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Showing 81 to 100 of 2067 Records
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2017 (11) TMI 1990
Maintainability of interlocutory application for modification - HELD THAT:- The appeal was heard on merit and disposed off on 20.2.2017. In the circumstances, interlocutory application for modification of the said order at this belated stage does not arise.
Interlocutory application otherwise is also not maintainable.
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2017 (11) TMI 1989
Validity of assessment u/s 143(3) - Question to be raised for the first time - issue the notice u/s 143(2) within 6 months from the end of the financial year in which the return is furnished - as argued notice u/s 143(2) issued by the AO is barred by limitation under proviso to section 143(2) - HELD THAT:- Normally a question of fact may not be allowed to be raised for the first time as it may prejudice the other side. But as per the ratio laid down in NTPC case [1996 (12) TMI 7 - SUPREME COURT], the question of law can be raised at any stage. In the given case, it is not the issue of serving of notice but issue of notice to acquire jurisdiction to complete the assessment u/s 143(3). Hence, it is the question of law and not fact.
Moreover, section 292BB cannot be applied in the given case because the issue is not serving of notice but issue of notice to acquire the jurisdiction to complete the assessment u/s 143(3). Therefore, in the given case, issue is not serving of notice but issue of notice within the period of limitation prescribed in proviso to section 143(2) to complete the assessment u/s 143(3).
It is clear from the record that AO has issued the notice u/s 143(2) only on 20/10/2009 instead of issuing the notice on or before 30/09/2009. It clearly shows that the AO has no jurisdiction to complete the assessment u/s 143(3). Hence, the assessment completed u/s 143(3) cannot be passed without compliance with the mandatory requirement of notice being issued u/s 143(2), therefore, the assessment order in question is legally unsustainable and the same is hereby quashed. Appeal of assessee allowed.
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2017 (11) TMI 1988
Waiver of demand of duty with interest and penalty - HELD THAT:- Both sides have agreed that against the impugned order, the assessee-Respondents have filed the case before the Tribunal in M/S SHREE POUCHES VERSUS CCE, JAIPUR-I [2017 (11) TMI 701 - CESTAT NEW DELHI] and the Tribunal by modifying the impugned order remanded the matter to the original authority.
When it is so, then we remand this matter also pertaining to the dropping of the demand to the original authority. Thus, the original authority is directed to decide the issue de novo, but by providing a reasonable opportunity to the assessee-Respondents to present their case. Fresh evidence, if any, may be admitted as per law.
The appeal filed by the Department is allowed by way of remand.
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2017 (11) TMI 1987
Seeking a decree of permanent injunction restraining Doosan India and its representatives, agents etc. from instituting or continuing or proceeding with arbitration proceeding against GMR Energy before the Singapore International Arbitral Centre - Order XXXIX Rule 1 and 2 CPC - Order XXXIX Rule 4 CPC - Section 45 of the Arbitration and Conciliation Act, 1996 - Whether the arbitration that commenced at Singapore pursuant to Arb.316/16/ACU would fall under Part-I or Part-II of the Arbitration Act? - HELD THAT:- An arbitration agreement is an independent self-contained agreement not dependant on the substantive agreement, therefore irrespective of the contractual rights and obligations parties can opt for an international arbitration - argument raised by learned counsel for Doosan India which deserves to be accepted is that in case the contention of learned counsel for GMR Energy that the present arbitration is covered by Part-I is to be accepted then this Court will have no territorial jurisdiction to entertain the present suit for the reason in the jurisdictional para mentioned in the plaint GMR Energy submits that the closest connect of the parties to the present case is Chhattisgarh in India, thus the Court at Delhi is ousted of the territorial jurisdiction to try the suit and pass orders - the arbitration that commenced at Singapore pursuant to Arb.316/16/ACU would fall under Part-II of the Arbitration Act and not Part-I.
Whether on the basis of pleas in the notice of arbitration issued by Doosan India a case is made out by Doosan India to subject GMR Energy to arbitration with GCEL and GIL? - HELD THAT:- It is evident that though Doosan India stated that the tripartite agreement between GCEL and GMR Energy and Doosan India became null and void on 31st December, 2015 and that the payment obligation was now on the GCEL and GIL by invocation of the corporate guarantee however, the said letter was without prejudice to the rights and remedies available to Doosan India in respect of any breach of agreements, MOUs, Corporate Guarantee and related documentation and agreements. Further whether a tripartite agreement resulting in the two MOUs between Doosan India, GCEL and GMR Energy could be novated by a unilateral letter is a question to be decided on merits during the arbitration and not in the present suit.
Considering the fact that firstly, GCEL was a joint venture of GMR Group, secondly, the group companies did not observe separate corporate formalities and commingled corporate funds, thirdly, by the two MOUs entered into between Doosan India, GMR Energy and GCIL, GMR Energy undertook to discharge liability and made part payments in discharge of GCEL's liability also, fourthly, when the two MOUs were entered into, GMR Energy had acquired GCEL and fifthly, whether the two MOUs being the tripartite agreement between Doosan India, GCEL and GMR Energy could or could not be novated by letter dated 31st December, 2015 being an issue to be decided on merits, it is held that from the notice of arbitration Doosan India has made out a case for proceeding against GMR Energy to subject GMR Energy to arbitration with GCEL and GIL.
Whether the Arbitral Tribunal has no jurisdiction to pierce the corporate veil? - HELD THAT:- In CHLORO CONTROLS (I) P. LTD. VERSUS SEVERN TRENT WATER PURIFICATION INC. & ORS. [2014 (1) TMI 830 - SUPREME COURT] Supreme Court reiterated the decision in NATIONAL INSURANCE CO. LTD. VERSUS M/S. BOGHARA POLYFAB PVT. LTD. [2008 (9) TMI 864 - SUPREME COURT] wherein a distinction was carved out between a court referred arbitration and an arbitration without the intervention of the Court. In Chloro Controls, Supreme Court was dealing with an application under Section 45 of the Arbitration Act seeking reference to arbitration. In the present case the arbitration was initiated without the intervention of the Court and only after initiation of the arbitration, GMR Energy filed the present suit invoking the jurisdiction of this Court seeking an injunction against arbitration to proceed against it on the basis of issue of alter ego - the issue of alter ego based on the facts as noted in the present case and not on fraud can be decided by the Court as well as the Arbitral Tribunal.
In the present suit whether this Court will form a prima facie opinion on the issue of alter ego or return a finding? - HELD THAT:- The present arbitration not being a court referred arbitration and the application under Section 45 of the Arbitration Act filed by Doosan India without prejudice to its rights and contentions, for the reason this Court passed an interim injunction on the facts of this case it would be sufficient if this Court returns a finding based on the pleadings supported by affidavits by the parties without going into a full-fledged trial.
Whether the arbitration against GMR Energy is contrary to Rule 7 of SIAC Rules? - HELD THAT:- There being a distinction between invoking arbitration against a non-signatory and joinder of a non-party during arbitration, the contention of learned counsel for GMR Energy that the invocation of arbitration against GMR Energy is contrary to Rule 7 of the SIAC Rules is rejected. In any case GMR Energy would be at liberty to raise the plea before the arbitral tribunal - This Court having held that the arbitration that has commenced at Singapore would fall under Part-II of the Arbitration Act and not Part-I; the arbitration pending in Singapore pursuant to Arb.316/16/ACU not on a reference by Court, the issue of piercing the corporate veil, in the facts the present case, can be decided both by the Court as well as the Arbitral Tribunal; and this Court having formed an opinion based on the pleadings on affidavit that from the notice of arbitration Doosan India has made out a case for proceeding against GMR Energy to arbitration with GCEL and GIL.
It is clarified that the finding of this Court on the issue of alter ego is for subjecting GMR Energy to arbitration and not a final determination on merits to pass an award against GMR Energy which would be in the domain of the Arbitral Tribunal.
Application disposed off.
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2017 (11) TMI 1986
Denial of exemption under section 11 - AO treating the assessee as a mutual concern - proof of charitable purposes u/s 2(15) - HELD THAT:- As decided in own case [2017 (5) TMI 295 - ITAT MUMBAI] neither the Assessing Officer in the assessment order nor the learned Departmental Representative at the time of hearing has brought any material to demonstrate that there is any change in the object of the trust in the impugned assessment year as compared to earlier assessment years, wherein, the issue has been decided in favour of the assessee.
For invoking the first proviso to section 2(15), it is necessary and incumbent on the part of the Assessing Officer to give a factual finding that the assessee has derived income by engaging itself in trade, business or commercial activity. In the absence of any such finding the first proviso to section 2(15) cannot be attracted. More so, when the Tribunal and the Hon'ble Jurisdictional High Court in the preceding assessment years have held that the objects of the assessee qualify the object of general public utility, hence, is existing for charitable purpose as per section 2(15) - Decided in favour of assessee.
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2017 (11) TMI 1985
TDS u/s 195 - deduct tax for making payment to a foreign entity - AO holding that the payment by the assessee to ISL was in the nature of royalty within the meaning of Article-12 of India Israel Tax Treaty - HELD THAT:- The assessee did not have any right to exploit the copyright of the software and that ISL had the copyright over the software. In other words the assessee was using a copyrighted article. ISL had sold copyrighted Article and not the copyright itself.
We find that in the case of Alcatel Lucent, USA[2017 (5) TMI 1605 - ITAT MUMBAI] the Tribunal has dealt with the issue of sale of copyrighted Article and sale of copyright as held that provisions of the DTAA would prevail over the Act unless the Act is more beneficial to the assessee. Therefore, except to the extent a provision of the Act is more beneficial to it, the DTAA will override the Act. This is irrespective of whether the Act contains a provision that corresponds to the treaty provision. In our opinion, international taxation issues have to be decided keeping in mind the above broad principles. - the impugned payment made by the Branch to the H. O. towards reimbursement of cost of data processing cannot be held to be covered within the scope of expression “royalty” under Article 12(3)(a) of the India Belgium DTAA - data processing cost paid by the assessee does not amount to royalty, consequently, there is no requirement for deducting tax at source on such payment. Therefore, the provisions of section 40(a)(i) will not apply. - Decided in favour of assessee.
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2017 (11) TMI 1984
Smuggling - Proclaimed Offenders - jurisdiction to summon additional accused persons - authenticity of the evidence in terms of Section 65-B of the Evidence Act - HELD THAT:- The petitioners are not the complainants in the present case who have been summoned but they are additional proposed accused - It would be appropriate to find out the ratio decidendi laid down in the decision in RAVINDER SINGH VERSUS STATE OF PUNJAB AND ANOTHER [2017 (3) TMI 1883 - PUNJAB AND HARYANA HIGH COURT]. The question framed clearly shows that what was considered by this Court was as to whether the complainant in the FIR case himself can be summoned as an accused, based on the deposition of defence witnesses before the trial Court as the proposed accused is required to be tried together with the accused already on trial - In the present case, the above said position on the basis of the aforesaid question is not relevant and, therefore, the said decision has no application in the present case. The petitioners are not the complainants in the present case who have been summoned but they are additional proposed accused.
The next submission of the learned senior counsel for the petitioners is that the trial Court became functus officio on the date of judgment i.e. 31.10.2017 - HELD THAT:- The power under Section 319, Code of Criminal Procedure, can be exercised even after the judgment is concluded. In that case, the accused persons were acquitted by the trial Court and after four months of the conclusion of the trial, the trial Court exercised the power under Section 319, Code of Criminal Procedure, for summoning the additional accused - The present case stands on a better footing inasmuch as the order was passed under Section 319, Code of Criminal Procedure, simultaneously with the judgment and order of conviction of the original accused persons. The contention raised by the learned counsel for the petitioners, thus, stands disposed of.
A look at the evidence of PW-4 Ajmer Singh, PW-5 Jaswant Singh and PW-13 Ravinder Pal Singh, which has been relied upon by the trial Court, for exercising power under Section 319, Code of Criminal Procedure, shows that some part of the evidence is admissible while some part of the evidence is inadmissible. But then, as earlier stated, the same can be subject matter of objection in de novo trial - whether Exhibit DX and its documents, and the call records, filed along with the writ petition are admissible or not is a matter of proof before the trial Court and certainly the petitioners are entitled to object to the admissibility of the documents for want of legal proof in the de novo trial. To say that Exhibit DX or the certified copy of the writ petition could not be looked into by the trial Court would be to prohibit the prosecution from effectively participating in the de novo trial. That would not serve the interest of justice.
The next submission made by the learned senior counsel for the petitioners is that the trial Court could not have directed filing of supplementary charge-sheet as the trial Court does not have such power, as held by the Apex Court in some decisions. There are no doubt that the law is trite that the Court does not have power to order filing of supplementary charge-sheet. But then, there are peculiar facts in the present case - It is a settled legal position that filing of supplementary challan, one or in multiples, is permissible under Section 173, Code of Criminal Procedure. To contend that first supplementary challan was filed and in that the petitioners were not named would be no answer because the authority to file one more supplementary charge-sheet of the investigating machinery has not been taken away. Therefore, the investigating agency is entitled to file supplementary charge-sheet.
The next submission made by the learned senior counsel for the petitioners that the trial Court should not have issued non-bailable warrants against the accused, must be upheld - HELD THAT:- It is a well settled legal position that such a course of action should not be pressed into service. The trial Court has not recorded a single reason as to why instead of issuing summons, straightway warrants have been issued. The trial Court has overdone it. The trial Court was not at all justified in doing so. Hence, the said part of the order issuing non-bailable warrants for securing the presence of the petitioners, must be set aside.
The impugned order under Section 319, Code of Criminal Procedure, will have to be upheld - revision dismissed.
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2017 (11) TMI 1983
Jurisdiction - Customs authorities have jurisdiction over the SEZ irrespective of any provision in SEZ Act or not - HELD THAT:- On the previous occasion it was observed that necessary rule under Section 21 of the SEZ Act, 2005 was framed and notified in Gazette of India on 5-8-2016 to take cognizance the offence committed under Section 111 of the Customs Act, 1962 to be an offence committed under SEZ Act, 2005. It is well-settled position of law that no penalty can be imposed on commitment of an alleged offence under Customs Act, 1962 without authority of law prior to 5-8-2016 to take cognizance thereof under SEZ Act - If contention of the Revenue is accepted that shall bring chaos to the implementation provisions of the SEZ Act prior to coming into force thereof. While notification is part of statute, it cannot be said that without such notification there was power vested on Customs authorities to penalize an action not cognizable under SEZ Act, 2005. On such legal premise, all appeals are allowed.
It is also settled principle of law that the Gazette being an official document of the Government to convey its intention and decision, without such decision, it cannot be presumed that the authorities were vested with the power before the date of issuance of such notification - Appeal allowed.
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2017 (11) TMI 1982
Jurisdiction - Validity of assessment - power of respondent no. 4, to make a fresh assessment in pursuance of the remand order - suo motu revisional proceedings are pending before respondent No. 2 - HELD THAT:- When this case came up for admission on 10-11-2017, learned Special Standing Counsel for Commercial Taxes (A.P.) requested for an adjournment for instructions. Today, on instructions, he has not disputed the fact that the suo motu revisional proceedings initiated by respondent No. 2 are still pending. When the suo motu revisional proceedings of respondent No. 2 are pending with reference to the remand order of respondent No. 3 against the order dated 25-07-2012 of respondent No. 4, respondent No. 4 is denuded of jurisdiction to pass a fresh assessment order purporting to comply with the remand order of respondent No. 3.
It is found from the impugned proceedings of respondent No. 4 that the specific objection raised by the petitioner in this regard has not been dealt with.
The impugned assessment order of respondent No. 4 cannot be sustained - Petition allowed.
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2017 (11) TMI 1981
Direction to supersede the Board of Directors of the said Company by appointing an Administrator and/or Special Officer to take over its management and affairs, as well as its assets and properties - constitution of Committee consisting of representatives of the appellants to function as such Administrator and/or Special Officer - HELD THAT:- The resignation of the Director respondent no.5 in writing came into effect immediately and did not require acceptance.
There is a series of illegal acts by respondent No.5 ( as will be explained more in detail later) , which are part of the same transaction to cause oppression on appellant No.1 and show his malafide intention. These violations by him are burdensome, harsh and wrongful to appellant No.1 - there is no valid withdrawal of resignation of respondent no.5 in law and consequently the Board meeting held on 9.4.2013 is non-est in the eye of law.
The view taken by the CLB that the issuance of the said letter by appellant No.1, notwithstanding the filing of CP No.1 of 2013 by her questioning the decisions taken therein, amounts to acquiescence on her part and that she recognized the Board by addressing letters dt.22-08-2013, 25-09-2013, 07-10-2013, 08-102013 and 20-10-2013, is perverse and unsustainable.
It is declared that:
(i) acts of respondent Nos. 2 to 7 are oppressive;
(ii) the meetings of the Board of Directors held on 09-04-2013, 10-04-2013 and 11-04-2013 are null and void and all resolutions passed therein as well as forms/returns filed therein are set aside;
(iii) resolutions passed at the Annual General Meeting of the Company held on 18-12-2013 are null and void and forms filed by respondents with regard to resolutions passed at the said AGM are set aside;
(iv) the Board of Directors of the Company as existing as on today shall stand superseded and respondent Nos.2 to 7 are removed from the Directorship of the Company, and all forms-32 filed for their appointment as Managing Director/Director/Whole Time Director of the Company are declared as null and void ab initio;
(v) the transmission of 4,00,691 equity shares held by late Dr.Vijaykumar Datla to respondent No.2 is illegal, null and void;
(vi) consequently, that the register of members shall stand rectified by transmission of 1/4th of the 4,00,691 equity shares to appellant No.1, pending decision on the validity of the Will dt.04-12-1987 propounded by appellant No.1 and Will dt.14-2-2005 propounded by respondent No.2 by the competent Civil Court and subject to its decision;
(vii) respondent Nos.2 to 4 and 6 and 7 have no authority to deal with the movable or immovable assets of the Company including the various Bank accounts of the Company in Bank of Baroda, ICICI Bank, State Bank of India or in any other Bank hereafter;
(viii) the Board Meetings held on or after 20-3-2013 as null and void and all resolutions passed therein are set aside; and
(ix) All Forms, documents, returns filed by respondent no.s 2-7 on behalf of the Company with/before any Government authorities on or after 20-3-2013 are declared as null and void.
The appeal is accordingly allowed with costs of ₹ 25,000/- to be paid by respondent Nos.2 to 4 to the appellant No.1 within 4 weeks.
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2017 (11) TMI 1980
Cheating - real grievance of the second respondent commences after dropping the idea of construction of the proposed property and when the petitioners failed to return the advance amount of ₹ 1.5 Crores - whether the ingredients of Section 420 have been made out or not? - HELD THAT:- The Hon'ble Apex Court in a judgment in HRIDAYA RANGAN PD. VERMA AND ORS. VERSUS STATE OF BIHAR AND ANR. [2000 (3) TMI 1105 - SUPREME COURT OF INDIA] had laid down the ingredients to constitute an offence under Section 420 to include deception of any persons; fraudulently or dishonestly inducing any person to deliver any property; or to consent that any person shall retain any property; and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
It is clear from various judgements. whenever there are sufficient materials to indicate that a complaint manifestly discloses a civil dispute, the inherent powers of this Court under Section 482 Cr.P.C., can be invoked. Likewise, when the complaint prima-facie discloses that the transaction is for recovery of money due on a commercial transaction, the police cannot be transformed into a collection agent by spicing a criminal colour to the complaint.
There are no justification to permit the first respondent police to continue with the investigation - petition allowed.
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2017 (11) TMI 1979
Acceptance of highest bid in respect of sale of the assets - auction of the assets - HELD THAT:- Considering the fact that nobody has come forward to object to the sale of the assets of Lot No.3 to M/s Satguru Cement Pvt. Ltd. and also taking note of the circumstances which are disclosed in the aforesaid OLR, I am of the opinion that prayer made in the OLR deserves to be allowed.
Application are disposed of by confirming the sale of the assets of Lot. No.3 in favour of Satguru Cement Pvt. Ltd. with a direction to the said auction purchaser to deposit the balance sale consideration of ₹ 73,37,000/- after adjustment of AMD of ₹ 12 Lacs within a period of 30 days from today. On deposit of the said amount the O.L. will handover the assets of Lot No.3 to M/s Satguru Cement Pvt. Ltd. - application disposed off.
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2017 (11) TMI 1978
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - settlement of arrears of salary - time limitation - HELD THAT:- The defence taken by the Respondent/ Corporate Debtor is highly contradictory, if the dues of the employee have been settled, and there is nothing outstanding, then, the argument that the claim is barred by lirnitation does not carry any weight. The other defence that has been taken by the Respondent/ Corporate Debtor is that it has paid on 31.07.2015 as arrear of salary. In support of the same, they placed on record 'payment voucher' filed with the Written Arguments which goes to show that the entry 'pay to' is filled with name "N. Subramanian"; entry 'Rupees' is filled with words "Two Lakh and Ten Thousands only" and entry 'Rs. ' is filled with amount, "2, 10,000/-". These are being written in one hand writing. However, entry 'debt' is filled with the words "salary arrears" and entry '(particulars)' is filled with the words "full & final settlement of salary as on date" which are in different hand writing. The 'payment voucher' per se reflects that a fraud is being played on the Petitioner/ Operational Creditor, which can easily be identified with the naked eyes. Therefore, the entries relating to the "salary arrears" and "full & final settlement of salary as on date" seem to have been entered with mala fide intention to show that the amount paid is full and final settlement of the arrears of salary, which in no circumstances could be relied upon.
The Corporate Debtor defaulted in making payment arrears of the salary to the Petitioner/ Operational Creditor. The Operational Creditor has complied with requirements under Sections 8, 9 (3) (b) (c) of I&B Code, 2016 and has made out a case for admission of the Application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
Application admitted - moratorium declared.
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2017 (11) TMI 1977
Validity of assessment framed u/s 143(3) r.w.s. 153C - assessee has submitted that the search was conducted on 6.2.2012 and in pursuant to the search the AO issued a Notice u/s 153C for the AY 2012-13 which is not valid as this assessment year is the current year in which the search itself was carried out - HELD THAT:- Undisputedly when the search was carried out on 6.3.2012 then the provisions of Section 153C are not applicable for the assessment year under consideration i.e. 2012-13 therefore, the assessment framed in question for the assessment year under consideration will be treated only u/s 143(3) and mere mention of section 153C in the assessment order will not render the assessment invalid or void ab-initio. It is apparent that this is a case of only a mistake of mentioning the assessment framed under Section 143(3) r.w.s 153C and no other material or procedural defect either pointed out or found on the record to suggest that the Assessing Officer has not followed the procedure for framing the assessment u/s 143(3). Hence, this ground raised by the assessee is devoid of any merit and accordingly we dismiss the Ground No.1 of the additional ground.
Validity of Notice issued u/s 142(1) - as contended that when the assessee has already filed the return of income on 26.9.2012 then the Notice issued by the Assessing Officer under Section 142(1) on 12.9.2013 is not valid - HELD THAT:- We are of the view that even if the assessee filed the return of income on 26.9.2012 and the AO has subsequently issued a Notice under Section 142(1), the same will not effect the validity of the assessment in question framed u/s 143(3) of the Act. Accordingly, we do not find any merit or substance in additional ground No.2 and the same is dismissed.
Validity of assessment due to the reason that the Notice issued u/s 143(2) on 21.10.2013 is beyond the limitation provided under law and consequently the assessment framed on the basis of the said time barred Notice - We find that the assessee filed its return of income by efiling on 26.9.2012. This fact of e-filing of return has not been disputed by the AO and it is also matter of record as a copy of the said return has been now filed by the Assessing Officer along with the record. There is no dispute that the return of income was filed by the assessee under Section 139 of the Act and it was not filed in response to the Notice under Section 142(1). The assessee only intimated the Assessing Officer vide its letter dt.8.10.2013 that he has also filed its return of income and a copy of which was also filed before the Assessing Officer. The fact of filing the return of income by the assessee on 26.9.2012 is not in dispute and therefore, the limitation for issuing the Notice under Section 143(2) would expire by six months from 31.3.2013 which would be on 30.9.2013.
Notice issued under Section 143(2) was beyond the period of limitation then consequent assessment is not valid and liable to be quashed. - Appeal of assessee allowed.
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2017 (11) TMI 1976
Validity of reopening of assessment u/s 147 - as argued No valid notice issued - Assessee submitted notice was issued by the ITO Ward-2 (4), Meerut who had no jurisdiction on the case of the assessee - HELD THAT:- The notice under Section 148 of the Act was issued by the ITO Ward-2 (4), Meerut for initiating the proceedings under Section 147 of the Act, on the basis of the said notice the assessment has been framed by the ITO, Baraut who had not issued any, therefore, the assessment framed U/S 144 of the Act by the ITO, Baraut was void.
In the present case, it is an admitted fact that the AO who framed the assessment U/S 144 of the Act, never issued any notice for initiating the proceedings under Section 147 of the Act, therefore, in the absence of any valid notice being issued by the AO the present assessment order was not valid, accordingly the same is quashed. - Decided in favour of assessee.
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2017 (11) TMI 1975
TP Adjustment - comparable selection for Design Engineering Services - HELD THAT:- Rolta India Ltd. having different accounting period cannot be selected as comparable and hence, the same is directed to be excluded from the final list of comparables.
Accentia Technologies Ltd. was engaged in KPO services, then the margins of same cannot be compared with the margins of assessee being functionally different. Accordingly, we hold so and direct the Assessing Officer/TPO to exclude Accentia Technologies Ltd. from final list of comparables.
KLG Systel Ltd. - We direct the Assessing Officer/TPO to apply segmental details of activity which is functionally comparable to the assessee in order to work out the margins of said concern. Accordingly, we direct the Assessing Officer/TPO to re-compute the margins of KLG Systel Ltd. and include the same in final list of comparables.
Neilsoft Ltd. - From the details filed by the assessee, we find that in all the earlier years, wherein the said concern was selected as comparable and its margins were applied as part of final set of comparables, the said concern was showing profits and only in this year it had shown marginal loss; hence there is no merit in excluding the said concern from the final set of comparables in the instant assessment year on the ground that it has shown losses. In the absence of Revenue establishing that the said concern was persistent loss making concern, merely because the said concern during the year had shown losses, the margins of the said concern could not be excluded. Accordingly, we hold so and direct the Assessing Officer to include the margins of said concern in order to benchmark international transactions of Design Engineering Services Division of assessee. The ground of appeal No. 2 raised by the assessee is thus, allowed.
Exclusion of Manufacturing Division - non-allowance of capacity under-utilization in the Manufacturing Division of the assessee - Though the assessee had received support payments from its associated enterprises at ₹ 3.16 crores but it had still suffered losses because of under-utilization of the capacity. The assessee wanted carve out on account of capacity under-utilization. Following the same parity of reasoning as in assessment year 2009-10, we hold that the assessee is entitled to said carve out. Accordingly, we direct the Assessing Officer to allow the capacity under-utilization in the hands of assessee. Secondly, we also hold that there is no merit in the orders of TPO/Assessing Officer in holding that support payments received from associated enterprises should have been to the extent of under-utilization of capacity. Applyingin CIT Vs. Whirlpool [2015 (12) TMI 1188 - DELHI HIGH COURT], we reverse the findings of Assessing Officer/TPO in this regard and delete the addition made in the hands of assessee in the Manufacturing Segment Consequently, the ground of appeal No. 3.1 raised by the assessee is allowed.
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2017 (11) TMI 1974
Seeking grant of Bail - HELD THAT:- It is directed that the respondent shall remain in the custody of Enforcement Directorate till 15th November, 2017. Mr. Grover and Mr. Nanda very fairly accepted that the counsel for the respondent may remain at the visible distance as permissible in law. Be it clarified, that is the singular payer on behalf of the petitioners.
SLP disposed off.
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2017 (11) TMI 1973
Rejection of extension of ‘ED Custody’ remand of the respondent made by the petitioner - HELD THAT:- The trial court has denied further custody remand for sufficient reasons. A careful perusal of the application indicates that primarily the plea taken by the petitioner has been that the respondent did not cooperate in investigation during this nine days period. He gave evasive replies and wasted time by making false allegations that he was beaten by the officials of the petitioner. This can be gathered from the application. This cannot be sufficient enough to keep the accused in ED custody.
Petition dismissed.
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2017 (11) TMI 1972
Seeking direction to the 1st respondent to release the amounts due under the matured Fixed Deposits - Invocation of power of discretionary remedy under Article 226 of the Constitution of India - HELD THAT:- The said issue was considered by a learned Single Judge of this court in W.P.(C) No.18243/2015 filed against the 1st respondent society, in THE CHOONDACHERRY SERVICE CO-OPERATIVE BANK LTD. VERSUS THE MEENACHIL RUBBER MARKETING & PROCESSING CO-OPERATIVE SOCIETY LTD., THE MANAGING COMMITTEE OF THE MEENACHIL RUBBER MARKETING & PROCESSING CO-OPERATIVE SOCIETY LTD. REPRESENTED BY PRESIDENT, KOTTAYAM, THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) , KOTTAYAM [2017 (7) TMI 1403 - KERALA HIGH COURT], and held as per the judgment dated 5.7.2017 that, the nature of the provisions and the regulatory powers conferred on the Registrar under the Cooperative Societies Act and Rules, 1969, makes it clear that, there is no inhibition created in directing to release the matured fixed deposit, and further held that, the writ petition is maintainable against the 1st respondent society.
If the 1st respondent is carrying on with the banking business based on the permission granted by the Registrar of Co-operative Societies, then the public law remedy is available to the petitioner since the banking business is carried on by the 1st respondent under the supervision and control of the Registrar of Co-operative Societies. Even though petitioner has approached the Registrar of Co-operative Societies seeking appropriate directions, no direction was issued. In that view of the matter also, it can be seen that, the writ petition is perfectly maintainable against the 1st respondent society.
The petitioner is entitled to succeed in the writ petitions - petition allowed.
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2017 (11) TMI 1971
Higher rate of depreciation on “Enclosed Withering Trough Machine” - Scope of functional test - this is an energy-saving device and a pollution controlling equipment - AO was of the view that these machines are called Withering Trough Machinery and are required in all tea making factories and are integral part of the factories - HELD THAT:- “Enclosed Withering Trough Machines”, is not comparable with any of the energy-saving devices listed in the New Appendix-I to the Income Tax Rules, 1962. The assessee further claims that “Enclosed Withering Trough Machines”, is pollution control equipment, but he has not specified as to under which item of the New Appendix-I to the Income Tax Rules, 1962, this equipment falls.This claim on the ground that the functional test satisfies the requirement is also to be rejected.
Hence we hold that the assessee failed to substantiate his claim that “Enclosing Withering Trough Machine” is an “energy-saving device” or “pollution control equipment”, which is entitled to higher rate of depreciation. Just because the Assessing Officer had not disturbed this claim of the assessee in the Assessment Year 2012-12, this claim cannot be allowed.
The findings in those cases are that the machines therein fall within this category. We have given a factual finding otherwise. Before us, the assessee has not advanced any arguments on its claim for allowing this expenditure as revenue expenditure. We find that this so called alternative claim is a contradictory claim. The argument is that a machine is fabricated, and it is entitled to depreciation. This means that it is capital expenditure. Just because higher rate of depreciation is not allowed on an asset, it does not lead to a conclusion that the expenditure incurred for acquiring an asset is revenue expenditure. This is an untenable claim. In the result, we uphold the findings of the Assessing Officer on this issue and reverse the order of the ld. CIT(A).
Allowability of depreciation on good-will - claim for allowance of depreciation on the ground that it had acquired intangible assets through this conveyance deed - claim was not made by the assessee in the return of income and was made before the ld. CIT(A) - HELD THAT:- When a registered conveyance deed has been entered into between the two parties and the cost of each asset purchased and sold is specified in that particular deed, then it cannot be altered unilaterally by one party at its convenience. It is not open for the assessee to reduce the cost of land and plantation and reallocate such reduction in cost of tangible fixed asset to an intangible asset and thereafter claim depreciation. Cost of purchase of land and plantation cannot be reduced. The assessee has not filed details as to the cost of which asset has been reduced, so as to enable it to create a new asset called intangible asset/goodwill and thereafter claim depreciation on such asset, for which there is no cost of purchase. All the papers justifying the arriving at of the value of ₹ 325 Lakhs, as the cost of “intangible assets” are self-serving documents. The assessee has neither purchased nor has the seller sold any “intangible asset” in this case. The assessee’s claim that its request to the seller to make such an allocation was rejected by the seller. The vendors were very clear that no intangible property of their is being sold to the company. What was sold intangible property - claim made by the assessee that it incurred the cost to purchase intangible asset is factually incorrect and false. This is a wrong and unjustified claim. It is an indirect way of claiming depreciation on land and plantation which is patently wrong and misleading. Hence, the claim of the depreciation on such intangible asset is devoid of merit.
MAT applicability - Whether Section 115JB of the Act is applicable only when there is no positive total income for the assessee? - HELD THAT:- On a plain reading of this section 115 JB, we are of the considered opinion that the same is attracted whenever the book profit “as calculated under this Section” is in excess of the income computed under the regular provisions of the Act. There is no requirement that the normal profit computed under the act should be a positive figure and that should be payable on the same, in order to attract the special provisions under section 115 JB of the Act. No such requirement is mentioned in this Section. In fact such introspection would defeat the very objection of introduction of this Section.Thus, we uphold the contention of the revenue and allow this ground of the revenue.
Deduction u/s. 80IE which had not been claimed in the return nor any Audit Report has been filed in that regard - HELD THAT:- FAA has not admitted this claim but has held that the assessing officer should have granted the deduction under section 80 IE equal to 100 percent of the profits of Dullabcherra Tea Estate, as the fact that the assessee is eligible for deduction under section 80 IE is not in dispute. How the ld. CIT(A) has come to a conclusion that the fact of the assessee being eligible for claim of deduction u/s 80-IE of the Act and that this fact is not in dispute is not known. There are no basic facts record and no authority has examined the facts and have come to a conclusion that the statutory requirements for claim of deduction u/s 80-IE have been complied by the assessee.
In our view, this finding is perverse. The assessing officer nor the ld. CIT(A), have examined the basic facts or have come to the conclusion that the assessee is eligible for deduction under section 80 IE equal to 100 per cent of the profits for the Dullabcherra Tea Estate. Without doing such an exercise the ld. CIT(A), has directed grant of this deduction. This is bad in law.
Interest subsidy received - capital receipt or revenue received - assessee had acquired “Dullabcherra Tea Estate” and as claimed that the unit “Dullabcherra Tea Estate” received certain interest subsidy, which pertains to a period prior to the acquisition of Dullabcherra Tea Estate - CIT(A), had held that this is interest subsidy and hence a capital receipt - HELD THAT:- This finding of the ld. CIT(A), is not correct. The interest subsidy in question pertains to a period prior to the acquisition of Dullabcherra Tea Estate by the assessee. The ld. Counsel for the assessee submits that, if the claim for refund of this amount of interest subsidy received is made by the former owners of Dullabcherra Tea Estate, then this amount needs to be returned, as it was not factored in computing the purchase price of the estate. In our view, this receipt had accrued during the year and the assessee got the right to receive the interest in this year only, as it is a successor of Dullabcherra Tea Estate. The nature of receipt is not interest subsidy in the hands of the assessee. There is no claim from the vendors of ‘Dullabcherra Teas Estate’ till date on the assessee for return of this amount to them. Hence the receipt is in the revenue field and it has accrued and arisen during the year. Thus this ground of the revenue is allowed.
Allowability of deduction u/s 80 IE - assessee had not claimed deduction under section 80 IE, for this year in the return of income as the gross total income was negative - HELD THAT:- On profits from Dullabcherra Tea Estate, or not has to be examined in the initial assessment year. “Initial Assessment Year” has been defined for the purpose of this section as means the Assessment Year relevant to the previous year in which the undertaking begins the manufacturing or produces articles or things or completes substantial expansions.
Ten consecutive years commence from this initial Assessment Year. The assessee claims that it completed substantial expansion during the Financial Year 2007-08, relevant to the Assessment Year 2008-09. This claim has not been examined by any authority.The assessing officer has not examined this issue in any of the earlier years. The deduction in the 3rd year has been allowed as if the entire facts have been considered in the earlier years.
When no authority has verified the fact as to whether the assessee has complied with the statutory conditions laid down u/s 80IE of the Act, in any of the years, we cannot understand as to how the Assessing Officer decided to allow the claim for the first time in the 3rd year.Assessing Officer has failed to conduct a proper enquiry. CIT(A) has also failed in his duty on this issue.
Thus we set aside this issue to the file of the AO, for fresh adjudication, in accordance with law. The Assessing Officer is directed to examine whether the conditions laid down u/s 80IE of the Act, have complied with by the assessee company in the “Initial Year” and then only come to a conclusion on this issue. We draw strength for this proposition, from the judgement of the Hon’ble Delhi High Court in the case of CIT vs. Delhi Patra Prakashan Ltd[2013 (6) TMI 70 - DELHI HIGH COURT].
Disallowance of club expenses - HELD THAT:- What is to be seen, is as to whether these expenses are incurred for official purposes or personal purposes. If it is incurred for personal purpose, then the same has to be disallowed. Hence this matter is set aside to the file of the assessing officer for fresh adjudication, in accordance with law, after examining the vouchers of club expenses.In the result, this ground of the assessee is allowed for statistical purposes.
Disallowance u/s 14A - HELD THAT:- As decided in WINSOME TEXTILE INDUSTRIES LTD. [2009 (8) TMI 220 - PUNJAB AND HARYANA HIGH COURT] disallowance made u/s 14A, cannot exceed the dividend earned. Keeping in this position of law, we uphold the contention of the assessee and delete this addition made under section 14 A, to the extent of ₹ 63131/-. DMAT charges of ₹ 1433/-, is disallowed by the Assessing Officer twice. Hence the disallowance is deleted as it was a double disallowance.
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