|
Advanced Search Options
Case Laws
Showing 421 to 440 of 1398 Records
-
2020 (10) TMI 978
Estimation of income - Revenue recognition method - Percentage Completion Method for recognition of revenue - HELD THAT:- Percentage Completion Method for recognition of revenue, till the F.Y. 2015-16 (A.Y. 2016-17), was not mandatory/compulsory to be followed by the assessee. It is only with effect from F.Y. 2016-17 (A.Y. 2017-18), that Percentage Completion Method has been made compulsory for the Real Estate Developers, that too for projects commencing on or after 01.04.2016, by way of introduction of Income Computation and Disclosure Standards (ICDS - III), relating to Construction Contracts.
Since the assessee firm has been consistently following the same accounting policy for recognition of revenue, which has even been accepted in the past, therefore, there is no justification, on the part of the ld. AO to disturb the accounting policy adopted and thereby apply Percentage Completion Method for the relevant previous year.
No infirmity in the order of the CIT(A) in holding that the assessee was consistently following the project completion method and income has been properly estimated accordingly. Accordingly, we uphold the order of the ld. CIT(A). Appeal of the revenue is dismissed.
-
2020 (10) TMI 977
Cash purchases in violation of the provisions of Section 40A(3) - HELD THAT:- Assessee purchases fish from fishermen/farmers and in turn sells the articles for storage of fish (plastic crates), for which the payments are made in cash by the farmers/fishermen, which are promptly deposited by the assessee in the bank account of Sundry debtor, [M/s. Supreme Industries]. Since there is risk in carrying large quantity of cash from the rural areas of Andhra Pradesh to Kolkata while transporting back fish from State of A.P to Kolkata the assessee has consistently adopted this modus of remittance of payment to M/s. Supreme Industries.
Since the genuineness of the modus operandi has not be disbelieved/doubted by the AO and the ld. CIT(A) has made a clear finding of genuineness of purchase/payments made in cash, which finding of fact has not been assailed and since the identity of the payee is not doubted and moreover, since the assessee is dealing with fish/fish food as well as for the purpose of storing the fish plastic crates are used/purchased and the CIT(A) placed reliance on the order of this Tribunal in the case of Rampada [2015 (11) TMI 1128 - ITAT KOLKATA] there is no ground for interference as such.
We set aside the order of the CIT(A) and remand the impugned issue back to the AO with a direction that no disallowance of expenditure to be resorted to u/s. 40A(3) if the same are found to be genuine and paid to M/s. Supreme Industries. Appeal of revenue is allowed for statistical purpose.
-
2020 (10) TMI 976
Addition of on-money in cash from the buyers of various flats - unexplained cash u/s 68 - Addition made by the A.O. by simply relying upon the sworn statement made u/s 132(4) of Director of the assessee company - assessee stated that he himself stated in his statements recorded U/s 132(4) of the Act during the course of search as well as past search proceedings - CIT-A deleted the addition - HELD THAT:- CBDT had issued instructions wherein it has been instructed that no surrender should be obtained and assessment should be completed not on the basis of such surrender but on the basis of material gathered during search. However, in the present case, the A.O. had made additions solely on the basis of solitary statement made by the Director of the assessee. Even the Hon’ble Jurisdictional High Court of Rajasthan in the case of CWT vs. Sanwarmal Shivkumar [1987 (9) TMI 26 - RAJASTHAN HIGH COURT] has held that the officers of the Department are bound by the circulars of the board.
Mere admission is not conclusive as to the truth of the matter. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances in which it is made. It can be shown to be erroneous or untrue. Therefore, addition made merely and solely on the basis of confession without any corroborative evidence was not sustainable in law and moreover the said confession made by the assessee was subsequently retracted and since the addition was not supported by any cogent, convincing independent documentary evidence, therefore, the same was correctly found to be not sustainable by the ld. CIT(A).
No new facts and circumstances have been brought before us in order to controvert or rebut the findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere or deviate from the findings so recorded by the ld. CIT(A). Therefore, we uphold the order passed by the ld. CIT(A) qua this issue. - Decided in favour of assessee.
-
2020 (10) TMI 975
Disallowance of personal expenses - HELD THAT:- When the assessee was asked to explain as to why these expenses should not be disallowed as the same is not added back in the statement of income, the assessee could not furnish any explanation before the assessing authority or before the ld. CIT(A) or even before the Tribunal. Disallowance of personal expenses made by the AO and confirmed by the ld. CIT(A) stands sustained. Thus, the ground raised by the assessee is dismissed.
Disallowance of road repairs and maintenance - HELD THAT:- Since the roads are being used by all general public and the same are generally maintained by the Government or local bodies, it is not clear as to whether the assessee has been permitted to carry out any repair work of the public road or not. In case, the local bodies/government claimed similar expenditures, then such expenditure would not be allowed to the assessee and thus, NOC from the local bodies is required for consideration. Moreover, it is required to be verified any similar expenditure incurred by the assessee in earlier year, and if so, whether it has been allowed or not. Case law filed by the assessee shall not come to his rescue since the assessee has not produced any agreement with the local bodies/Government for undertaking repair and maintenance work of public roads. However, as discussed above, we set aside the issue to the file of the AO for verification.
Disallowance of professional fee - HELD THAT:- Since the nature of service rendered by the consultant was purely personal and assessee has submitted before the authorities below that the above amount was paid for taking advice for investments made, and not related to the business activity of the assessee, the Assessing Officer disallowed the above expenditure and brought to tax. CIT(A) confirmed the disallowance. Before us, assessee could not explain anything and filed any written submission for incurring the above expenditure towards business activities of the assessee. Accordingly, the disallowance confirmed by the ld. CIT(A) stands sustained.
-
2020 (10) TMI 974
Addition u/s 40A - Whether expenditure incurred was neither in connection with setting up or formation of nor was it a contribution to any fund, referred to in section 40A (9) but was merely expenditure incurred on employee welfare through an external agency? - whether expenditure in question was incurred wholly and exclusively in the ordinary course of the business of the Appellant and as such is deductible u/s 37? - HELD THAT:- We find that the amount in question was paid for the welfare of the employees of the assessee and not as contribution to any fund, trust, etc., and therefore, in our humble understanding, provisions of sub-section 9 of section 40A are not applicable in the present case and the amount in question is allowable under section 37 and accordingly, this disallowance is deleted and this ground is allowed.
MAT Computation - Disallowance u/s 14A r.w.r. 8D(ii) for the purpose of computing book profit under section 115JB - HELD THAT:- Respectfully following this judgment of Vireet Investment (P.) Ltd [2017 (6) TMI 1124 - ITAT DELHI] this issue is decided in favour of the assessee.
Reversal of provision for bad debts in the present year to be reduced from book profit for the purpose of computing book profit u/s 115JB - Assessee argued that, revenue cannot insist in the present year that for this reason alone that there was no addition to book profit in the year of creation of provision, the deduction cannot be allowed in the present year on account of write back of provision but we do not find any merit in this argument because as per the proviso below clause (i) below explanation 1 to sub-section 2 of section 115JB as reproduced above, this is not the requirement that if book profit was computed in the year of creation of the reserve of provision and addition was not made in that year for computing book profit then only the benefit of clause (i) in Explanation 1 to section 115JB (2) will not be available. In our humble understanding, as per this proviso, the benefit of clause (i) of Explanation 1 to section 115JB (2) will not be available to the assessee if the book profit was not increased by the amount of provision made in the year of making the provision for whatever reason. Hence, we hold that there is no infirmity in the order of CIT(A) on this issue.
-
2020 (10) TMI 973
Smuggling - Betel Nuts - reasons to believe - contention of the learned counsel for the petitioner is that the petitioner received an order from one M/s Saurabh Traders for purchase of ''betel nuts' and the petitioner purchased the ''betel nuts' from the local market and send the goods to the said M/s Saurabh Traders through the transporter Nahata Transport - HELD THAT:- This Court held that the "reasons to believe" which are a sine-qua-non for exercising the powers under Section 110 of the Customs Act should be based upon acceptable materials and should be more than a moon shine. The "reasons to believe" based upon prima facie examination of goods by naked eye, opinion of the local traders as well as the inscriptions on some of the bags were not held to be a valid "reasons to believe" for exercising the powers under Section 110 of the Customs Act. The Court also considered the instructions in Instruction No. 1/2017 and after considering the facts has quashed the seizure order.
In the present case also the Panchnama, which is stated to be the seizure order, is based upon only three factors namely, prima facie examination of goods, opinion of the local traders as well as inscriptions on some of the bags. Once this Court has held the said reasons to be not adequate for exercising of power under Section 110 of the Customs Act, the seizure order in the present case is also liable to be quashed
Petition allowed.
-
2020 (10) TMI 972
Direction to allow to petitioner to give his statement in presence of his counsel - Section 108 (3) of Customs Act - HELD THAT:- The petitioner may move appropriate application before the authority concerned seeking the benefit of Section 108 (3) Customs Act within a period of one week from today, in case he has already not moved such application. The authority concerned may consider and decide the said application in accordance with law, expeditiously. In case the petitioner is permitted to appear along with his agent i.e., his Lawyer; then, the authority concerned may proceed with the matter accordingly.
Petition disposed off.
-
2020 (10) TMI 971
Validity of SCN - Levy of Penalty u/s 112(a) of Customs Act on CHA - abetment of offence committed by the importer as against which the petitioner - scope of Sections 28(2) and 28(4) of the Customs Act, 1962 - suppression of facts or not - extended period of limitation - HELD THAT:- The benefit extended to an assessee under section 28(2) is available only in those situations falling under clauses (i) and (ii) of section 28(1)(b), that is, either where the assessee self-computes or seeks a computation from the proper officer of the duty and interest payable, and remits the same voluntarily, even prior to the receipt of a SCN from the officer and not in any other situation contemplated under Section 28 - In the present case, the SCN has been issued invoking the provisions of section 28(5) which contemplates an alternate scheme of assessment.
This submission is not acceptable for the reason that it does not take note of the scheme of assessment under Section 28 as noted and explained by me in the preceding paragraphs. To reiterate the conclusion in paragraphs 12 to 17 above, the benefit under Section 28(2) is available only in the case of a ‘regular’ assessment contemplated made under Section 28(1). This is made clear by the explicit exclusion in Section 28(1) of cases of collusion, wilful mis-statement or suppression of facts for the initiation of which revenue has the benefit of an extended limitation of five years. Furthermore, section 28(2) makes reference to the duty and interest remitted by the assessee computed in terms of Section 28(1), that is, in cases where there is no allegation of collusion, mis-statement or suppression of facts - The placement of Section 28(2), immediately after 28(1) is also, to my mind, supportive of the aforesaid conclusion. It is evident that it is only the remittance of duty and interest as referred to in sub-section (1) that is addressed in sub-section (2) of Section 28.
The petitioner is permitted to file an appeal challenging the impugned order before the appellate authority within a period of two weeks from the date of uploading of this order. Such appeal, if filed within the period as stated hereinbefore, shall be received by the registry of the appellate authority without reference to limitation but subject to all other statutory pre-conditions and will be heard and disposed on merits - petition dismissed.
-
2020 (10) TMI 970
Refund of excess duty paid on account of wrong declaration of invoice value - rejection of request for amendment of the bills - HELD THAT:- Admittedly, in the present case, the goods have been cleared for home consumption and therefore the petitioner seeks the benefit of the proviso, as per which, the petitioner/assessee would be entitled for amendment if it were able to supply sufficient evidence by way of documents that were ‘in existence’ at the time of the goods were cleared, deposited or exported to establish the error - The lis in this matter revolves around the interpretation of the phrase‘in existence’, as according to the revenue the phrase should be read as available with the Department and it is only if the documents relied upon by the petitioner seeking amendment were, in fact, ‘on record’ that such amendment could even be considered.
What is contemplated vide the proviso to Section 149 is an opportunity to be extended to an assessee to produce such documents that were ‘in existence’ at the stipulated time that would serve to establish the error, if any, in the B/E. The genuineness of such documents or a confirmation as to whether such documents were actually ‘in existence’ is certainly to be left open for thorough examination by the customs authorities and the Court would have no say in such a factual matter. Suffice it to say that the Department should take note of the documents that are presented by an assessee as being ‘in existence’ at the relevant time to evidence an error sought to be amended.
The rejection of the request for amendment by the respondent is set aside to be re-done de novo - Petition allowed.
-
2020 (10) TMI 969
Restoration of name of the Company in the Register of Companies, maintained by the Registrar of Companies, Kochi - delay in filing the Balance Sheets and Annual Returns - Section 252(3) of the Companies Act, 2013 - HELD THAT:- It appears from the records that vide order dated 28.07.2020, the appellant was directed to produce the Financial Statements of the Company for the Financial Year 2018-19 along with the GST Returns. The appellants produced the same on 23.09.2020.
This Tribunal is of the opinion that it would be just and equitable to order restoration of the name of the Company in the Register of Companies - Registrar of Companies, the respondent herein, is ordered to restore the original status of the Appellant Company as if the name of the company has not been struck off from the Register of Companies and take all consequential actions like change of company’s status from ‘Strike off’ to Active (for e-filing) and to intimate the bankers about restoration of the name of the company so as to defreeze its accounts - Application allowed.
-
2020 (10) TMI 968
Approval of Scheme of Arrangement by way of Amalgamation - Sections 230-232 of Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Various directions were issued with respect to convening/holding or dispensing with the meetings of the Shareholders, Secured and Unsecured Creditors as well as issue of notices including by way of paper publication - notices for various statutory authorities also to be served - application allowed.
-
2020 (10) TMI 967
Oppression and mismanagement - forgery of signature on the Financial Statements of the 1st Respondent Company for the Financial Years 2013-14 and 2014-15, the Power of Attorney dated 31.07.2006 and the two PANCARDS bearing Nos. ASEPK5529M and AFWPN7566B - requirement of forensic investigation or not - HELD THAT:- Considering the signature in the Financial Statements and the two PAN cards of the applicant and also perusing the letter dated 23.04.2018 sent by the Company Secretary, this Tribunal finds that there is a difference in the signature of the applicant. Hence, this tribunal is of the opinion that a forensic verification is necessary before disposing of the Company Petition.
This Tribunal is of the view that the ends of natural justice would be met if all the facts that could have a bearing on the issues before us, must be brought on record. For this purpose, in exercise of the statutory powers conferred on this Tribunal under Rule 43 of the NCLT Rules 2016 and also under Section 424 of Companies Act 2013, requiring the production of documents, it is deemed necessary to call for necessary documents such as, the original audited Financial Statements for the period 2013-14 and 2014-15 signed by the Board of Directors, PAN Cards of applicant, Power of Attorney executed on 31.07.2006, in order to set a correct picture in the matter.
This Tribunal hereby direct the Respondent No.1 Company to produce the original audited Financial Statements of the 1st Respondent company for the Financial Year 2013-14 and 2014-15. The applicant is also directed to produce the original Power of Attorney dated 31.07.2006 and the originals of two Pan Cards of the applicant bearing nos. ASEPK5529M and AFWPN7566B to this Tribunal in a sealed cover within two weeks from the date of receipt of this order - The applicant is directed to appear in person before this Tribunal on any working day within two weeks in order to give a specimen signature, so that the same can be sent to the Central Forensic Science Laboratory along with the documents for comparing the signature appearing in those documents.
Application allowed.
-
2020 (10) TMI 966
Approval of Scheme of Amalgamation - Section 230-232 of the Companies Act, 2013 - HELD THAT:- Under Section 230(9) of the Companies Act, 2013, the Tribunal may dispense with calling of a meeting of Creditor or class of Creditors where such Creditor or class of Creditors, having at least 90% value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement.
More than 99% of the Shareholders, all Secured Creditors and more than 94% of the Unsecured Creditors of the Transferee Company as well as more than 99% of the shareholders and the only one Unsecured Creditor in the Transferor Company have been supporting and agreeing to the Scheme of Amalgamation and for dispensation of their meeting for approval of the scheme by way of their consent affidavits. There is no Secured Creditor in the Transferor Company.
Calling of the meetings of the members of the Transferor Company and Transferee Company as envisaged under Section 230(1) of the Companies Act, 2013 is not necessary and will not serve any purpose, if called.
Application disposed off.
-
2020 (10) TMI 965
Restoration of petition - whether the Applicant/Financial Creditor is entitled to seek restoration of the company petition that has already been disposed of, and whether the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016, has the power to do so?
HELD THAT:- The applications seeking revival of a company petition disposed of as withdrawn after recording the settlement terms arrived at between the parties, is permissible in exercise of the powers conferred on the Tribunal under rule 11 of the NCLT Rules, 2016 - Incidentally, exercise of the power conferred by rule 11 of the Rules ibid for the purposes of the Code has been upheld by the Hon’ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 1508 - SUPREME COURT].
Petition is revived and restored to file.
-
2020 (10) TMI 964
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - claim of Financial Creditor - time limitation - amount in question has been claimed in a civil suit before the Civil Judge (Senior Division), Amravati, by the Financial Creditor, which dismissed the application of the Financial Creditor for attachment before judgment, the appeal against the order has also been dismissed by the Hon’ble Bombay High Court - suppression of facts by Financial Creditor or not.
Time Limitation - HELD THAT:- The date of default mentioned in the application to be 21.09.2013. Also, the Financial Creditor has relied heavily on the acknowledgements in the balance sheets for the Financial Years 31.03.2013, 31.03.2014, 31.03.2015, 31.03.2016, 31.03.2017 and 31.03.2018, which have been attached to the petition at pp.133-219, to contend that the application filed under section 7 of the Code to be within the period of limitation.
The present application filed under section 7 of the Code fails the test of limitation in so far as the Code is concerned - Application dismissed.
-
2020 (10) TMI 963
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt or not - novation of contract - suppression and misrepresentation of the facts or not - existence of debt and dispute or not - HELD THAT:- This Tribunal is of the clear view that the Adjudicating Authority is only to satisfy that the default has occurred and that the ‘Corporate Debtor’ is entitled to point out that the default has not been occurred in the sense that the debt is not due. As no other person has a right to be heard at the stage of admission of the application under Section 7 and 9 of the I&B Code. This Tribunal does not consider the objection raised by the guarantors to arrive at a decision in this matter. To clear this confusion regarding treatment of assets of guarantors of the corporate debtor vis-à-vis the moratorium on the assets of the corporate debtor, it is clarified by way of an explanation that all assets of such guarantors to the corporate debtor shall be outside the scope of moratorium as per Section 14(3) (b) of the Code.
It appears from the records that the Corporate Debtor nowhere denied the debt amount nor filed any documents to show that the claim is false, but in reply by way of counter the Corporate Debtor simply prayed to dismiss the application without showing any commendable and acceptable reasons - Under Sub-Section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. The applicant produced the statement of account for the loan account which shows that as on 30.11.2019 a sum of ₹ 32,39,45,078/-, is due from the Corporate Debtor. It has also been established that admittedly there is a “Default” as defined under Section 3 (12) of the Code on the part of the Corporate Debtor and the nature of debt is a ‘financial debt’ as defined under Section 5(8) of the Code.
The application on behalf of Financial Creditor is complete and there is default in the payment of the financial debt. Therefore, as per Section 7(5)(a) of the code, the present application filed U/S 7 of the I&B Code deserves to be admitted against the Corporate Debtor.
Application admitted - moratorium declared.
-
2020 (10) TMI 962
CIRP Proceedings - submission of claim before RP on the basis of an Arbitral Award - Change in voting percentage - The Appellant after becoming Member of COC, objected to part claim of OBC, to the extent it is based on corporate guarantees given by the Corporate Debtor for third party dues-debts. Appellant objected that, such part of the claim is not Financial Debt and to that extent voting right percentage of OBC should be reduced. - HELD THAT:- In the present matter, there was disbursal of debt by the bank to the third parties and the Corporate Debtor gave guarantee for repayment of such debt when it became outstanding. Clearly, the loan advanced carried the element of consideration for time value of money and when such disbursal was guaranteed, it has to be treated as a financial debt under Section 5(8)(a) read with (i) of IBC - The third party was advanced debt which was admittedly given by the Financial Creditor to the said third party. Even if Corporate Debtor issued guarantee in recovery proceeding for the financial debt of third party and in default the said guarantee/s have been invoked by the Financial Creditor, the Corporate Debtor is liable to pay the amount being amount of liability in respect of guarantee issued which falls in the definition of Section 5(8)(i) of IBC.
Counsel for Appellant did not show as to how findings as recorded by the Adjudicating Authority with regard to India Bulls were not sustainable. Going through the record, we do not find any reason to interfere with the findings as recorded by the Adjudicating Authority in connection to the claim entertained of India Bulls - the inclusion of entire claim of Oriental Bank of Commerce (now PNB) and India Bulls (Respondent No.3) and the determination of the voting percentage of the members of COC on the basis of admitted claims of these Financial Creditors, is legal and proper.
Appeal dismissed.
-
2020 (10) TMI 961
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Non-performing Asset - time limitation - main ground in the present appeal is that application under section 7 of the I and B Code was filed in December 2018, i. e., after a delay of almost five years - applicability of section 18 of the Limitation Act, 1963 to insolvency cases - HELD THAT:- The corporate debtor's balance-sheet cannot be considered as an acknowledgment under section 18 of the Limitation Act, 1963. The issue was considered explicitly by the five hon'ble Members of this Appellate Tribunal in the case of V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF) [2020 (3) TMI 1244 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] and held that the books of account are required to be prepared under the obligation casted under section 92 of the Companies Act, 2013. Therefore, it cannot amount to an acknowledgment for section 18 of the Limitation Act, 1963. The acknowledgment to extend the period of limitation should be voluntary and cannot be given under the compulsion of law or with the threat of any penalty/punishment.
We are unable to convince with the argument of learned counsel for the corporate debtor that section 18 of the Limitation Act, 1963 is not applicable to insolvency cases.
The judgment in V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF) requires reconsideration on following reasons :
(I) There is consistent view of the hon'ble Supreme Court and High Court of Allahabad, Calcutta, Delhi, Karnataka, Kerala and Telangana that the entries in the balance-sheet of the company be treated as an acknowledgment of debt for the purpose of section 18 of the Limitation Act, 1963. The majority view in V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF) is just contrary to settled law.
(II) In V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF) minority view is in the line of settled law that balance-sheet of the company, be treated as acknowledgment of debt for the purpose of section 18 of the Limitation Act, 1963. In the majority judgment no reasons have been assigned for disagreement with this view.
(III) In support of majority judgment in V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF) none of the precedent cited before us.
(IV) In V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF), it is discussed that the balance-sheet of the company is prepared pursuant to section 92 of the Companies Act, 2013 and filing of balance-sheet/annual return being mandatory under section 92(4) of the Companies Act, 2013, failing of which attracts penal action under section 92(5) and (6) of the Act. In our humble opinion balance- sheet is not annual return but is a financial statement. Financial statement is defined under section 2(40) of the Companies Act, 2013.
(V) In V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF) it is held that the balance-sheet is required to be prepared under the obligation casted under section 92 of the Companies Act, 2013. Therefore, it cannot amount to an acknowledgment for section 18 of the Limitation Act, 1963. The acknowledgment should be voluntary and cannot be given under compulsion of law or with the threat of any penalty/punishment. The hon'ble Calcutta High Court in the case of Bengal Silk Mills Co. v. Ismail Golam Hossain Ariff, [1961 (4) TMI 113 - CALCUTTA HIGH COURT] held that merely on the ground that the balance-sheet of the company is prepared under the compulsion of law or in discharge of statutory duty, it cannot be held that the balance-sheet of the company cannot amount to an acknowledgment of liability.
(VI) The balance-sheet is a material document attached with sanctity that must be submitted to the Registrar of Companies and is used for obtaining a business loan or investments. Relevant provisions in regard to balance-sheet of the company provided in sections 129, 130, 131, 134, 137, 143 and 397 of the Companies Act. Sections 130 and 131 provides that a company cannot reopen its books of account and financial statement without the order made by the court of competent jurisdiction or the Tribunal. Directors of the company after making judgments and estimates that are reasonable and prudent cannot resile without permission of the Tribunal.
(VII) Section 397 of the Companies Act, provides that the documents filed for the purpose of the Companies Act, and Rules made thereunder by a company with the Registrar shall be admissible in any proceedings there under. Without proof or production of original as evidence of any contents of the original or of any fact stated therein of which direct evidence is admissible.
Thus, with all great respect to the hon'ble Five Members Bench of this Appellate Tribunal that V. Padmakumar v. Stressed Assets Stabilisation Fund (SASF) requires reconsideration. Hence, we are referring the matter - the matter be referred to a Bench of five hon'ble Members of this Appellate Tribunal.
-
2020 (10) TMI 960
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute - Share application money - HELD THAT:- The Respondent's first contention that he has already paid the full and final amount of ₹ 1.03 Crore pursuant to amicable settlement of dispute as recorded in order dated 11th October, 2017 of the Hon'ble National Company Law Tribunal passed in CP No. 205(ND)/2017, the Applicant has accepted the fact that the said amount has been duly received by him but argued that the interest on that amount has not been paid. On our perusal of provisions of section 42 of Companies Act, 2013 and Companies (Acceptance of Deposit) Rules, 2014 as well as of the definition of financial debt under the Code - The Applicant's contention that while returning the principal amount the cheque bearing No. 070259 dated 26.06.2018 for ₹ 1,52,37,000/- was given as interest which was dishonoured whereas, the Respondent argued that the respondent company had lodged a police complaint for lost cheque No. 070259 and the Applicant misused that cheque. The Tribunal is of the view that National Company Law Tribunal is not the correct authority to adjudicate in the matters related to the negotiable Instruments.
The matter between both the parties was amicably settled as recorded in order dated 11th October, 2017 of the Hon'ble National Company Law Tribunal passed in CP No. 205(ND)/2017, between the parties along with that the Respondent failed to show any agreement to substantiate the fact that money was paid as a financial debt or that the money was paid against the payment of interest - the share application money does not fall under any of the clauses of Section 5(8) of the Code and it cannot be said to fall under the definition "a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money" since no debt was disbursed by the Applicant to the Respondent and no time value has been attached with the share application money. Thus, since the claim is not a financial debt the present application under Section 7 of the Code is not maintainable and is dismissed with no costs.
Application dismissed.
-
2020 (10) TMI 959
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - scope of Financial Credit - Competent person or not - disputed debt of debt due - time limitation - legally recoverable debt or not.
Whether Application filed by the Financial Creditor is not filed by a competent person? - HELD THAT:- The Financial Creditor has the proper authority to file the present application, and the objection raised by the counsel for the Corporate Debtor is merely incongruous, and therefore, holds no water. Moreover, the Financial Creditor has annexed the Board Resolution dated 05.08.2019 authorising Deputy Manager (Legal) to represent the Financial Creditor before various forums from time to time - there are no merit in the argument made by the Corporate Debtor in this connection.
Whether the alleged debt in the application is a disputed debt and it is not 'due'? - HELD THAT:- It is settled law as decided by the Hon'ble NCLAT in its order in Vinayaka Exports and Anr Vs M/s Colorhome Developers Pvt. Ltd [2019 (9) TMI 968 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI] the existence of dispute is not relevant for Financial Creditor. Therefore, there are no merit in the contention raised by the Corporate Debtor.
Whether application filed by the Financial Creditor under Section 7 of Insolvency and Bankruptcy Code, 2016 is barred by limitation? - HELD THAT:- It is now a settled case law that the acknowledgement of debt in the balance sheet of the Corporate Debtor extends the period of limitation - From the records it is observed that the Corporate Debtor from 2012 to 2019 made entries in the Balance Sheet about the amount due to the Financial Creditor - this amounts to acknowledgement of debt and, therefore, the application is not barred by the limitation.
Whether the respondent Corporate Debtor is not a Corporate Debtor as there is no legally recoverable debt? - HELD THAT:- It is evident that the Corporate Debtor defaulted in repaying the loan, Revenue Recovery notice and requisition was initiated by the Financial Creditor against the Corporate Debtor and its guarantors in the year 2012. Against the said action, several Writ Petitions were filed by the Corporate Debtor and its guarantors to obtain stay against the RR action initiated by the Financial Creditor. Even otherwise, it is trite and a well settled law that pendency of proceedings before other forums is not a bar to initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 - the Financial Creditor is trying to recover his dues through various legal actions which was being contested by the Corporate Debtor at every stage. In the absence of any adverse order in the above proceedings and after thoroughly perusing the documents executed by the Corporate Debtor with the Financial Creditor, the debt in question is legally recoverable debt and therefore reject the contention that respondent company is not a Corporate Debtor as there is no legally recoverable debt.
Thus, the present application filed by the Financial Creditor is satisfying all the definitions of "Financial Creditor", "Default" and "Financial Debt" and qualifies for filing an application under Insolvency and Bankruptcy Code - the Application under Sub-Section (4) of Section 7 of I&B Code, 2016 is complete and deserves to be admitted for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor.
Application admitted - moratorium declared.
............
|
9911796707
