm's length price at nil, then logically the income of the assessee also should be reduced. This is the view expressed in Mercer Consulting Pvt. Ltd. [2016 (8) TMI 62 - ITAT DELHI]. Thus adjustment made by determining the arm's length price of royalty payment at nil deserves to be deleted.
-
2019 (7) TMI 1725
Addition u/s 68 - bogus share application money and share premium received as bogus accommodation entries provided by Shri Mukesh Choksi and Shri Shirish Shah - CIT-A deleted the addition - HELD THAT:- In the present assessment year assessee has submitted that it has submitted all the information and documents. Not specific defect in the same has been pointed out by the assessing officer. Assessing officer has solely gone on the investigation done in the case of third parties. As a matter of fact, no summons were issued by the assessing officer to the share applicants the present case. For assessment year 2006-07, even notice under section 133(6) were not issued.
As assessee has discharged its onus and no addition under section 68 is warranted. Accordingly we uphold the order of learned CIT-A. - Decided in favour of assessee.
-
2019 (7) TMI 1724
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of Financial debt and dispute or not - Non-performing asset - HELD THAT:- This Tribunal issued notice to the Corporate Debtor on 22nd February, 2018 which was duly received by the Corporate Debtor who sought time to file reply on 4th April, 2018, and after filing the rejoinder by the Financial Creditor, time was sought by the Corporate Debtor for settlement. However, request for seeking further time made on behalf of the Corporate Debtor was objected to by the Financial Creditor after his pleadings were completed. The matter has been heard finally on 3rd July, 2019. The Counsel for the Financial Creditor has taken us through the contents and averments made in the application and also through various documents placed on record. While hearing the Counsel for the Corporate Debtor, the Corporate Debtor has mainly submitted that the petition is defective and cannot be accepted because the documents and bank statements enclosed with the application are in violation of the Bankers Books Evidence Act, 1891.
In the instant case, there is no plea of limitation. This application was filed in time before the expiry of the period of limitation. So even if there are certain errors in calculation of the debt due, or that the statement of account was not updated immediately before the filing of this application, according to us, the plea of limitation is devoid of any merit. We are on summery trial. The law is settled that "a limited inquiry cannot be converted into a full dressed trial"
The application filed by the Financial Creditor under Section 7 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s. Amrit Fresh Private Limited is hereby admitted - moratorium declared.
-
2019 (7) TMI 1723
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Financial Creditor - Financial Debt - HELD THAT:- The procedure in relation to the initiation of Corporate Insolvency Resolution Process by the "Financial Creditor" is delineated under Section 7 of the Code, wherein only "Financial Creditor" / "Financial Creditors" can file an application. As per Section 7(1) of the Code, an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors.
In the present case applicant Central Bank of India had sanctioned and disbursed several loan facilities by entering in to loan agreements with the original borrower, which are recoverable with applicable interest. The corporate debtor had undertaken the liability of the borrower in respect of the demerged undertaking including the liability to pay relevant interest. The loan was clearly disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover, the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes within the purview of 'Financial Debt but also the applicant bank can clearly be termed as 'Financial Creditor' of the respondent corporate debtor so as to prefer the present application under Section 7 of the Code.
An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least 1 lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable - In the present case the respondent corporate debtor has admitted in its letter dated 19.11.2018 that it owes ₹ 21.55 Crores to the applicant Central Bank of India. In addition, applicant bank has filed the relevant statement of accounts duly certified in accordance with Bankers' Books Evidence Act, 1891 as per the requirement of Form 1-part V column 7 of the application. Certified copy of statement of accounts pertaining to various loan facilities, kept during the course of banking business basing on which the claim has been raised can be termed as sufficient evidence of the financial debt.
It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record including the admission letter clearly goes to show that respondent has committed default in repayment of the outstanding loan amount - the objection of respondent that applicant is not a financial creditor and that there has been no default on their part cannot sustain.
Respondent has raised another objection that the application preferred in Form-1 is defective - Such insignificant technical objections are only to be iron out and cannot be a ground to reject the application filed under Section 7 of the Code.
The material placed on record including the letter of respondent showing transfer of liability confirms that the respondent corporate debtor committed default in repayment of the financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt - in terms of Section 7 (5) (a) of the Code, the present application is admitted.
Application admitted - moratorium declared.
-
2019 (7) TMI 1722
Registration u/s 12AA denied - Proof of charitable activities u/s 2(15) - scope of inquiry by CIT(A) for the registration u/s 12A and 12AA - HELD THAT:- Sec.12AA(1) requires the Commissioner to whom an application is made for the registration of a Trust or Institution to satisfy himself about the genuineness of the activities of the Trust or the Institution as well as the objects of the Trust or Institution and for that purpose Commissioner is vested with power to call for documents or information and is also empowered to make such inquiries as he may deem necessary in that behalf. The Commissioner is thereupon empowered to pass an order in writing either registering an Institution or if he is not satisfied about the objects of the Trust or Institution and of the genuineness of its activities, to pass an order in writing refusing to register the Trust or Institution. Thus it can be seen that at the time of grant of registration, the Commissioner is not empowered to examine the application of income. The stage for consideration of the relevance of the object of the Trust and the application of its funds arises at the time of assessment.
There is no finding of CIT(E) on the objects of Trust as mandated by the provisions of the Act as noted above. Further it is also not in dispute that assessee had made an application for registration in 2014 which was not been acted upon and therefore assessee filed 2nd application in 2018.
Considering all, we restore the issue back to CIT(E), Pune to decide the issue of registration u/s 12AA of the Act in accordance with law and after granting reasonable opportunity of hearing to the assessee. We also direct the CIT(E) to dispose of the application within three months of the receipt of the present order. Appeal of the assessee are allowed for statistical purposes.
-
2019 (7) TMI 1721
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- This Petition reveals that there is a debt as defined in Section 3(11) of IBC; there is a default within the meaning of Section 3(12) of IBC; the application of the Financial Creditor is complete; an amount of more than Rupees One Lakh is a due and payable and in default and no disciplinary proceedings are pending against the proposed resolution professional. Therefore, this petition deserves to be admitted.
Application admitted - moratorium declared.
-
2019 (7) TMI 1720
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor - existence of debt and dispute or not - time limitation - HELD THAT:- The expressions "Financial Creditor" and "Financial debt" have been defined in Section 5 (7) and 5 (8) of the Code and very precisely "Financial debt" is a debt along with interest, if any, which is disbursed against the consideration for time value of money - In the present case applicant bank had sanctioned and disbursed the term loan amount recoverable with applicable interest by entering in to loan agreements with the respondent corporate debtor. Even after Demerger the 'Power Division' continued to remain with the respondent Corporate Debtor, whose liability continues towards all assets and liabilities arising only from the 'Power Division'. The debt in question pertains to the facilities granted to the respondent only for 'Power Division' as are set out at part IV of the application.
Time Limitation - HELD THAT:- There is no dispute that the loan account was restructured on 10.06.2013 and was secured by way of mortgage. Under Article 62 of the Limitation Act, when mortgage is created over immovable property and offered as collateral security for the loan, the limitation period is 12 years. Even otherwise it is seen that the Scheme of Demerger was approved on 27.11.2017 inter alia fixing the liability of respondent pertaining to Power Project'. It creates fresh period of limitation from 27.11.2017. In view of the continuous cause of action and also in view of Article 62 of the Limitation Act, the present claim is not barred by limitation.
In the facts it is seen that the applicant bank clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed various loan facilities to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the relevant outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed IRP - the present application is complete in all respect and there has been default in payment of the financial debt.
In terms of Section 7 (5) (a) of the Code, the present application is admitted - Moratorium declared.
-
2019 (7) TMI 1719
TDS u/s 195 - assessee failed to deduct tax at source on payments made to Non-resident parties on account of professional fee - AO rejected the contention of the assessee that services rendered by the 6 non-resident entities are not in the nature of independent personal services - CIT-A deleted the addition - HELD THAT:- DR could not controvert the finding of the Ld. CIT(A) that the article on “ independent personal services” is applicable on income derived by a person who is an individual or firm of individuals or by an individual, whether in his own capacity or any member of a partnership firm. Further in the DTAA with Netherland, the word resident has been used for the benefit of independent personal services, which is wider than individual and the firm, who has rendered services is entitled to benefit of said provision. No error in the order of the Ld. CIT(A) on this issue.
CIT(A) has also analysed in view of the various DTAAs that the services rendered by the those non-resident parties are not Fee for Technical Services.
DR could not establish that any technical knowledge was made available in the process of providing services by the non-resident parties to the assessee. In absence of not making available, the technical knowledge to the assessee, in view of the Article 13 of the respective DTAAs, the payment for services cannot be held as fee for technical services under the provisions of the respective DTAAs. We do not find any error in the order of the Ld. CIT(A) on this issue also.
CIT(A) has further observed that Article 13 of DTAAs provisions defining Fee for Technical Services being more favourable to the assessee as compared to the provisions of section 9(1)(vii) of the Act which has defined Fee for Technical Services, and thus the assessee was having option of choosing more favourable provisions of the DTAAs. In our opinion, the finding of the Ld. CIT(A) is in accordance with the established legal position on the issue.
CIT(A) in view of the decision in the case of Van Oord ACZ India (P) Ltd versus CIT [2010 (3) TMI 167 - DELHI HIGH COURT] has held that the sum payable to the nonresidents was not chargeable to income tax in their hands and thus the assessee was not liable for deduction of tax at source on such payment under the provisions of section 195 and no disallowance under section 40(a)(i) could be made. - Decided against revenue.
-
2019 (7) TMI 1718
Bogus LTCG - Exemption u/s 10(38) disallowed by AO on the ground that the company in which the assessee invested is a penny stock company - Long term capital gains on the sale of shares denied - HELD THAT:- It is not brought on record how the assessee is involved in promoting the penny stock company and how the assessee involved in inflating the shares of the company. Moreover, the copy of the investigation report said to be received from the Directorate of Investigation at Kolkata was not furnished to the assessee. On identical circumstances, this Tribunal in the case of Kanhaiyalal & Sons (HUF) v. ITO [2019 (2) TMI 1640 - ITAT CHENNAI] has remitted back the matter to the file of the Assessing Officer for reconsideration.
Matter needs to be re-examined by the Assessing Officer. Accordingly, orders of both the authorities below are set aside and the issue raised by the assessee with regard to deduction under Section 10(38) of the Act is remitted back to the file of the Assessing Officer. - Decided in favour of assessee for statistical purposes.
............
|
9911796707
