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Showing 61 to 80 of 1183 Records
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2021 (6) TMI 1123
Additions made under the head salary u/s 143(1) based on entry in Form-26AS - additions were made in the hand of assessee on the basis of TDS shown in Form-26AS - assessee contended that she has not earned such income nor any work was performed by her - HELD THAT:- We find that both the authorities below acted in a mechanical way. There is no consideration of the contentions raised by the assessee that she has not worked or earned any income from such deductor. In our view once the assessee denied that she has not earned such income as reflected in her Form-26 AS, the onus shift on the revenue authorities to prove such income of the assessee.
The addition is based solely on the basis of TDS shown in Form-26AS, ignoring the submissions of the assessee. The ld. AR for the assessee vehemently argued before us that the deductor if more than 1000 KM away from the place of practice of assessee.
We find merit in the submissions of assessee that the assessee had entered into any such transactions and the lower authorities have not made any verification or effort to verify such transactions and there is certain mistake of entering the wrong PAN, which belongs to the assessee and the addition made in the income is uncalled for.
As decided in Ravindra Pratap Thareja case [2015 (10) TMI 1487 - ITAT JABALPUR] that merely because a payment was reflected in Form-26AS and was shown to have been made to the assessee, it could not be brought to tax as it could not be established that the assessee was actual beneficiary of said payments and the additions was liable to be deleted. As no purpose would serve to restore the matter back to the file of assessing officer or to Income–tax Officer (TDS), as prayed by ld Sr.DR for the revenue. In the result, the grounds of appeal raised by the assessee are allowed.
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2021 (6) TMI 1122
Direct Tax Vivad Se Vishwas Act scheme - HELD THAT:- Assessee requested Withdrawal of the appeal filed by him and stated that the assessee has opted to settle the dispute relating to the tax arrears for the assessment year under consideration under the Vivad Se Vishwas Scheme, 2020. A certificate to this effect u/s 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020 has also been filed.
DR has no objection. We accept the request of the assessee for withdrawal of the appeal. Appeal of the assessee is dismissed as withdrawn.
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2021 (6) TMI 1121
Notified SEZ Area or not - 34 Acres on which the CWC constructed godown formed part of notified SEZ Area which was developed by APSEZL as Developer in terms of Special Economic Zone Act, 2005 or not - Rule 11(5) and 11(7) of the SEZ Rules - HELD THAT:- The CWC in the present case, is not only in this spree of litigation against the private Respondent - APSEZL but also against its own parent, namely, the Central Government challenging its action of not agreeing with the CWC to exclude its existing area of Warehouse from the SEZ Area, which was allotted to the private Respondent - APSEZL and is being developed by them in accordance with the provisions of SEZ Act, 2005 and Rules made thereunder just because under a sub-lease given by APSEZL to CWC, it had already constructed a Warehouse there, before a much larger area of more than 5000 Acres including that warehouse area of 34 Acres was declared as a SEZ area under the special and overriding law.
There are considerable force in the submission made by Mr. Kamal Trivedi, learned Senior Counsel for the Private Respondent that even though the Respondent No.3 APSEZL was not under any kind of legal obligation or contractual obligation, it made an offer to Appellant - CWC to construct at the cost of APSEZL an equal size Warehouse, outside the SEZ Area for CWC for its warehousing facility which was not permitted within the SEZ Area as per the over riding legal provisions of the SEZ Act 1951 and Rules which has over riding effect as per Section 51 of the SEZ Act - The Proposal No.3 in letter dated 9.3.2019 was also conditional and it was given only if new warehouse outside SEZ area was provided by APSEZL to CWC by taking such a warehouse on rent, purportedly to facilitate immediate shifting out of CWC from the existing warehouse within SEZ area.
Section 51 of the Act provides that nothing inconsistent in any other law or even in any instrument having effect by virtue of any other law shall override the provisions of this Act. The Board for Approval has been constituted under Chapter III of the said Act to approve the proposals for creating SEZ areas, while a lower authority in the form of Development Commissioner has also been created in Chapter IV of the Act to oversee the operations of each SEZ Area - both the parties can now start working upon the mutually agreed first two proposals, namely, providing of land of the same size by the Respondent - APSEZL to Appellant – CWC outside the SEZ zone at the cost of APSEZL and to construct a Warehouse of the same size at the cost of APSEZL and provide the same to CWC on mutually agreed terms and conditions, as a valid contract between the two parties on these two proposals can be deemed to have already come into existence vide letter dated 9.3.2019 and follow up letter of APSEZL and CWC Board Resolution dated 12.6.2019.
Following directions are issued after considering all issues:-
(i) That Appellant – CWC is allowed three months time from today either:-
(a) to seek and obtain approval as a SEZ compliant Unit from the competent authority under the SEZ Act in respect of its Warehouse facility situated in 34 acres of land in question within SEZ Area developed by Respondent – APSEZL;
or
(b) to obtain a waiver of the conditions to comply with the provisions of SEZ Act as a SEZ Unit and the Competent Authority while considering any such application of CWC, if any filed by it, will provide opportunity of hearing to both the parties;
(ii) If CWC fails to get such approval as a SEZ compliant Unit or waiver as aforesaid within aforesaid period of three months, the Respondent - APSEZL may acquire the land of the same size of approximately 34 Acres outside SEZ area as already identified and selected by CWC, for the construction of a Warehouse facility for the Appellant – CWC of approximately same size as agreed between the parties under Proposal Nos.1 and 2 in the letter dated 9.3.2019 and affirmed by subsequent correspondence and Board Resolution dated 12.6.2019 of CWC and the Affidavits of the parties filed in this Court. Such acquisition of land and construction of warehouse by the Respondent - APSEZL may be completed within a period of one year after the expiry of aforesaid period of three months in Clause (i) above and same may be offered to CWC to be occupied by the Appellant - CWC on such terms and conditions in consonance with the previous Agreement between the parties vide Lease Agreement dated 2.6.2004 or under such mutually agreed terms as may be agreed afresh between the parties.
(iii) Once the completed construction on the land outside the SEZ Area, already identified and selected by CWC, is offered to the Appellant - CWC, the Appellant - CWC shall vacate the existing premises of the warehousing facility on the said 34 acres of land situated within SEZ area within three months of such communication of the Respondent - APSEZL and the Appellant - CWC shall be bound to hand over the peaceful and vacant possession of existing warehousing facility and land of 34 Acres in question to the Respondent - APSEZL within such period of three months of the communication of the Respondent - APSEZL that new warehousing facility on the land situated outside the SEZ area is ready to be taken in possession and occupied by CWC.
(iv) If the Appellant – CWC fails to hand over the vacant and peaceful possession to the Respondent, even thereafter, the Respondent - APSEZL shall be free to approach this Court or the concerned Development Commissioner or the learned Single Judge or other authorities of the State for appropriate execution of these directions of this Court.
(v) That regarding Proposal No.3 about underwriting of the future business loss of CWC on the basis of published tariffs or market tariffs or otherwise, the parties are left free to make efforts for amicable settlement of this issue between themselves with the help of Development Commissioner or the Mediation process under Section 89 of Civil Procedure Code in the High Court annexed Mediation Centre, where services of Senior Trained Mediators can be made available to the parties at the appropriate point of time.
(vi) For the aforesaid period of 18 months of timeline involved in the aforesaid directions namely, three months under Clause (i) and one year or 12 months under Clause (ii) and three months for handing over the vacant possession under Clause (iii) aforesaid, the interim order granted by the coordinate bench of this Court on 11.1.2017 shall continue to operate between both the parties.
(vii) That if the extension of the aforesaid time period(s) becomes very necessary for compelling reasons, both the parties shall be at liberty to apply to the learned Single Judge in the pending Writ Petition; being Special Civil Application No.184 of 2017 and the learned Single Judge keeping in view the conduct of the applicant-party may grant such further time as may be considered expedient and necessary by the learned Single Judge.
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2021 (6) TMI 1120
TP adjustment made in respect of sourcing commission - assessee claimed that the payment of commission is at arm’s length - TPO determined the ALP of commission payment as Nil and accordingly made transfer adjustment of entire claim - HELD THAT:- We notice that an identical issue has been examined in the assessee’s own case by the coordinate bench in A.Y. 2014-15 [2020 (10) TMI 1049 - ITAT BANGALORE] and the matter has been restored to the file of the AO/TPO for examining it afresh.
TP adjustment made in respect of payment of interest on debentures - HELD THAT:- As decided in own case for assessment year 2012-13 & 2014-15 [2020 (10) TMI 1049 - ITAT BANGALORE] TPO has been taking different stand in different years. While he accepted the CCD as debentures in AY 2012-13 and reduced the rate of interest only, the TPO treated CCD as equity in AY 2014-15. However, in AY 2015-16, the TPO has accepted the rate of interest of 12% to be at arms length. We notice that the TPO has made certain enquiries in AY 2015-16 and accordingly came to the conclusion that the interest payment is at arms length. The benefit of those enquiries was not available with the TPO in the two years under consideration. Since the issue is the same in all the years and further, in view of the conflicting stands taken by TPO, we are of the view that this issue requires fresh examination at the end of TPO. Accordingly, we restore this issue in both the years under consideration to the file of AO/TPO for examining it afresh
TP adjustment in respect of reimbursement of expenses - HELD THAT:- Identical issue in assessment year 2005-06 and 2006-07 and has held that the nature of these expenses is such that they cannot be attributed solely and exclusively incurred by parent company for distribution business of the assessee. Accordingly, the TPO, following the decision of ITAT, determined the ALP of reimbursement of expenses at NIL.
Tribunal following the decision rendered by the coordinate bench in A.Y. 2005-06 & 2006-07 [2013 (11) TMI 355 - ITAT BANGALORE] has decided this issue against the assessee.
TP adjustment in respect of royalty payment - HELD THAT:- We notice that an identical issue has been examined by the coordinate bench in A.Y. 2014-15 [2020 (10) TMI 1049 - ITAT BANGALORE] as held that onus to prove that the expenses incurred by the AE was towards sale of products and not for purpose of creating brand awareness lies upon the assessee. We notice that this onus has not been discharged by the assessee. The basic details like the agreement if any for reimbursing this expenses, RBI approval, business necessity/expediency in making the payment, the basis of calculation etc., have not been furnished. Hence, the TPO has taken the view that this expenditure is not related to the business of the assessee and accordingly he has determined the ALP at NIL.
Before us also, no further details were furnished. In view of the above, we are of the view that there is no infirmity in the order so passed by the TPO/AO - Decided against assessee.
TP adjustment made in respect of Advertisement, Marketing and Promotion expenses (AMP expenses) - HELD THAT:- We notice that the AMP expenses incurred by the assessee in the years, other than the year in which there was partial reimbursement of expenses by A.E. of the assessee, has been held to be fully allowable by the coordinate bench. Since the facts available in the present year is akin to A.Y. 2009-10 and since it is stated that there is no agreement between the assessee and its A.E. for reimbursement of expenses, we are of the view that the decision rendered by Hon’ble Delhi High Court in the case of Maruti Suzuki Ltd. [2015 (12) TMI 634 - DELHI HIGH COURT] is applicable to the facts of the present case.
Accordingly, following the decision rendered by the coordinate bench in other years, we hold that the TP adjustment made in respect of AMP expenses is not justified. Accordingly, we direct the A.O. to delete the same.
Disallowance of claim of purchase of samples - allowable business expenses or not? - HELD THAT:- When the transaction is between related parties, the Act places more burden on the shoulders of the assessee to prove that the expenditure is related to the business of the assessee. Further, in trade circles also, it is known fact that the expenditure on samples are borne by the manufacturers only. Hence this claim of expenditure is against the trade practice and the assessee appears to have borne the expenses only on the reasoning that the same was charged upon it by its parent company. Hence, we are of the view that the AO was justified in holding that the burden to incur this expenditure is that of parent company and is not related to the business activities of the assessee - As relying on previous years we decide this issue against the assessee and accordingly, confirm the disallowance made by the A.O. on this issue.
Disallowance u/s 40(a)(i/ia) of the Act for non-deduction of tax at source - A.R. submitted that the assessee could not fully furnish the relevant details before the AO/DRP in respect of expenses which were disallowed in earlier years in respect of which TDS was remitted during the year - HELD THAT:- Having regard to the submissions made by the Ld. A.R., we are of the view that, in the interest of natural justice, the assessee may be provided with an opportunity in this regard. Accordingly, we restore this issue to the file of AO for examining the same afresh in accordance with law.
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2021 (6) TMI 1119
Applicability of time limitation to arbitration proceedings initiated Under Section 18(3) of Micro, Small and Medium Enterprises Development Act, 2006 - maintainability of counter claim in such arbitration proceedings - HELD THAT:- Applicability of Limitation Act, 1963 to the arbitrations is covered by Section 43 of the 1996 Act - The High Court, while referring to abovesaid provisions and the judgment of this Court in the case of Andhra Pradesh Power Coordination Committee and Ors. v. Lanco Kondapalli Power Ltd. and Ors. [2015 (11) TMI 1005 - SUPREME COURT] has held that the Limitation Act, 1963 is applicable to the arbitrations covered by Section 18(3) of the 2006 Act. A reading of Section 43 itself makes it clear that the Limitation Act, 1963 shall apply to the arbitrations, as it applies to proceedings in court. When the settlement with regard to a dispute between the parties is not arrived at Under Section 18 of the 2006 Act, necessarily, the Micro and Small Enterprises Facilitation Council shall take up the dispute for arbitration Under Section 18(3) of the 2006 Act or it may refer to institution or centre to provide alternate dispute resolution services and provisions of Arbitration and Conciliation Act 1996 are made applicable as if there was an agreement between the parties Under Sub-section (1) of Section 7 of the 1996 Act.
In view of the express provision applying the provisions of the Limitation Act, 1963 to arbitrations as per Section 43 of the Arbitration and Conciliation Act, 1996, the High Court has rightly relied on the judgment in the case of Andhra Pradesh Power Coordination Committee (2016) 3 SCC 468 and held that Limitation Act, 1963 is applicable to the arbitration proceedings Under Section 18(3) of the 2006 Act - no further elaboration is necessary on this issue and it is held that the provisions of Limitation Act, 1963 will apply to the arbitrations covered by Section 18(3) of the 2006 Act.
Maintainability of counter claim in the arbitration proceedings initiated as per Section 18(3) of the 2006 Act - HELD THAT:- From a reading of Section 18(3) of the 2006 Act it is clear that when the conciliation initiated Under Sub-section (2) of Section 18 of the said Act is not successful, the Council shall either itself take up the dispute for arbitration or refer to any institution for arbitration. Further Section 18(3) of the said Act also makes it clear that the provisions of 1996 Act are made applicable as if there is an agreement between the parties Under Sub-section (1) of Section 7 of the 1996 Act. Section 23 of the 1996 Act deals with the statement of claim and defence. Section 23(2A), which gives a right to Respondent to submit a counter claim or plead set-off with regard to claims within the scope of the arbitration agreement, is brought into Statute by Amending Act 3 of 2016 - When there is a provision for filing counter-claim and set-off which is expressly inserted in Section 23 of the 1996 Act, there is no reason for curtailing the right of the Respondent for making counter-claim or set-off in proceedings before the Facilitation Council.
MSMED Act, being a special Statute, will have an overriding effect vis-à-vis Arbitration and Conciliation Act, 1996, which is a general Act. Even if there is an agreement between the parties for resolution of disputes by arbitration, if a seller is covered by Micro, Small and Medium Enterprises Development Act, 2006, the seller can certainly approach the competent authority to make its claim. If any agreement between the parties is there, same is to be ignored in view of the statutory obligations and mechanism provided under the 2006 Act. Further, apart from the provision Under Section 23(2A) of the 1996 Act, it is to be noticed that if counter-claim is not permitted, buyer can get over the legal obligation of compound interest at 3 times of the bank rate and the "75% pre-deposit" contemplated Under Sections 16 and 19 of the MSMED Act.
On a harmonious construction of Section 18(3) of the 2006 Act and Section 7(1) and Section 23(2A) of the 1996 Act, it can be held that counter-claim is maintainable before the statutory authorities under MSMED Act.
It is also not in dispute that the Appellant approached the District Industrial Centre and filed entrepreneur memorandum Under Section 8 of the MSMED Act 2006 only on 25.03.2015 and later has approached the Council invoking the provisions of MSMED Act by filing application Under Section 18 of the Act. It is the specific case of the Respondent that the Appellant has abandoned the incomplete work having made deficient and defective supplies in the month of February/March 2015 - Further, as it is also not in dispute that there is an agreement for arbitration between the parties for resolution of disputes pursuant to their contract, as such, the High Court has rightly allowed the application filed by the Respondent Under Section 11(6) of the 1996 Act.
Appeal dismissed.
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2021 (6) TMI 1118
Delayed payment/contribution of employees’ share made to the PF & ESI authority - scope of amendment - HELD THAT:- We notice in the factual backdrop that the legislature has not only incorporated necessary amendment in Sections 36(va) as well as 43B vide Finance Act, 2021 to this effect but also the CBDT has issued Memorandum of Explanation that the same applies w.e.f. 1.4.2021 only. It is further not an issue that the foregoing legislative amendments have proposed employers’ contribution/ disallowance u/s 43B as against employee’s contribution u/s 36 (va) of the Act; respectively. However, keeping in mind the fact that the same has been clarified to be applicable only with prospective effect from 1.4.2021, we hold that the impugned disallowance is not sustainable. See M/S MERCHEM LIMITED [2015 (9) TMI 560 - KERALA HIGH COURT], GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT], GTN. TEXTILES LTD. [2002 (10) TMI 9 - KERALA HIGH COURT], SOUTH INDIA CORPORATION LTD. [1999 (10) TMI 44 - KERALA HIGH COURT] and JAIRAM AND SONS. [2003 (10) TMI 16 - KERALA HIGH COURT]
The impugned ESI/PF disallowance is directed to be deleted therefore. - Decided in favour of assessee.
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2021 (6) TMI 1117
TDS u/s 195 - India-Swiss DTAA - HELD THAT:- Respondent-Revenue, cannot but accept that the issue raised in the present petition is covered by the judgment of this court dated April 22, 2021, passed in Concentrix Services Netherlands B. V. [2021 (4) TMI 1051 - DELHI HIGH COURT]
Accordingly, the impugned orders dated January 4, 2021 and March 11, 2021 are set aside. The writ petition is disposed of in the aforesaid terms.
Consequently, a certificate under section 197 will be issued in favour of the petitioner, indicating therein, that the rate of tax, on dividend, as applicable qua the petitioner is 5 per cent. under the India-Swiss Double Taxation Avoidance Agreement.
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2021 (6) TMI 1116
Levy of tax which was claimed under Form SVLDRS-1 - seeking waiver from interest and penalty as was promised under the Scheme - Form SVLDRS-1 submitted by the petitioner was summarily rejected, without giving any opportunity of hearing to the petitioner - HELD THAT:- According to the Scheme, once the assessee avails the Scheme and files the return by declaration, the verification of declaration by the designated committee was prescribed under Section 126 of the SVLDRS Scheme and the issue of statement by the designated committee is covered under Section 127 of the SVLDRS Scheme.
The order which is on record whereby the declaration of the petitioner was rejected, meaning thereby he would be liable to pay the additional amount, which would be a levy imposed. In order to impose such levy, the designated committee was duty bound to hear the petitioner by giving him an opportunity of hearing. Considering the benevolent scheme which has been set into motion by the respondents, the petitioner was required to be heard even otherwise under the statutory mandate.
The order whereby the Form SVLDRS-1 was rejected by the designated committee which is embodied in the remarks column is setaside. The cases are remanded back to the designated committee with a direction to give an opportunity of hearing to the petitioner by adhering to the rules of natural justice - Petition allowed by way of remand.
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2021 (6) TMI 1115
TP addition - addition u/s 92CA(3) in respect of Information Technology Enabled Services ("ITes") provided by the Assessee to its Associated Enterprise ("AE') - comparable selection - HELD THAT:- Manipal Digital Systems Private Limited - As per Indian Council for Advertising, the online advertising has to be published on true and honest disclosure basis and therefore, when proper documentation of activities are not physically available, in such scenario, referring the website for information is correct option and the information therein cannot be doubted. These are all multi-national companies and certain amount of honesty has to be attributed to them since all are functioning as per relevant rules and laws. With these observations and respectfully, following the judgment of RAMPGREEN SOLUTIONS PVT LTD VERSUS COMMISSIONER OF INCOME TAX [2015 (8) TMI 931 - DELHI HIGH COURT] we direct the AO/TPO to exclude this company i.e. Manipal Digital Systems Private Limited from the final set of comparables with that of the assessee company.
CES limited - Segregation of ITes services has to be categorically conducted before classifying as functionally comparable with another. In this case Revenue Authorities have only looked into the revenue earning from ITes segment and included this company as comparable. The facts remains both these companies are functionally different. We therefore, direct the AO/TPO to exclude CES Limited from the final set of comparables with that of the assessee company.
MPS Limited - Having gone through the annual report of the company, findings of the Sub-ordinate Authorities and the submissions of the assessee placed on record along with judicial pronouncements, it is evident that MPS Limited is functionally different from that of the assessee company in more-so that high end activities of MPS Ltd. is akin to IT services and not ITes - we direct the AO/TPO to exclude MPS Limited from final list of comparable companies.
Domex E-Data Pvt. Ltd. - If two companies performing ITes are to be considered as comparable then the specific business of the said two companies has to be analyzed and then decide upon whether they are at all comparable or not. In this case, we do not find such exercise was conducted neither by TPO nor by the Ld. DRP. Therefore, we are of the considered view that in the given set of facts, this company is functionally not comparable with that of the assessee company. We, therefore, direct the AO/TPO to exclude this company i.e. Domex E-Data Pvt. Ltd. from the final set of comparables.
e4e Healthcare Business Services Pvt. Ltd - As decided in M/S MERCER CONSULTING (INDIA) PVT. LTD. GURGAON [2016 (8) TMI 1163 - PUNJAB AND HARYANA HIGH COURT] miniscule difference cannot result in the rejection of the case if it is otherwise comparable. However, it had not laid down any specific percentage as to the deviation permissible. We find, the Ld. DRP stated the permissible deviation is at 0.5% but this is not appearing anywhere in the said judgment. That further, the Sub-ordinate Authorities have rejected this company as it failed on the RPT filter which according to the assessee was not correct. Now before us, the Ld. Counsel for the assessee has prayed that the issue may be restored to the file of AO/TPO for factual verification of functional Compatibility to which the Ld. DR also has not objected. Therefore, in the interest of justice, we set aside the order of the Ld. DRP on this issue i.e. e4e Healthcare Business Services Pvt. Ltd. and remand this matter back to the file of AO/TPO for verification of functional compatibility of this company with that of the assessee while complying with the principles of natural justice.
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2021 (6) TMI 1114
Assessment u/s 153 - Period of limitation for proceedings for making a reference under Section 92CA(1) - HELD THAT:- Admittedly in the present case, the proceedings for making a reference under Section 92CA(1) of the Income Tax Act, 1961 by the 3rd respondent/Additional Commissioner of Income Tax to the Jurisdictional Commissioner of Income Tax started prior to expiry of normal period of limitation under the 1st proviso to Section 153(1) of the Income Tax Act, 1961 and during the course of assessment.
The permission was also granted by the CIT on 18.11.2008 to make a reference under Section 92CA(1) though the actual reference was made only on 17.02.2009. Since the case of the petitioner falls under Chapter X of the Income Tax Act, 1961, special period of limitation under the 2ndproviso to Section 153(1) was attracted for completing the assessment.
On perusing the records, it is noticed that the petitioner has wholeheartedly participated in the proceedings before the 2nd respondent/Transfer Pricing Officer pursuant to the reference made on 17.02.2009 by the 3rd respondent/Additional Commissioner of Income Tax. Before the 2nd respondent/Transfer Pricing Officer also no objection was raised by the petitioner regarding limitation.
After, the 2nd respondent/Transfer Pricing Officer passed a Transfer Pricing Order dated 30.10.2009 under Section 92CA (2) of the Income Tax Act, 1961, the petitioner was also issued with a Show Cause Notice dated 23.11.2009 by the 3rd respondent/Additional Commissioner of Income Tax. Even before the 3rd respondent, before the Draft Assessment Order was passed on 31.12.2009, the petitioner did not raise any objection regarding limitation.
It is for the first time before the 1st respondent/Dispute Resolution Panel, the Petitioner raised the objection regarding the limitation to proceed with the assessment for the first time which has been rightly overruled by the 1st respondent/Dispute Resolution Panel.
Therefore, it is not open for the petitioner to challenge the jurisdiction of the 3rd respondent/Additional Commissioner of Income Tax to refer to the 2nd respondent/Transfer Pricing Officer to pass a Transfer Pricing Order after 31.12.2008. Since the petitioner had also not questioned the jurisdiction of the 2nd respondent/Transfer Pricing Officer when the reference was made on 17.02.2009, there was also acquisence by the petitioner to the reference to the 2nd respondent/Transfer Pricing Officer. The petitioner is therefore estopped form questioning the aforesaid reference made to the 2nd respondent/Transfer Pricing Officer.
Both 1st and the 2nd proviso to Section 153(1) of the Income Tax Act, 1961 only specify the time-limit within which assessment has to be completed. Both operate under different circumstances. Former applies in the case of normal assessment while the later applies where Chapter X is attracted. The 2nd proviso to Section 153(1) of the Income Tax Act, 1961 does not state that the reference also should be made before the expiry of 21 months where chapter X of the Income Tax Act, 1961 are attracted for completing the assessment. Therefore, there is no merits in the present writ petition.
The present Writ Petition is therefore liable to be dismissed.
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2021 (6) TMI 1113
Dishonor of Cheque - direction to petitioner to deposit 20% of the cheque amount in accordance with Section 143A of NI Act - HELD THAT:- Section 143A was inserted in the Negotiable Instruments Act by Act No.20 of 2018 with effect from 01.09.2018. The complaint was filed on 11.10.2019. Therefore the amendment is very much applicable to the present case.
According to Section 143A(a), if the accused does not plead guilty, the Court may pass an order directing him to pay interim compensation to the complainant and this amount shall not exceed 20% of the cheque amount. Sub-section(4) of Section 143 makes it very clear that if the accused is acquitted, the Court will direct the complainant to re-pay the amount with interest. Therefore it is very clear from the language of the Section that the accused may be directed to pay interim compensation if he pleads not guilty. In the case on hand, having noticed that the petitioner pleaded not guilty, the Court below directed him to pay interim compensation to the complainant.
Petition is dismissed.
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2021 (6) TMI 1112
Seeking a temporary injunction to restrain the Opposite Party No. 1 and 2 (Appellants herein) and any person acting on their behalf from in any manner, initiating, continuing arbitral proceedings commenced under the purported Drag Notice and purported Conversion Notice - Whether the impugned orders are against the settled principles governing the law on Anti-Arbitration Injunctions? - Whether the impugned orders are ultra virus the scope of Sections 241 and 242 of the Companies Act 2013?
Validity of the Order passed by the National Company Law Tribunal in issuing Anti-Arbitration Injunction Order, which restrains the Appellants from initiating, commencing and continuing of Arbitration proceedings - HELD THAT:- In the instant case, the Learned NCLT has yet not decided to refer the matter to Arbitration. However, both the parties have placed reliance on several cases of the Hon'ble Supreme Court on reference to the Arbitral Tribunal. Whether dispute should be referred to Arbitral Tribunal or not this is not the issue in this Appeal.
The issues in the Arbitration proceedings are relating to the enforcement of contractual provisions. In contrast, the issues in the Investors Petition deals with oppression and mismanagement by Promoter Respondents who are in the majority on the Board of Respondent No. 6 and allegedly abused their majority to the detriment of other Shareholders. The Promoter Respondents have failed to show a commonality of issues between the proceedings. Since the issues raised in the proceedings before the NCLT and Arbitration are distinct and separate, there is no question of any commonality of issues within the Investors Petition and Arbitration proceedings.
The powers of the NCLT under the Sections 241 and 242 of the Companies Act operate in a different realm compared to an Arbitral Tribunal under the Arbitration and Conciliation Act, 1996. The NCLT under the Companies Act is concerned only with the affairs of the Company and does not have the jurisdiction to deal with the issues relating to the enforcement of contractual provisions between the parties. Therefore, there does not exist any commonality of issues in the proceedings in the NCLT due to the dressed-up Petition filed by the Promoter Respondents, i.e. Promoters petition - It is pertinent to mention that in the Investor's Petition, no prayer or relief with respect to the breach of rights pertaining to the conversion notice has been sought by the appellants. This was a subsequent event and not within the scope of the Investor Petition. The fact was merely brought to the attention of the Learned NCLT in the rejoinder to the Investors Petition to demonstrate the conduct of the Promoter Respondents. The Appellant's legitimately exercised their rights under the Arbitration Agreement.
Since the issues arising out of the Investors Petition and the Arbitration are distinct, a party invoking the jurisdiction of the NCLT and contending oppression and mismanagement under the Companies Act cannot be held to waive its rights to arbitrate a contractual dispute arising out of an Agreement. Even otherwise, assuming that the appellants have waived their rights to arbitrate, the said determination cannot be made by the NCLT. It can only be decided by an Arbitral Tribunal in keeping with the principles of Kompetenz-kompetenz - There are ample precedents to suggest that averments concerning the maintainability of the Petition and the fact that the action covered in the Petition is subject of an Arbitration Agreement, thereby seeking reference to Arbitration, raised at the 1st instance, i.e. in the response filed by the Respondents, qualified as a valid Application in terms of Section 8 of the Act. There is no requirement to file a separate Application to this effect.
The impugned Order granting an Anti Arbitration Injunction and further passing an order that Interim Application shall be decided along with Company Petition after disposal of the Company Appeals are arbitrary self-contradictory. The 1st of the impugned Order grants an interim order to understand that the matter would be finally heard on the next date - the illegality is compounded by containing the interim Order endlessly. Therefore, such an order is grossly unjust and illegal and cannot be sustained in law. Therefore, the impugned orders are against the settled principles governing the law on Anti-Arbitration Injunctions and are ultra virus the scope of Section 241 and 242 of the Companies Act 2013.
The impugned orders are against the settled principles that govern Section 8 of the Arbitration and Conciliation Act, 1996. Thus, the NCLT erred in holding that in the absence of either party filing an Application under Section 8 of the Arbitration and Conciliation Act, it would not be able to refer the matter to Arbitration. The NCLT further held that "parties cannot be permitted to initiate arbitration"; it is contrary to the settled principles of law, which mandates a judicial authority to refer the matter to Arbitration if a valid arbitration agreement existed between the parties - Appeal allowed.
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2021 (6) TMI 1111
TP Adjustment - selection of MAM - onus to justify selection of MAM - HELD THAT:- A perusal of the finding of DRP show that the DRP had put the onus on the assessee whereas the onus lies on the TPO to justify the adoption of “other method” as the most appropriate method and not on the assessee. Further the comparable used by the TPO and accepted by the DRP related the payment of royalty relating know-how, patent and process technology and therefore, such comparables cannot be accepted on the business profile of the assessee.
We find conflicting findings of the DRP for example in the case of L 1 7961 Maciej Zalewski Trustee; Maciej Zalewski - DRP says that this comparable was rejected by this panel during A.Y. 2015-16 on the ground that licensee is a manufacturer of machinery and equipment whereas for the same profile the DRP has accepted L6245 Zbigniew Torkaz, an individual and Trustee and Polymer Energy has submitted that this agreement is identical to Sr. No.1 and should therefore, be excluded. The agreement is regarding know-how, patent and process technology. Atagencer, LLC; Mehmet Gencer an individual and Polymer Energy LLFC Rate 3.75% the assessee has submitted that this agreement is identical to Sr. No. 1.
Thus we are of the considered view that the lower authorities should have accepted TNMM as the most appropriate method on the business profile qua the international transaction of the assessee as was accepted in A.Y.2009-10 to 2014-15. We accordingly direct the AO/ TPO to delete the TP adjustment of Rs.361320620/- appeal filed by the assessee is accordingly allowed.
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2021 (6) TMI 1110
Extended period of limitation - details of trading was available in the Balance Sheet of the respondent during the relevant period and that there was much confusion during the relevant period as to whether credit could be availed in respect of trading activities and the issue was in litigation leading to perversity? - mere availability of details of trading in Balance Sheet is sufficient to drop the demand for extended period on the ground that there was no suppression or not - Whether the CESTAT is right in attributing the prior knowledge of trading activity of the respondent ignoring the fact that the respondent produced the Balance Sheet only during the investigation and not prior to that? - demand for extended period of limitation and penalty.
HELD THAT:- Undisputed facts of the case are, as recorded in paragraph 6 of the show cause notice, it was issued based on the balance sheet for the year ending 2008. Thus, the contentions of the Revenue that respondents trading activity was not known to the department and that it was learnt based on intelligence report are not tenable.
In Shriram Value Services Pvt. Ltd. [2019 (8) TMI 1174 - MADRAS HIGH COURT], the Madras High Court has held that at the relevant period of time. Viz., from April 2009 to March 2011, the Assessee was, obviously, under bona fide belief in view of the conflicting decisions of the Tribunals during that period and taking the trading activity as Exempted Services, availed the CENVAT Credit which is sought to be reversed and recovered by the Department invoking the extended period of limitation. Such a bona fide belief cannot be held to be done with ulterior purpose for evading the Duty and therefore, the extended period of limitation would not be available to the Revenue Authority in view of the aforesaid decision rendered by the Hon’ble Supreme Court.
The substantial questions raised by the Revenue are answered in favour of the assessee - Appeal dismissed.
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2021 (6) TMI 1109
Validity of Faceless Assessment u/s 144B - Violation of the principles of natural justice - denial of granting personal hearing to petitioner and on considering his submissions - HELD THAT:- We had put to Mr. V. Lakshmikumaran, who appears for the petitioner, as to whether it would suffice if we were to set aside the impugned order, and direct the Assessing Officer to consider the petitioner’s reply to the show cause notice-cum-draft assessment order, dated 12.03.2021.
Mr. Lakshmikumaran says that such a direction would satisfy the petitioner. Therefore, the assessment order, passed under Section 143(3) of the Act, dated 13.03.2021, is set aside.
AO will be at liberty to pass a fresh order, after considering the reply/submissions, filed by the petitioner, dated 12.03.2021. The AO will accord a personal hearing to the authorized representative of the petitioner, and for this purpose, he/she will indicate, in writing, the date and time of the hearing. The AO will transmit this information via the registered e-mail ID of the petitioner. Furthermore, the A.O. will ensure that the link for the hearing is also sent to the petitioner.
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2021 (6) TMI 1108
Seeking issuance of a writ in the nature of habeas corpus for the release of petitioner's brother - Smuggling - Gold - smuggling gold by concealing the same in diplomatic cargo which is not normally subjected to detailed customs examination - illegal detention - COFEPOSA Act - whether there was awareness in the mind of the detaining authority that detenu is in custody and he had reason to believe that detenu is likely to be released on bail and if so released, he would continue to indulge in prejudicial activities? - HELD THAT:- The detaining authority was aware of the fact that the detenu was in judicial custody; that he is likely to be released on bail; and that if so released, he would engage in prejudicial activity - If the grounds of detention show that the detaining authority was alive to these facts, and was satisfied that there was a real likelihood of the detenu being released on bail, we will not substitute our satisfaction for that of the detaining authority for what the law requires is only the subjective satisfaction of the detaining authority.
The next contention raised by the learned counsel for the petitioner is that the learned counsel for the detenu was not given an opportunity for hearing before the Advisory Board constituted under Section 8 of the COFEPOSA Act, 1974 - HELD THAT:- Though the hearings before the board were concluded on 22.1.2021, it was only on 29.1.2021 that a request was received from the Advocate for the detenu enclosing a detailed representation on behalf of the detenu and requesting for a hearing. It is obvious that considering the time limit imposed under Section 8 of the COFEPOSA Act, 1974 the Board was not in a position to grant any further adjournment to accommodate any request of the detenu. It is also clear that the Advisory Board had also considered the representation dated 29.1.2021 despite the fact that the representation was received after the hearing was concluded on 22.1.2021 - The contention of the learned counsel for the petitioner that proceedings of the Advisory Board are vitiated on account of the failure to permit the detenu to be represented by an Advocate of his choice, cannot be accepted. - It can only be held that the opportunity extended to the detenu to be represented by a counsel was not availed by the detenu.
The last and final contention of the learned counsel for the petitioner is that the Advisory Board which considered the case of the detenu under Section 8 of the COFEPOSA Act is not competent to consider the same - HELD THAT:- On reading of the provisions of Art. 22 of the Constitution and the various provisions of the COFEPOSA leads to conclude that neither the Constitution nor the COFEPOSA Act require that in every case where the detention order is passed by the Central Government, its confirmation must be by an Advisory Board constituted by the Central Government under Section 8(a) of the COFEPOSA Act. Art. 22(4) of the Constitution of India only provides that no law providing for preventive detention shall authorise the detention of a person for a period longer than three months unless 'an Advisory Board' consisting of persons who are, or have been, or are qualified to be appointed as Judges of a High Court have reported before the expiration of the period of three months that there is, in its opinion, sufficient cause for such detention. Art. 22(4) was sought to be amended by the Constitution (44th Amendment) Act, 1978 by which, among other things, it was provided that the Advisory Board shall consist of a Chairman who has to be a serving Judge of the 'appropriate High Court' and further providing that 'appropriate High Court' means, in case of an order of detention made by the Government of India or an officer or authority subordinate to that Government, the High Court of Delhi and in case of an order of detention issued by the State Government, the High Court for that State.
The provisions of Section 8(a) of the COFEPOSA Act provide for the constitution of Advisory Boards. Significantly, those provisions do not use the words 'appropriate Government'. Section 8(b), no doubt says that the reference to the Advisory Board shall be by the 'appropriate Government' and uses the words 'the Advisory Board'. Any significance cannot be given to the word 'the' before the words 'Advisory Board' to hold that the Advisory Board must be one constituted by the appropriate Government - The provisions of Art. 22(4) of the Constitution and Section 8 of the COFEPOSA only requires that the case of the detenu could be considered by an Advisory Board consisting of persons having the qualifications mentioned in Art. 22(4) and constituted by appropriate notification under Section 8 of the COFEPOSA Act. The Learned Counsel for the petitioner has no case that the Advisory Board which considered the case of the detenu has not been constituted under Section 8 of the COFEPOSA Act. At any rate, the detenu cannot be said to be prejudiced in any manner as his representation was duly considered by an Advisory Board comprising of such members as are recognised both by the unamended and amended provisions of Art. 22(4) of the Constitution.
There is no merit in the contention of the learned counsel for the petitioner that only the Board constituted under the notification dated 17.3.2020 was competent to consider the case of the detenu - Petition dismissed.
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2021 (6) TMI 1107
Classification of goods - PAPAD of different shapes and sizes manufactured/ supplied by the appellant - tariff heading/HSN Code - Applicable rate of GST - HELD THAT:- Though, traditionally Papad has been prepared manually, in round shape. However, when ingredients and process are similar in case of PAPAD and impugned product, then the product in question is nothing but a kind of PAPAD irrespective of their shape and sizes - As submitted by the appellant, when the consumer desires to eat the said products of the appellant, the said products are required to be fried or roasted before consumption. Thus, these products are not meant to be eaten without frying or roasting - The products under consideration become crispy when these products are fried or roasted.
The products of the appellant has found its use as an alternative to regular round shaped Papad or as an additional variety of Papad in the Indian meal, especially the meals served during the community functions. The caterers, who prepare the meals for the community functions, as well as the people in general, consider such products as a different type or variety of Papad only - applicant’s products of different shapes and sizes of papad, whose pictures are reproduced, are nothing but Papad, classifiable under Tariff Item 1905 90 40 of the Customs Tariff Act, 1975.
Would it be judicious to stick that the product which are having Round shape, manufactured by using ingredient of cereal flour only are PAPAD and the products having the same characteristic and uses but shape and size is different cannot be termed as “PAPAD”? - HELD THAT:- Reliance can be placed in the case of M/S. SHIV SHAKTI GOLD FINGER VERSUS ASSTT. COMMISSIONER, COMMERCIAL TAXES, JAIPUR [1996 (5) TMI 419 - SUPREME COURT] where it was held that irrespective of the shape of PAPAD and irrespective of ingredients used, the PAPAD still remains PAPAD - the decision is squarely applicable in the instant case as such the impugned product having different shapes and size PAPAD as compared to round shape Papad however are similar to Papad in respect of the ingredient, manufacturing process and use.
Further, in entry No. 96 of Notification No. 02/2017-CT (Rate) dated 28.06.2017, the description of the product is “PAPAD by whatever name called”. To understand the term “whatever name called” the principle of “Noscitur a sociis” is to be applied. As per the said principle, the meaning of an unclear word or phrase must be determined by the words that surround it. In other terms, the meaning of a word must be judged by the company that it keeps. Therefore, in this entry, only a product called by name of PAPAD would not be covered but all types of product which are similar to PAPAD in respect of ingredient, manufacturing process, use and common parlance would be covered irrespective of their shape and size and even name. As such, the appellant’s product is similar to the traditional round shaped Papad in all respect - the impugned product i.e. different shapes and sizes of papad is eligible to be covered under entry No. 96 of Notification No. 02/2017-CT (Rate) dated 28.06.2017.
The rule of interpretation for classification is that when a product is eligible to be classified under specific entry then classification under general entry should not be preferred. It is found that in the case at hand, the product “different shapes and sizes Papad” is “Papad” of different shapes and size and find specific entry at CTH No. 19059040, therefore as per rule of interpretation, the product is to be classified under CTH No. 19059040 only and not under CTH No. 21069099 of the Customs Tariff Act, 1975 as classified by the GAAR.
The product ‘different shapes and sizes Papad’ involved in the present case merit classification under Tariff heading No. 19059040 of the Customs Tariff Act, 1975. It is already held that the product in question is classifiable under CTH No. 1905 of the Customs Tariff Act, 1975, the said CTH No. 1905 is covered under entry No. 96 of Notification No. 02/20178-CT (Rate) dated 28.06.2017 and accordingly chargeable to NIL rate of Goods and Services Tax.
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2021 (6) TMI 1106
CENVAT Credit - inputs - welding electrodes - period from April 2010 to December 2012 and from January 2013 to October 2013 - HELD THAT:- The issue stands decided in favour of the appellant as held by the Tribunal in the case of CCE, MEERUT VERSUS M/S. BAJAJ HINDUSTAN LTD. [2013 (11) TMI 943 - CESTAT NEW DELHI] where the issue pertaining to eligibility of welding electrode for repair and maintenance activity during the year 2008 (i.e. prior to amendment from 1st March, 2011) has been examined.The Tribunal while taking note of the decision in the case of M/S STEEL AUTHORITY OF INDIA LTD. VERSUS COMMR. OF CENTRAL EXCISE, JHARKHAND [2008 (7) TMI 16 - SC ORDER] took a view in favour of the assessee considering the decision of three High Courts wherein it has been held that credit is eligible on welding electrodes. It has also been observed therein that mere dismissal of SLP by the Supreme Court against the decision rendered by the Tribunal will not be considered to be law since not decided by the Apex Court.
Since the issue is no longer res integra and the eligibility of Cenvat Credit on welding electrode has been squarely decided in favour of the assesse even for the period prior to 1st March, 2011, there is no reason to disallow credit in the present case. The demand of excise duty, interest and penalty is thus set aside.
Appeal allowed - decided in favor of appellant.
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2021 (6) TMI 1105
Levy of GST - onboard catering services provided by the respondent under a temporary license - requirement of serving welcome drink to the passengers who boarded the subject trains - Entitlement to claim Goods and Services Tax (GST) on production charges/supply of meals after 01.07.2017, when the Goods and Services Tax Act, 2017 [GST Act] came into force - who to face financial burden concerning the food which got wasted due to cancellation or the failure of the passengers to turn up - claim for interest as well.
Whether onboard catering services provided by the respondent under a temporary license issued to it also obliged the respondent to serve a welcome drink to the passengers who boarded the subject trains? - HELD THAT:- It is only on 06.04.2017, when IRCTC indicated to the respondent, that unless it gave its unconditional acceptance to the policy framework captured in its communication dated 07.02.2017, its temporary license, which was expiring on 18.06.2017, would not be extended, that the respondent agreed to provide a welcome drink and bear the financial burden qua the same - Faced with this difficult choice, and having regard to the fact that it had already invested funds in the contractual arrangement arrived at with IRCTC, on 12.04.2017, the respondent accepted the terms indicated in the communication dated 07.02.2017, concerning the supply of welcome drink for the period that was to extend beyond 18.06.2017
The claim of the respondent qua welcome drink was restricted to the period spanning between 19.12.2016 and 18.06.2017. To be noted, the temporary license was extended by IRCTC till 04.07.2018 - The learned arbitrator, to our minds, correctly concluded that IRCTC could not have deducted the amounts expended by them towards serving welcome drink to the passengers from the bills of the respondent.
Whether IRCTC is obliged to reimburse the amount deposited by the respondent towards GST levied, with effect from 01.07.2017, on production charges? - HELD THAT:- GST is a central tax, whereas VAT is a local tax, which various states would have levied at the relevant time, when the 2017 Act had not been enacted. It appears, that because the VAT rates varied from state to state, production charges were made inclusive of tax at the relevant point in time. Since VAT, amongst other taxes, stands repealed, the respondent, rightly claims, that it should be reimbursed GST upon proof of payment of the same - as correctly concluded by the arbitrator, GST from 01.07.2017 would have to be reimbursed to the respondent by IRCTC, upon the proof of deposit of the same with the concerned statutory authority.
Given the fact, that IRCTC has already factored GST in the train fare, lends heft to the stand taken by the respondent, that it should be reimbursed -
Whether the respondent was entitled to claim Goods and Services Tax (GST) on production charges/supply of meals after 01.07.2017, when the Goods and Services Tax Act, 2017 (GST Act) came into force? - HELD THAT:- GST deposited by it with the concerned statutory authority. Furthermore, as noticed hereinabove, IRCTC was in a position to, in fact, perhaps, claim ITC, at least for the period spanning between 01.07.2017 and 31.03.2018.
As regards other issues, it is not required to deal with the same, as the respondent has neither made any submissions, nor filed any cross appeal qua the same.
Appeal dismissed.
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2021 (6) TMI 1104
The National Company Law Appellate Tribunal, Principal Bench in New Delhi disposed of the appeal based on a settlement between the parties. The Respondent paid full consideration to the Liquidator, who agreed with the submission. The Liquidator was directed to pay electricity charges as per Section 53 of IBC. The parties are bound by the settlement agreement and auction notice. The Liquidator was directed to provide necessary cooperation for the restoration of electric supply.
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