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Showing 361 to 380 of 1574 Records
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2024 (12) TMI 1214
Valuation of Excess Stock found during Survey - addition u/s 69 - Assessee is in appeal objected to the excess quantity determined by the CIT(A) with the plea that the assessee was holding at the time of survey 213 gms. Of 22 K jewellery kept for repair work which was also included in the above said excess stock. He prayed that above said amount must be removed from the excess stock
HELD THAT:- CIT(A) has considered the difference in physical stock. After considering both the parties it is also a fact on record and the nature of business of the assessee that there are certain jewellery which may be kept for the purpose for repair purpose.
In our view assessee should have brought to the notice of the officers at the time of survey itself. Since the nature of business demands that certain jewellery may be kept for repair purpose which could not be denied. For the sake of substantial justice, in our considered view, the difference claimed by the assessee is only Rs. 6,54,853/-, we are inclined to give the benefit of doubt to the assessee to the extent of 50% of the above value. Therefore, we direct the AO to reduce the same from the amount sustained by the CIT(A) i.e. Rs. 36,82,978/-.
Short quantity found during the survey - CIT(A) has adopted gross profit at 25%, which, in our considered view, is excessive. We may have to determine the gross profit relevant to the assessee for the year under consideration. On careful consideration we observe from the Balance-Sheet submitted by the assessee wherein assessee has achieved Rs. 2,34,96,286/- over the sales of Rs. 18,46,56,857/- gross profit @ 12.72%.
Since the AO has accepted the result furnished by the assessee and we are aware that the gross profit may differ from item to item, however, it is difficult to determine at this stage. Therefore, we are inclined to direct the AO to adopt the gross profit rate at 12.72% of the value of short stock determined by the CIT(A) i.e. at Rs. 9,19,350/-. With the above observation we are inclined to partly allow the grounds raised by the assessee.
Appeal filed by the assessee is partly allowed.
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2024 (12) TMI 1213
Addition u/s 68 treating gains from shares as bogus - AO observed that assessee had made huge profit out of this investment because of this, it makes the script as suspicious and penny stock - HELD THAT:- We cannot agree to the AO observation, merely because of huge profit, it does not make the script a penny stock.
The financials of the company are not commensurate with the purchase and sale price in the market. Assessee has purchased the shares directly from the company and through share transfer from other party, subsequently, sold the same in the stock exchange.
There is no discrepancies in the documents filed by the assessee claiming the deductions u/s 10(38). Even though all the characteristics of the penny stock exists in the present case, still the revenue has not brought on record any materials linking the assessee in any of the dubious transactions relating to entry, price rigging or exit providers.
Even in the SEBI report, there is no mention or reference to the involvement of the assessee. We can only presume that the assessee is one of the beneficiaries in these transactions merely as an investor who has entered in investment fray to make quick profit. Even the AO has applied the presumptions and concept of human probabilities to make the additions without their being any material against the assessee.
AO and CIT(A) has applied the concept of Human probabilities and held the above said scrips to be a penny stock without bring on record how the assessee is involved in any of the scrupulous activities or directly linked to one of the person who has involved in manipulation/rigging of share prices, entry operator or exit provider as observed in the case of Ziauddin A Siddique [2022 (3) TMI 1437 - BOMBAY HIGH COURT] Therefore, there is no material with the tax authorities to substantiate their findings that the impugned transaction is non-genuine. Decided in favour of assessee.
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2024 (12) TMI 1212
Revision u/s 263 - disallowance u/s 14A read with Rule 8D - Effect of suo motu disallowance made by the assessee - HELD THAT:- We are of the view that after examining the explanation of the assessee, the AO prima facie was satisfied with the correctness of the suo motu disallowance made by the assessee, having regard to its accounts. Hence, he did not discuss the issue in the body of the assessment order itself.
By merely stating that the A.O. has not properly recorded his satisfaction, the revisionary authority cannot substitute the satisfaction of the A.O. with his own, that too, without making any enquiry himself.
Coming to the enquiry part, ld. PCIT himself admits that assessee’s case does not fall under no enquiry. According to ld. PCIT, the A.O. has made partial enquiry and has not carried the enquiry to its logical end.
It is evident from the past history relating to the issue in dispute, the assessee has been consistently following a particular method for making suo motu disallowance u/s. 14A.
Assessee’s contention that in the past assessment years, the methodology adopted has been accepted, either at the stage of assessment or in appellate proceeding, remains uncontroverted. Therefore, if the A.O., having been satisfied with the explanation of the assessee, has accepted the suo motu disallowance, which is otherwise consistent with the methodology adopted by the assessee in past assessment years, in our view, the assessment order cannot be considered to be erroneous. Thus, assumption of jurisdiction u/s. 263 of the Act, is invalid. Decided in favour of assessee.
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2024 (12) TMI 1211
Addition u/s 68 - unsecured loans from paper companies - HELD THAT:- As decided in Ojas Tarmake (P.) Ltd. [2023 (9) TMI 845 - GUJARAT HIGH COURT] AO made addition on ground that assessee failed to discharge onus of liability as laid down under section 68, since amount of loan received by assessee was returned to loan party during year itself and all transactions were carried out through banking channels, impugned addition was to be deleted.
Also in Ganesh Plantation Ltd. [2021 (12) TMI 206 - GUAJRAT HIGH COURT] since no live link/proximate nexus of alleged dubious transactions between searched person and assessee had been brought on record, said addition was to be deleted. Decided against revenue.
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2024 (12) TMI 1210
Disallowance of interest expenditure - interest income from advances made to group concerns, claimed deduction for interest expenditure - HELD THAT:- Borrowed funds have been utilized by the assessee for advancing loans to certain parties from whom interest income has been indeed earned by the assessee. Hence, one-to-one nexus has been proved beyond doubt. Accordingly, the interest expenditure paid by the assessee on the unsecured loans becomes an allowable expenditure for the purpose of earning interest income in terms of section 57(iii). Accordingly, we direct the AO to grant deduction on account of interest paid and ground no. 1 raised by the assessee is hereby allowed.
Addition of unsecured loans received - Loan received from Mr Piyush Kumar, was repaid and thereafter fresh loan was received from the said party. AO in the assessment had added both old as well as the fresh loans. Once the second loan of Rs 5 lakhs is accepted as genuine and found to be satisfactory, there is no case for treating the earlier loan of Rs 20 lakhs from the same party to be non-genuine. Hence we direct the learned AO to delete the addition of Rs 20 lakhs received from Mr Piyush Kumar.
Addition on account of unsecured loans was made by the learned AO u/s 69A - Mentioning of wrong section - onus to prove - For section 69A the basic pre-condition is that assessee should be found to be the owner of any money, bullion, jewellery, etc. for which assessee was not able to explain the source thereon or the explanation found given by him was not found to be satisfactory in the opinion of the AO.
In the instant case, no such satisfaction per se has been recorded by the learned AO or by the learned CITA that assessee was found to be the owner of any money, bullion, jewellery, etc. On the contrary, assessee has merely received loans from certain parties - CIT-A sought to examine the veracity of the loans from the angle of section 68 of the Act by asking the assessee to prove the three ingredients of section 68.
Though mentioning of wrong section may not be fatal to the addition that is being made, the burden of proof clearly shifts from assessee to the department when provisions of section 69A are being invoked.
There is a huge difference between burden and onus of proof in terms of section 68 and 69A of the Act. This being not satisfactorily explained by the revenue in the instant case, we hold that no addition could be made in the hands of the assessee for the loans received from certain parties u/s 69A of the Act. Decided in favour of assessee.
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2024 (12) TMI 1209
Imposition of ADD - grievance raised by appellant is that despite a recommendation having being made by the designated authority in the final findings notified on 16.02.2022 for imposition of anti-dumping duty under section 9A of the Customs Tariff Act 1975, the Central Government did not issue the notification for imposition of anti-dumping duty - violation of principles of natural justice - it is held by CESTAT that 'The office memorandum dated 26.05.2022 is set aside and the matter is remitted to the Central Government to reconsider the recommendation made by the designated authority in the final findings'.
HELD THAT:- It is pointed out by the learned counsel for the petitioner that the domestic industries have given up their right in terms of the recommendation made by the Directorate General of Trade Remedies, Department of Commerce, Ministry of Commerce and Industry, Government of India, in the Notification (Final Findings) F.No. 6/46/2020-DGTR dated 23.09.2021 for imposition of anti-dumping duty under Section 9A of the Customs Tariff Act, 1975 made by the designated authority, as well as, their claims on the basis of the order passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi.
In view of the statement made, the special leave petition is dismissed as infructuous.
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2024 (12) TMI 1208
Validity of SCN issued u/s 28(9) of the Customs Act, 1962 - Delay of almost eight years in adjudication of the SCN - HELD THAT:- Coming to the facts of this case, the Show Cause Notice dates back to 17th April, 2015. The counter affidavit claims that there was certain re-organisation within the Customs Department and on 12th January, 2016, a Common Adjudication Authority was appointed. Even if the date is reckoned from 12th January, 2016 when the adjudication authority was appointed, the Mangli Impex decision came only on 3rd May, 2016 and the matter has been placed in the callbook on 21st July, 2016. A few months later, it was retrieved on 2nd February, 2017 but again from 2017 till 2023, there can be no reason for not adjudicating the show-cause notice.
Four hearing notices have been given during this period. Despite the reply having been filed to the show-cause notice, there has been no adjudication. In the opinion of this Court, there existed no reason for the non-adjudication of the show-cause notice and therefore this Court is of the opinion that the facts do not reveal any glaring impossibility for the Customs Department to deal with the show-cause notice.
The impugned show-cause notice dated 17th April, 2015 deserves to be quashed and is set aside - petition allowed.
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2024 (12) TMI 1207
Eligibility of Concessional rate of duty applicable to melting scrap - rejection of certificate dated 15.06.2004 produced by the appellant - mis-declaration of ingots and flats of alloy steel as heavy metal scrap - Confiscation of imported goods - Department believed that the imported goods were not eligible for concessional rate of duty applicable to melting scrap and, therefore, 100% physical examination of the goods was conducted in the presence of two independent witnesses.
HELD THAT:- One of the grounds taken in the appeal is that the Additional Commissioner had no authority in law to change the classification of the imported goods from heavy melting scrap to ingots and flats.
It is not possible to accept this submission. Apart from the fact that the appellant failed to substantiate this ground, the Additional Commissioner does have the power to determine the classification of the imported goods. In the present case, 100% physical examination of the goods was conducted and thereafter reports were also called from the examiner. This finding of the Additional Commissioner has been confirmed by the Commissioner (Appeals). Apart from making a bald statement that the Commissioner (Appeals) failed to appreciate the contention raised by the appellant, this finding has not been seriously disputed by the appellant.
There is, therefore, no infirmity in the order passed by the Commissioner (Appeals) - The appeal is, accordingly, dismissed.
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2024 (12) TMI 1206
Classification of goods under DEPB Scheme - Hand Tools Digging Spade With Handle to be classified under CTH No. 82011000 or as Pick Mattock falling under CTH No. 82013000? - mismatch between the quantity declared and the quantity good - Valuation of goods.
Classification of goods under DEPB Scheme - Hand Tools Digging Spade With Handle to be classified under CTH No. 82011000 or as Pick Mattock falling under CTH No. 82013000? - HELD THAT:- The goods are described as consisting of two parts, one metal part and one wooden handle. The appellants have submitted a certificate of Chartered Engineer Shri O.S.Nagar describing it as digging spade. The notice alleges that as per examination report the goods are found to be Pick Mattock. The notice does not define what a ‘Pick Mattock’ is and how the revenue comes to a conclusion that it is a ‘Pick Mattock’ - it is seen that both the Chartered Engineers have opined that the tool is used for digging. CRCL Kandla, in its opinion has not given any name to product. The word ‘Pick Mattock’ has not been defined anywhere in the proceedings. Shri Nagar, Chartered Engineer in reply to questionnaire had described that the words ‘Digging Spade’ and ‘Pick Mattock’ are used interchangeably - The Google defines a spade as “a tool that you use for digging”. Since, both the Chartered Engineers have stated that the item is used for digging it can be called a ‘Spade’. There are no evidence is produced by revenue to establish that the goods are not ‘Spade’ falling under Sr. No. 196 of DEPB schedule.
Mismatch between the quantity declared and the quantity good - HELD THAT:- The declaration made in the documents was based on the order placed by the exporter. Physical counting of 21000 pieces would require opening of all packages. Moreover, it is stated that there was a delay in carting of second truck in the part by two days which necessitated the carting of cargo from the warehouse to open. The pictures of the cargo available in the file show that the goods were loosely packed in bags. In these circumstances the exporter cannot be blamed for some mismatch in quantity. As it is the benefit depends on value of foreign currency earned and not on the number of places exported.
Valuation of goods - HELD THAT:- There is no evidence that the market price indicated by dealers is of identical goods as nothing except approximate weight of metal part is mentioned. There is no reference to the composition. Moreover, it is not necessary to export the goods has to be done at the domestic market price. The exporter can get a better price due to his marketing skills as well - It is apparent that the only administrative restriction is that the DEPB claimed should not exceed 50% of the market value. Thus, the CBEC also recognizes that FOB value can be much higher than market value. In these circumstances we do not find any merit in this objection as well.
The Impugned ordered is set aside - the appeal is allowed.
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2024 (12) TMI 1205
Constitutionality of Section 3 of the Judges (Protection) Act, 1985 - failure to pay debt - default on the part of a Corporate Debtor - forum shopping - suppression - multipicity of cases - wastage of time of the court - making unfair statements - prayer to restrain and prohibit the two learned members of the NCLT-1, Mumbai from functioning and exercising jurisdiction.
HELD THAT:- The view taken by the Hon’ble Supreme Court in Swiss Ribbons Pvt. Ltd. and Anr. V/s. Union of India and Ors. [2019 (1) TMI 1508 - SUPREME COURT] is now crystallized that even the non-payment of a part of the debt, when it becomes due and payable, will amount to default on the part of a Corporate Debtor. In such a case, an order of admission under Section 7 of the IBC must follow. If the NCLT notices that there is a debt, but it has not become due and payable, the application under Section 7 can be rejected. When there is a non-payment of debt under Section 3 (12) of the Code, when whole or any part or installment of the amount of debt has become due and payable and is not paid by the debtor or the Corporate Debtor, as the case may be, it would amount to default and the proceeding under Section 7 of the IBC must follow. In view of the above, there are no illegality or error in the order dated 29th October, 2024.
Forum shopping - suppression - multipicity of cases - wastage of time of the court - HELD THAT:- The impugned order dated 29th October, 2024, can neither be termed as perverse or illegal. Merely because a different view could be possible, would not call upon this Court to quash and set aside the impugned order, in view of the law laid down in Syed Yakoob V/s. K.S. Radhakrishnan, [1963 (10) TMI 26 - SUPREME COURT] and Surya Dev Rai V/s. Ram Chander Rai [2003 (8) TMI 527 - SUPREME COURT], this Petition to the extent of the challenge to this order, stands dismissed.
Taking into account all the prayers put forth by the Petitioner, except the challenge to the impugned order dated 29th October, 2024 and main Prayer Clause, all other prayers being practically ‘copied and pasted’, this Petition deserves to be dismissed.
Petition dismissed - cost of Rs. 2.5 Lakhs imposed.
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2024 (12) TMI 1204
Maintainability of suit - Seeking a decree of possession and permanent injunction & mesne profit in its favour and against the Defendants - consequence of the Plaintiff Company's struck-off status on its capacity to initiate legal proceedings - HELD THAT:- The present suit has been filed for seeking recovery of possession of the suit property from the Defendants on basis of the sale deed dated 30.10.1987 and sale deed dated 25.08.2011. However, the District Court on 15.09.2022 has granted a permanent injunction against the Plaintiff Company from relying upon the said documents and from interfering in the peaceful possession of the Defendants. In view of this permanent injunction, the present suit for recovery of possession is barred in law.
The disputes between the parties arose in the year 2011 as acknowledged in the plaint at paragraphs 29 and 30. The Defendant Nos. 1 and 2, who were in possession and were threatened by the Plaintiff immediately to recourse to due legal process and filed the Civil Suit in year 2012, which culminated in the final judgment and order dated 15.09.2022 in favour of Defendant Nos. 1 and 2 as well as against the Plaintiff Company. The present suit filed after the passing of the final judgment and order dated 15.09.2022 is a gross abuse of process and is intended to nullify the binding effect of the said Judgment.
A corporate entity is liable under the Companies Act, 2013 to make annual compliances with respect to its affairs by filing statutory returns. The Plaintiff Company would have been obliged between the year 2018 to 2024 to make several filings and would have immediately learnt that it is unable to do so since the company has been struck-off. This Court, therefore, finds no substance in the explanation offered by the Plaintiff Company - this Court is of the considered opinion that the captioned suit is liable to be rejected under Order VII Rule 11 (a) and (d) of the Code of Civil Procedure, 1908.
The present suit is dismissed with actual costs awarded in favour of Defendant Nos. 1 and 2. Since, Plaintiff Company has been struck-off, Mr. Ram Dilawri will be personally liable for the costs awarded.
List before the Taxing Officer/concerned Joint Registrar on 14.01.2025 - List before the Taxing Officer/concerned Joint Registrar on 14.01.2025.
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2024 (12) TMI 1203
Admission of application u/s 7 of the Insolvency and Bankruptcy Code, 2016 - withdrawal u/s 12A of the IB Code - HELD THAT:- In view of Section 12A of the IB Code, obviously on the basis of the statement of the first respondent, interference cannot be made with the impugned order - the view taken by the NCLAT is agreed upon. There is no error therein.
Accordingly, the appeal is dismissed.
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2024 (12) TMI 1202
Suspension of Petitioner’s registration as an Insolvency Professional for a period of one year by Disciplinary Committee - Petitioner’s engagement of M/s Ibay Capital, a firm owned by his brother, without proper disclosure of appointment to the Committee of Creditors - submission of a valuation report prepared by M/s iVAS Partners, whose appointment and fee had not been approved or ratified by the CoC - purported failure to take timely and appropriate action against Gravity Facility Management Solutions Pvt. Ltd. for non-payment of water charges.
Non-disclosure of Related Party Transaction pertaining to M/s Ibay Capital - Petitioner’s engagement of M/s Ibay Capital, a firm owned by his brother, without proper disclosure of appointment to the Committee of Creditors - HELD THAT:- While Section 28 (1) (f) of the IBC Code, relied upon by the Petitioner, permits the Resolution Professional to undertake Related Party Transaction, the same must be done with the prior approval of the CoC. In the present case, while the CoC approved the appointment of M/s Ibay Capital in its 13th Meeting, the CoC was not made aware of the fact that M/s Ibay Capital was a related party of the Petitioner. Thus, prior approval required under Section 28 (1) (f) of the IBC Code has not been complied with. As regards, compliance with para 3 of the Circular dated 16th January, 2018, the Court has perused the nature of services for which M/s Ibay Capital was hired, as detailed in minutes of the 13th CoC meeting. These services fall within the definition of “professional” rather than mere clerical or logistical support. The Petitioner’s interpretation that no disclosure was necessary is thus off the mark. Thus, in the opinion of the Court, the Petitioner has violated clauses 1,2,5,9,12,13, 14 and 23B of the Code of Conduct, Section 28 (1) (f) of the IBC Code and Circular dated 16th January, 2018. While the Petitioner has relied on the case of Mr. Anil Goel to claim parity it must be noted each case has to be decided on its own merit.
Wile the Court acknowledges that the Impugned order does not indicate any concrete financial irregularity on the Petitioner’s part, it nonetheless remains evident that the Petitioner failed to fully adhere to the requirements of disclosure provided under IBC, 2016 and the regulations framed thereunder. Considering the Petitioner’s role as an Insolvency Professional, entrusted with fiduciary duties and the responsibility to act in the best interests of the stakeholders, strict compliance with these provisions is non-negotiable. Therefore, Petitioner’s oversights in candidly informing the CoC of a related-party engagement justify regulatory intervention.
The valuation report was submitted by M/s iVAS Partners whose appointment or fee was not approved/ ratified by the CoC - HELD THAT:- On perusal of the minutes of 13th CoC meeting, it is clear that CBRE South Asia Pvt. Limited was appointed to determine the cost of completion of the projects. Further, in the minutes of 17th CoC meeting, it was recorded that the cost of completion report and final valuation report of ‘iRing’ commercial complex were submitted by CBRE. However, there is no mention of any discussion with the CoC regarding the engagement of M/s iVAS Partners, nor was any fee related to them approved by the CoC. Even if the valuation of the iRing Complex was delegated to M/s iVAS, by CBRE, the Petitioner has not placed anything on record to show that the fee paid to M/s iVAS was approved by the CoC. Based on the available documents, it can be concluded that neither the appointment of M/s iVAS Partners nor the fees paid to them were approved by the CoC - RP is mandated to take approval of the CoC for the expenditure incurred to run the Corporate Debtor as a going concern. Therefore, the contention of the Petitioner that he, as an RP, is not required to take approval of the CoC for going concern expenses cannot sustain. Hence, the Court finds that the Petitioner violated Regulation 34 of the CIRP Regulations.
The Petitioner failed to take appropriate action against the Gravity Facility Management Solutions Pvt. Ltd for non-payment of water charges - HELD THAT:- The documents placed on record discloses that the Petitioner had infact initiated necessary action against Gravity Facility Management Solutions Pvt. Ltd. A civil suit for recovery of Rs. 64,20,813/- had been intiated by the Petitioner before the Civil Commercial Court, Guatam Budh Nagar, Uttar Pradesh. The Impugned order fails to take note of the same. In light of the aforenoted, it cannot be said that the Petitioner failed to take appropriate action against the Gravity Facility Management Solutions Pvt. Ltd. Accordingly, the contravention, arising from alleged inaction on the part of the Petitioner, is not made out.
Conclusion - The one-year suspension, therefore, stands supported by at least two valid grounds, while the third ground is found lacking. Accordingly, the Petitioner’s plea to set aside the suspension order, in its entirety, cannot be granted - application disposed off.
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2024 (12) TMI 1201
Condonation of delay of 156 days in re-filing the appeal - sufficient cause for not filing the Appeal presented or not - HELD THAT:- From the series of events as enumerated, it is noted the Appellant has not been vigilant enough in prosecuting the Appeal which was initially e-filed on 01.06.2023 and finally refiled on 22.11.2023 after a huge delay of 156 days. The explanation given by the Appellant is found to be not sufficient to condone the delay.
The Respondent has also relied upon various judgments of Hon’ble Apex Court. The adherence to procedural timelines has been emphasised again and again by Hon’ble Apex Court and also this Appellate Tribunal in various judgments - Reliance placed in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] where it was held that 'on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days.'
The issue of timelines has been further elaborated by Hon’ble Apex Court in EBIX SINGAPORE PRIVATE LIMITED VERSUS COMMITTEE OF CREDITORS OF EDUCOMP SOLUTIONS LIMITED & ANR., KUNDAN CARE PRODUCTS LIMITED VERSUS MR AMIT GUPTA AND ORS. AND SEROCO LIGHTING INDUSTRIES PRIVATE LIMITED VERSUS RAVI KAPOOR RP FOR ARYA FILAMENTS PRIVATE LIMTIED & ORS. [2021 (9) TMI 672 - SUPREME COURT] where it was held that 'Any judicial creation of a procedural or substantive remedy that is not envisaged by the statute would not only violate the principle of separation of powers, but also run the risk of altering the delicate coordination that is designed by IBC framework and have grave implications on the outcome of the CIRP, the economy of the country and the lives of the workers and other allied parties who are statutorily bound by the impact of a resolution or liquidation of a corporate debtor.'
All above judicial pronouncements don’t support the case of the Appellant. IBC proceedings are time bound. No indulgence can be given for condoning such long delays which do not have sufficient casue. It appears that the Appellants’ attempts are to hinder and restrict the resolution process from attaining finality. Under these circumstances of 156 days of delay in refiling and also supported by judicial precedents and provisions of the Code, re-filing delay cannot be condoned.
Appeal dismissed.
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2024 (12) TMI 1200
Rejection of intervention application filed for the purposes of approval of the Resolution Plan under Section 30 of I & B Code - Applicant/Appellant herein had participated and has been determined as to be an unsuccessful Resolution Applicant - locus standi to become a party to the proceedings - Impleadment of M/s Lulu International Shopping Malls Private Limited.
Rejection of Intervention Application - HELD THAT:- The Applicant himself was admittedly determined as be an unsuccessful Resolution Applicant. The rejection of the of the intervention Application was rightly made because the Appellant was not even required to be heard even at the consideration of approval of the stage when the Resolution Plan is placed before the Ld. Adjudicating Authority for its approval.
Rejection of application filed for the purposes of approval of the Resolution Plan under Section 30 of I & B Code - HELD THAT:- As far as, the aspect pertaining to Section 30 (2) of I & B Code, it would be absolutely falling within the domain of the learned Adjudicating Authority to determine as to whether the approved Resolution Plan by the COC falls to be within the parameters prescribed therein, as that contained in clause A & B of Section 30(2). Ensuring the satisfaction of those conditions is a prerogative of the tribunal and not a right of the Appellant to ensure its compliance, particularly when the plan of the has Appellant already been rejected as their rights are not at all to be affected at the stage when the mechanism prescribed under section 53 of I & B Code, was to be resorted to. Hence the appeal lacks merit and the same would stand dismissed.
Impleadment of M/s Lulu International Shopping Malls Private Limited - HELD THAT:- Having considered the fact that the plan already stands approved and if any orders are likely to be passed in the instant appeal their rights are likely to be affected, the IA No. 1195/2024, would stand allowed, the applicant intervener M/s Lulu International shopping malls Private Limited, is being permitted to intervene in the appeal. The Appellant herein, who is also the appellant of the appeal already decided by the aforesaid part of today's judgment who has put a challenge to the order passed on IA No. 1229/2024, as rendered in CP(IB)No. 296/7/HDB/2022. The factual part as far as the instant appeal is concerned, the same will remain similar up to the stage of filing of the application IA No.1229/2024, preferred by the appellant who has already been dealt with the above, and has been determined as to be an unsuccessful Resolution Applicant and whose Intervention Application has been rejected.
Owing to the fact that the Appellant's Intervention Application has been rejected and its rejection has been affirmed by the Judgment rendered in Company Appeal AT CH (Ins) No. 342/2024 as decided today the limited question which would be required to be venture is as to whether, at all the Company Appeal AT CH (Ins) No. 343/2024, preferred by the Appellant whose intervention has been rejected as against the decision rendered on IA No. 1229/2024, could at all put a challenge to the process of approval of the Resolution Plan, is to the effect that since the appellant has got no locus standi and their Intervention Application has already been rejected.
As such the relief sought for in IA No. 1229/2024, as against the approval of the Resolution Plan, it as stood submitted by the newly impleaded Respondent M/s Lulu International shopping malls Private Limited, the same cannot be questioned by the present appellant hence the appeal at their behest as against the process of the approval of the Resolution Plan would not be tenable the same would too stand dismissed.
The revised plan submitted by the Appellant has been rejected and the rejection of the plan has not been challenged has attained finality, has no locus to agitate a cause by intervention or by challenging approval of Resolution Plan - Since the Resolution Plan of the Appellant has been rejected, he has no locus standi to either intervene or to put a challenge to the process of the approval of the Resolution Plan granted in favour of M/s Lulu International shopping malls Private Limited.
Appeal dismissed.
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2024 (12) TMI 1199
Dismissal of petition for being barred by limitation as having been preferred beyond the prescribed period contemplated under law for initiation of the CIRP proceedings - HELD THAT:- In the instant Appeal, actual balance period of limitation remaining with effect from 01.03.2022 is the period from 01.03.2022 to 06.09.2022, that is, 190 days. Since this is greater than 90 days, the end date of limitation period will continue to be 06.09.2022 and not 22.08.2024 as contended by the Appellant.
The determination of period of limitation as it has been sought to be impressed upon by the Counsel for Appellant, in which he is attempting to compute the end date of the limitation period by adding 905 days from 01.03.2022 on the premises that 905 days is the actual balance period of limitation remaining is absolutely a misconceived notion because the actual balance period of limitation has to be calculated from 01.03.2022 - as the Company Petition was filed only on 17.04.2023, it is clear that it has been filed much beyond 06.09.2022, the end date of limitation period and accordingly, the rejection of the Company Petition on the ground that has been observed by the Learned adjudicating authority does not suffer from any error.
The dismissal of the Company Appeal is also desirable for the reason being that, the proceedings which are held under the I & B Code,2016, are to be strictly construed in a straight jacketed formula, so far it relates to the aspect and computation of limitation, because period of limitation invariably in all the proceedings under the I & B Code, 2016 has an objective to be attained and it cannot be stretched according to the expectation of the appellant to defeat the very objective of the Act, which itself contemplates that, the proceedings of CIRP has had to be concluded in the specified time frame.
Appeal dismissed.
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2024 (12) TMI 1198
Money Laundering - Jurisdiction of the E.D. to attach the properties of the Corporate Debtor, which was undergoing Corporate Insolvency Resolution Process, particularly in the light of Section 32A of the Insolvency and Bankruptcy Code, 2016 - provisional attachment of the properties - proceeds of crime as defined u/s 2 (1) (u) of the PMLA - HELD THAT:- In view of the submissions made by the learned counsel for the E.D. and the learned counsel for the CoC and for the successful Resolution Applicant JSW, following order is passed without expressing any opinion on the merits of the Appeals and without prejudice to the rights and contentions of the respective parties in the connected Appeals and other proceedings, including the right of the E.D. to investigate into the cases registered against the accused-Promoters of the Corporate Debtor, under the PMLA.
The Appellant-E.D. is directed to handover and the Respondent successful Resolution Applicant JSW is directed to take over the control of the properties of Corporate Debtor-Bhushan Power and Steel Ltd., provisionally attached vide the order dated 10.10.2019 passed by the E.D., immediately in view of Section 8 (8) of the PMLA read with Rule 3A of the said Rules.
Appeal disposed off.
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2024 (12) TMI 1197
Condonation of delay in filing appeal - no sufficient reasons for the delay - Non-payment of service tax - Cleaning Services - Manpower Recruitment or Supply Agency Services - Services provided by the respondent to the Government Hospitals, Medical Colleges, Primary Health Centres, Community Health centres, Arogya & Parivar Kendra, Block health Centres, Panchayat Health Centres, Municipal Corporation, District Ayurved Office Bhavnagar etc. - exemption from payment of Service tax under Sr. No. 25(a) of the Notification No. 25/2012-ST dated 20.06.2012 - the exemptions were allowed by CESTAT.
HELD THAT:- There is a gross delay of 155 days in filing these appeals and 47 days in refiling which has not been satisfactorily explained by the appellant.
There are no reason to interfere with the impugned order dated 23-02-2024 passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad.
The Civil Appeals are, accordingly, dismissed on the ground of delay as well as merits.
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2024 (12) TMI 1196
Levy of service tax - Site Formation service for the period from June 2005 to May 2007 - demand of service tax by culling out the site formation charges from a composite mining contract - short payment of service tax under Mining service for the period June 2007 to September 2008 - demand of service tax under Mining Service for period June 2007 to Sept 2008 on account of charge of under valuation.
Whether demand of service tax made under Site Formation service for the period from June 2005 to May 2007 by culling out the site formation charges from a composite mining contract is sustainable? - HELD THAT:- From the documents available on record and the agreements between the parties which is the ‘cause’ for any action between the parties, it is definitely not the intention of either of the signing parties to undertake SFS and hence, at the most, it could be incidental to the mining service. This is in fact of the spirit of the TRU Letter dated 28.02.2007 wherein the Board has considered the incidental activities insofar as the Mining Service is concerned. Hence, the Circular F.No. B1/6/2005–TRU dated 27.07.2005 would apply only when the scope of work is SFS per se. The scope of work would naturally flow from the intention between the parties, as reduced into writing, which alone is instrumental in working out the tax liability. Hence, demanding tax on a service that was not agreed upon, for which no separate consideration is payable or paid, is clearly unsustainable - the Order-in-Original passed by the Ld. Commissioner is clearly on surmises and wrong interpretation of the understanding between the parties, and thus the impugned order lacks any credit and cannot be supported.
The contract entered into in 2002 by the appellant with the mine owners for raising of ore is a composite mining contract and the alleged activity of 'site formation' is only incidental to the of mining service and hence, the scope of mining contract cannot be vivisected to demand service tax on the incidental activity of site formation. Therefore, the demand confirmed under 'site formation service’ for the period from June 2005 to May 2007 is not sustainable and is ordered set aside.
Whether the demand of service tax made under Mining service on account of short payment for the period June 2007 to September 2008 is sustainable? - HELD THAT:- Rule 6 was amended in the year 2011 to levy service tax from receipt basis to accrual/billing basis. However, in terms of proviso to Rule 9 of P.T.R., 2011, the point of taxation for the services provided/invoice raised before 30.06.2011 would continue to be the date on which payment is received. As per the certified worksheet, the appellant had an opening balance of unrealised income of Rs.17,04,66,648/-as on 01.04.2011 and during the said year 2011-2012 they had billed income of Rs.40,25,39,421/-. However, it is seen from the said worksheet itself and the ST3 returns, that the appellant had discharged service tax on the opening balance of unrealised income as well as the billing income during the year 2011-2012 consequent to the above amendment, irrespective of realisation and despite the above proviso to Rule 9 of P.T.R., 2011, except for a short fall of Rs.4,03,673/-.
The demand of service tax on account of short payment of service tax on mining service for the year 2007-2008 & 2008-2009 (Upto September 2008) is not at all sustainable as the appellant had already paid the service tax in full on the gross income reported in their balance sheet by the end of year 2008-2009 itself. Accordingly, the demand of service tax confirmed in the impugned order in this regard cannot be sustained and is required to be set aside.
Whether the demand of service tax made under Mining Service for the very same period June 2007 to Sept 2008 on account of charge of under valuation is sustainable? - HELD THAT:- Section 67(1)(ii) provides that in a case where the provision of service is for a consideration not wholly or partly consisting of money be such amount in money with the addition of service tax charged, is equivalent to the consideration. In the instant case, however, there is no allegation that the appellant had realised any part of the consideration in kind other than money. Rule 3 of the above rules provides that the value of taxable service, where the consideration received is not wholly or partly consisting of money, shall be determined in the manner prescribed under clause (a) or (b) below in the said Rule.
Since the demand of service tax in respect of billed amount itself is not sustainable if the payment is not received, even presuming without admitting that the redetermination of value as proposed in terms of Rule 3(b) is sustainable for a moment, the question of realising such notionally enhanced value based on cost of provision from the mine owners is not possible at all and as such, in the absence of any realisation of such enhanced value, the demand of tax lacks any merit and is an impossibility - the demand of service tax is not legally sustainable for the reason that enhancement of value based on cost of provision in terms of Rule 3(b) is not applicable as there is no realisation of consideration in kind in this case, in the absence of any realisation of the enhanced value. Accordingly, the enhancement of value as well as the demand of service tax in this regard lacks any merit and hence, the same is set aside.
The three demands proposed and confirmed in the impugned order is not sustainable and the same is set aside - the demand of interest confirmed and the penalty imposed in the impugned order are also not sustainable - appeal allowed.
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2024 (12) TMI 1195
Classification of services - Cargo Handling Service or not? - activity of loading of Lime Stone into tippers, dumpers at mines and from railway plots into railway wagons using front end loaders - Cum-tax benefits in terms of provisions of section 67 (2) of Finance Act, 1994 - Extended period of limitation - penalty.
Classification of services - HELD THAT:- The issue about movement of lime stone/coal and rejects in the mining area is no more res-integra to the effect that the activity does not involve ‘Cargo Handling Service’ as it was held by this Tribunal, Kolkata Bench in the case of SAINIK MINING & ALLIED SERVICES LTD. VERSUS COMMR. OF C. EX., CUS. & ST [2007 (11) TMI 90 - CESTAT, KOLKATA]. Hon’ble Apex Court also in the case titled as CHOWGULE & CO. PVT. LTD. VERSUS UNION OF INDIA [1980 (11) TMI 61 - SUPREME COURT] has held that process of extraction of ores from mines washing, screening, crushing in the crushing plant and stacking at the mining site all are covered under the Mines Act, 1952, hence, cannot be called as ‘Cargo Handling Service’.
The CBEC Circular No.232/2/2006 dated 12.11.2007 clarified that “the services which are liable to tax under this category (‘Cargo Handling Service’) are the services provided by cargo handling agencies who undertake the activity of packing, unpacking, loading and unloading of goods meant to be transported by any means of transportation namely truck, rail, ship or aircraft. Well known examples of cargo handling service are services provided in relation to cargo handling by the Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations. This is only an illustrative list. There are several other firms that are engaged in the business of cargo handling services.”
Thus, the activity rendered by the appellant to M/s.RSMML cannot be called as ‘Cargo Handling Service’. Otherwise also the ‘Cargo Handling Services’ were made taxable w.e.f. 01.06.2007. The period in dispute/ period of demand is the period prior the said date (27.05.2005 to 12.04.2006). Hence, the demand has wrongly been confirmed by the Department.
Extended period of limitation - Penalty - HELD THAT:- It has been brought to the notice that there were several circulars got issued by CBEC with respect to explaining scope of ‘Cargo Handling Services’. One has been already discussed above and the another was of the year 2002. The series of the Circulars created doubts and confusions. It has been settled by this Tribunal in the case of VISHAL TRADERS VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I [2009 (11) TMI 137 - CESTAT, NEW DELHI] that when the question of interpretation caused confusion, the intention to evade tax cannot be alleged.Penalty is also not impossible in such circumstances. Keeping in view the same and the fact that there is no specific allegation nor any proof about any positive act of the appellant which may amount to suppression /willful mis-statement that too, with an intent to evade payment of service tax, we hold that the department was not entitled to invoke the extended period of limitation. The entire period of impugned demand is beyond the normal period, seen from the date of impugned Show Cause Notice. Hence, the Show Cause Notice is held barred by time.
Cum-tax benefits in terms of provisions of section 67 (2) of Finance Act, 1994 - HELD THAT:- The services provided in relation to security by the appellant are not taxable in terms of the definition as it stood prior to 18.04.2006. Due acknowledgement has been given to the fact that Service Tax on transportation activity has been paid by M/s.RSMML. Appellant is also held eligible for cum-tax benefits in terms of provisions of section 67 (2) of Finance Act, 1994. The demand has been confirmed only by holding that the complete and proper details about the services and the taxable value were suppressed by the appellants.
The order under challenge is set aside - appeal allowed.
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