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Showing 381 to 400 of 1471 Records
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2022 (1) TMI 1094
Addition based on statement recorded during the course of survey action u/s. 133A - Disallowance under valuation of work in progress and Disallowance of expenditure partly supported by self made vouchers and not fully supported - HELD THAT:- On going through the statement recorded during the course of survey action u/s. 133A it is clear that from the questions posed to the appellant, the Assessing Officer had not brought any specific instance of discrepancies in the valuation of closing work in progress as well as any evidence in support of the bogus expenditure incurred by the assessee.
It is a different matter as to why the assessee had agreed to make the addition, but the issue of valuation of work in progress as well as proof of genuineness of expenditure incurred, are pure questions of facts, which the AO should brought on record. AO failed to do so, but merely based on the statement given by the assessee, had proceeded to make the assessment and made addition. It is settled position of law that no addition can be made on the mere basis of the statement given by the assessee.
Appellant had categorically stated before the Assessing Officer that there was no discrepancy in the valuation of work in progress, as well as no doubts as to the genuineness of expenditure incurred, inspite of this fact, the AO proceeded with making of addition based on the mere statement given by the assessee u/s. 133A. It is not the case of the Department that, the discrepancy if any in the valuation of closing work in progress as on date of survey, still existed in the valuation of closing work in progress as on date of end of previous year, nor no addition can be made based on discrepancies, if any, in the valuation of work in progress in the middle of previous year. This approach of the Assessing Officer does not stand to the judicial scrutiny. - Decided in favour of assessee.
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2022 (1) TMI 1093
Penalty u/s. 271(1)(c) - AO disallowed the excess claim of deduction u/s. 36(1)(viia) on the ground that the assessee had not created the requisite provision - As argued AO was not able to prove that is a fit case for imposition of penalty either under the main part of section u/s. 271(1)(c) or under the deeming provisions of explanation 1 to section 271(1)(c) - HELD THAT:- On perusal of the assessment order, it will clearly suggest that, it is a case of mere disallowance of excess claim for want of creation of requisite provision which, in our considered opinion, does not tantamount to furnishing inaccurate particulars of income, nor can it be said that it is false claim. Therefore, the ratio of decision in the case of Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] is squarely applicable to the facts of the present case.
Also on perusal of the assessment order, it will clearly suggest that, it is a case of mere disallowance of excess claim for want of creation of requisite provision which, in our considered opinion, does not tantamount to furnishing inaccurate particulars of income, nor can it be said that it is false claim. Therefore, the ratio of decision of the Hon'ble Apex Court in the case of Reliance Petro Products Pvt. Ltd. (supra) is squarely applicable to the facts of the present case - no fallacy and illegality in the order of the Ld. CIT(A) deleting the penalty u/s 271(1)(c) - Decided in favour of assessee.
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2022 (1) TMI 1092
Addition u/s 68 - additional income declared by the appellant in the course of survey action u/s. 133A - disallowing the sum of 6 crores debited to the profit and loss account under the head "WIP declared u/s. 133A survey - Assessee submitted that addition has been made on estimated basis without 1st rejecting the books and assessee has actually declared as additional income, the sum of ₹ 6 crores declared during survey. He submitted that the additional amount of ₹ 6 corers, which has been debited to the profit and loss account as a stock declared in survey is duly reflected in the closing work in progress - HELD THAT:- We are inclined to agree with the submission of assessee that the veracity of the factual submissions made by him may be examined at the level of AO to resolve the issues in this case. Firstly, we note that as regards, the finding of the authorities that the profit declared is less than ₹ 6 crores will not be correct if the assessee submissions that before the debit of partners remunerations and interest on partners capital account the profit is more than ₹ 6 crore. Secondly, Ld. CIT(A) has rejected the assessee's claim that the increased figure of ₹ 6 crore reflected as declaration in survey by debit to stock in the profit and loss account is reflected in corresponding closing work in progress.
CIT(A) has rejected the submission of assessee for having included the aforesaid sum of ₹ 6 crores in the closing work in progress on the basis of certification of the audited account, which did not show that the closing stock includes this increased figure.
We find that this aspect can be verified by the AO. The components of closing work in progress are to be examined by him to arrive at the veracity of assessee's factual submission that closing work in progress includes this as a corresponding effect of stock of ₹ 6 core to declared in survey debited to profit and loss.
As assessee submission regarding wrong application of section 68 is concerned, we are of the considered opinion that the said issue will arise only, if the above submissions of the Ld. Counsel of the assessee are not found to be correct by the AO. In any case, it is settled law that quoting a wrong section is not fatal to the assessment, if the addition is justified and warranted on the facts and circumstances of the case - Accordingly, we remit the issue to the file of AO.
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2022 (1) TMI 1091
Conversion of "limited" scrutiny to a "complete" one - scope of enquiry under 'Limited Scrutiny' - HELD THAT:- The reason of the assessee's "limited" scrutiny herein was regarding the assessee's cash deposit in savings account(s) as more than the turnover only. And that the AO had duly taken note of the fact that the assessee had made huge cash deposits in his OD account whilst sending his proposal to the PCIT
There is no material on record which could indicate the assessee to have either declared or explained source of his cash deposits made in the undisclosed bank account concerned. A perusal of the assessment order sufficiently reveals that it was only after the assessee's failure to explain source of his deposits and other issues that the AO sought for PCIT's approval in issue which stood accepted on 22.12.2016.
We observe in this factual backdrop that the Assessing Officer's failure, if at all, in issuing notice of "complete" notice to the assessee between 22.12.2016 to 31.12.2016 was only a procedural one only which could not be held to have vitiated the entire assessment proceedings as a non-est one as held in the CIT(A)'s order under challenge. We therefore reverse lower appellate findings to this effect and restore the Revenue's sole substantive ground raised in the instant appeal back to the Assessing Officer for his afresh factual verification/adjudication qua all the issues following subject matter of "complete" scrutiny as per law within three effective opportunities of hearing.
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2022 (1) TMI 1090
Revision u/s 263 by CIT - interest earned on short term deposit not immediately required in the business of assessee is assessable under the head “income from other sources” and no deduction under section 80P(2)(a)(i) - HELD THAT:- During the hearing of submission, assessee fairly conceded that the interest earned on such deposit with DGVCL may not be eligible for deduction under section 80P(2)(d) of the Act. Therefore, the order of ld PCIT is upheld to that extent.
Other interest earned on deposit with Surat District Co-operative bank we find that deduction claimed qua this interest income is eligible for deduction under section 80P(2)(d) of the Act in view of the decision of this Bench in Bardoli Vibhag Gram Vikas Co.Op. Credit Society Ltd. [2021 (5) TMI 446 - ITAT SURAT]
We find that the assessment order qua the deduction under section 80(9)(2)(d) of the Act on account of interest earned from Surat Co-operative bank is not erroneous. Since the order is not erroneous, though, it may be prejudicial to the interest of the Revenue. Thus, the twin condition as provided in section 263 of the act is not fulfilled qua the income component of interest income earned on deposit with Surat Cooperative Bank; therefore, the order passed by the ld PCIT is set-aside to that extent. In the result, the grounds of appeal raised by the assessee are partly allowed on the primary submissions of the ld AR for the assessee. Appeal of the assessee is partly allowed.
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2022 (1) TMI 1089
TDS u/s 195 - non-deduction of tax at source as royalty and /or FTS in respect of the payments made to Facebook and other entities - CIT(A) held that the advertisement expenses paid to Facebook and other entities constitutes use of industrial, commercial or scientific equipment under section 9(1)(vi) - HELD THAT:- CIT(A) has followed the decision rendered by Hon’ble Karnataka High Court in the case of Samsung Electronics Co. Ltd [2011 (10) TMI 195 - KARNATAKA HIGH COURT] to decide the issues against the assessee. However the above said decision has since been reversed by Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence P Ltd [2021 (3) TMI 138 - SUPREME COURT] - The issue of granting license to use software was examined in the context of its taxability as royalty by Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (supra) as held that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income-tax Act were not liable to deduct any TDS under section 195.
As rightly pointed out by Ld D.R, we are of the view that the issues contested in all these appeals require fresh examination at the end of Ld CIT(A) applying the ratio of the decision rendered by Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence P Ltd (supra).
Accordingly, we set aside the orders passed by Ld CIT(A) in all these appeals and restore all the issues to his file for examining them afresh - Grounds raised by assessee stands allowed for statistical purposes.
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2022 (1) TMI 1088
Validity of assessment - absence of issuance of notice u/s. 143(2) within period of limitation - whether curable defect u/s 292BB - HELD THAT:- The jurisdiction by the Ld.AO is founded on issuance of notice u/s. 143(2). The notice u/s. 143(2) is a mandatory notice and is to be issued within the period prescribed under law. For year under consideration, limitation period expires within six months from the end of the Financial Year in which the return of income has been filed. In the present facts, the limitation period expired on 30.09.2013.
Section 292BB of the Act contemplates situations of irregularities wherein the notice has been served to the assessee in time and in accordance with the provisions of this Act. The present case assessee has not received the notice u/s. 143(2) in time and therefore the argument raised by revenue cannot be appreciated.
In case of Hotel Blue Moon reported in (2010) 321 ITR 362 [2010 (2) TMI 1 - SUPREME COURT] wherein Hon’ble Supreme Court held that an omission on part of the Assessing Officer u/s. 143(2) cannot be procedural irregularity and the same is not curable. As the notice was not issued within the period of limitation, the empathetic statement of law in the absence of issuance of notice u/s. 143(2) within the period of limitation by the revenue would therefore inure to the benefit of the assessee.
Statute make its imperative that notice u/s. 143(2) is to be issued within the period of limitation and any omission or failure would be hit at the root of the jurisdiction applying the principles laid down by the Hon’ble Supreme Court in various judgments.
Accordingly, we hold the assessment order passed by the Ld.AO to be bad in law and the same is quashed.- Decided in favour of assessee.
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2022 (1) TMI 1087
TDS u/s 194A - assessee in default under the provisions of section 201(1)/201 (1A) of the Act on account of non-deduction of TDS - HELD THAT:- The proviso to section 201(1) provides that the assessee shall not be deemed assessee in default provided if the payee has furnished the return of income u/s 139 of the Act after considering the income which was subject to the provisions of TDS and paid the tax on such income. To this effect, the assessee was to furnish the certificate from the qualified chartered accountant in the prescribed form.
Admittedly, the contentions raised before us were also raised by the assessee before the learned CIT (A) but no benefit was extended by the learned CIT (A) to the assessee on the ground that the submission of the assessee was without the supporting evidence. Even before us, we do not find any documents supporting the contention of the assessee except the submission as discussed in the preceding paragraph.
Onus upon the assessee to furnish the CA certificates that the payee has paid necessary taxes on income credited by the assessee. However in the case on hand the assessee has submitted PAN of the payee and claimed that the payee has filed income tax return for the year dated 13-07-2009 and declared gross total income of ₹ 1,71,031/- before claiming deduction under section 80C and 80D for ₹ 56,230/- which includes interest income credited by assessee bank. The claim of the assessee bank was very much verifiable by the revenue authority from the income tax record of the payee.
None of the authorities below verified the genuineness of the claim of the assessee. We are of the view that the proviso to section 201(1) in beneficial in nature hence the same should be applied in liberal manner. In the case on hand the payee to whom interest income was credited by the assessee bank is an individual and arguably declaring very nominal income which is below the taxable limit. Thus in our understanding the fact that weather the payee has included the interest income in return of income can be easily verified.
Therefore we set aside the issue to the file of the AO with the liberty to verify the fact that weather the payee has included the interest income in his return filed for the year or not and determine the issue accordingly. Hence, the ground of appeal of the assessee is allowed for the statistical purposes.
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2022 (1) TMI 1086
Addition of gross profit - AO for adopting the gross profit figure as income and not allowing the claim of expenses made in the profit and loss account - HELD THAT:- We find that the assessee is carrying on business consistently. Since the tax audit report has been filed, the facts remain undisputed that the books of account are regularly maintained. In the profit and loss account, various expenses incidental to running the business have been claimed. These expenses are duly supported by the Audit Report. Looking to the consistent running of business of the assessee this action of the Ld. AO of disallowing all the expenses claimed in the profit and loss account was not justified. Ld. CIT(A) has rightly deleted the addition which calls no interference. Thus ground no.1 raised by the revenue stands dismissed.
Addition u/s 68 for unsecured loan - HELD THAT:- We find that the assessee took, unsecured loan from existing loan creditors in other words those parties which have already given unsecured loan to the assessee in preceding years further gave loan to the assessee during the year. Nothing has been brought on record that whether identity, genuineness and creditworthiness of these cash creditors were ever disputed by revenue authorities in the preceding years as no such material was put forth by the Ld. DR.
Remaining amount we find that out of this sum amount of ₹ 40,50,000/- was received and was repaid during the year itself and for the remaining amount of unsecured loan of ₹ 40,50,000/- was repaid in subsequent A.Y. 2006-07.
Assessee had filed complete details of confirmation of account, copies of Income Tax Return of the cash creditors along with bank statements to explain the identity, genuineness and creditworthiness of all the alleged unsecured loans. Revenue authorities failed to find any discrepancy in these documents and even before us also Ld. DR could not file any evidence to challenge the evidences filed by the assessee. Under these given facts and circumstances of the case we find merit in the finding of Ld. CIT(A) and the same stands confirmed. Accordingly, ground no.2 & 3 raised by the revenue stands dismissed.
Disallowance of purchase iron scrap - HELD THAT:- We find that the AO made the disallowance for want of verification of purchase. The assessee placed these details before the ld. CIT(A) who after going through the same and also in view of the details appearing in the audited financial statement deleted the disallowance of purchase of Iron Scrap - Before us Ld. DR failed to controvert the finding of Ld. CIT(A) which therefore, in our view needs no interference. Accordingly ground no.4 raised by the revenue stands dismissed.
TDS u/s 194C - Addition u/s 40a(ia) of the Act for non-deduction of tax at source and the Motor Bhada Expenses - HELD THAT:- AO was supplied with the relevant details of the Motor Bhada Expenses claimed in the profit and loss account. Before the Ld. CIT(A) it was stated that none of the payment exceeded the limit provided u/s 194C i.e. ₹ 20,000/- per transaction and ₹ 50,000/- in aggregate for transaction with one party during the year. Further there is no adverse remark in the tax audit report and also Ld. CIT(A) has examined the documents to arrive at the finding that TDS was not deductible on the alleged expenses and this finding of Ld. CIT(A) remains uncontroverted by ld. CIT-DR, we therefore, find no inconsistency in the finding of Ld. CIT(A). Accordingly ground no.5 raised by the revenue stands dismissed.
Addition u/s 68 of the Act for the sale consideration received from sale of capital asset - HELD THAT:- AO made the addition for the total sale consideration received from sale of land and also made addition for cost of acquisition of equity share - when the matter was carried before the Ld. CIT(A) the assessee had filed the details of cost of assets and calculation of capital gain and the same were found to be correct. We find that the ld. AO failed to allow the deduction for cost of acquisition of equity shares against the sale of securities and similarly failed to give deduction for cost of acquisition of land purchased during the F.Y. 1994-95 & 1991-92 as claimed in the computation of income. Since necessary enquiries were carried out by the ld. CIT(A) by calling remand report and examining documentary evidences before deleting the impugned addition, we find that Ld. CIT(A) has rightly examined the facts of this issue and the finding of Ld. CIT(A) remains uncontroverted before us by the Revenue authorities.
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2022 (1) TMI 1085
TP Adjustment - adjustment on receivables - arms length price adjustment in the assessment order going by S.B.I’s 14.45% interest rate; and that too, without adopting any segmental comparable in the assessee’s segment of business support services - HELD THAT:- We note with able assistance of both the parties that the Transfer Pricing Officer’s order has relied on assessee’s alleged inter-company agreements executed with its associated enterprise only for determining the corresponding credit period in the business transactions as 30 days only. We thus make it clear that the learned lower authorities have not adopted any segmental comparable whilst arriving at the impugned adjustment.
We quote Tecnimont Icb Pvt Ltd., Mumbai [2013 (9) TMI 595 - ITAT MUMBAI] and Sabic Innovative Plastic India Pvt Ltd [2013 (9) TMI 596 - ITAT AHMEDABAD] holding that an associate enterprise itself would not to be taken as a comparable since lacking the independent nature of an uncontrolled transaction in forming hallmark of Chapter X of the Act. We thus delete the impugned arms length price adjustment on receivables for this precise reason alone. Decided in favour of assessee.
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2022 (1) TMI 1084
Delayed payment of employees contribution to PF and ESI - Contribution paid after the due dates prescribed in the relevant Statutes but before the due date of filing of return under section 139(1) - HELD THAT:- As the issue involved in the present appeal as well as the material facts relevant thereto are similar to the case of Lumino Industries Limited [2021 (11) TMI 926 - ITAT KOLKATA] wherein allow the claim of deduction in respect of employees contribution shares towards ESI, PF, by the assessee before the due date of filing of return u/s 139(1) - we respectfully follow the decision rendered by the Tribunal in the said case and delete the disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of delayed payment of employees contribution towards PF and ESI. - Decided in favour of assessee.
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2022 (1) TMI 1083
TP Adjustment - classification of the assessee as a KPO by applying safe harbor Rules - AR submitted that the functional profile of the assessee has been accepted by the TPO and no case was ever made out by the TPO that the assessee is a KPO - HELD THAT:- It is pertinent to note that the Revenue at no point of time disputed the functions of the assessee company. The assessee company provides back office support services to AEs with the help of tools, infrastructure and training provided by the AEs which is different than the functions of the KPO. Besides this, the DRP has admitted that the Safe Harbour Rule will not be applicable in assessee company’s case. Thus, classification of the assessee as a KPO by applying safe harbor Rules is totally out of context and does not get any support from the evidences before us. Therefore, the directions of the DRP as well as the observations made by the TPO and thereafter comparing the assessee company with that of high end KPO for benchmarking ALP determination of the comparables is not correct. Hence, Ground No. 4 is allowed.
Comparable selection - E- Clerx Services Ltd - Functions performed by E-Clerx Services Ltd. takes the nature of high end analytical and research services which require manpower of specific qualifications, skill sets and domain knowledge in contrast to the Assessee rendering back office support services. E-Clerx Services Ltd. works on outsourcing model and outsources substantial amount of work. In the subject year, 22.07% of the total cost of the company that has been paid to the outside vendors for availing of IT enabled services. As such it cannot be compared to the Assessee which provides in-house back office services to AEs.
Infosys BPO Ltd - This comparable company is a giant engaged in providing high-end integrated services by assisting its clients in improving their competitive positioning by managing their business processes in addition to providing increased value, whereas the Assessee engaged in providing IT Enabled services. Infosys BPO has high value of goodwill. Infosys BPO owns significant intangibles. Infosys BPO acquired Portland Group Pty. Limited during the FY 2011-12. The acquisition has enhanced the presence of Infosys BPO in high end sourcing and procurement space in Asia Pacific Region. Thus, this comparable company has to be excluded from the set of final comparables.
Caliber Point Business Solutions Ltd. - This comparable company cannot be rejected only on the ground of different financial year ending. Company is functionally comparable, this fact has not been disputed by the TPO or the DRP. Caliber Point Business Solutions Ltd. was held comparable to the assessee and included in the final set of comparables by the Tribunal in assessee’s own case in AY 2010-11. No distinguishing facts were pointed out by the Ld. DR related to functions for this year to that of A.Y. 2010-11. Hence, we direct the TPO/AO to include this comparable company in final set of comparable.
Jindal Intellicom Ltd.- The assessee is not a high-end KPO. Jindal Intellicom Ltd. passes all the filters applied by the TPO and it is functionally comparable to the assessee. In fact, in preceding year 2011-12, the said comparable company was accepted by the TPO/DRP and the functions remain same. No distinguishing facts were brought on record by the Ld. DR. Hence, we direct the TPO/AO to include this comparable company in final set of comparable.
Erroneous treatment of foreign exchange gain/loss as non-operating by applying Safe Harbour Rules - HELD THAT:- It is pertinent to note that foreign exchange fluctuation is inextricably linked with the assessee’s business operation. The foreign exchange gain was on account of difference in the exchange rate prevailing at the time of invoicing & payment for the inter-company billing as well as Difference in exchange rates prevailing at the time of transaction and as on 31.3.2012 for the amount outstanding at the end of the year. In fact, the DRP has admitted that the Safe Harbour Rules do not apply in assessee’s case. Thus this Ground is allowed.
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2022 (1) TMI 1082
TP Adjustment - adjustment of AMP - international transaction or not? - case of the assessee has been that the primary engagement of the assessee is in manufacturing operations and the AMP expenditure incurred by it is to the benefit of its operations in India - HELD THAT:- The alleged excessive AMP expenditure does not fall in the category of international transaction and therefore the adjustment made by the Revenue on account of incurrence of AMP expenses is not sustainable in law, and set aside the orders of the authorities below. We, however, in consonance with the view taken by the Tribunal in assessee’s own case for the assessment year 2011-12, as in the Hon’ble jurisdictional High Court [2018 (12) TMI 1852 - ITAT DELHI], restore the matter to the file of the learned Assessing Officer to act in accordance to be given in the pending matters. We accordingly, allow ground No. 2 of assessee’s appeal.
Disallowance of professional fees on account of short deduction of TDS - HELD THAT:- This issue is no longer res integra and squarely covered by the decision in the case of CIT vs. M/s SK Tekriwal .[2012 (12) TMI 873 - CALCUTTA HIGH COURT] and also the decision of PV Rajagopal [1998 (4) TMI 127 - ANDHRA PRADESH HIGH COURT] as held that section 201 has 2 limbs – one is that where the employer does not deduct the tax and the 2nd is where after deducting the tax fails to remit it to the government and there cannot be assumption that if there is any shortfall due to any difference of opinion as to the taxability of any item the employer can be declared to be an assessee in default. In view of this settled position of law we allow the ground of appeal.
Disallowance of provision of stamp duty - HELD THAT:- The assessee incurred the stamp duty expenditure in respect of the instrument for 3 years, learned Assessing Officer was of the opinion that for each year of the 3 years, assessee is entitled only for 1/3rd of such an expense and on that premise, disallowed 2/3rd of the stamp duty. Ld. CIT(A) recorded a finding that in order to secure expenditure to be deferred Revenue expenditure, such an expense must result in a benefit in Revenue field and inasmuch as by incurring the stamp duty, the assessee does not get any enduring benefit of creation of a capital asset so as to have any enhanced income. We agree with this finding of the Ld. CIT(A) and dismiss this ground of appeal.
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2022 (1) TMI 1081
Seeking a direction that the term “excisable goods” in Entry 107 of the Notification No.50/2017-Customs dated 30th June 2017 to include “taxable goods subject to tax under GST laws” - respondents states that though the summons were issued on 11th February 2021, the petitioner did not bother to implead the Directorate of Revenue Intelligence as party respondent and to impugn the summons issued by the said authority - HELD THAT:- Leave to amend is granted to impugn the summons annexed to the compilation of documents and other documents forming part of the said compilation. Leave to amend is also granted to implead the Directorate of Revenue Intelligence, Zonal Unit, Bangalore as party respondents to this petition. Amendment to be carried out within one week from today.
The Directorate of Revenue Intelligence shall not take any coercive steps against the petitioner during the course of recording the statement as aforesaid. If the Directorate of Revenue Intelligence proposes to take any coercive steps, the same shall not be adopted without giving 7 days’ clear notice to the petitioner - Writ petition is disposed of.
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2022 (1) TMI 1080
Classification of goods - Bed Cover - revenue's claim is that imported goods is "polyester woven fabric” classifiable under CTH 54075490 - HELD THAT:- The other appeals from the bunch have been disposed of vide this Tribunal’s case MS SUNRISE TRADERS, JAI DURGA IMPEX, ALISHAN IMPEX, SATISH JINDAL, ADITYA LOOMTEX, TUSHAR TILAK, JMD TRADING CO, MOHIT SOIN, AJAY HIRALAL VIJ, JAI HANUMAN OVERSEAS, PANKAJ KUMAR KATARIA, PANKAJ KUMAR, SHREE SHYAM INTERNATIONAL AND TUSHAR GUPTA VERSUS C.C. -MUNDRA [2022 (1) TMI 468 - CESTAT AHMEDABAD] - it was held in the case that Since the revenue has not been able to discharge their burden of proof. Hence the classification of goods declared by the appellants cannot be disturbed.
Appeal allowed.
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2022 (1) TMI 1079
Principles of natural justice - plea for setting aside the impugned order is claimed to be rooted in the failure to remand - seeking restoration of the detriment visited on the respondent herein merely owing to the first appellate authority having decided the issue on merit as well as propriety - HELD THAT:- It has been admitted to in the first ground of appeal that it was by hasty and improper reading that the request from the importer for final disposal had been misinterpreted as waiver of show cause notice and of right to be heard in person. There is nothing on record to give credence to this explanation and it does appear odd that a review procedure that should have motivated seeking of appellate remedy against the original order has, instead, chosen to articulate a perspective merely for overcoming an unfavorable outcome - The first appellate authority cannot be faulted for not having considered a remand to the original authority that would serve no purpose other than prolonging the agony of the exporter without, in any way, gratifying the ‘benefit denial mode’ that the customs authorities appear to have imbued themselves as far as the present dispute is concerned.
Considering the narrative of the investigation undertaken by the jurisdictional authorities and the lack thereof which rendered the order of the original authority to be untenable in law, it is concluded that the impugned order is not lacking in legality and propriety - Appeal dismissed.
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2022 (1) TMI 1078
Classification of imported goods - interactive intelligent panel (automatic data processing machine) model – cloudtouch - covered by heading 8471 of First Schedule to Customs Tariff Act, 1975 or under 8528 5900 of First Schedule to Customs Tariff Act, 1975? - discharge of burden to prove - HELD THAT:- The heading deployed by customs authorities pertains to ‘monitors and projector’ and, while the impugned goods may appear to have some of the characteristics of ‘monitors’, it is abundantly clear from the descriptions in the catalogue that these do contain a central processing unit and does operate on software that requires an input device which, though not be different from that for computers and other automatic data processing machines, functions on its own. Therefore, the goods in question cannot be said to be merely projectors or monitor and, thereby, renders recourse to heading 8528 of the First Schedule to the Customs Tariff Act, 1975 to be inconsistent with the General Rules for Interpretation of the Import Tariff. In accordance with the judicial decisions on discharge of the onus devolving on the assessing authority, and without going into the conformity of the description adopted in the bill of entry, it can safely be held that the revised classification does not bear the authority of law.
Furthermore, as it is not controverted that the said exemption notification is available to all goods classified under heading 8471 of the First Schedule to the Customs Tariff Act, 1974, without examining the appropriateness of the tariff item, it is held that the duty liability discharged by the appellant suffices for the purpose of levy.
Appeal allowed - decided in favor of appellant.
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2022 (1) TMI 1077
Claim of the workmen - Validity of award made by the Industrial Tribunal - Seeking restraint on respondents from proceedings against the petitioner-company pursuant to the award - company under Liquidation - rapid erosion of the Company's net wealth took place - settlement of workmen dues - HELD THAT:- It is not on record that what all orders were passed by the Industrial Tribunal after the order of the moratorium passed by the NCLT till the order of liquidation passed on 23.3.2018. However, the fact remains that the award of the Industrial Tribunal was made well after the order of liquidation dated 23.3.2018. Sub-section (5) of Section 33 of the Code prohibits the institution of any suit or other legal proceeding by or against the corporate debtor (in the present case, the petitioner-company) when a liquidation order has been passed subject to the proviso that the suit or legal proceeding may be instituted by the liquidator on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority. This provision is also subject to the provisions of Section 52 of the Code that provides for the role of a secured creditor in liquidation proceedings.
In view of the liquidation order passed by the NCLT on 23.3.2018, the order of moratorium passed under Section 14 ceased to have effect. Accordingly, further proceedings in the pending adjudicating case before the Industrial Tribunal was not barred after the order of liquidation passed by the NCLT - Under Section 238 of the Code, the provisions of the Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Therefore, the distribution of the proceeds from the sale of liquidation assets are to be distributed in the order of priority as provided under Section 53 of the Code after determination of the claims by the Liquidator.
In view of the manner of distribution of the assets of the company in liquidation as provided under Section 53 of the Code, the “workmen's dues” of the company in liquidation shall be made strictly in accordance with the priority, to the extent, and, in the manner provided in Section 53 of the Code - no negative evidence could have been led by the workmen in this regard. It is pertinent to note that in the testimony of the witness on behalf of the workmen, it was stated that all the workmen affected by lay-off used to visit the Head Office of the Establishment for recording their attendance and they are still doing so. Therefore, under the circumstances of the present case, this piece of evidence would suffice to demonstrate that the workmen were not gainfully employed elsewhere.
It is pertinent to mention here that in paragraph no.19 of the writ petition itself it is reflected that around 2016 claims of workmen / employees were received, but on perusal of the books of accounts and record, the Liquidator admitted claims of 6337 workmen/ employees. Therefore the details of all the workmen of the petitioner-Company are with the Liquidator - the lay-off having been held to be unjustified and illegal by the Industrial Tribunal, what follows is that all the workmen who were not employed after lifting of the lock-out with effect from 15.04.2007 and were laid off, would be entitled to full wages, allowances and consequential benefits as directed by the Industrial Tribunal. Any amounts received by them towards lay-off compensation shall be adjusted. However, the workmen would only be entitled to receive / recover their dues in accordance with the provisions of Section 53 of the Code.
Petition disposed off.
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2022 (1) TMI 1076
Oppression and mismanagement - Sale of property of the company to the third parties - Maintainability of application - application under order VII Rule 11 (d) of the CPC seeking rejection of the plaints on the ground that the suits have barred by law - HELD THAT:- In the case on hand, the sales had taken place in the years 2013 and 2014 where the applications for oppression and mismanagement before the Company Law Board came to be filed in September 2016 which is well beyond three months period. Therefore, it is quite clear that the even though the sales made in the years 2013 and 2014 were the subject matter of the proceedings before the National Company Law Tribunal filed under Section 241 and 242 of the Companies Act, neither the National Company Law Tribunal nor the National Company Law Appellate Tribunal would have power to set aside the sales. In the absence of such power, the bar under section 430 of the Companies Act, would not apply.
In T.Vinayaga Perumal Vs. T.Balan [2011 (4) TMI 1209 - MADRAS HIGH COURT], this Court has noted the limitation on the power of the Company Law Board to set aside sales under Section 402 of the Companies Act. Sections 398 to 402 of the Companies Act, 1956, governs oppression and mismanagement. This Court had held that if the sale had happened three months prior to the presentation of the petition, the Company law Board will not have a power to set aside the same. The said Judgment would apply to the case on hand also, which is under Sections 241 and 242 of the Companies Act, 2013 which provide for oppression and mismanagement.
There are no material irregularity or illegality in the order of the trial Court, dismissing the applications - revision dismissed.
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2022 (1) TMI 1075
Sanction of the Scheme of Arrangement - Section 230(6) read with 232(3) of the Companies Act, 2013 - HELD THAT:- It is ordered that in case of any default including any Provisions of Income Tax Act in this respect of the Transferor Companies the Income Tax department, the ROC, West Bengal and all other Statutory Department shall be at liberty to initiate appropriate proceedings against the Transferee Company, which after the sanction of the scheme by this Tribunal is in any case responsible for the liabilities/non-compliance of the Transferor Companies also.
Various directions regarding holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued.
The scheme is approved - application allowed.
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