|
Advanced Search Options
Case Laws
Showing 61 to 80 of 834 Records
-
2020 (6) TMI 775 - NATIONAL COMPANY LAW TRIBUNAL — BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - HELD THAT:- Initiation of CIRP proceedings, under the provisions of the Code, would be a civil death for corporate debtor. Therefore, before initiating such CIRP, the Adjudicating Authority is empowered, and to be satisfied the grounds for such initiation in terms of section 7 of Code, under which the present petition is filed, by taking into consideration of object of the Code, financial status of corporate debtor, whether it is going concern, what is effect of initiation of CIRP on its stake holders, public at large. And these factors are necessarily to be considered by the Adjudicating Authority, especially in view of the present severe adverse economic conditions prevailing in the Country due to Pandemic. The Adjudicating Authority cannot mechanically examine merely the debt and default as defined under the provisions of Code.
Without considering the issue in a positive way, it is not just and proper for the petitioners to plead first to initiate CIRP as prayed for, and thereafter, all issues can be resolved during CIRP proceedings.
It is true that since the default occurred prior March 25, 2020 it would not cover by the said amendment. Since the case is not yet admitted by the Adjudicating Authority and the respondent expressed its willingness to settle the issue in the light of earlier offer of one-time settlement as offered by the petitioners, it would be just and proper for the financial creditor to take it into consideration the prevailing economic situation while considering settlement proposal, as debt and default in question is continuous cause action till date.
The initiation of the CIRP against the corporate debtor, at present not is at all justified, and the parties have to resolve the issue by coming to a new settlement basing on the prevailing economy situation in the country - the petitioners/financial creditors, are hereby directed to re-consider the settlement proposal made by the respondent by taking into con sideration of present severe economic conditions and also the corporate debtor being going concern having several stake holders.
Petition disposed off.
-
2020 (6) TMI 774 - ITAT DELHI
TP Adjustment - adjustment on account of purchase of medical equipments - Onus on the part of the tax payer to establish the cost of goods in the hands of the AE which exported it to the tax payer - HELD THAT:- Since the assessee in the instant case has not filed the purchase bills of these assets in the hands of its AE and as to whether the AE has sold these assets to the assessee at the same price at which they were purchased by the AE or with any mark up value, therefore, we are of the considered opinion that the contention of the assessee that the purchase of medical equipments are at ALP cannot be accepted - considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the AO / TPO with a direction to give one more opportunity to the assessee to substantiate its case by filing some basic evidence regarding purchase cost in the hands of the AE or copy of the valuer’s report etc regarding purchase of the assets from the AE’s. Needless to say the AO/ TPO shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The first issue raised by the assessee in the grounds of appeal is accordingly allowed for statistical purpose.
Interest on outstanding receivables - HELD THAT:- Working capital adjustment has been provided by the DRP for the services segment which already takes into account the impact of the outstanding receivables. Further in the impugned assessment year the outstandings payable are more than the outstandings receivable and average payment period to its AE is 176 days whereas the average collection period from its AE is only 19.55 days which is evident from page 331 of the paper book. Therefore, in our opinion, no adverse inference is warranted on account of receivables from the AE.
No interest has been charged from third parties by the assessee on account of delay in payment. Under these circumstances and in the light of the decision of Hon’ble Delhi High Court in the case of Kusum Health Care (P) Ltd.[2017 (4) TMI 1254 - DELHI HIGH COURT] we are of the considered opinion that no adjustment on account of interest on receivables is called for. The AO is directed to delete the addition. We hold and direct accordingly. The second issue raised by the assessee in the grounds of appeal is accordingly allowed.
-
2020 (6) TMI 773 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Approval of a Resolution Plan - section 30(6) of the Insolvency and Bankruptcy Code, 2016 read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- The Resolution Plan in hand satisfies the minimum threshold of approval by 66% majority of the CoC. Hence, as per the CoC, the plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the plan effective after approval by this Bench.
Grant of time to comply with the statutory obligations/seeking sanctions from governmental authorities - HELD THAT:- The Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code - in case of non-compliance of this order or withdrawal of Resolution Plan, the CoC shall forfeit the EMD amount already paid by the Resolution Applicant.
The resolution plan is approved - Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 shall cease to have any effect forthwith - application allowed.
-
2020 (6) TMI 772 - DELHI HIGH COURT
Direction to furnish adequate security in the form of a bank guarantee issued by a nationalized bank in India or such other security that shall cover the entire sum in dispute between the parties - direction to deposit amount which is equivalent to the amount paid by the Petitioner herein to the Respondent as consideration under the Contract dated 10.03.2020 - amount so deposited by the Respondent be kept in an interest-bearing fixed deposit until the conclusion of the arbitration proceedings.
HELD THAT:- The thought process, which weighed for incorporating proviso to Section 2(2) of the Act is the difficulty faced by both the Indian and the foreign party in seeking orders/interim measures in India in a foreign seated arbitration. So, it follows that proviso to Section 2(2) was incorporated to facilitate the parties to move the Court in India, even though the arbitration is seated outside India - it is clear that, passing of orders/granting interim-measures under Section 9 does not presuppose existence of asset(s) in India. The bank guarantee, which is furnished/amount deposited pursuant to an order passed by a Court in India under Section 9 (as stated at "C" above) can be invoked/withdrawn by an Indian party in the eventuality, it succeeds in a foreign seated arbitration in satisfaction of the Award, even though the foreign entity may not have any assets in India.
Tt is clear that for grant of the relief as prayed for by the petitioner, the petitioner has to show that; (a) it has a prima facie case and balance of convenience in its favour and shall succeed in the arbitration proceedings and (b) that the respondent is acting in a manner as to defeat the realization of the future award that may ultimately be passed. It follows that orders, as sought by the petitioner cannot be passed mechanically on its asking, as the exercise of power under Order XXXVIII Rule 5 CPC, is drastic and extraordinary.
There exists disputed facts which cannot be decided in this petition. It has to be decided by the Arbitral Tribunal. Further, it is found that the averments in the petition. The plea in support of the reliefs primarily is that in view of COVID-19, the petitioner is unable to meet the timelines for invoking the Arbitration and there is an apprehension that the respondent may make attempts to obstruct the satisfaction of the decree, which may be awarded in favor of the petitioner in the arbitration proceedings.
Petition dismissed.
-
2020 (6) TMI 771 - SUPREME COURT
Validity of impugned order passed by the NCLAT - HELD THAT:- There are no ground to interfere with the impugned order passed by the NCLAT in March, 2020. The NCLAT is requested to hear the appeal within a period of one month from the date of production of a copy of the order, however, we direct the CoC not to precipitate further in the matter in the meanwhile.
The appeal is, accordingly, disposed of.
-
2020 (6) TMI 770 - CALCUTTA HIGH COURT
Capital gain computation - Transfer of capital asset within the meaning of section 2(47)(ii) - Scheme of amalgamation - renunciation of rights to the ultimate transfer of shares by SWFSL in RRITCPL to MBL - Settlement Commission order - HELD THAT:- When SWCL was relinquishing its shares, the allotting and subscribing companies were subsidiaries or step down subsidiaries of SWCL. The transactions being limited to that extent, possibly, the Department would not have had a case to argue. The transactions did not stop with SWCL relinquishing its shares in its subsidiary and step down subsidiaries. In fact, these relinquished shares were ultimately sold of to MBL for a valuable consideration. The relinquishment of rights by SWCL and allowing a merger to take place are mechanisms to create an entity which but for such steps and measures would not have come about. The newly created entity was thereafter sold to MBL. This mechanism is improper, results in avoidance of taxation and impermissible at the end of SWCL. The Settlement Commission has not considered this aspect of the contentions of the Department in the impugned order. It has not assigned any reason as to why, when the subsidiary and step down subsidiary of SWCL is transferring the shares to MBL, the same will not be taxed on SWCL as capital gains as SWCL was instrumental in bringing about the ultimate entity. The Settlement Commission has failed to take into consideration the fact that the entity created and sold to MBL come about by the active steps taken by SWCL and that SWCL therefore may not enjoy the benefits of section 47(iv) of the Act of 1961.
The applicability of sections 45 and 47 of the Act of 1961 have to be considered in the context of the transactions had by the assessee. If on consideration of the entirety of the transactions, the Department can substantiate the fact that the assessee that is respondent No. 2 had entered into such transactions in order to avoid taxes payable, then, respondent No. 2 is not entitled to claim that the transactions in question were covered under sections 45 and 47 of the Act of 1961 and therefore not taxable.
The contention of respondent No. 2 on the interpretations of sections 47 and 45 and the authorities cited on such subject are to be considered in the context of the actual contours of the transactions of the assessee, that is respondent No. 2, had in this regard. In George Henderson and Co. Ltd. (supra) a reference to the Supreme Court was answered by finding that the actual contract price paid was obscure and its import could not be determined. The Supreme Court directed the Appellate Tribunal to rehear the appeal and record a clear finding as to what was the actual price received.
Again the contention of respondent No. 2 relying upon Vodafone International Holdings BV [2012 (1) TMI 52 - SUPREME COURT] that control is an interest arising from holding a particular number of shares and that the same cannot be separately acquired or transferred is required to be considered in the given facts and circumstances of the present case. S. R. Chockalingam Chettiar [1967 (4) TMI 39 - MADRAS HIGH COURT] has held that the right to obtain a specified number of rights shares under section 81 of the Companies Act, 1956 in a fresh issue of capital is a tangible right and is not interest in future property but is existing property as defined in the Gift-tax Act, 1958.
The fact that SWFSL offered capital gains arising out of the transactions of shares of RRITCPL to MBL for the assessment year 2004-05, ipso facto, does not absolve SWCL from its tax liability in the event, it is found that SWCL brought about an entity to be transferred to a third party by the mechanism employed to defraud the Revenue.
By the impugned order the Settlement Commission has overlooked the evidence produced before it so far as transactions relating to M/s. Amrit Engineering, commission sales promotion through Super Distributors, and payments made to Tirupati Enterprises are concerned. S. Ajith Kumar (supra) and Smt. C Sabira (supra) have held that reliance can be placed on evidence discovered during the search and seizure as also evidence which is relatable to the evidence unearthed during the search and seizure. The Settlement Commission ought to have considered the evidence placed by the Department with regard to such transactions of the assessee as they relate to the block assessment period before the Settlement Commission on the strength of the ratio laid down in the authorities noted in this paragraph.
The Department has sought to bring on record evidence relating to the transactions that the assessee had on such accounts. Such evidence relates to the block assessment period under consideration by the Settlement Commission. Such evidence have a material bearing on the issue as to the quantum of tax that the assessee is liable to pay during the assessment period under consideration before the Settlement Commission. Such evidence cannot be said to be not relevant for the purpose of assessing the tax liability of respondent No. 2.
Specified portions of the impugned order of the Settlement Commission are therefore non-speaking. One of the grounds for a successful challenge to an order of the Settlement Commission is that the impugned order suffers from the vice of breach of principles of natural justice. Since some portions of the impugned order of the Settlement Commission are non-speaking, it can be said that the present writ petition is maintainable.
Having answered the issue of maintainability in favour of the writ petitioner and having found that specific portions of the impugned order of the Settlement Commission to be uninformed with reasons, such specific portions of the impugned order are set aside.
The Settlement Commission is directed to consider the issue of tax liability of SWCL on different stages commencing from the initial renunciation of rights to the ultimate transfer of shares by SWFSL in RRITCPL to MBL. The Settlement Commission will also consider the tax liability of respondent No. 2 with regard to purchases of gift items from Amrit Engineering, commission sales promotion through Super Distributors, and payments made to Tirupati Enterprises, in accordance with law
-
2020 (6) TMI 769 - AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH
Exemption from GST - amount received for leasing residential hostel rooms - exemption under Sl.No.14 (Heading 9963) or under Sl.No.12 (Heading 9963) of Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 as amended upto 25.01.2018 - HELD THAT:- Sl. No. 14 of Heading 9963 describes “Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent” as nil rated' - the applicant, who is the service provider, does not satisfy the above conditionalities. Ile is neither registered under Hotel, Inn, Guest House, Club or Campsite, by whatever name it is called, nor providing services to the students under the style and name of his registered trade name with a declared tariff of a unit of accommodation below one thousand rupees per day or equivalent to avail the exemption under the notification. The service recipient, i.e., the Lessee in this regard, further sublets the property to the Narayana Educational Society, which in return uses the facility to accommodate their students.
Whether amount received for leasing residential hostel rooms is exempt under Sl.No.12 (Heading 9963) of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as amended upto 25.01.2018? - HELD THAT:- In the instant case, it is evident from the above reading, that the property under question is not a home or residence being used by a family or group of a members maintaining a regular house hold, but used for commercial purposes of accommodating students in bulk numbers. A temporary stay of the students will not merely qualify the purpose “for use as residence” and hence it is not qualified to be listed under heading 9963 or 9972.
The activity under question is non residential property rented out for commercial activity and supply of such services, in the facts and circumstances of the case, are classifiable as “Rental or leasing services involving own or leased non-residential property” under Service Code (Tariff) 997212. It is taxable in the hands of the lessor and is liable for IGST at the rate of 18 percent.
-
2020 (6) TMI 768 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - is Tribunal a Recovery Forum? - HELD THAT:- It is imperative to bear in mind that an application under section 9 of the Code, 2016 cannot be filed to recover the debt amounts. The code has been enacted to bail out Companies that have become insolvent through the insolvency resolution process.
In the present case, it is seen from a perusal of the Bank Statement annexed by the Respondent that the Petitioner had been receiving the dues from supply of goods, and has a running account with the Corporate Debtor, and default has occurred against some invoices. The Respondent has not accepted the debt and the amounts claimed but accepts that after reconciliation, if any amount is payable, it will pay the same. The Petitioner has therefore come before this Tribunal for the recovery of its unpaid invoices, which also are disputed by the Respondent. This Tribunal cannot be used for recovery of debt. Further no case has been made out that the Respondent has become insolvent and has lost its substratum such that it is unable to be pay its debts or run its business.
Application disposed off.
-
2020 (6) TMI 767 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD BENCH-I
Seeking directions to Respondents to make contributions to the assets of the Corporate Debtor - Section 66(1) & Section 66 (2) of Insolvency & Bankruptcy Code 2016 - misutilisation of LC facilities - Fraudulent transactions or not - Writing off trade receivables to the tune of ₹ 96.97 crores as bad debts by Corporate Debtor - dispute raised by the parties regarding quality of the material supplied - Applicability of provisions of Section 66 (1) of IBC to the transactions referred to by the Liquidator -
Misutilisation of LC facilities - HELD THAT:- The Respondents misused the LC facilities without actual purchase of goods and it was done with a view to defraud the creditors and they are liable to make good to the assets of Corporate Debtor under Section 66 (1) of IBC. The Liquidator estimated the liability being 1% of each LC which comes to ₹ 35 lakhs on the goods worth ₹ 35 crores involved in the above transactions.
Fraudulent transactions or not - HELD THAT:- Taking into account the volume of transactions involved, which is around ₹ 550 crores, the goods worth ₹ 35 crores were only returned. It is a specific case of Respondents 1-3 that the goods were returned after inspection due to quality and also due to fluctuations in the price. Neither the Liquidator nor the Forensic Auditor alleged that these are fraudulent transactions. Then mere return of goods on the very same day cannot be held to be fraudulent transactions intended to defraud the creditor. The important factor to be taken note of that these are not related party transactions. Thus, when there is no material to conclude that these are fraudulent transactions, then the request of the Liquidator to direct the Respondents to make contributions to the assets of the Corporate Debtor to the extent of ₹ 35 lakhs cannot be granted.
Writing off trade receivables to the tune of ₹ 96.97 crores as bad debts by Corporate Debtor - HELD THAT:- There was dispute raised by the parties regarding quality of the material supplied. The total amount involved in these transactions is around ₹ 57,79,35,214. It is very clear that disputes are not with related parties. These are the transactions entered with third parties and not with related parties. Thus, debts were written off on the ground that parties raised disputes with regard to quality. As far as these transactions are concerned, it cannot be said that they are fraudulent trading or wrongful trading - The contention of Liquidator, the Respondents who were in the management ought to have taken appropriate steps against those parties who raised disputes and who have not responded. The case of Liquidator, the Respondents, as ordinary prudent persons ought to have initiated legal action against those debtors. The Respondents failed to exercise due diligence and caused loss to Corporate Debtor Company and hence they are liable to compensate to the assets of the Corporate Debtor.
There is nothing wrong in writing off those debts which are barred by limitation. Regarding claims where disputes are involved even though such debts were written off, it is open to the Corporate Debtor to proceed. Likewise the amount due from the parties who have not responded, even against them also the new management who acquired Corporate Debtor Company can proceed, if so advised. The fact remains that there is no fraud alleged. Secondly, the parties against whom the debts were written off are not related parties. It is within the commercial wisdom of the Company that the debts were written off. No fraud is alleged and established.
There is no point in directing the Respondents to make good to the assets of the Company due to failure of the Company to take appropriate action against concerned parties for recovery of debts. It is made clear that the new management is at liberty to initiate action against the defaulters according to law - Application disposed off.
-
2020 (6) TMI 766 - DELHI HIGH COURT
Compensation for violation of the petitioner’s fundamental rights - HELD THAT:- While the petitioner had impleaded only the State/Government of NCT of Delhi as respondent in the matter, the complainant has also now been impleaded as party-respondent No.2 in the petition.
Issue notice - List on 23.07.2020.
Seeking stay of investigation and further proceedings against him in the subject FIR - HELD THAT:- It is note-worthy that the offence comprised in section 505(2) IPC is in pari materia with that comprised in section 153A IPC, inasmuch as it refers to acts and omissions that are intended to create enmity, hatred or ill-will between different religions or communities - Although, as submitted at the bar, the petitioner has already been granted interim protection in anticipatory bail proceedings by the learned Additional Sessions Judge, this court is of the prima-facie view that further investigation or proceedings pursuant to the FIR are likely to cause unwarranted and unjustified harassment to the petitioner.
Without forming an opinion on the merits of this matter, this court is persuaded to think that the filing of the complaint and registration of the FIR deserve to be considered - List on 23.07.2020.
-
2020 (6) TMI 765 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Seeking approval of Resolution Plan - Apparent contradictions in the Resolution Plan - Approvals from regulatory authorities - - application filed u/s 30(6) of the IBC seeking approval of this Adjudicating Authority u/s 31(1) of the IBC - HELD THAT:- Section 31(1) ibid mandates that the Adjudicating Authority shall by order approve the resolution plan if it is satisfied that such resolution plan as approved by the CoC under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30.
From the perusal of the plan the Resolution Applicant is planning to monetise most of the assets and will continue only with a small portion of the business operations as stated above. Therefore, the Resolution Plan is not in accordance with the provisions of Income Tax Act and the existing benefits envisaged thereunder may not be available.
The plan also gives commercial logic for issuing 24% of equity to Financial Creditor as passing on the value garnered by the companies during continuous operations of five years. However, we are afraid that the Resolution Applicant may generate very negligible amount from actual business operations for three years as stated above. Therefore, this logic also appears to be flawed.
Apparent contradictions in the Resolution Plan - HELD THAT:- The plan does not appear to a Resolution plan but appears to be a winding up, liquidation plan while just retaining a small portion of the business operations of the corporate applicants.
In K. Sashidhar v Indian Overseas Bank & others, [2019 (2) TMI 1043 - SUPREME COURT], decided by Hon’ble Supreme Court, the Hon'ble Supreme Court examined the situations arising in terms of section 31 of the IBC and held that the legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of CoC.
Approvals from regulatory authorities - HELD THAT:- Since the corporate applicants are licencees of spectrum by DoT, approval of DoT for Spectrum Transaction and AL Fibre and Business Transactions, and activities ancillary thereto or required therefor, will also be taken by the corporate applicants acting through the Monitoring Committee after the Resolution Plans are approved by this Adjudicating Authority.
The Resolution Plans placed on record in respect of all the three corporate applicants, viz., (1) Aircel Limited; (2) Dishnet Wireless Limited; and (3) Aircel Cellular Limited, is hereby approved with the few modifications - moratorium shall cease to have effect.
Application allowed.
-
2020 (6) TMI 764 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Sanction of scheme of merger (By Absorption) - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme of Merger appears to be fair, reasonable and is not violative to any provisions of law nor is contrary to public interest - Since all the requisite statutory compliances have been fulfilled, petition is made absolute in terms of prayer of the said Company Scheme Petition.
The Scheme is hereby sanctioned, with the Appointed Date fixed as 01 April 2018. The Transferor Company be dissolved without winding up - Petitioner Company is directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically in e-FormINC-28, in addition to physical copy, within 30 days from the date of receipt of the Order duly certified by the Deputy/Assistant Registrar of this Tribunal.
Application allowed.
-
2020 (6) TMI 763 - NATIONAL COMPANY LAW TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Oppression and mismanagement - siphoning of funds - company's money siphoned by giving interest free loans to various persons and thereafter paying out extra money to related parties - HELD THAT:- It appears that the respondents' side, by way of loan as well as by way of preference, already invested more than ₹ 10 Crore into the company, but the petitioners by just putting in ₹ 25,000 in the year 2013, which is only 0.02% of the total paid up capital, trying to stall the company from carrying its functions by filing this petition via number qualification u/s 244 of the Companies Act 2013.
When it comes to merit, prima facie as it appears on record, it is a real estate company governed by RERA and has been mandated to release possession of the flats on phase wise, unless money comes into the company, it will become difficult to complete the project and to get the remaining balance that is to come from the home buyers. As to this aspect, the respondents' counsel has categorically mentioned that unless this project is finished on time and possession is given on time to the respective home buyers, the company will not get the remaining payment that is around ₹ 69 Crore from the home buyers - to show debt equity ratio to the creditor banker, it is necessary to raise equity to sustain and survive the company. For this reason alone, the company has issued notice to proceed with rights issue by not only notifying it to the petitioners but also by offering them to invest on pro rata basis.
Thus, there are no unfairness prima facie to grant stay as sought by the petitioners, therefore it is made clear that the Respondents are free to proceed with rights issue and with a direction to the Respondents side to file reply within four weeks hereof, rejoinder if any by the petitioners within four weeks thereafter - List this main company petition for main hearing on 20.08.2020 by cancelling the date 23.06.2020 earlier given.
-
2020 (6) TMI 762 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Replacement of Interim Resolution Professional (IRP) - HELD THAT:- Let notice be issued on Respondent No. 3. Appellant to provide mobile Nos./e-mail address of Respondent No. 3. Notice be issued through e-mail or any other available mode. Requisites along with process fee be filed within three day.
List the appeal ‘for Admission (After Notice)’ on 22nd July, 2020.
-
2020 (6) TMI 761 - ITAT DELHI
TP Adjustment - Comparable selection - comparable Caliber Point Business Solutions Ltd. - HELD THAT:- No such disclosure is apparent in the annual report of the company and, therefore, we are of the considered opinion that this company cannot be excluded only on an inference that some extraordinary event might have occurred. We also note that the functional comparability of this company has not been disputed either by the TPO or by the CIT (A).
As now settled law that a company cannot be excluded as a comparable solely for the reason that its financial year is different without considering whether the data for the financial year adopted by the assessee can be compiled from the audited statements of such company. The ITAT Delhi Bench in the case of Xchanging Technology Services India Pvt. Ltd. [2015 (10) TMI 1005 - ITAT DELHI] directed that this company be included as a comparable wherein it had been rejected only on the ground of having different financial year any. Accordingly, this company is directed to be included in the final set of comparables after verifying that the margin can be recomputed to work out the proportionate working margins if the financial data are duly audited and are available in the public domain, of course with the rider that during that period there were no other factors affecting the operating margin, thus, ground No.2 stands allowed for statistical purposes.
Rejection of the comparable R-System International Ltd. - As rejection of the comparable by the Ld. CIT (A) is more on some kind of suspicion rather than being supported by any cogent data. As we have already mentioned in the preceding paragraphs, a comparable cannot be rejected merely because of a different financial year ending and now there are numerous orders of the Tribunal in this regard. We again refer to order of the ITAT Delhi Bench in the case of Xchanging Technology Services India Private Limited [2015 (10) TMI 1005 - ITAT DELHI] wherein this company was directed to be included. Since, the Ld. CIT (A) has not indicated any basis for suspecting the reliability of the financial results for this company, we direct that this company be included in the final set off comparables subject to the verification that the relevant data can be easily compiled from the audited statements of the company, of course with the rider that during that period there are no other factors affecting the operating margin. Accordingly, Ground No.4 stands allowed for statistical purposes.
Exclusion of Infosys BPO as a comparable - Similarly, ITAT Delhi Bench in the case of Cengage Learing India Pvt. Ltd. [2018 (7) TMI 1549 - ITAT DELHI] held that Infosys BPO Ltd. had huge turnovers, owns IPR and brand value on products and provides services to vast clientele. Under such circumstances this company cannot be accepted to be a fit comparable in case of assessee who is a captive service provider providing services only to its group concerns. The Judicial precedents where Infosys BPO Ltd. has been excluded for the reason of being a giant company, having huge turnover, brand value, ownership of IPRs etc. can be multiplied. Therefore, in over all view of the matter, considering the size and service being rendered by the assessee company as compared to Infosys BPO Ltd., we hold that this company is not a good comparable. Accordingly, we direct the exclusion of this company from the final set of comparables. Thus Ground No.5 stands allowed.
Incorrect computation of operating profit margin of e4e Healthcare Business Services Pvt. Ltd. - We note that the Delhi Bench of the ITAT in the case of Sony India Pvt. Ltd. [2008 (9) TMI 420 - ITAT DELHI-H] has held that provision for doubtful debts is part of normal operating activity of the business and, similarly, any write back of provision is also to be treated as operating in nature. Similar views have been taken by the Bengalure Bench of ITAT in the case of Outsource Partners International (P.) Ltd. [2017 (2) TMI 1410 - ITAT BENGALURU] and Hyderabad Bench of the Tribunal in the case of Sum Total Systems India Pvt. Ltd. [2016 (9) TMI 1514 - ITAT HYDERABAD] Accordingly, we direct that the provision for bad and doubtful debts of this company be treated as a part of the operating expenses and the margins of this company be recomputed after giving proper opportunity to the assessee to present its case. Thus, Ground No.6 stands allowed for statistical purposes.
Operating profit margin of ICRA Techno Analytics Limited has been incorrectly computed at 28.66% instead of the correct operating profit margin of 24.96% - It is the assessee contention that this computational error occurred because the foreign exchange fluctuation loss was deducted twice by the TPO. In this regard a chart has also been submitted. In our considered opinion this claim of the assessee needs to be re-examined by the TPO after giving proper opportunity to the assessee. Accordingly, Ground No.7 is restored to the file of TPO for verification of the assessee’s claim and pass order in accordance with law after giving due opportunity to the assessee. Ground No.7, thus stands allowed for statistical purposes.
-
2020 (6) TMI 760 - GAUHATI HIGH COURT
Permission to transfer the monies payable to the workmen, to the Provident Fund Commissioner concerned - HELD THAT:- The issue decided in the case of CACHAR PAPER PROJECT WORKERS UNION (INTUC) VERSUS UNION OF INDIA AND ANR. [2020 (2) TMI 1532 - DELHI HIGH COURT] where it was held that respondent no. 2 is directed to pursue the matter with HDFC Bank to ascertain the status of the investments as well as to see as to how the same could be statutorily transferred to the Provident Fund Commissioner at the earliest for disbursal to the workmen.
It is hereby directed respondent Nos.4 and 5 to file the documents viz. copy of the writ petition and orders passed by the Hon’ble Delhi High Court which would demonstrate that issue raised before this Court is also involved in the lis pending before the Hon’ble Delhi High Court - List on 24.07.2020, high-up on the list.
-
2020 (6) TMI 759 - GAUHATI HIGH COURT
Repayment of loan by way of cash credit and term loan from the respondent-Bank - certain default in repayment - non-payment of second instalment of OTS - lockdown due to Covid-19 - HELD THAT:- Since the petitioner is willing to pay the second installment of ₹ 50,88,751/- by 25th June, 2020 as already committed in his e-mail dated 08.05.2020, the Bank may consider allowing the petitioner to deposit the second installment and the third installment as well.
Even though none is present on behalf of the respondent-Bank, in the interim, this Court deems it fit that in the light of the Covid-19 pandemic, if the petitioner makes the second installment of ₹ 50,88,751/- by 25th June, 2020 as proposed in his e-mail dated 08.05.2020, the respondent-Bank will not resort to any coercive action against the petitioner.
List accordingly on 28.07.2020 on which date the petitioner will submit the necessary documents as proof of payment of the second installment.
-
2020 (6) TMI 758 - ITAT AHMEDABAD
Disallowance on account of interest on late payment of TDS u/s 201(1A) - contention of the assessee is that the provision of section 40(a)(ii) prohibits the deduction of payment of taxes levied on profit or gain of the business and TDS is not paid on profit or gains of the business, therefore interest paid under section 201(1A) is allowable as business expenses as the same does not constitute the part of the taxes which is levied on profit or gains of business - AO disallowed the claim of the assessee by holding that the interest paid on TDS is not as allowable expenses - HELD THAT:- Interest on delayed deposit of TDS is not allowable deduction in view of the judgment of Hon’ble Madras High Court in case of CIT vs. Chennai Properties & Investment Ltd [1998 (4) TMI 89 - MADRAS HIGH COURT]
As we have decided the identical issue in favour of the assessee in the case of M/s Narayani Ispat Pvt. Ltd. (supra). However, we are changing our decision in the present case for the simple reason that the judgment of Hon’ble Madras High Court in case of CIT vs. Chennai Properties & Investment Ltd [2017 (10) TMI 67 - ITAT KOLKATA] was not brought to our notice while hearing the case of M/s Narayani Ispat Pvt. Ltd. There is no ambiguity that the issue is covered against assessee by the Hon’ble Madras High Court in case of Chennai Properties & Investment Ltd. (supra). Accordingly we do not find any infirmity in the order of the learned CIT-A. Hence we decline to interfere. Thus the ground of appeal of the assessee is dismissed.
-
2020 (6) TMI 757 - SUPREME COURT
Maintainability of appeal - HELD THAT:- It is submitted that a sum of ₹ 28,00,00,000/- shall be deposited within a month - Only on the condition of such deposit being made within one month from today, notice be issued to the respondents.
In case the amount is not deposited, the appeal shall stand dismissed without further reference to the Bench.
-
2020 (6) TMI 756 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, DELHI
Restoration of appeal - liquidation order - CIRP period expired - commercial wisdom of the Committee of Creditors with respect to Resolution Plan - HELD THAT:- It is by now settled that, the commercial wisdom of the Committee of Creditors qua the business decision as regard the feasibility and viability of the Resolution Plan cannot be questioned before the Adjudicating Authority or even before this Appellate Tribunal. Likewise, the decision of the Committee of Creditors recommending liquidation of the Corporate Debtor after proper evaluation of the assets and liabilities of Corporate Debtor with no Resolution Plan forthcoming would be a business decision falling within the domain of commercial wisdom of the Committee of Creditors which is not amenable to judicial review. Admittedly, the Corporate Insolvency Resolution Process period has expired and the order of admission on application under Section 7 culminating in passing of impugned order of liquidation has not been assailed by the Appellant.
Since, the Corporate Insolvency Resolution Process is over and all actions taken in such process go unassailed, there are no merit in the instant appeal - appeal dismissed.
........
|
