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Showing 421 to 440 of 2121 Records
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2019 (2) TMI 1704
Disallowing interest u/s 36(1)(iii) - HELD THAT:- On records including the details of own funds and details of advances. We find that the CIT(A) has recorded findings of facts that loans and advances to directors were ₹ 1,32,29,609/-, advances for business purposes were ₹ 33,55,861/- such as advances to suppliers, for factory plot and advances to staff and the remaining amount of advances represented the advances to various govt. authorities.
CIT(A) has recorded a finding of facts to this effect and sustained the additions on ₹ 1,22,92,377/- @14% by excluding out the advances to directors of ₹ 1,32,29,609/- advance given to Reliable Infra Ltd ₹ 9,37232/-for business purpose. CIT(A) has accepted the contentions of the assessee that the interest free advances on which disallowance of interest is to be made are to the tune of ₹ 1,22,,92,377/-.
We find merit in the arguments of assessee that own funds were ₹ 1,58,40,305/- as the balance Sheet whereas the interest free advances are only ₹ 1,22,92,377/- and therefore presumption is that no disallowance u/s 36(1)(iii) of the Act can be made as the interest free funds were more than the amount of advances given free of interest which is supported by the decision of the Hon’ble Bombay High Court in the case of CIT Vs Reliance Utilities and Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT]. We therefore following the ratio laid down by the Jurisdictional High Court , set aside the order of CIT(A) and direct the AO to delete the addition as made u/s 36(1)(iii) - Appeal of the assessee is allowed.
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2019 (2) TMI 1703
Admissibility of petition - initiation of Corporate Insolvency Resolution Process - Corporate Debtor had defaulted in repaying a sum - existence of debt of default - Section 7 of Insolvency and Bankruptcy Code, 2016, R/w Rule 4 of Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 - whether Petitioner is Financial Creditor and that Corporate Debtor owed financial debt to the Petitioner and if so, is there any default?
HELD THAT:- If Petitioner is able to establish that debt payable by Corporate Debtor is a financial debt and it is a Financial Creditor and debt is committed default, then Petition is liable to be admitted.
It is not in dispute Financial Creditor is del-credere agent of M/S RIL. All Purchase orders to be placed through Financial Creditor who undertakes to provide credit facility for the supply of goods to the Corporate Debtor and interest for 20-30 days from the date of supply is at 15% and beyond the said period, interest will be charged at 18%. It is strongly established that Financial Creditor extended credit facility to the Corporate Debtor and goods are supplied to the Corporate Debtor. M/S RIL is not directly extending any credit facility to the Corporate Debtor. M/S RIL will supply goods only on payment. Payment was being made by Financial Creditor in respect of purchase orders and goods are delivered to Corporate Debtor. The credit facility extended by Financial Creditor is subject to payment of interest. Money is paid to M/S RIL on behalf of Corporate Debtor against time value for money.
It is proved that Petitioner is a Financial Creditor and that the debt due by Corporate Debtor is a Financial Debt. Petition is in order and as such Petition is liable to the admitted - Petition admitted - moratorium declared.
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2019 (2) TMI 1702
Maintainability of petition - Initiation of CIRP - Corporate Debtor failed to pay the total outstanding debt - Operational Debt - Existence of dispute or not? - HELD THAT:- The Respondent Debtor has filed a Civil Suit on 02.05.2019 but it has no correlation to the claim amount of the Petitioner as the same is totally different from the Rent amount. The Bench observed that the Petitioner has not claimed anything related to balance rent amount and hence, the dispute on rent will not apply to the payment of ‘Royalty’, which is demanded through the Demand Notice dated 22.02.2018 - it is clear that there is no existence of dispute vis-à-vis amount claimed as Royalty payment.
This Bench being satisfied that the Respondent Debtor company defaulted in paying its debt to the Petitioner, hereby ‘Admit’ this Petition - Petition admitted - moratorium declared.
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2019 (2) TMI 1701
Addition on account of the difference in the job work - CIT (A) deleted the addition made by the AO by observing that there was no concealed job work as alleged by the AO - HELD THAT:- Addition was made by the AO merely on the basis of the difference of sales shown by the assessee in its books and the excise records. There was no other material available with the AO suggesting that the assessee has carried out any job activity outside the books of accounts.
The assessee in support of his claim that it has carried out the job work on behalf of other parties has filed the excise returns, production registers, VAT returns, stock registers, declaration filed to the excise authorities, TDS certificate issued by the loan license party. All these documents are available on record. But the AO has not pointed out any defect in such documents.
AO was very much empowered to take the confirmation from the loan license party under section 131/133(6) of the Act, but he failed to exercise his powers given under the statute. DR before us has not brought anything contrary to the finding of Ld. CIT(A). Accordingly, we do not find any reason to interfere in the order of the Ld. CIT(A). Hence, the ground of appeal of the Revenue is dismissed.
Addition on account of suppressed production - HELD THAT:- AO observed the difference in the production due to the job work carried out by the assessee during the year. We have already adjudicated the similar ground of the Revenue vide paragraph numbers 9 to 9.4 of this order. The reasoning given in ground No. 1 of the Revenue as discussed above will also be applied to this ground as well with full strength. Therefore, we do not find any infirmity in the order of the Ld.CIT(A). Hence, the ground of appeal of the Revenue is dismissed.
Addition on account of lower GP ratio - AO has estimated the gross profit at the rate of 25% - HELD THAT:- If the AO was not satisfied with the gross profit ratio shown by the assessee, then he should have referred the gross profit declared in the earlier and subsequent assessment year. We find that the assessee in earlier years has shown the GP less than 25% of the turnover. The necessary details of the GP ratios. But the AO has not made any reference to the GP ratio declared by the assessee in earlier assessment years. Therefore we are of the view that the GP ratio taken by the AO is based on his surmise and conjecture. Thus we do not find any reason to disturb the finding of the CIT (A). Hence the ground of appeal of the Revenue is dismissed.
Addition on account of undervaluation of closing stock - HELD THAT:- The accounting standard 2 issued by the ICAI requires the assessee to show closing stock either on cost or market value whichever is less. The AO in the case on hand has rejected the valuation done by the assessee without adducing any reason thereon. DR before us has also not brought anything on record contrary to the finding of the CIT (A). Hence we do not find any reason to disturb the finding of the Ld.CIT (A). Hence the ground of appeal of the Revenue is dismissed.
CIT(A) contravening the provisions of section 251 of the Act by directing the AO to verify the contention of the assessee - HELD THAT:- CIT (A) has not restored the matter for fresh adjudication. But it was restored to the AO to adjudicate the issues with the direction. Therefore, we hold that there was not blanket direction provided to the AO which is in contravention to the provisions of section 251 of the Act.
AO in giving effect order to the Ld.CIT (A) direction has deleted the addition in its order dated 9th June 2011. The copy of the order is placed on record. Thus we are of the view that once addition deleted by AO, there remains no grievance to the AO. Accordingly, the ground of appeal filed by the Revenue does not require to be adjudicated separately. As such the ground of appeal of the Revenue as discussed above becomes infructuous.
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2019 (2) TMI 1700
Approval of Resolution Plan - Section 31(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Resolution Plan filed with the Application meets the requirements of Section 30(2) of the I&B Code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The ‘Resolution Plan’ is also not in contravention of any of the provisions of Section 29A. The Resolution Professional has also certified that the “Resolution Plan” approved by the CoCs does not contravene any of the provisions of the law for the time being in force. The Compliance Certificate is placed at pages 7 to 11 of the typed set filed with the Application. The ‘Resolution Plan’ stands approved by the CoCs with 74.84% voting share.
The ‘Resolution Plan’ is hereby approved, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan including Resolution Applicant.
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2019 (2) TMI 1699
Assessment of trust - Applicability of provisions of Sec.164(1) - whether the assessee trust cannot be assessed as on AOP? - ITAT held that the income of the assessee is taxable in the hands of contributors and not in the hands of the AOP - whether ITAT erred in holding that activities of the assessee are not commercial in nature even though the assessee has not carried out any activity in the spirit of Trust? - HELD THAT:- As decided in M/S. INDIA ADVANTAGE FUND, M/S. ICICI EMERGING SECTORS, M/S. ICICI ECONET INTERNET & TECHNOLOGY FUND [2017 (2) TMI 722 - KARNATAKA HIGH COURT] we cannot accept the contention of the Revenue that the shares were non-determinable or the view taken by the Tribunal is perverse. On the contrary, we do find that the view taken by the Tribunal is correct and would not call for interference so far as determinability of the shares of the beneficiaries are concerned.
Once the shares of the beneficiaries are found to be determinable, the income is to be taxed of that respective sharer or the beneficiaries in the hands of the beneficiary and not in the hands of the trustees which has already been shown in the present case - Decided against revenue
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2019 (2) TMI 1698
Service of order - grievance of the petitioner is that he has not been able to get the copy of the final order - HELD THAT:- In case any final order has been passed the opposite parties may provide a copy of the same to the petitioner.
Writ petition, as such, is not require to be decided on merit.
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2019 (2) TMI 1697
Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - default in repayment of debt - Section 9 of Insolvency and Bankruptcy Code 2016 R/w Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- M/S Priya Trading Company is nothing but a firm belonging to the suppliers and in pursuance of Agreement only the Supplier supplied the raw material to the Corporate Debtor through M/S Priya Trading Company, the Operational Creditor herein.
It is interesting to note Corporate Debtor till date had not initiated any action against the supplier / Operational Creditor for recovery of alleged loss. The alleged dispute has no merit at all. The alleged dispute cannot be recognised. The Corporate debtor has committed default in paying the amounts covered by the invoices. Having committed default, the Corporate debtor cannot blame the Operational Creditor.
The Hon'ble Apex Court has held in MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [2017 (9) TMI 1270 - SUPREME COURT] that the dispute must truly exist in fact and is not spurious, hypothetical or illusionary. Absolutely there is no material filed by Corporate Debtor that there existed a dispute in fact between it and the Operational Creditor.
This is a Petition filed by Operational Creditor under Setion 9 of IBC. The Operational Creditor filed bank account copy It has issued demand notice to the Corporate debtor and there was reply. Thus, Petition filed by Operational Creditor is complete and Petition is liable to the admitted.
The Adjudicating Authority admits this Petition under Section 9 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code - petition admitted - moratorium declared.
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2019 (2) TMI 1696
Penalty u/s 271AAB - search & seizure operation u/s 132 - ‘undisclosed income’ for the purposes of levy of penalty - whether the income offered by the assessee in its return for AY 2012-13 being the value of closing stock of sub-grade fines having cost can be considered to be ‘undisclosed income’ found in the course of search so as to warrant penalty u/s 271AAB ? - HELD THAT:- Levy of penalty under Section 271AAB is mandatory and automatic and therefore in the matter of levy of penalty the AO had no discretion once the assessee admits of any undisclosed income in his statement u/s 132(4) of the Act. Such a view goes against the words used in section 271AAB and section 274.
We note that if the intention of the Legislature to levy the penalty was mandatory and automatic then the right of appeal u/s 246A would not have been provided for by the Legislature against the order of penalty passed u/s 271AAB.
We also note that while enacting Section 271AAB the Legislature has consciously used the word ‘may’ in contradistinction to the word ‘shall’ in the opening words of Section 271AAB of the Act. The choice of the expression ‘may’ and not ‘shall’ in the opening Section of 271AAB shows that the Legislature did not intend to make the levy of penalty statutory, automatic and binding on the AO but the AO was given discretion in the matter of levy of penalty. Our foregoing view finds support in the decision in the case of ACIT Vs Marvel Associates (2018 (3) TMI 946 - ITAT VISAKHAPATNAM) which inturn relied on Hon’ble Andhra Pradesh High Court ratio in Radha Krishna Vihar (2018 (2) TMI 1595 - TELANGANA AND ANDHRA PRADESH HIGH COURT).
Section 145A of the Income-tax Act, which deals with the method of valuation of stock for the purposes of Section 145 of the Act, requires the assessee to follow any of accepted methods of stock valuation on the condition that the method once adopted must be followed consistently. We therefore find that following the consistent method of valuation followed in the past and accepted by the Revenue even in the financial accounts for the year ending 31.03.2012, the assessee had valued the stock of subgrade Fines at NIL. Having regard to these facts therefore we do not find any infirmity in the accounts and find merit in the Ld. AR’s submissions that no undisclosed income could be inferred merely because in the accounts the value of stock of sub-grade fines was taken as NIL.
Department has been consistently accepting the assessee's method of accounting employed whereby it valued the sub-grade Fines in stock at NIL and the gross proceeds realized on sale was assessed by way of income in the year on sale which is evident from the income-tax assessments framed for the all the preceding years. Therefore following the Rule of consistency we do not find any infirmity in the assessee’s stand regarding valuation of sub-grade fines at NIL.
In the circumstances the inventory of sub-grade fines whose value was considered as additional income cannot be considered to be ‘undisclosed income’ found as a result of search so as to attract the rigors of Section 271AAB because such inventory was found recorded in other business records regularly maintained in the course of assessee’s business.
Levy of penalty under Section 271AAB was automatic. Since in the foregoing paragraphs we have held that the income of ₹ 59.09crores offered by the assessee while filing of the return of income did not come within the ken of ‘undisclosed income’ defined in clause (c) of Explanation to Section 271AAB, we hold that the penalty levied under that Section was unsustainable and for the aforesaid reasoning we confirm the order of CIT(A). We accordingly uphold the CIT(A)’s order for the aforesaid reasoning and reject the Revenue’s appeal.
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2019 (2) TMI 1695
Works contract - classification of contract after 01.06.2007 where contract entered into prior to 01.06.2007 - whether "works contract" is a taxable service only w.e.f. 01.06.2007.
HELD THAT:- Ld. Counsel for the appellant is granted four weeks' time to file affidavit of valuation and deficit court fee.
List again on 26.4.2019.
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2019 (2) TMI 1694
Validity of decision of the ‘Resolution Professional’ - seeking observation to place the matter before the ‘Committee of Creditors’ - whether ‘Resolution Professional’ or the ‘Adjudicating Authority’ can decide whether goods hypothecated, such as four cranes, belongs to the ‘Corporate Debtor’ or not?
HELD THAT:- From the record we find that there is a disputed question of fact which cannot be decided by the ‘Resolution Professional’ or the ‘Adjudicating Authority’. The appellant can raise such issue and claim at an appropriate stage, i.e. after moratorium is over.
Appeal dismissed - decided against appellant.
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2019 (2) TMI 1693
Addition made on NRI Mobilization expenses on the basis of decision of Bombay High Court in the case of Emirates Commercial Bank Ltd [2003 (4) TMI 2 - BOMBAY HIGH COURT] - HELD THAT:- The respondent assessee is a bank. For Assessment Year 200001, the assessee had claimed expenditure of ₹ 4.56 crores under the head "NRI Deposit Mobilization". According to the assessee to assist and facilitate the investments by NRIs, such a branch was set up. The said amount was expended towards administrative and other related expenses and the entire expenditure was for the purposes of head office and, therefore, no restrictions in terms of Section 44C should be imposed.
The Tribunal accepted the view of the assessee relying upon the decision in the case of this very assessee for the earlier AY 1989-90 and 1990-91. The Tribunal also referred to certain other decisions.
Revenue submitted that the Tribunal has erred in not applying the provisions of Section 44C of the Act. On the other hand, learned Counsel for the assessee supported the view of the Tribunal and contended that in an identical situation for the earlier assessment years, the Revenue had not carried the matters in appeal before the High Court. We note that non-filing of the appeals by the Revenue could not have been on the ground of low tax effect. Under the circumstances, the decisions of the Revenue not to challenge the Tribunal's judgment in earlier years in respect of this very assessee, can be seemed as conscious decision of accepting the proposition involved. This question is, therefore, not entertained.
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2019 (2) TMI 1692
Crediting the amount encashed form Bank Guarantee, in the account of the Registrar General of this Court - insolvency proceedings pending before the NCLT Mumbai - HELD THAT:- Considering the fact that insolvency proceedings are pending before the NCLT Mumbai, the amount is directed to be retained in the account of the Registrar General. The same would be subject to further orders that may be passed in the insolvency proceedings - No further orders can be passed as the moratorium period under Section 14 of the Insolvency and Bankruptcy Code, 2016 has already kicked in.
Petition disposed off.
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2019 (2) TMI 1691
Deduction u/s 36(1)(viia) - provision made in books for bad and doubtful - HELD THAT:- In view of the above findings of the Tribunal in assessee’s own case in the earlier assessment years [2016 (4) TMI 753 - ITAT CHENNAI] restricting claim u/s 36( 1)(viia)only for provision for rural debts and consequently disallowing claim for deduction of provision made of in accordance with the provision of sec 36( I )(viia) we find no reason to interfere with the order of the Ld. CIT(A) and reject the grounds raised by the assessee.
Alternate claim raised in connection with protective disallowance made u/s 36(1 )(vii) - Direct the AO to examine these issues in the light of the Hon’ble Supreme Court decisions in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] and Catholic Syrian Bank Ltd [2012 (2) TMI 262 - SUPREME COURT]. The assessee shall place all the materials in support of its contentions before the AO and comply to the AO’s requirements as per law. AO shall furnish adequate opportunity to the assessee and then decide these issues in accordance with law.
Restriction of tax relief u/s.90 only to the extent of tax paid in foreign country - HELD THAT:- As decided in own case [2017 (4) TMI 1424 - ITAT CHENNAI] CIT(A) has quoted a notification No.S.O 2123(E) dated 28.8.2008, clarifying that in such a case involving a DTAA, an income has to be included in the total receipts and the necessary relief is to be granted by ‘elimination’ method or as per the terms of agreement seeking to avoid double taxation. He relies upon Finance Act, 2012 inserting explanation 3 to section 90 making the notification retrospectively applicable.
Denial of depreciation on goodwill - HELD THAT:- Assessee did not have any goodwill in commercial terms as it has acquired more liabilities than the assets. The Ld.DR’s submission that when there is no goodwill as per the terms of the agreement as well as in reality. When the assessee has not paid any amount for the goodwill, it cannot claim existence of any goodwill. When there is no existence of goodwill, it is not entitled for any depreciation. Therefore, the assessee’s corresponding grounds fail.
Disallowance of contribution to staff welfare fund - HELD THAT:- As decided in own case [2017 (4) TMI 1424 - ITAT CHENNAI] decided against assessee.
Recovery of bad debts written off relating to rural branches - HELD THAT:- As decided in own case [2017 (4) TMI 1424 - ITAT CHENNAI] Revenue does not dispute that the assessee had raised its claim of deduction of bad debts relating to the very sums in preceding assessment years. The Assessing Officer did not allow this relief in relevant previous year, when it has recovered the aforesaid debts, the Revenue is again seeking to tax the same. There is no cogent evidence before us to dispute this factual position Moreover, the CIT(A) has cited section 41(4) of the Act whilst granting relief.The Revenue has failed to point out any legal or factual error in CIT(A)’s findings Therefore, the same are affirmed. However, as a matter of caution, we observe that the assessee’s claim of bad debts pertaining to those sums in preceding assessment years, if any, shall be deemed to have been dismissed
Depreciation on UPS allowed at 60% instead of 80% - decided against assessee.
Depreciation @ 30% on software was rightly claimed - See M/S. SARASWAT INFOTECH LTD. [2013 (1) TMI 861 - BOMBAY HIGH COURT]
Disallowance u/s 14A - HELD THAT:- No finding in the assessment order regarding treatment of exempted income yielding assets as stock-in-trade. Hence, in our opinion, if it is treated as stock-in-trade by the assessee, then the claim of assessee is to be allowed in terms of Order of Tribunal in [2014 (9) TMI 1179 - ITAT CHENNAI] . Accordingly, this issue is remitted to the file of AO for fresh consideration.
Disallowance of provision made for leave salary on actuarial valuation - HELD THAT:- assessee submitted that the provision for leave salary cannot be disallowed u/s. 43B for the reason that leave provision is a contractual liability and therefore, it cannot be treated at par with tax, duty, cess or fee u/s. 43B. However, in the SLP in the case of CIT & ors. Vs M/s. Exide Industries Ltd & ANR [2009 (5) TMI 894 - SC ORDER] wherein, the Apex Court held that “pending hearing and final disposal of the Civil Appeal, Department is restrained from recovering penalty and interest which has accrued till date. It is made clear that as far as the outstanding interest demand as of date is concerned, it would be open to the Department to recover that amount in case Civil Appeal of the Department is allowed. We further make it clear that the assessee would, during the pendency of this Civil Appeal, pay tax as if section 43B(f) is on the statute Book but at the same time it would be entitled to make a claim in its returns. Addition sustained
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2019 (2) TMI 1690
Bogus purchases - GP estimation - HELD THAT:- AO has gone routine exercise by issuing 133(6) notices to ascertain without carrying out further investigation to know exact nature of the transaction between the assessee and said firms when the assessee has filed sufficient materials including purchase bills. Therefore, it is difficult to accept the version of the AO that purchases from above parties are bogus in nature which are not supported by valid evidence. The only option left for the authorities is to settle the controversy by estimating income of the assessee from these kind of transactions.
As in assessee’s own case [2017 (4) TMI 1465 - ITAT MUMBAI] has considered identical facts in the light of DGIT(Inv.) report and also the statement of Shri Rajendra Jain given during course of search, to arrive at a conclusion that 12.5% profit on alleged bogus purchases is reasonable and would meet ends of justice.
For the year under consideration, the facts are identical and even parties from whom purchases were made by the assessee for AY 2007-08 and for the present assessment year are one and the same. Under these facts, it is difficult to take different view from the view already taken by the Co-ordinate Bench. Further, Tribunal had taken a consistent view in case of alleged bogus purchases and depending upon the facts of each case has directed the AO to estimate profit percentage of 5 to 12.5% on alleged bogus purchases - profit percentage applied by the Ld. CIT(A) on alleged bogus purchases appears to be less and hence direct the AO to consistent with view taken by the Co-ordinate Bench, we adopt 12.5% net profit on alleged bogus purchases.- Appeal filed by the Revenue is partly allowed.
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2019 (2) TMI 1689
NP determination - rejection of books of accounts - HELD THAT:- It is an admitted fact that the assessee is engaged in the business of civil construction and despite opportunities granted by the Assessing Officer during the course of assessment proceedings, the assessee did not produce the requisite details as called for by the Assessing Officer.
Therefore, rejection of book results and thereby estimation of profit is fully justified.
Adoption of net profit rate - a perusal of the comparative chart of gross profit and net profit filed by the assessee reveals that the net profit varies from 5.31% to 5.87% from assessment year 2010-11 to 2015-16. Therefore, considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion that adoption of net profit rate of 6% on the contract receipt for the impugned assessment year will meet the ends of justice. Grounds raised by the assessee are accordingly partly allowed.
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2019 (2) TMI 1688
Invocation of Extended period of limitation by subsequent SCN - three SCN for larger period of limitation had been issued to the appellants in the past for the same cause of dispute - HELD THAT:- Appeal is admitted for substantial question of law.
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2019 (2) TMI 1687
Stay of recovery of outstanding demand - HELD THAT:- Undisputedly, the assessee has complied to the conditions of stay. Thereafter, the stay has been extended from time–to–time and the last order by the Tribunal extending stay recovery of the outstanding demand was passed on 26th October 2018, vide S.A. no.428/Mum./2018. Notably, on 17th December 2018, when the corresponding appeal of the assessee was fixed for hearing before the Tribunal, Department sought adjournment and on the request of the Department, the appeal was adjourned to 27th February 2019.
Thus, as could be seen, non–disposal of the corresponding appeal of the assessee is not attributable to the assessee. Since the assessee’s appeal is now fixed on 27th February 2019, we are inclined to extend the stay recovery of outstanding demand till the disposal of the corresponding appeal of the assessee or for 180 days from the date of this order, whichever is earlier. Stay application is allowed.
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2019 (2) TMI 1686
Initiation of Corporate Insolvency Resolution Process (CIRP) - Financial creditor - default in repayment of loan - Section 7 of the Insolvency and Bankruptcy Code - Time limitation - HELD THAT:- Corporate Debtor’s foremost contention, that the documents to prove that the Financial Creditor is acting in its capacity as a trustee of the Phoenix Trust have not been placed on record, is rejected as the Assignment Agreement itself is evident of this fact and the same has not been challenged by the Corporate Debtor. Hence, no further proof is required to be submitted in this regard. Also, as per section 5(7) of IBC, Financial Creditor means any person to whom a financial debt is owed and includes a person to whom such a debt is legally assigned or transferred. The Assignment Agreement dated 29.06.2015 legally assigns the impugned debt to Phoenix ARC Pvt. Ltd. as trustee of Phoenix Trust. Therefore, Phoenix ARC is a Financial Creditor in the meaning of section 5(7) and hence this contention of the Corporate Debtor is unsustainable.
The Petition is not barred by limitation as the given petition is to enforce the payment of money secured by a mortgage of immovable property. Hence, as per Article 62 of the Limitation Act, 1963, the limitation period is twelve years from the date when the money sued for becomes due. Even if the limitation is to be taken three years from the date when the cause of action arose, then also the Corporate Debtor’s Balance Sheet as on 31.03.2017 acknowledge the amount payable to the Financial Creditor. Hence, in view of Section 18 of the Limitation act, 1963, the limitation stands extended.
Hon’ble Supreme Court in the matter of Innoventive Industries Limited V. ICICI Bank & Anr. [2017 (9) TMI 58 - SUPREME COURT], wherein inter alia it was held that the provisions of Section 7 become applicable as soon as a financial debt is established and there is an existence of default. The Hon’ble court has expressed that the moment the Adjudicating Authority is satisfied that a default in repayment of debt had occurred, the process of insolvency is to be triggered, unless the application is incomplete.
The nature of Debt is a “Financial Debt” as defined under section 5 (8) of the Code. 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 Debtor - Petition admitted.
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2019 (2) TMI 1685
Removal from Dissemination Board of NSE - Illegal buy back of shares - HELD THAT:- The appellant did not accept the letter of offer and chose not to sell the shares back to the Company. The buy-back offers were made in the year 2016-17 and after two years the appellant has now filed the present appeal contending that the buy-back offer made by the Company was wholly illegal in as much as the circular dated April 17, 2015 and October 10, 2016 issued by SEBI only permitted the promoters to buyback the shares and did not allow the Company to buy-back the shares.
The contention of the learned counsel for the appellant is patently misconceived as we find that SEBI issued a circular dated July 25, 2017 permitting the Company to buyback the shares so as to provide an exit to the public shareholders. In view of the said circular we do not find any illegality being made in the buy-back of the shares by the Company. In any case, we do not find any reason to disturb the arrangement made two years ago at this belated stage.
In the light of the aforesaid, we do not see any illegality in the order dated July 2, 2018 removing respondent no. 3 Company from the Dissemination Board.
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9911796707
