|
Advanced Search Options
Case Laws
Showing 381 to 400 of 1280 Records
-
2022 (10) TMI 901
Addition u/s 68 - credit entries reflecting creditors for purchases of goods - onus to prove - non discharge of burden placed upon assessee by revenue - HELD THAT:- The impugned credit entries reflecting creditors for purchases of goods, in our considered view, are not satisfactorily explained. As regards the claim that since sales are not being doubted, the purchases cannot be doubted either, as what is sold must have been purchased as well, this theory is relevant only when purchases are being sought to be disallowed as bogus, and profit on the sale is being thus computed without providing for the cost of purchases; that is not the case here.
What is held to be unexplained is the bunch of entries showing credits in the names of certain vendors and the existence and means of these vendors is not proved and the genuineness of the transactions is not established. None of the three necessary ingredients of a credit, i.e. existence of the creditor, means of the creditor and genuineness of the transaction involved, are established on the facts of this case.
In the case of CIT Vs Precision Finance Pvt Ltd [1993 (6) TMI 17 - CALCUTTA HIGH COURT] Hon’ble Calcutta High Court has summed up this principle by observing that “It is for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. In our view, on the facts of this case, the Tribunal did not take into account all these ingredients which have to be satisfied by the assessee. Mere furnishing of the particulars is not enough. The enquiry of the ITO revealed that either the assessee was not traceable or there was no such file and, accordingly, the first ingredient as to the identity of the creditors had not been established. If the identity of the creditors had not been established, consequently, the question of establishment of the genuineness of the transactions or the creditworthiness of the creditors did not and could not arise. The Tribunal did not apply its mind to the facts of this particular case and proceeded on the footing that since the transactions were through the bank account, accordingly, it is to be presumed that the transactions were genuine.
Referring to the judgment of Hon’ble Patna High Court, [1985 (3) TMI 57 - PATNA HIGH COURT]. Their Lordships observed that "The Patna High Court emphasised that as to the nature of the explanation to be rendered by the assessee, it was plain on principle that it was not the law that the moment any fantastic or unacceptable explanation was given, the burden placed upon him would be discharged and the presumption rebutted. We agree. We further agree that it is not the law that any and every explanation by the assessee must be accepted. It must be an acceptable explanation, acceptable to a fact-finding body." These observations are equally relevant in the context of explanations for the purpose of application of section 68. Viewed in this light, we reject the explanation of the assessee as an explanation unacceptable to this final fact finding body.
As regards the learned CIT(A)’s stand that the amount shown as outstanding for the credit purchases can never be covered by the scope of Section 68, in our considered view, that is a very superficial way of looking at the provisions of Section 68. The law is simple and unambiguous. When a sum is found credited in the books of accounts of the assessee, he has to explain the same, and in the event of the assessee’s failure to do so, that amount is treated as unexplained credit under section 68.
When an assessee purchases something from a vendor, obviously, the account of such a vendor is credited and the purchases are debited and, therefore, when the assessee does not have a reasonable explanation about the credit appearing in the account of the vendor- as in this case, the Assessing Officer is perfectly justified in making the addition under section 68. The assessee explains that these people keep changing their office and are not easily traceable, but could it be an acceptable explanation that someone owes huge amounts to the vendors and these vendors are untraceable? The answer, in our humble understanding, is emphatically in negative.
Another explanation of the assessee is that the goods were found defective and, therefore, no payments were made but there is no evidence whatsoever of the goods having been returned; this explanation does not merit acceptance either. Yet another facet of the explanation is that “entire” supplies were found to be defective, and this explanation is also highly unlikely. There is no explanation for why did it take so long to discover that the goods were defective, and there is not even a whisper of evidence that there were any issues in this aspect. A lot of emphasis is then placed on the fact that section 68 is titled ‘cash credit’ and, therefore, purchases on credits cannot be covered by this section.
This plea is also ex-facie incorrect as wordings of Section 68, as we have noted above, are categorical, and these words cover any unexplained credit in the books of accounts. This matter has been under hearing before this Tribunal for almost a decade, and a lot of papers are placed on record, but there is not one confirmation from the purported vendors evidencing the transaction, evidencing the goods return or evidencing the payment. When we specifically asked the learned counsel to point out one confirmation filed by the assessee, he could not do so.
We have carefully perused the submissions filed by the assessee before the CIT(A) there is not one averment on this aspect. Learned counsel for the assessee expressed inability to file any confirmation from the persons from whom such purchases were purportedly made. It was once again explained that these persons being small traders of limited means and operating from table space etc are no longer available for any verification, but then these persons were not available even at the stage of the assessment proceedings.
There is a mention about some confirmations having been filed by these persons in the next year but even those confirmations could not be produced before us. There is nothing to establish identity of these persons; no payments have been made to them, and there is no evidence before us about the current status of amounts payable to them.
All that is being reiterated are the self-serving statements, based on sweeping generalizations, unverified statements, and without any supporting evidence. The onus is on the assessee to prove the identity of these persons, the means of these persons to have allowed these credits to the assessee, and the genuineness of the transactions leading to these credits. On each of these counts, the assessee has miserably failed in discharging his onus. The factual foundation of the case of the assessee is devoid of any substance or merits. The credits appearing in the books of the assessee, with respect to the purported purchase of goods on credit, in our considered view, are, therefore, not at all reasonably explained, and the Assessing Officer was, therefore, fully justified in making the impugned addition under section 68. We must, therefore, restore the addition made by the Assessing Officer. - Decided in favour of revenue.
-
2022 (10) TMI 900
Revision u/s 263 by CIT - Period of limitation - as per PCIT there is difference in contract receipts as per 26AS and figures reflected in the profit and loss account - A.Y.2010-11 - HELD THAT:- The revision order passed by the ld. PCIT u/s.263 of the Act deserves to be quashed it is barred by limitation.
A.Y.2009-10 being unabated assessment as on the date of search on 21/07/2017 and admittedly there was no incriminating material found during the course of search relatable to mismatch in gross receipts and mismatch in TDS credit. Hence, the ld. AO could not have disturbed the earlier concluded assessments in view of the decision of Continental Warehousing Corporation [2015 (5) TMI 656 - BOMBAY HIGH COURT]
Explanation 2 to Section 263 of the Act has been invoked only in the revision order passed in the 263 of the Act without giving show-cause notice to the assessee in that regard. Hence, by placing reliance on the decision of the Hon’ble Gujarat High Court in the case of Shreeji Prints Pvt. Ltd. [2021 (9) TMI 108 - SUPREME COURT] the order passed by the ld. PCIT u/s.263 of the Act becomes unsustainable in the eyes of law;
Adequate enquiries with regard to the disputed issues were already carried out by the Assessing Officer in three independent proceedings;
Even on merits, the assessee had furnished detailed reconciliation statement explaining the mismatch in receipts and mismatch in TDS credit before the ld. AO in three independent proceedings and before the ld. PCIT in Section 263 proceedings;
PCIT had never pointed out by any error in the order of the ld. AO by making preliminary enquiries with regard to submissions made by the assessee before him. Reliance in this regard is placed on the decision of Jabalpur Tribunal in the case of Jashn Beneficiary Trust vs. ACIT [2017 (8) TMI 362 - ITAT JABALPUR]
We find that this is purely a legal issue raised by the assessee and it does not require examination of any fresh facts. Hence, the said additional ground is admitted herein. But in view of the decision rendered by us hereinabove wherein 263 order passed by the ld. PCIT is quashed the adjudication of additional ground becomes academic in nature and hence, it is left open.
Direction given by the ld. PCIT to the ld. AO to verify with regard to taxability of share of profit from AOP in the sum of Rs.3.43 Crores while computing book profit u/s.115JB - A.Y.2011-12 - We find that the said sum has already been added by the ld. AO in the second search assessment completed on 19/06/2019. This goes to prove complete non-application of the mind on the part of the ld. PCIT. Hence, the revision order passed u/s 263 of the Act by the ld. PCIT in respect of these two issues i.e. (c) above is hereby quashed.
Direction given by the ld. PCIT to the ld. AO to verify with regard to adding back the non-genuine purchases while computing book profit u/s 115JB we hold that the ld. AO could only add those list of items that had been stipulated in Explanation 1 to section 115JB(2) of the Act and he cannot tinker with the audited accounts of the assessee which had been approved by the shareholders in Annual General Meeting. Reliance in this regard is placed on the decision of Apollo Tyres Ltd [2002 (5) TMI 5 - SUPREME COURT]. Hence we hold that the ld. AO had correctly followed the ratio decidendi of Hon’ble Apex Court in Apollo Tyres Ltd referred supra. Hence there cannot be any addition to book profit u/s 115JB of the Act in respect of alleged non-genuine purchases. Accordingly, there cannot be any error in the order of the ld. AO in this regard. Hence the revision order u/s 263 of the Act passed by the ld. PCIT in this regard deserves to be quashed and is hereby quashed.
Nature of transactions entered by the assessee with its Subsidiaries / Associates and consequently to verify whether the assessee company had failed to comply with the provisions of section 92E - A.Y.2015-16 - We find that the ld. AO in the original scrutiny assessment proceedings framed u/s 143(3) of the Act on 07/11/2016 had duly examined this aspect which is evident from the reply given by the assessee vide letter dated 11/07/2016 in response to notice u/s 142(1) of the Act letter dated 04/07/2016. In this letter, the assessee had duly furnished the complete details of related party transactions before the ld. AO. The ld. AO after examination of the same had come to a conscious conclusion that the domestic transfer pricing issues cannot be made applicable to the assessee in the instant case and hence there was no need to refer the case to Learned Transfer Pricing Officer. We hold that the ld. PCIT is only trying to substitute his view , which is patently illegal, in the place of view already taken by the ld. AO, which, in our considered opinion, cannot be done by invoking revision jurisdiction u/s 263 of the Act. Hence we have no hesitation in quashing the revision order passed u/s 263.
Mismatch in gross receipts and mismatch in TDS credit for various assessment years - We find that the revenue declared by the assessee in its profit and loss account from Asst Years 2011-12 to 2017-18 is much more than the revenue reflected in Form 26AS. This goes to prove that there would always be mismatch in revenue with corresponding impact in TDS. Hence the revenue reconciliation statement and TDS reconciliation statement filed by the assessee assumes greater importance, which had been duly verified by the ld. AO in all the assessment years. We find that the assessee had duly explained as to why certain receipts though subjected to TDS, would not be liable to be offered to tax such as mobilization advance. This had been completely ignored by the ld. PCIT while exercising his revision jurisdiction u/s 263 of the Act. This goes to prove that the revision jurisdiction u/s 263 of the Act had been exercised by the ld. PCIT in a mechanical and cavalier manner for all the assessment years under consideration and hence they deserve to be quashed.
-
2022 (10) TMI 899
Unexplained cash deposits in the bank account - Addition being 30% of the addition of cash deposit - assessee has not been able to discharge his onus of providing confirmation from parties from whom he claims to have received Cash which was deposited in the Bank accounts owned and operated by him - HELD THAT:- Even though the assessee is doing the activity of Shroff without obtaining any license from Competent Authority but what is mandated under the provisions of the Income Tax Act is to tax income of the assessee, whether it was from legal or illegal source. Therefore the principles for determining the income will remain the same even the source of income is illegal in nature as held by the Hon’ble High Court of Madras in the case of CIT vs. K. Thangamani [2008 (12) TMI 78 - MADRAS HIGH COURT].
Thus the Co-ordinate Bench held that after considering the facts in totality it was held that the assessee was acting as money transfer agent on behalf of the parties engaged in ceramic manufactures. Accordingly allowed the assessee’s appeal and dismissed the Revenue’s appeal.
Computation of income at 0.25 per lakh deposited in the bank account of the assessee - It is appropriate to follow the ruling of the Jurisdictional High Court in the case of Shree Sidhnath Enterprise [2016 (6) TMI 289 - GUJARAT HIGH COURT] it is the business to receive cash and issue cheques in lieu thereof for which the assessee charges commission amount. In the absence of any material to show that the cash in respect of which the cheque had been issued travelled back to the assessee, one fails to understand as to how such amount may be said to be the undisclosed income of the assessee and the Assessing Officer could not have charged the same as escaped assessment under the provisions of Income Tax Act.
The grounds raised by the assessee are hereby allowed and the grounds raised by the Revenue are devoid of merits. Thus we have no hesitation in deleting the additions made by the Ld. CIT(A) and confirming that the assessee is liable to be taxed his commission income at 0.25 per lakh deposited in the bank account.
-
2022 (10) TMI 898
Deduction u/s. 80P on interest income - HELD THAT:- The issue raised in the extant appeal is no more res integra by virtue of series of orders passed by the Pune Tribunal. The Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit [2019 (4) TMI 682 - ITAT PUNE] decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit [2015 (8) TMI 1085 - ITAT PUNE] has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed in Tumkur Merchants Souharda Credit Cooperative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT] allowing deduction u/s. 80P on interest income and that of the Hon’ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. [2014 (9) TMI 833 - DELHI HIGH COURT] not allowing deduction u/s.80P on interest income earned from banks. Both the Hon’ble High Courts took into consideration the ratio laid down in the case of Totagar’s Cooperative Sale Society Ltd. (supra). No direct judgment from the Hon’ble jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). I, therefore, overturn the impugned order on this score and allow the deduction - Assessee appeal is allowed.
-
2022 (10) TMI 897
Revision u/s 263 - As per CIT, AO not considered issues relating to interest and audit fee payments and also the claim of capital gains under section 45 - HELD THAT:- AO neither examined nor made any enquiry with regard to the issues relating to interest and audit fee payments and also the claim of capital gains under section 45 of the Act. Therefore, we find that the ld. PCIT has rightly issued notice by stating that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue and also directed the Assessing Officer to pass fresh order in accordance with law by considering the issues after making proper enquiry and the verifying the details. We find no infirmity in the order passed by the ld. PCIT dated 01.03.2018. Thus, the appeal filed by the assessee is dismissed.
Allowability of expenses claimed in the profit and loss account being TIIC loan interest & charges and audit fee resulting in loss - HELD THAT:- It is an admitted fact that the return of income was filed after due date prescribed under section 139(3) of the Act, thereby, the loss claimed in the return cannot be carry forwarded as per section 80 of the Act. Moreover, it is also an admitted fact that the assessee company was under lock-out by Tamilnadu Industrial Investment Corporation (TIIC) since 1998 and thereby, the authorities below have observed that there was no business activities carried during the previous year relevant to the assessment year under consideration and the assessee cannot compute income/loss from business under section 28 of the Act. Under the above facts and circumstances, we find no infirmity in the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the assessee is dismissed.
Capital gain on transfer of property to the GPA holder - case of AO is that the assessee has leased out a property through one of the Director - HELD THAT:- The assessee company has taken a land on lease from one of the directors Shri Sivasamy for 30 years. Subsequently, the company gave a general power of attorney in favour of Shri P. Parameswaran, who is the director of the company. The same property was sold through Shri P. Parameswaran, Tirupattur for a sale consideration of ₹.3,00,87,887/-. In the power attorney, the legal heirs of Shri Sivasamy also signed in the document. Therefore, the legal heirs along with Shri Sivasamy relinquished the rights on the property. We find that Shri Sivasamy, who was the land owner is no more land owner. The company has given general power of attorney to Shri P. Parameswaran and he sold the property and loans were cleared from TIIC.
The argument of the assessee is rejected for the reason that simply because Shri Sivasamy who is the owner of the property lease out to the assessee and filed property tax receipt though that receipts are not conclusive proof to consider the ownership rights taken away. In this case, the company has given general power of attorney to Shri P. Parameswaran and in that Shri Sivasamy and his legal heirs are also signed. During the course of hearing, when we asked the ld. Counsel for the assessee what is the consideration received by Shri Sivasamy and his legal heirs for relinquishment of the very legal rights on the property, he could answer and the reason is best known to him. Under the above facts and circumstances, we are of the considered opinion that the capital gains has to be taxed in the hands of the assessee as has been held by the authorities below. Thus, we find no infirmity in the order passed by the ld. CIT(A) and accordingly, the ground raised by the assessee is dismissed.
-
2022 (10) TMI 896
Penalty passed u/s 271(1)(c) - Non specification of charge - premise of defective and undetermined allegation - HELD THAT:- In the light of judgement rendered in “Dilip N Shroff [2007 (5) TMI 198 - SUPREME COURT] and “CIT Vs Samson Pericherry” [2017 (1) TMI 1292 - BOMBAY HIGH COURT] and recently in “Mohd. Farhan A. Shaikh Vs DCIT” [2021 (3) TMI 608 - BOMBAY HIGH COURT] we are on the considered view that, since the provision of section 271(1)(c) is calamitous, albeit commercial, consequences, and mandatory, hence brooks no trifling or dilution therewith, as a result in the instant case the SCN dt 22/03/2013 issued u/s 274 r.w.s. 271(1)(c) of the Act without specifying any limb or charge, is invalid and untenable in the eyes of law, consequently we set aside the first appellate order and quashed the order of penalty passed u/s 271(1)(c) of the Act, being bad in law - Appeal of the appellant assessee is allowed in terms of aforestated observation.
-
2022 (10) TMI 895
Reopening of assessment u/s 147 - bogus long term capital gain in the scrip - HELD THAT:- AO has reopened the assessment of A.Y. 2013-14 on the basis of information relating to AY 2011-12. Admittedly the AO has not referred to any material relating to the AY 2013-14 for arriving at the belief that there was escapement of income in the hands of the assessee in A.Y. 2013-14.
It is well settled principle of law that the material relied upon by the AO should have a live or proximate link with escapement of income. It was so held in the case of Amsa India Pvt. Ltd. [2017 (4) TMI 64 - DELHI HIGH COURT] and also in the case of Moser Bare India Ltd. [2012 (12) TMI 456 - DELHI HIGH COURT].There was material in the hands of the AO relating to assessment year under consideration for arriving at the belief that the Capital gains declared by the assessee in the return of income filed for A.Y. 2013-14 is bogus in nature.There is no live link between the material in the hands of the assessee and the belief entertained y him. AO has entertained such a belief only on the suspicion and surmises and not on the basis of any material. Accordingly hold that the reopening of assessment is bad in law. Accordingly we quash the impugned orders passed by the tax authorities on the legal issue. Appeal filed by the assessee is allowed.
-
2022 (10) TMI 894
Exemption u/s 10(23C) - unaccounted money was generated in podar Group and same was rooted through sham companies - HELD THAT:- According to the provision of Section 10(23C)(vi) any University or any Educational Institutions solely existing for education purposes and not for purposes of profit will have its whole of the income exempt. The proviso to section 10(23C) of the Act provides that if an educational institute applies its income on other than objects of trust or for the purpose of profit, it may lose exemption. Admittedly Ramrao Adik Education Society is also an educational institute, therefore, donation to that society cannot be said to be utilized by assessee for non-educational purposes. This fact has not been denied by the AO at any time. Thus it is not the case of the assessee that ₹1 crores given as a donation by the assessee is utilization of the fund for non-educational purposes.
Even otherwise, the disallowance under Section 10(23C) made by the AO is pursuant to search dated 9 January 2018. The impugned assessment year before us is 2012-13. Only evidence based on which the ld AO held that Rs 1 Cr of Donation is not eligible for exemption u/s 10 (23C) are the statements of those persons. For this year, original assessment is already completed u/s 143(3) of the Act on 27 March 2014 therefore, it clearly shows that impugned assessment is a concluded assessment at the time of search. Such retracted statement also cannot be said to be incriminating material found during the course of search, which can be used to enhance the income of assessee u/s 153A of the Act. Thus , there is no incriminating material existing pursuant to search, which could have disturbed the concluded assessment in case of the assessee. Therefore, even on this ground, the exemption u/s 10(23C) cannot be denied to the assessee. Accordingly, ground of the appeal of the learned Assessing Officer is dismissed and order of the CIT (A) is confirmed.
Gratuity and leave encashment provision - HELD THAT:- We find that assessee runs educational institute and makes provision for gratuity and leave encashment of the staff on actuarial basis, which is ascertained liability, and not merely a provision. Merely because it is stated to be a provision, it is not disallowable. Even otherwise, the issue is squarely covered in favour of the assessee by the decision of co-ordinate Bench in assessee’s own case for A.Y. 2014-15. In the result, ground no. 6 of the appeal of the learned Assessing Officer is dismissed.
-
2022 (10) TMI 893
Maintainability of petition - waiver of mandatory condition of pre-deposit - Section 129E - HELD THAT:- In HARESH NAGINDAS VORA, SACHIN LAXMICHAND SHAH VERSUS UNION OF INDIA, PRINCIPAL COMMISSIONER OF CUSTOMS (GENERAL) [2017 (6) TMI 964 - BOMBAY HIGH COURT] this court held that Section 129E of the Act was amended on 1st October 2014 and the mandatory requirement of pre-deposit incorporated in the Section and powers and discretion conferred with appellate authority to waive / dispense with the pre-deposit was taken away. The amendment was to curtail substantial time expended on adjudication of waiver / dispensation applications. The court held that the Parliament had in its wisdom amended the provisions of Section 129E of providing deposit of 7.5% and 10%, respectively, as subclauses (i), (ii) and (iii), respectively, provide and it certainly cannot be held to be unreasonable, onerous, unfair or discriminatory. In fact, court upheld the constitutional validity of the amended Section 129E.
The petitioner should approach the CESTAT by filing an Appeal under Section 129 E of the Act since there are various disputed questions of facts involved that requires to be considered. Further, as pointed out by Mr. Jetly, petitioner’s statements have been recorded under Section 108 of the Act, where petitioner has admitted his role and none of those statements are retracted.
The petition requires to be dismissed. Petition dismissed.
-
2022 (10) TMI 892
Advance Authorization Scheme - Issuance of Revalidation and Enhancement of value of import entitlement - discharge of export obligation or not - non-utilisation of Advance Authorization scheme - eligibility to file necessary application for duty draw back in terms of 4.28 (iv) of Para Handbook of Procedures to 2004-09 - validity period of an Advance Authorization - HELD THAT:- The validity of an import licence/ certificate/ Authorisation/ permission is decided with reference to the date of shipment/ dispatch of the goods from the supplying country as given in Paragraph 9.11 A of the Handbook and not the date of arrival of the goods at an Indian port - The subject Advance Authorisation came with a validity period 24 months from the date of their issue. Unless, they were revalidated before their expiry for a period of 6 months, the rights cannot be claimed except in accordance with the provisions of the Foreign Trade Policy and the relevant Handbook of Procedure.
Revalidation of import/export license/certificate/authorization/permission - HELD THAT:- As per the provisions for the Handbook of Procedures of Foreign Trade Policy 1992-97, the application for revalidation was required to be made within a month of the expiry of the license (for initial period) or before the expiry of license (later period). Subsequently, these time limits prescribed for filing application for Enhancement/Reduction in the value of Advance Authorization as well as for Revalidation of Advance Authorizations have been removed under Paras 4.21 and 4.23 respectively under the Handbook of Procedures issued under the respective respondent of Foreign Trade Policy.
Enhancement/reduction in the value of authorization - HELD THAT:- As per para 4.21 of Handbook of Procedure, the concerned Regional Authority could consider the request for enhancement or reduction in the value of the authorization. As per para 4.21.1 of the Handbook of Procedure to Foreign Trade Policy 2004-09, request for pro rata enhancement in the value and quantity may be made either before or after exports. It further stipulates that in such cases where there is a change in standard input output norm SION prior to export of the product, pro rata enhancement shall be given after calculating entitlement on revised SION.
Application after expiry of last date - HELD THAT:- Paragraph 9.13 of the HOP which states DGFT may, on his own or otherwise, call for records of any case pending with or decided by an officer subordinate to him or an officer of any EPC/FIEO including a Group/ Committee of officers nominated, appointed or authorised by him and pass such orders as he may deem fit is also not relevant. Claim for Exemption from the Policy / Procedure under 2.5 of 2009-14 Policy and later 2.58 of 2015-2020 is without merits - The application was filed on 16.02.2011 for the first time after the extension of two years. Thus, the application was beyond the limitation. Paragraph 9.3 of the Foreign Trade Policy therefore cannot come to the rescue of the petitioner.
Period of discharging the export obligation - HELD THAT:- Period of export obligation (EO) under an Advance Authorisation commences from the date of issue of Authorisation, unless otherwise specified. Export obligation issued under FTP 2004-09, 2009-14 and 2015-20 were to be fulfilled within 18, 24 and 36 months respectively - As per Paragraph 4.22 of the Handbook of Procedure with effect from 27.8.2009 the normal period of discharge of export obligation to 18 months.
No applications were filed within the time prescribed for extending the period of export obligation. Since, such a request was made for the first time on 16.2.2011, it was correctly rejected on 02.06.2011. Further, it is also not clear about the quantity imported and quantity that was lying unutilized on these dates when the period expired. The case of the petitioner does not fall within the above specified period. In any event no application was filed by the petitioner in time. Therefore, the petitioner has no case made on merits - Request for revalidation of an Advance Authorisation can be made once for 6 months from the expiry of date of its validity in terms of Paragraph 4.23 of the Handbook of Procedure and/or for enhancement/reduction in the entitlement in terms of Paragraph 4.21 of the Hand Book of procedure can be made only either before or after export.
This writ petition is disposed of with the following directions:-
(i) Fourth respondent Adjudicating Authority is directed to dispose the Show Cause Notice issued on 10.05.2013 within a period of twelve months from the date of receipt of a copy of this order.
(ii) To the extent, the petitioner has utilized the Advance Authorisations, it shall file necessary documents for discharging its Export Obligation undertaken.
iii) To the extent, the petitioner has not utilized the Advance Authorisations it shall file necessary application for duty draw back in terms of 4.28 (iv) of Para Handbook of Procedures to 2004-09.
-
2022 (10) TMI 891
Oppression and mismanagement - misappropriation of funds - Section 421 of the Companies Act, 2013 read with Section 241-242 of the Companies Act, 2013 - HELD THAT:- In special audit carried out by Vikas Dahiya and Company, Chartered Accountants, New Delhi vide its Special Audit Report dated 24th May, 2017 has observed multiple irregularities during the Financial Year 2013-14 to 2016-17. The auditor has also observed that huge payments were released in cash without supporting vouchers, receipts and payment amounting to Rs. 3.62 Crore has been made for which no satisfactory explanation was given by the Appellant. Illegal encashment of cheques, direct transaction of the funds, non-compliance of statutory duties of the Respondent No.1 Company etc came to the light and the same had happened under instruction of the Appellant. There are irregularities and misappropriation of funds including non-payment of statutory dues and the special audit has also recommended to carry an extensive forensic audit to find out the magnitude of misappropriation of funds.
There was no case of Oppression & Mismanagement as alleged out by the Appellant in present Appeal as well as in the Application filed before the Hon’ble NCLT, New Delhi vide CP-219/241-242/ND/2018 and the Adjudicating Authority rightly passed the detailed order dated 03.09.2021 after going through the entire materials placed on records and as such no irregularities were found in convening an Extra-Ordinary General Meeting which was requisitioned at the instances of a shareholder and a Board Meeting is not a pre-requisite as settled principles under Companies Act, 2013 - the Board Meetings were convened and suggested appropriate actions including convening of ‘Extraordinary General Meeting’ (EGM) based on requisition of shareholder to remove the Appellant from the Directorship of the company vide Special Notice dated 16.05.2018 and the Board has intimated vide letter dated 23.05.2018 to the concerned Director to defend the various allegations raised in the special notice but no cognizant explanation was offered against the discrepancies in the accounts of the Respondent No.1 company.
There are no irregularity in the impugned order - appeal dismissed.
-
2022 (10) TMI 890
Transfer of title of goods or not - Unpaid seller - delivery of BoL to the Corporate Debtor - Appellant TLD MEAI FZE continued to be the owner in view of the terms and conditions of Purchase Orders and Invoices on account of alleged failure of the Respondent to pay the balance of price of Equipment or not? - appellant entitle to make a request to remove the Equipment from the list of fixed asset of ‘Corporate Debtor’ in the CIRP and claim return of those Equipment under the provisions of IBC.
HELD THAT:- The intention of the parties to the Agreement to sell goods is the basis to determine whether the property of goods passes to the buyer or not. More particularly when the sale is under Agreement to sell as defined under Section 4 of the Sale of Goods Act, 1930 - All the conditions in the Purchase Order and Invoices would show that till payment of the price of Equipment by the buyer, the ownership will remain with the seller. In the instant case, the ‘Corporate Debtor’ paid only 30% on the date of contract of sale and later the balance of 70% of sale consideration was not paid. Therefore, strictly in terms of the Purchase Order and the conditions of Invoices the ownership will remain if the Appellant herein is seller of the Equipment to the buyer i.e., ‘Corporate Debtor’. If the intention of the parties is gathered from the terms and conditions incorporated both in Purchase Orders and Invoices, the title to the goods to the transferred only of sale consideration of the Equipment and therefore the delivery of BoL is only transfer of possession of the goods not ownership or title to the goods. Though, BoL is treated as document of title to goods under Section 2(4) of the Sale of Goods Act, 1930.
In the present case, the 70% of the sale price of Equipment was not paid by the ‘Corporate Debtor’ to the Appellant/Seller and the seller would fall within the definition of unpaid seller as defined under Section 45 of the Sale of Goods Act, 1930. The unpaid seller is entitle to claim lien when the goods for the price while he is in possession of them.
In the present facts, the buyer i.e., the ‘Corporate Debtor’, became insolvent and CIRP is initiated against him. If Sections 46 & 50 of the Sale of Goods Act, 1930, are construed strictly and the buyer i.e., the ‘Corporate Debtor’ became insolvent, the unpaid seller i.e., the Appellant herein is entitled to stop the Equipment in the transit in possession of the ‘Corporate Debtor’. Still the unpaid seller is entitled to recover the price by filing a suit for recovery of price under Section 55 or file a suit for specific performance under Section 58 of Sale of Goods Act, 1930 - If the terms and conditions of the Purchase Order or Invoices as mentioned in the earlier paras if construed strictly the title to the goods remained with the Appellant and mere delivery of BoL does not amount to transfer of ownership in the goods since the delivery of goods is based on contract of sale. As such, the intention of the parties to the contract of sale is to pass ownership in the goods only on full payment of sale consideration agreed by the parties.
Thus, the intention of the parties to the contract of sale was to pass ownership of the goods only on full payment of sale consideration agreed by the parties. Admittedly, only 30% of the sale consideration was paid and 70% is balance - the Appellant still continues to be owner of the equipment and the equipment being not assets of the Corporate Debtor ought not to have been included in the assets of the Corporate Debtor.
Appeal disposed off.
-
2022 (10) TMI 889
Seeking approval of the Resolution Plan - entitlement for the distribution under the Resolution Plan as per their admitted claim - HELD THAT:- From the facts brought on record in the Application and replies filed thereto, it is clear that Applicant did not file any claim in the CIRP of Corporate Debtor till the approval of Resolution Plan. It is submitted that neither any claim nor proof of filing in the proceedings has been filed and hence, at this stage there is no occasion to admit the claim, which is brought on record as Exhibit-C to the Application, in the CIRP of the Corporate Debtor. Now coming to Clause-12 of Part-V, on much reliance has been placed by learned Counsel for the Applicant, it is clear from the Resolution Plan brought on record that Clause-12 is part of Part-V of Scheme of Arrangement.
The Appellant is entitled to the relief as prayed, it is not necessary to issue any direction for modifying the Resolution Plan or modifying the order of Adjudicating Authority approving the Resolution Plan. The interest of justice will be served in issuing direction to the Resolution Applicant to make distribution to the Appellant as per its admitted claim of Rs.956.21 crores , which however, shall be without affecting distribution of amounts to other Financial Creditors both Assenting and Dissenting Financial Creditors and other stake holders.
Appeal allowed.
-
2022 (10) TMI 888
Forfeiture of entire Performance Bank Guarantee given by the Appellant - direction to exclude the time from the date of issuance of Form G till the date of passing of orders and issued certain further directions - HELD THAT:- The present is a case where Performance Bank Guarantee was given by the Appellant to implement the Resolution Plan approved as per the Code. The forfeiture of the Performance Bank Guarantee in the CIRP Regulations is statutory requirement.
The Application filed by Respondent No.1, thus, was a composite application invoking various provisions of the Code including Rule 11 of the NCLT Rules, 2016.
In the facts of present case, we are not persuaded to accept the submission of the learned Counsel for the Appellant that only option available to the Adjudicating Authority was to direct for liquidation. Liquidation could have been one of the orders, which is contemplated in the facts of the present case, but it cannot be held that liquidation is the only option in the facts of the present case. It is well settled and reiterated from time to time by the Hon’ble Supreme Court that all steps shall be taken to revive the Corporate Debtor and the liquidation is always a last resort.
The provision of the Code contemplates filing of a complaint by Board or the Central Government or any person authorized by the Government in this behalf. It is true that Adjudicating Authority while exercising jurisdiction under the Code is not required to return any finding of an offence within the meaning of Section 74, sub-section (3). It is a prerogative of the Special Court under Section 236 to try an office and award punishment if any - The observations made by the Adjudicating Authority has to be read only for the purpose of sending the copy of the order to the Board for consideration for filing a complaint and order of the Adjudicating Authority cannot be treated to any direction to initiate action under Section 74, sub-section (3), which is in the domain of the Board and Central Government as per the statutory Scheme of the Code.
Appeal disposed off.
-
2022 (10) TMI 887
Condonation of delay in filing petition - sufficient cause for delay is shown or not - whether the section 9 petition was filed within limitation and therefore it concerns IA No. 3425/2021, which is an application for condonation of delay under section 5 of the Limitation Act? - HELD THAT:- A perusal of pleadings made in section 5 application under Limitation Act shows that the operational creditor has admitted that the last acknowledgment by the corporate debtor was on 21.11.2017 through an e-mail from corporate debtor to Mr. Bruno Claeys, former Commercial Director of the ex Orbest Airlines which was actually to check the authenticity of letter dated 11.3.2013 and also enquiring whether the said letter was signed by him in his capacity as Commercial Director of Orbit Airlines. Clearly this e-mail is checking on the authenticity of his signature in letter dated 11.3.2013 and cannot be considered as acknowledgment of the operational debt by the corporate debtor.
The Orbest Airlines went into liquidation on 21.1.2014, and that in the event of Mr. Bruno Claeys refusing to accept that the signature on the letter dated 11.3.2013 was not in his hand-writing, it is not established that so-called operational debt is due and payable to the Appellant. We have also looked at the Charter Agreement between Air India and Orbest Airlines (attached at pp.148-159 of the appeal paperbook, Vol.II) wherein there is no mention of BKP Enterprise to act and collect payment on behalf of the original operational creditor Orbest Airlines. Significantly, vide a letter dated 28.11.2012, Mr. Sohil B. Zaveri and Mr. Bharat N. Zaveri of BKP Enterprise were authorized to reconcile the Orbest accounts with Air India in respect of the Haj operation undertaken in the year 2012.
The e-mails that have been cited by the Appellant in his application IA No. 3425/2021 for condonation of delay do not provide clear and unequivocal acknowledgment of debt that is due to be paid to the Appellant. These e-mails only allude to the fact that there was no clarity between whether payment should be made to BKP Enterprise and moreover, Orbest airlines after liquidation certified that no payment was due to be received from Air India.
The application for condonation of delay does not contain sufficient cause and has, therefore, been correctly dismissed by the Adjudicating Authority - Appeal dismissed.
-
2022 (10) TMI 886
Initiation of CIRP - Operational Creditors or not - existence of debt and dispute or not - whether claim raised by the Respondent No. 1 is actually an operational debt and whether the said operational debt exceeds an amount of Rs. 1 lakh? - HELD THAT:- Section 5(20) of the IBC lays down that unless the context otherwise requires operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred and Section 5(21) provides that operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority - a plain reading of the definition of operational debt, it is clear that it is a claim in respect of provisions of goods or services including dues on account of employment or a debt in respect of repayment of dues arising under any law for the time being in force payable to Centre or State Government or local authorities. It is, thus, confined to four categories viz. goods, services, employment and Government dues.
From the material on record, facts and circumstances there arises no clear or unambiguous jural relationship between the two parties as one of Corporate Debtor and Operational Creditor. Rather both the Corporate Debtor and Respondent No. 1 are like the principal as well as the agent of the other party. This spirit is not only captured in the body of the agreement but also demonstrated in the actions and conduct of both parties in their role as general profit sharing partners - the claim is not in the nature of Operational debt, it need not be further examined whether there was any default in respect of a debt which had become due and payable and whether it was laced with pre-existing dispute.
The Adjudicating Authority has erroneously admitted the application under Section 9 of the IBC - Appeal allowed.
-
2022 (10) TMI 885
CIRP - recovery of arrear of sales tax / VAT - first charge in favor of revenue - removal of lien created over the factory premises and landed property - overriding effect covered under Section 238 of the IBC - the Adjudicating Authority vacated the lien marked on the Corporate Debtor on 13.05.2019 for two reasons: i. It being subsequent to the admission of the company petition; and ii. This order will not have any primacy over the overriding effect covered under Section 238 of the IBC and allowed the application filed by the Liquidator vacating the lean marked on asset of the Corporate Debtor on 13.05.2019.
HELD THAT:- The Adjudicating Authority while passing the impugned order dated 01.10.2020 has not considered the ratio of the latest judgment of the Hon’ble Supreme Court in the case of State Tax Officer (1) Vs. Rainbow Papers Limited bearing Civil Appeal No. 1661 of 2020 [2022 (9) TMI 317 - SUPREME COURT] - the impugned order passed by the Adjudicating Authority cannot be sustained in the eye of law, therefore, the impugned order dated 01.10.2020 passed by the Adjudicating Authority (National Company Law Tribunal, Principal Bench, New Delhi.) is hereby set aside.
Appeal allowed.
-
2022 (10) TMI 884
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors - existence of debt and dispute or not - existence of loan agreement between the Financial Creditor and Corporate Debtor or not - Financial Creditor disburse any amount to the Corporate Debtor or not? - HELD THAT:- On perusal of the Balance Sheet for the Financial Year 2017-2018, the name of the Financial Creditor is written under the heading for term loans. Hence, there was an agreement for loan between the Corporate Debtor and the Financial Creditor and if there was no disbursal of any amount, the Corporate Debtor would not have sought for restructuring of the loan account on 04 February 2019 - there is a debt and there have been delays in payment of the debt.
The other defenses raised by the Corporate Debtor such as filing a declaratory suit are clearly an afterthought and was done after two years from receiving the notice for this Company Petition.
The present petition made by the Financial Creditor is complete in all respects as required by law. The Petition establishes that the Corporate Debtor is in default of a debt due and payable and that the default is more than the minimum amount stipulated under section 4 (1) of the Code, stipulated at the relevant point of time - petition admitted - moratorium declared.
-
2022 (10) TMI 883
Rejection of form under Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 - duty demanded, as mentioned in the Show Cause Notice, was incorrectly mentioned by petitioner while filing up the Form - HELD THAT:- As held by this court in Thought Blurb [2020 (10) TMI 1135 - BOMBAY HIGH COURT], the scheme has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. The primary focus being to is to unload the baggage of pending litigation in respect of service tax and central excise from pre-GST regime so that the businesses can move on. If this broad picture is kept in mind while considering not only the application under the SVLDRS scheme seeking amnesty, in the fact situation of this case, such a broad picture has to be kept in mind.
Mr. Agashe prays that a direction be given to Respondent no.3 not to impose any penalty. This is something which Respondent no.3 will have to consider on the facts and circumstances of the case. The respondent no.3 are requested to keep in mind that petitioner had filed an application under the SVLDRS which came to be rejected not because petitioner was not eligible but due to certain incorrect entries being made.
Petition disposed off.
-
2022 (10) TMI 882
Maintainability of appeal - appropriate forum - section 35L of the Excise Act - Classification of services - CHA service or not - revenue earned under the head Break Bulk Fee - revenue generated as airline/airline incentive - Business Auxiliary Service or not - penalty u/s 78 of the Finance Act, 1994 - HELD THAT:- Reliance placed upon the respondent’s own case DHL LEMUIR LOGISTICS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE [2009 (3) TMI 158 - CESTAT, BANGALORE], wherein it had held that the Break Bulk Fee would not be includable in the computation of service tax towards CHA Services.
Revenue earned as freight rebate - HELD THAT:- The Tribunal further held that the service tax under the head Business Auxiliary Service could not be charged on the revenue earned as freight rebate inasmuch as the freight rebate was the revenue stream generated out of trading of the space in the airlines incentives, and that unless the airline was booked specifically for a client, the components of Business Auxiliary Service did not come into play. It also held that the appellant (respondent herein) was booking the space for its own trading activities, and therefore, in those circumstances, held that demand of service tax under Business Auxiliary Service could not be sustained.
Income under the head airlines commission and airline incentives - HELD THAT:- The Tribunal held that the same could not be considered as supply of Business Auxiliary Services, and therefore, set aside the demand in that regard.
In view of the specific provisions of section 35L of the Excise Act, 1944, determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment would be a subject matter of appeal before the Hon’ble Supreme Court - the appeal is disposed of as not maintainable before this Court.
............
|
9911796707
