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Showing 401 to 420 of 2056 Records
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2019 (7) TMI 1657
Smuggling - Confiscation of goods - 200 Units of Portable Power Generator - import without a valid Certificate of type approval as prescribed under GSR 535 E dated 07.08.2013 and for being not declared in BL and IGM - HELD THAT:- The present importer M/s.Al Burhan International, Kolkata-700001 imported a consignment of 440 kerosene water pumps. They were yet to file a bill of entry to clear the consignment. During the same time, SIB was investigating into imports of portable power generators in garb of kerosene water pumps. They had registered a few cases and had issued an alert circular. In the instant case, the importer claims that after receipt of goods they received the import documents wherein they found that the consignment consists of 200 portable power generators, which they had not ordered. They approached the Import Noting Section and requested for amendment in the IGM to include 200 pcs. Of portable power generators. Sensing that the importer might have fraudulent intention, the Import Noting Section did not permit amendment to the IGM - the redemption fine and penalty on Reexport of goods is not imposable under Sections 125 and 112 of Customs Act, 1962 when supplier confessed mistake and agreed to bear expenses for export due to wrong shipment by foreign supplier and no mala fide on part of respondent as has been held in the case of REGAL IMPEX VERSUS C.C., ICD, TKD, NEW DELHI [2015 (10) TMI 2259 - CESTAT NEW DELHI]). The Tribunal in this case has held that when goods found other than what was ordered and on persuasion of the importers the overseas supplier admitted that goods are wrongly shipped, the charges of mis-declaration on the importers is not sustainable - Hence, applying the ratio of the above judgement when the respondent is not claiming the goods due to wrong supply is not liable to penalty under any circumstance and accordingly, the order imposing penalty on the respondent is liable to be set aside.
The departmental appeal has been preferred on the grounds that goods were not confiscated under Section 111(d) and 111(f) and 119 of Customs Act, 1962. Also, against the Order-in-Original, the respondent had also preferred an appeal, which was allowed vide Order-in-Appeal No.Kol/Cus/Port/AA/733/2017 dated 03.07.2017, setting aside the order of the adjudicating authority. Hence, the appeal filed by the department is not maintainable and liable to be rejected.
Appeal dismissed - decided against Revenue.
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2019 (7) TMI 1656
Jurisdiction to issue SCN - power of DRI to issue SCN - whether the Officers of DRI, can issue show-cause notice for the period prior to 08.04.2011? - HELD THAT:- It is true that the question as to whether the Officers of DRI, can issue show-cause notice for the period prior to 08.04.2011, has been the subject matter of the orders passed by the various High Courts - In the case of M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2016 (5) TMI 225 - DELHI HIGH COURT], the Hon’ble High Court of Delhi, has held that the Officers of DRI had no such power, while the Hon’ble High Court of Bombay in SUNIL GUPTA VERSUS UNION OF INDIA AND OTHERS [2014 (12) TMI 151 - BOMBAY HIGH COURT] had, on the other hand, held that the Officers of DRI had such power.
The decision of the High Court of Delhi in the case of Mangali Impex Ltd., has been stayed by the Hon’ble Supreme Court. In this factual matrix, in several cases, the Tribunal had remanded such matters to the lower authority to decide the matter on merits after the decision by the Hon’ble Apex Court in the case of Mangali Impex Ltd. - Such remand orders have been challenged before the Hon’ble High Court of Delhi in the case of Commissioner of Customs Vs. Arif Khichi [2018 (6) TMI 23 - DELHI HIGH COURT] and the Hon’ble High Court has held that the decision of the Hon’ble High Court of Delhi in the case of Mangali Impex Ltd., has been stayed by the Hon’ble Apex Court and therefore, the Tribunal ought to have decided the issue on merits including the issue of jurisdiction of DRI Officer for issuance of show-cause notice and the Tribunal remanding the matter causes harassment to the assessee and inconvenience to the Department. Thus holding, the Hon’ble High Court of Delhi had directed the Tribunal to recall their appeal in that case and decide the issue on merits including the jurisdiction issue without being influenced by the aforesaid order of the Hon’ble High Court in the case of Mangali Impex Ltd.
The impugned order passed by the first appellate authority remanding the matter to the lower authority is not correct and needs to be set aside - the matter has to be examined on merits by the first appellate authority as well as on the question of jurisdiction of DRI Officer to issue show-cause notice - Appeal allowed by way of remand.
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2019 (7) TMI 1655
Higher rate of depreciation on cranes - @ 15% or 30% - CIT(A) took the view that only the Hydra Cranes can be termed as “Motor Cranes” and accordingly allowed depreciation at the rate of 30% - why depreciation on cranes used in the business of running the same on hire should not be restricted to 15% instead of 30%? - Tribunal confirming the order of the Respondent in limiting allowance of depreciation to 15% as against the claim at the rate of 30% on various types of cranes used in hiring business under Section 32? - HELD THAT:- Disallowance is not sustainable. The Revenue has tried to dismiss the entire issue in the name of a mistake but it does not appear to be a mistake. We are saying so, because even independent of the principle of consistency, the assessee has a good case on merits.
We fail to understand as to on what basis the Revenue authorities have come to the conclusion that the assessee is not in the business of hiring and that the main business of the assessee is construction. According to the Revenue authorities, the cranes are used by the assessee for his own business of construction. There is thumping documentary evidence on record to indicate that the assessee is very much in the business of hiring. The depreciation at the higher rate could not have been declined merely on the assumption that the cranes might have been used by the assessee for his own business of construction.
In fact, it would be an error to take the view that for the purpose of claiming depreciation at the rate of 30% the assessee is obliged to establish that the cranes are used exclusively for the hiring business and that they are not used for any other purpose.
Decision of this Court in the case of Deputy Commissioner of Income-Tax v. Pradip N.Desai (HUF), [2011 (7) TMI 304 - GUJARAT HIGH COURT] wherein this Court took the view that if the assessee is not involved in the business of hiring the vehicle on rent, then he is not entitled to claim higher depreciation under clause (2)(ii) of Entry-III of Appendix-I. There need not be any debate on the proposition of law as explained by this Court in the said judgment. However, as discussed above, there is thumping evidence on record to indicate that the assessee is involved in the business of hiring the cranes. He might be using the cranes for his personal construction business too, but that does not disentitle him to claim higher depreciation once it is shown that the assessee is in the business of hiring the cranes. - Decided in favour of assessee.
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2019 (7) TMI 1654
Enhancement of income by CIT-A - Addition of sale consideration of shares - not allowing any opportunity to the appellant as provided in section 251(2) - HELD THAT:- As gone through the order of the Tribunal and noticed that this legal issue was not adjudicated. The learned Counsel for the assessee stated that he is only interested in recalling of the ground.
DR could not controvert the above factual position and submissions of the learned Counsel for the assessee - As legal issue raised by assessee has not been adjudicated. Hence, the same requires adjudication. Hence, qua ground No. 3, the appeal of assessee is recalled.
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2019 (7) TMI 1653
Stay petition - extension of stay on collection of outstanding disputed demand - delay in disposal of appeal - extension for a further period of 180 days - HELD THAT:- Delay in disposal of appeal is not attributable to the assessee. Therefore, the stay is extended for a further period of 180 days commencing from today i.e.25-07-2019 till the disposal of appeal whichever is earlier. We want to make clear that the assessee should seek adjournment in course of the hearing of this appeal without justifiable reasons and if the assessee does so, the stay granted by this order shall stand vacated automatically. It has been intimated that appeal has been fixed for hearing on 06-11-2019. Stay petition is allowed
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2019 (7) TMI 1652
Principles of natural justice - non-speaking order - Clandestine Removal - shortage of goods - shortage of 99 numbers of diesel engines and 167 numbers of alternators - recovery of CENVAT Credit - HELD THAT:- All the diesel engines and alternators are having serial numbers incorporated by the manufacturers and suppliers. They had also shown the serial numbers of the diesel engines and alternators at the time of clearance of the diesel generator sets in their Central Excise invoices. Hence, it is not difficult to co-relate such documents with the receipts and clearance of diesel engines and alternators and diesel generator sets.
Non-speaking order - violation of principles of natural justice - HELD THAT:- The learned adjudicating authority in his Order-in-Original did not consider the submissions made by the appellant in his reply to the show cause notice and also the documents submitted by them along with their reply and also the submissions made at the time of de novo adjudication proceeding. Hence, the order of the learned adjudicating authority was not a speaking order and such order is not maintainable under the statute.
Thus, the appellants should be given one more opportunity to explain their case before the lower authorities since there have been violations of principles of natural justice on the earlier occasions - Accordingly the appeal is remanded to the adjudicating authority to consider the submissions of the appellant on the basis of the supporting documents, statutory registers and the Chartered Accountant’s certificate.
Appeal allowed by way of remand.
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2019 (7) TMI 1651
Refund of unutilized CENVAT credit - input services used for Export of goods - period April, 2014 to June, 2014 - rejection of refund on the sole ground that from the documentary trail it could not be established that amount was paid for renting of immovable property - HELD THAT:- The substantive part in respect of eligibility of credit in respect of input service has remained the same, being used by the manufacturer, whether directly or indirectly, in relation to the manufacture of final product. It is the inclusive part wherein amendment has been made effective from 1stApril, 2011 vide Notification no. 3/2011-CE (NT) dated 01.03.2011 and accordingly several exclusions have been brought in the definition of Input services, which did not exist, in the prior period. Moreover, the term “services used in relation to setting up of the factory” has been removed from the definition, being replaced by specific exclusions. Thus, based on such amendments, the department has argued that credit in respect of input services which were used for setting up of the factory shall not be allowed. Such narrow interpretation, without even considering changes made in the definition of input services shall lead to wrong conclusion.
The refund claim filed by the Appellant is for the period April, 2014 to June, 2014. Various kind of input services viz. Business Auxiliary Service, Business Support Service, Clearing and forwarding service, erection commissioning and maintenance service, information technology service, renting of immovable property service, technical testing services has been taken by them during the set up stage of the manufacturing unit - These services do not form part of such exclusion clause, hence they are clearly available as credit. Moreover, adjudicating authority has admitted in the impugned order that the input services on which credit has been availed were essential for running of business and a pre condition for manufacturing final product. This also goes long way in establishing the fact that these services were eligible.
Appeal dismissed - decided against Revenue.
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2019 (7) TMI 1650
Method of Valuation - related party transaction - benefit of SSI exemption - existence of mutuality of interest - HELD THAT:- There is nothing in the records to show that the two companies are related i.e., they are inter-connected undertakings or relatives or one is a distributor of the other or they are so associated that they have interest directly or indirectly in the business of each other. Under the circumstances, there is no infirmity in the order of the learned Commissioner once he held that there is no evidence that the two companies are related persons. Therefore, there is also no ground whatsoever to deny them the benefit of SSI exemption individually.
It is the case of the Revenue that they are located on the same plot of land and have three common directors and were using the same office and telephone. It is also the case of the Revenue that in one letter-head of M/s.Bharat, the name of the appellant was also printed on the type right side. It is further the case of the Revenue that the balance sheet and profit and loss account of the two companies show that one amount went to the other - None of these facts, if true, would meet the requirement under section 4(3)(b) for the two companies to be called related persons.
The impugned order is upheld and the appeal filed by the Revenue is dismissed.
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2019 (7) TMI 1649
Cessation of liability - Guarantee commission payable to the Government - treatment given to the amounts i.e. the payments payable to the State for standing guarantee and shown as fee - revenue or capital receipt - AO treating it as income under Section 41(1)(a) - HELD THAT:- Undoubtedly, the assessee claimed them to be revenue receipts. At the same time, the record also supports the findings of the CIT(A) and ITAT, in that the loan utilized by the assessee was for the capital purposes; the loan was in-fact given by the NDDB. The assessee continues to remain liable to repay those amounts. In these circumstances, the State instead of fully writing off the amounts, (repayable by the assessee) imposed an important condition that they would be utilized only for capital/rehabilitation purposes. This was therefore a significant factor i.e. the writing off was conditional upon use of the amount in the hands of the assessee which was for the purpose of capital.
The ruling of T.V. Sundaram Iyengar & Sons Ltd. [1996 (9) TMI 1 - SUPREME COURT]in the opinion of this Court, would not apply. No substantial question of law.
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2019 (7) TMI 1648
CENVAT Credit - duty paying documents - contravention of Rule 9 of Cenvat Credit Rules, 2004 - HELD THAT:- The name of Indian Oil Corporation Ltd., Servo Lube Depot is mentioned in the invoice. Further, the appellants had purchased the goods from the registered dealer and there is no dispute that the goods had been purchased by the dealer from M/s. Indian Oil Corporation Ltd. When the goods had been indisputably purchased from M/s. Indian Oil Corporation Ltd. by the registered dealer and having supplied the same to the appellant and the appellant had received the goods in their factory and used them in the manufacture of the final products, the question of denial of Cenvat Credit cannot arise.
It is not the case of the Department’s that the invoice is not genuine or the Central Excise Duty has not been paid. Under the circumstances when the goods have suffered duty and the goods have been received by the appellant in their factory from the registered dealer and have not used in the manufacture of the final products, the benefit of Cenvat Credit cannot be denied.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1647
TP Adjustment - adjustment to the arm's length price of the corporate guarantee fee - HELD THAT:- We will proceed on the footing that the provision of corporate guarantee to AE is an international transaction under section 92B - we will deal with the issue whether determination of arm's length price on corporate guarantee fee @ 1.75% is proper. It is evident, the Transfer Pricing Officer has applied the rate of 1.75% on the basis of certain information obtained from Indian Banks on the rate of commission relating to various guarantee. Further, the Transfer Pricing Officer has also relied upon his own order passed in the assessment year 2012-13. It is also a fact that learned DRP has upheld the decision of the Transfer Pricing Officer by relying upon its order passed in assessment year 2012-13. Pertinently, while deciding assessee's appeal in assessment year 2012-13 [2019 (4) TMI 1847 - ITAT MUMBAI] the Tribunal has followed its own order passed in case of a sister concern of the assessee and held that corporate guarantee fee should be computed @ 0.5%. Facts being identical, respectfully following the aforesaid decision of the Co-ordinate Bench in assessee's own case, we direct the Assessing Officer to compute the corporate guarantee fee @ 0.5%. This ground is allowed.
Addition on account of arm's length price of interest on interest free loans to AEs - HELD THAT:- If the loan has been advanced to the overseas AEs in foreign currency, it will be appropriate to compute the interest on such loan by applying prevailing LIBOR with basis points. However, the assessee is required to furnish the necessary supporting evidence to substantiate its claim. In view of the aforesaid, we restore the issue to the Assessing Officer for verifying the primary facts and thereafter considering assessee's plea of applying the appropriate LIBOR rate of interest. This ground is allowed for statistical purposes.
Nature of receipt - interest subsidy received under the TUFS - as a capital receipt or revenue receipt - HELD THAT:- Following Tribunal in assessee's own case [2019 (4) TMI 1847 - ITAT MUMBAI] we hold that the interest subsidy received by the assessee being in the nature of capital receipt is not taxable, hence, the Assessing Officer is directed to delete the addition.
MAT Computation u/s 115JB - non-reduction of interest subsidy while computing book profit u/s 115JB - HELD THAT:- As decided in own case [2019 (4) TMI 1847 - ITAT MUMBAI] interest subsidy which was required to be excluded from Book profit. We accordingly direct AO to exclude the TUF subsidy while computing book profit u/s.115JB.
Disallowance u/s14A r/w rule 8D - HELD THAT: -As could be seen from the details of fund available with the assessee as mentioned in DRP's order, own funds available with the assessee far exceeds the investment made. Prima-facie, a conclusion has to be drawn that the investments in exempt income yielding assets were made out of surplus funds available with the assessee. In that event, no disallowance of interest expenditure under rule 8D(2)(ii) can be made. Therefore, we direct the AO to examine assessee's claim factually and delete the disallowance made under rule 8D(2)(ii). As regards the disallowance of administrative expenditure under rule 8D(2)(iii), we are of the view that such disallowance needs to be upheld, as it has been correctly computed by the Assessing Officer.
However, the disallowance already made by the assessee under section 14A of the Act has to be reduced. This ground is partly allowed.
Disallowance u/s 14A r/w rule 8D to the book profit computed under section 115JB - HELD THAT:- Now it is fairly well settled that while computing the book profit under section 115JB of the Act, the Assessing Officer cannot make any adjustment by referring to the provisions of section 14A r/w rule 8D. However, the Assessing Officer has the power to make adjustment on account of expenditure incurred for earning exempt income as provided under clause (f) of Explanation-1 to section 115JB of the Act. Therefore, in the facts of the present case, we direct the Assessing Officer to make adjustment to the book profit in terms of Explanation- 1(f) to section 115JB of the Act by restricting it to the amount disallowed by the assessee voluntarily. This ground is partly allowed.
Disallowance of interest expenditure by apportioning it to interest free loan advanced to associate entities - main contention of the assessee before learned DRP as well as before us is, since it had sufficient interest free fund available with it to take care of the loans advanced to the sister concern, no disallowance out of interest expenditure should be made - HELD THAT:- As applying the aforesaid principle, the Tribunal in assessee's own case in assessment year 2012-13 [2019 (4) TMI 1847 - ITAT MUMBAI] has deleted the disallowance of interest expenditure made under section 36(1)(iii) of the Act. As it appears, neither the Assessing Officer nor learned DRP have controverted assessee's claim regarding availability of surplus fund. What the Departmental Authorities have observed while disallowing interest expenditure is, the assessee failed to establish nexus between the advancement of interest free loan to the sister concern and the business expediency. Thus, in the aforesaid factual position, applying the ratio laid down by the Hon'ble Jurisdictional High Court in CIT v/s Reliance Utilities And Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT]as well as the decision of the Tribunal in assessee's own case cited supra, we hold that no disallowance under section 36(1)(iii) of the Act can be made. This ground is allowed.
Disallowance of employees contribution to Provident Fund (PF) & ESIC - HELD THAT:- As seen from the factual details relating to payment of employees' contribution to PF & ESIC reproduced in the assessment order, all such payments were made before the due date of filing of return of income for the impugned assessment year in terms of section 139(1) of the Act. That being the case, as per the ratio laid down by the Hon'ble Jurisdictional High Court in Ghatge Patil Transports Ltd.. [2014 (10) TMI 402 - BOMBAY HIGH COURT] no disallowance can be made keeping in view the amended provisions of section 43B of the Act r/w the proviso. In fact, following the aforesaid decision of the Hon'ble Jurisdictional High Court, the Tribunal in assessee's own case in assessment year 2008- 09, has allowed assessee's claim of deduction towards employees' contribution on PF & ESIC while deciding the appeal [2019 (4) TMI 1847 - ITAT MUMBAI].
Assessee's appeal is partly allowed.
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2019 (7) TMI 1646
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The respondents relying on the clause 4.8 and clause 5.1 in the apartment buyer agreement submits that the refund amount was not arbitrary and whimsical and that the forfeiture was lawful - And has further relied on the Judgement of the Supreme Court of India in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT] that there is no debt which is payable in law or in fact. It is seen from the apartment buyer agreement clause 5.1, timely payments was the essence of the agreement. The petitioners have also failed to disclose as to how the financial debt is "Due" from the respondent and how the cancellation notice issued by the respondents was illegal and the money forfeited was not lawful.
This tribunal is of the considered view that the debt claimed does not come under the definition of "Debt" which is in "default" and since the petitioners have failed to satisfy this tribunal about the requirements of the section 7 of IBC, 2016 to claim any relief - this tribunal is of the opinion that it is not a fit case to initiate Insolvency process as prayed for by the petitioner/applicant - application dismissed.
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2019 (7) TMI 1645
Request for registration of their contract with TMO rejected - import of poppy seeds - request was rejected on the ground of country cap - HELD THAT:- Prima facie, this Court concurs with the contention that if the registration of TMO itself is exhausted on the basis of the country cap, then the guidelines would work on a first come first serve basis, which is not the methodology under the said guidelines.
Issue notice. The learned counsel appearing for the respondents accepts notice and seeks time to take instructions.
List on 29.07.2019.
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2019 (7) TMI 1644
TP Adjustment - comparable selection - Functional similarity - HELD THAT:- Accentia Technologies Ltd. - From the annual report of the company as well as other material placed on record, it is noticed that the business model of the company is different from the assessee as it provides services in healthcare sector with the aid of software which is in the nature of KPO service. Moreover, during the year under consideration, this company has acquired another company which was a software development company having expertise in developing software relating to EMR, SaaS. It is also observed, due to the aforesaid acquisition the revenue of the company has substantially increased which certainly could have impacted the profitability. TPO has also accepted that the company has made acquisition during the year under consideration. However, he has tried to get over such fact by stating that the company acquired was in the same line of business. In our view, the aforesaid reasoning of the Transfer Pricing Officer is unacceptable. Thus this company cannot be a comparable to a BPO service provider. See B.C. MANAGEMENT SERVICES PVT. LTD. [2017 (12) TMI 255 - DELHI HIGH COURT]
Acropetel Technologies Ltd. - Transfer Pricing Officer himself has stated that the company has three segments namely; engineering, design service, information technology service segment and healthcare segment. However, he has stated that only healthcare service segment was considered by him for comparability analysis. But nowhere the Transfer Pricing Officer has dealt with assessee’s contention with regard to unavailability of segmental details relating to export sales, employee cost, etc. Further, he has also not dealt with assessee‘s objection that substantial operation of software development activities were outsourced on sub–contract basis Learned DRP has also not considered the objections of the assessee property. As decided in CGI INFORMATION SYSTEMS AND MANAGEMENT CONSULTATION PVT. LTD. [2018 (4) TMI 567 - ITAT BANGALORE] this company from being treated as comparable since segmental information to apply certain filters are not available. Thus we exclude this company as a comparable.
Crossdomain Solutions Ltd - Department has failed to substantiate the nature of information gathered by the Transfer Pricing Officer to consider the company as a comparable to the assessee. If the financial results of the company for the impugned assessment year are not available, as alleged by the assessee, the company cannot be considered as a comparable. Moreover, from the decisions relied upon by the learned Sr. Counsel for the assessee, it is noticed that the company has been excluded as a comparable in case of a BPO service provider since it is engaged in providing KPO service. In view of the aforesaid, we hold that this company cannot be treated as comparable to the assessee. Accordingly, the Assessing Officer is directed to determine the arm's length price of the international transaction with the AE after excluding the aforesaid three companies namely Accentia Technologies Ltd., Acropetel Technologies Ltd. and Crossdomain Solutions Ltd. from the list of comparables.
Disallowance of depreciation on goodwill - HELD THAT:- When the assessee has paid capital gain tax at the time of transfer of goodwill and the Department has accepted it, it cannot be said that the assessee has adopted a colourable device. Moreover, the scheme of amalgamation between the assessee and Tracmail AR Services Pvt. Ltd., having been approved by the Hon'ble Jurisdictional High Court, no doubt can be raised with regard to the transparency or genuineness of such transaction. Thus, when the assessee by virtue of such amalgamation has received back the goodwill in its book, depreciation has to be allowed on goodwill. As regards the doubt raised by learned DRP that the assessee cannot claim depreciation on the entire amount of goodwill, it must be observed that the assessee has claimed goodwill on the opening WDV only and not on the entire amount. It is now fairly well settled that goodwill being an intangible asset, depreciation has to be allowed.
Depreciation on additional goodwill arising on amalgamation - HELD THAT:- In case of Pruthvi Brokers and Shareholders Pvt. Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] has held that even if the assessee has failed to claim a deduction either in the return of income or by filing revised return of income, the assessee can make such claim subsequently. Even in case of Goetz India Ltd. [2006 (3) TMI 75 - SUPREME COURT] has held that there is no restriction on the appellate authorities in entertaining a fresh claim of deduction made by the assessee.
Therefore, keeping in view the ratio laid down in the aforesaid decisions, the decision of learned DRP in rejecting assessee’s claim is unsustainable, hence, deserves to be set aside. However, since the Departmental Authorities have not examined assessee’s claim, both factually and legally, we are inclined to restore the issue to the Assessing Officer for examining assessee’s claim on its own merit. While doing so, the Assessing Officer is also directed to take note of the fact whether such claim was allowed in any other assessment year. Ground is allowed for statistical purposes.
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2019 (7) TMI 1643
Grant of Regular Bail - Section 132 of CGST and GGST Act, 2017 - HELD THAT:- Taking into consideration the facts of the case, nature of allegations, gravity of offences, role attributed to the accused, without discussing the evidence in detail, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail.
The applicant is ordered to be released on regular bail in connection with FIR registered with Additional Chief Judicial Court, Bhavnagar) on executing a personal bond of ₹ 10,000/- with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions imposed.
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2019 (7) TMI 1642
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - acquittal of the accused - locus standi to depose the case - failure to prove the debt - non-filing of income tax return to show the loan - time limitation for issuance of cheque - Vicarious liability - borrowing of amount in individual capacity - loan not shown amount of loan in income tax account.
Locus standi to depose the case - HELD THAT:- The deposition of Gagan Bothra, in the crossexamination spanning to 11 days, runs to around 25 typed pages. However, strangely, in the typed set of papers filed by the petitioners before this Court, they have not filed the full deposition of Gagan Bothra and have filed the deposition given by him on 7 days, suppressing the deposition given on four days, viz., 04.03.2015, 01.04.2015, 08.04.2015 and 15.04.2015. It is indeed a sharp practice to file incomplete deposition and the same is deprecated. This Court is not finding fault with the learned Senior Counsel, for, perhaps, they may not be even aware of this - crossexamination has been in Tamil and Gagan Bothra has stated in the crossexamination itself that he does not know to read Tamil, despite which, the answers given by him in respect of the fact in issue militates against the submission of the learned counsel that he was incompetent to depose. The Trial Court and the Appellate Court have appreciated the evidence of Gagan Bothra and have acted on his testimony.
Mukanchand has failed to prove the debt - HELD THAT:- The learned Senior Counsel submitted that Mukanchand has failed to prove the debt of ₹ 35 lakhs and ergo, the prosecution should fail. As alluded to above, Mukanchand has obtained the certified copies of the two promissory notes, the originals of which, he has filed in C.S. No.652 of 2004 and has marked their certified copies as Exs.P.11 and P.12. - In this case, apart from the cheque in question, two promissory notes totalling to ₹ 35 lakhs have also been marked as exhibits (Exs.P.11 and P.12) and this Court is unable to understand as to beyond that, what proof is required.
Complainant has not filed the income tax returns to show that ₹ 35 lakhs was given as loan - HELD THAT:- Gagan Bothra brought to the notice of this Court the complaint given by Mani (A3) to the police which formed the registration of the FIR in Cr. No.548 of 2006 and submitted that even in that complaint, there is no mention that the impugned cheque bearing no.578202 was given as security to Mukanchand which he has misused. The admissions of Mani (A3) in the FIR (Ex.P.13) can be used against him under Section 21 of the Evidence Act. In that complaint, he has admitted that a sum of ₹ 21 lakhs was borrowed from Mukanchand for the purpose of construction of college. The said complaint has been given by Mani (A3) in the capacity of Managing Trustee of the Rajiv Gandhi Trust (A1). He has referred to several cheque numbers that have been given as security to Mukanchand, but, significantly, the cheque bearing no.578202 (Ex.P.1) – impugned cheque, does not find place therein. That apart, Mani (A3), even in the complaint, has stated that since Arul Anbarasu (A9) is contesting the election in Sholingur constituency, Mukanchand, under the instigation of someone having vested interest, has given wide publicity to tarnish the reputation of Anbarasu (A2) and also his son Arul Anbarasu (A9) to see that Arul Anbarasu (A9) is defeated in the ensuing election - Across the Bar, Gagan Bothra submitted that on this frivolous complaint given by Mani (A3), his father Mukanchand was arrested and remanded to custody. If what Gagan Bothra says is true, then, the accused will have to perforce reap for what they had sown, for, that is the law of nature. Be that as it may, this Court has no reasons to hold that Mukanchand has not proved the debt.
Issuance of the impugned cheque is barred by limitation - HELD THAT:- Section 138 NI Act prosecution is not intended for money recovery, but, to instill fear in the mind of the drawer of a cheque to ensure that cheques are not indiscriminately issued. In a given case, the Court can merely sentence the accused to imprisonment till the raising of the Court without ordering any compensation. If any amount is paid by the accused to the complainant in a prosecution under the NI Act, that can definitely be given credit in the execution of a money decree.
Vicarious liability on Anbarasu (A2) - HELD THAT:- The Trust Deed, no doubt, says that Anbarasu (A2) is an Honorary Chairman, which, according to this Court is a misnomer. Unlike a business enterprise where its Managing Director will have remuneration, the Trustees cannot draw remuneration from the Trust funds. They may only draw some actual expenses incurred by them for the benefit of the Trust. Therefore, there is no question of a paid Trustee or Honorary Trustee in matters of Trust - These clauses themselves show the overarching power and hold of Anbarasu (A2) in the affairs of the Rajiv Gandhi Trust (A1).
Mani (A3), in the FIR (Ex.P.13), has stated that he has borrowed in his individual capacity - HELD THAT:- In this case, 2 promissory notes for ₹ 20 lakhs and ₹ 15 lakhs have been executed in favour of Mukanchand. The promissory notes have been signed by Mani (A3) for and on behalf of the Rajiv Gandhi Trust (A1). The rubber stamp of the Rajiv Gandhi Trust (A1) is available in the promissory notes as well in the impugned cheque. The statutory notices sent to the accused were returned on the ground “not claimed”. In their Section 313 Cr.P.C. statement also, the accused have not explained the circumstances under which the impugned cheque came into the hands of Mukanchand.
Mukanchand has not shown the loan in his income tax account and therefore, it should be black money and as such, Section 23 of the Contract Act would apply - HELD THAT:- In the opinion of this Court, after having obtained a loan, it does not behove of the debtor to repudiate it on the ground that the creditor had earned the money through illegal means. In other words, after having borrowed from a compassionate harlot, can the borrower deny repayment of loan on the ground that she had earned the money immorally and illegally? The answer to this question can only be an emphatic “No” and nothing else. In short, a thief is not entitled to legitimately rob a dacoit.
This Court has no reasons to interfere with the concurrent findings of facts arrived at by the two Courts below - Revision dismissed.
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2019 (7) TMI 1641
Maintainability of application - initiation of CIRP - Interim stay of the meetings of the Committee of Creditors pending disposal of petition - reconstitution of Committee of Creditors - withdrawal of Resolution Plan - legally enforceable debt or not - HELD THAT:- The Corporate Debtor has not been maintaining the accounts properly, for which the Applicant cannot be made liable, as the same pertains to the internal management of the Respondent/Corporate Debtor. Therefore, the absence of any entry in the Books of Account of the Corporate Debtor, about the loan taken from the Applicant, cannot be a valid ground for rejection of the claim of the Applicant, in the face of the bulk of the documentary evidence, i.e., loan confirmation letter, pro- note and Cheque including Cash Book produced by the Applicant, to substantiate his claim.
All the directors of the Board had consented to the borrowings of the loan from the Applicant and the loan confirmation letter has been signed by the managing director viz., Senthil kumar, having affixed the seal of the Corporate Debtor that leaves no doubt, that he (the director) has due authority to represent the Corporate Debtor. Therefore, the plea raised by the Corporate Debtor with regard to the Board resolution for obtaining loan from the Applicant is misdirected, the same stands rejected.
Legally enforceable debt or not - HELD THAT:- In the case on hand, the Respondent/Corporate Debtor did not deny the signature, thus the presumption under Sec. 139 would operate. The Respondent failed to rebut the presumption by adducing any cogent or credible evidence. In addition to this a.pronote has also been executed by the managing director viz., Senthil kumar on 21-2-2017. Therefore, the Applicant has proved his case by over-whelming evidence to establish his claim based on acknowledgment/confirmation letter and pro-note, both dated 21-2-2017 and Cheque dated 12-6-2017 [along with 'Cash Book'] that are admissible in evidence which were issued by the Corporate Debtor towards the discharge of an existing liability and legally enforceable debt.
This authority takes judicial notice that during the pendency of this Application, the Resolution Plan came to be approved by the CoC, which has been filed before this Authority under section 30(6) read with Section 31(1) of the IBC, 2016, to treat the Applicant at par with other unsecured financial creditors and make the appropriate provision for payment to which he is entitled, in consultation with the CoC and the Resolution Applicant, and file the supplementary affidavit to that effect before this authority, or to withdraw the Resolution Plan and constitute the CoC afresh to get the Resolution Plan(s) approved with suitable modifications, as may be required.
Application disposed off.
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2019 (7) TMI 1640
Permanent injunction restraining infringement of trademark, passing off, delivery up and rendition of accounts - HELD THAT:- The Defendant clearly reached out not only to Indian customers but global customers as well. A perusal of the website extract and the social media platforms representations clearly show that the Defendant was offering its services and IT products across the country and globally - After the filing of this suit, the Defendant has made a mala fide attempt to change the status of its website. Documents have been filed on record to show that the online payment facility has been deactivated. In the LinkedIn page, instead of 501-1000 employees, the Defendant now claims that it only has 2-10 employees. However, the representations made by the Defendant that it provides services throughout India continues to exist even today.
The nature of IT services is such that the same can be provided from any corner of the globe. The question is whether the impugned infringing mark is being used within the territorial jurisdiction of this Court. The above facts go to show that the Defendant is not limited in its business operations only to Chennai or to the state of Tamil Nadu, but it has been marketing its services to Indian and International customers. The Defendant has not only reached out through its website but through its YouTube channel, Twitter and other platforms. Thus, there is clear use of the mark within the territorial jurisdiction of this Court - the objection as to territorial jurisdiction is not maintainable and is liable to be rejected as the Defendant is clearly offering its services in Delhi and the cause of action, inter-alia, has arisen in Delhi.
The Plaintiff is entitled to protect the mark EXXON even in respect of IT services. Plaintiff itself has a technology company providing IT services. This issue does not require any evidence to be led. Moreover, the nature of IT services in current day and age are such that the same are used in every area of business whether it is manufacturing of goods or providing services. IT services have become an integral part of every business. Information Technology permeates every walk of life and every business. IT services in that sense are now the foundation of every office and no business can be successfully run without a supporting IT framework. Thus, the stand of the Defendant that the services are distinct and different from that of the Plaintiff is not liable to be accepted. Thus, in view of the various admissions by the Defendant, and the admitted facts relating to the Defendant's website, it is clear that the Plaintiff is entitled to an injunction.
Suit disposed off.
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2019 (7) TMI 1639
Declaration of Power of Attorney executed in favour of R3 as null and void - HELD THAT:- It is evident that the Petitioner and R2 being Shareholders and Directors of RI Company, on 04.09.2014, they passed board resolution authorizing R2 to execute Power of Attorney in favour of R3 authorising him to alienate the asset of RL In pursuance of it, R2 executed power of attorney in favour of R3 authorising him to alienate the property of RI Company, accordingly R3 executed sale deeds in favour of third parties basing on the power conferred upon him as reflected in Power of Attorney dated 30.10.2014 to alienate the property of RI company to the intending purchasers - Though this document was executed in the year 2014, until before initiating this proceeding in the year 2018, no proceeding was initiated by this petitioner against her husband for nullification of the Resolution both of them passed and the power of attorney executed by her husband in favour of R3. It is only in the year 2018, this company petition was filed for nullification of Power of Attorney executed in favour of R3 basing on the resolution passed on 04.09.2014.
The Honourable High Court held that the sale deeds executed through Power of Attorney in force cannot be declared nullified through filing Writ Petition - It appears till date neither the Petitioner nor R2 contested the order of Madurai Bench of High Court of Madras in respect to the observations made saying that execution of Power of Attorney is not in dispute.
This Petitioner has not even asked any relief for nullification of the Resolution dated 4.9.2014 in this company petition, then the question of conducting trial would not arise, moreover this petitioner has not placed any prima facie material to believe that R2 fabricated the Resolution dated 04.09.2014. Therefore, it is hereby held that the petitioner counsel has tried to argue the case beyond the pleadings and the relief sought bv the petitioner. Courts are not expected to stretch case beyond the pleadings and reliefs sought in a case. When a point is not legally tenable and when relief is not sought, Court is not obliged to get swayed by the oral arguments of a counsel.
Petition dismissed.
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2019 (7) TMI 1638
Approval of OTS proposal - HELD THAT:- The bank has already initiated that its parallel proceeding under SARFEASI Act while filing the present proceeding under the Insolvency & Bankruptcy Code. It also seems the process of auction is going on and bank can realize the debts from the sale proceed Of such auction. Hence, we are not able to understand the purpose of filing such parallel proceeding in this Court which amount to forum shopping and attract the panel provision of Section 65 of the Insolvency & Bankruptcy Code, because this Court is not meant for recovery forum, and if such petition is filed, wherein the Petitioner is having intention of other then resolution of the Company, then penalty may be imposed under Section 65 of the Insolvency & Bankruptcy Code.
List the matter on 09.08.2019.
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