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2015 (8) TMI 1515
Rejection of application under Order 7 Rule 11 of the Code - seeking declaration that the aforesaid Annual General Meeting held on 31.08.2007 and the decisions taken therein are illegal, invalid and void - seeking declaration that the Extraordinary General Meeting proposed to be held on 28.12.2007 is illegal, invalid and void - seeking permanent injunction restraining the defendant Club from alienating any land in its possession for establishing a Hotel - HELD THAT:- It is relevant to narrate the facts from the plaint for the purpose of Order 7 Rule 11 of the Code. It is a settled proposition of law that the Court shall confine its perusal and scrutiny to the averments made in the plaint or the documents annexed thereto when the rejection is sought on the ground that the plaint does not disclose cause of action or is barred by law. The suit as it appears is a simplicitor suit for declaration that the AGM held on 31st August, 2007 was in violation of the Article of association of the club and the decision taken therein is illegal, void and not binding being opposed to clauses 3(a), (d) & (e) of the memorandum and article of association of the defendant club. The plaint case proceeds that in the notice for AGM to be held on 31st August, 2007, there was no agenda for setting up the hotel project which was circulated to the members present in the said meeting and was thereafter passed by majority by raising of hands. It is further stated that Article 57 of the memorandum and article of association relatable to the business of the AGM stipulates the election of captain, committee, appointment and fixation of remuneration of auditors as ordinary business and the special resolution shall be transacted only after compliance under Section 173 (2) (3) of the Companies Act - The special resolution being not in conformity with the said clause is, therefore, bad and is also opposed to the object for which the club was established.
It is undeniable that the application for temporary injunction was dismissed by the Trial Court as the Plaintiff/Opposite Party failed to make out any prima facie case and affirmed by the Court of appeal below, on the other point that the suit is otherwise hit under Section 10GB of the Companies Act. Before the revisional Court, the defendant- petitioner conceded that the suit is not hit by the provision of Section 10GB of the Companies Act and, therefore, the plea under Order 7 Rule 11 of the Code in this regard cannot be taken as a ground for rejection of the plaint. A point which was agitated at an earlier point of time in course of the suit having decided, cannot be allowed to be agitated at the different stages of the same proceeding.
The suit at the instance of an individual shareholder, alleging the infringement of a right for an action and the majority shareholders being opposed to the memorandum and article of association, cannot be said to be an imperfect suit liable to fail on the parameters of Order 7 Rule 11 of the Code. Mere reference of more than 3100 members does not, ipso facto, raise a presumption that the suit is not maintainable in absence of any leave under Order 1 Rule 8 of the Code. Section 9 of the Code of Civil Procedure postulates that the Civil Courts have jurisdiction to try all suits of civil nature unless there is an express or implied bar. It is no longer res integra that such exclusion should not be readily inferred and the rule of construction being that every presumption should be made in favour of his existence rather than exclusion of the jurisdiction of the Civil Court.
The petitioner-club says that the challenge is made to a resolution dated 31st August, 2007 when, in fact, the resolution have been adopted in a subsequent AGMs which are not a subject-matter of the instant suit. In all the subsequent AGMs, the resolution adopted in the AGM dated 31st August, 2007 is ratified and confirmed and a consequential steps and/or the consequential resolution have been taken therein. None of the resolutions adopted in the subsequent AGM have virtually superseded and/or withdrawn resolution taken in AGM dated 31st August, 2007. If the resolution in the subsequent AGM are based upon the parent resolution taken in the first AGM which is a subject-matter of the suit, it cannot be said that the suit become infructuous - This Court, therefore, does not find that the suit become infructuous because of the subsequent events.
The cause of action pleaded in the plaint is clear and explicit in consonance with the reliefs claimed therein and it cannot be said that the plaintiff have created an illusory cause of action with the clever draftsmanship which amounts to abuse of the process of the Court - This Court does not find that the order impugned deserves any interference.
Revision application dismissed.
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2015 (8) TMI 1514
Condonation of delay - application for condonation of delay has been filed on the ground that after getting knowledge of the order dated 20.11.2013, the same was forwarded for necessary action to the Higher Authorities - HELD THAT:- The Courts should not take liberal approach in the matter of condonation of delay when State's action in preferring an appeal is marred by serious laches and negligence in absence of "sufficient cause" - It is equally well settled that if the appellant has substance in the appeal then the appeal has to be on merits.
The Apex Court time and again stated that there should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. There is distinction between inordinate delay and a delay of short duration. In the present case, the appeal is only barred by 137 days. The State representing the collective cause should be given some acceptable latitude.
Application disposed off.
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2015 (8) TMI 1513
Short deduction of tds - TDS u/s 194C or 194I - payments made for hiring of JCB, Porkland, breaking and bucket machines etc. - CIT-A deleted the addition by holding hiring of the machines as works contract AND held that the assessee has rightly deducted tax at source u/s. 194C on the payments made - HELD THAT:- We find that the facts in the present case are similar to the issue decided by the Co-ordinate Bench in the case of Bharat Forge Ltd. Vs. Addl. CIT [2013 (11) TMI 1263 - ITAT PUNE]
We are of the considered view that the assessee has rightly deducted tax at source on the payments made for hiring of JCB, Porkland etc. u/s. 194C. The payments made for hiring machines are in nature of works contract and not ‘rent’ as defined in Explanation to section 194I - No infirmity in the findings of the Commissioner of Income Tax (Appeals). - Decided in favour of assessee.
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2015 (8) TMI 1512
Dismissal of appeal for non prosecution - HELD THAT:- These appeals were fixed for hearing before the Bench on 04.08.2015. At the time of hearing, none appeared on behalf of the assessee. The notices of hearing were issued by Registered AD on 23.07.2015, but there was no compliance on behalf of the assessee. Even no application seeking adjournment was filed. The laws aid those who are vigilant, not those who sleep upon their rights. This principle is embodied in well known dictum "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUBVENIUN”.
Under these circumstances, assessee is not interested in prosecuting the appeals. As such hold that these appeals are liable to be dismissed for non prosecution.
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2015 (8) TMI 1511
Disallowance of expenses @ 20 % and G.P rate - Estimation of income - Difference in VAT account and cash discount - HELD THAT:- On certain issues, relief to some extent could have been granted to the assessee namely reduction of disallowance of expenses @ 20 % and G.P rate could have warranted an interference on facts. It is also seen that the assessee has also not helped its case by placing the relevant facts and submissions on record.
Since on a reading of the issues under challenge and how they have been canvassed before the CIT(A and considering the same have been more or less upheld even where a partial relief on facts on record could have been granted it leads to the conclusion that the order passed has been passed with the mindset that the claims necessarily had to be rejected.
The fact that the representation on the part of the assessee was also not complete and proper has already been taken note of as the evidences upon which reliance could have been placed and were evidences which the assessee ought to have in its possession has never been brought on record is also coming out from the orders. In view of these peculiar facts and circumstances considering the overall factual background in the interests of substantial justice the impugned order is set aside.
The issue is restored back to the file of the CIT(A granting liberty to the assessee to file fresh evidences, if any, in support of its claim. CIT(A), thereafter shall pass a speaking order in accordance with law. Needless to say that it is hoped that the opportunity so provided is not abused by the assessee and a proper compliance is made before the CIT(A). Appeal of the assessee is allowed for statistical purposes.
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2015 (8) TMI 1510
Addition on protective basis - amount was recovered from the common residence of the assessee and the locker in the joint name of the assessee and his wife - cash belonged to the assessee and was rightly added in the hands of the assessee on substantive basis - HELD THAT:- The assessee had not operated the said bank locker after 16th February, 2003 and till the date of search therefore, the cash found during the course of search in the said bank locker belonged to Smt. Vineeta Singh and not to the assessee.
CIT(A) was not justified in treating the cash of ₹ 5,20,000/- ( ₹ 2,20,000/- + ₹ 3,00,000/-) found during the course of search in the hands of the assessee particularly when his wife claimed that the said cash belonged to her. Accordingly, we delete the addition of ₹ 4,60,000/- which was directed by the ld. CIT(A) to be made in the hands of the assessee on substantive basis.
Another addition on account of amount found from locker no. 294 Syndicate Bank in the name of Smt. Vineeta Singh jointly with her domestic servant, the ld. CIT(A) although stated at page no. 40 of the impugned order that this cash of ₹ 16,33,000/- would be treated as belonging to Smt. Vineeta Singh as the assessee Shri Tribhuvan Singh is not party, however, inadvertently it has been mentioned that the addition to that extent can be made in the name of the assessee on substantive basis.
Addition can be made in the hands of the assessee on substantive basis is wrong particularly when the ld. CIT(A) himself accepted that the locker no. 294 Syndicate Bank was in the name of Smt. Vineeta Singh wife of the assessee jointly with her domestic servant and the assessee Shri Tribhuvan Singh was not party to that and the cash of ₹ 16,33000/- would be treated as belonging to Smt. Vineeta Singh.
The observation of the ld. CIT(A) that this amount should be treated in the hands of the assessee was wrong. Accordingly, we direct the AO to delete this addition also from the hands of the assessee. - Decided in favour of assessee.
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2015 (8) TMI 1509
Addition u/s 68 - unexplained cash credits - HELD THAT:- As concurrently held by both the CIT(A) as well as ITAT that the creditors in question were having running accounts with the Assessee and that the balance belonged to the earlier years. There was no fresh credit during the year in question. The Court finds no substantial question of law arises in the above facts as far as this issue is concerned.
Addition on account of notional interest on interest free loans/advances - HELD THAT:- ITAT has rightly observed that there is no provision for taxing notional income as explained by the Supreme Court in Excel Industries [2013 (10) TMI 324 - SUPREME COURT].
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2015 (8) TMI 1508
Death sentence awarded to the Petitioner by the trial court - Constitutional Validity of Section 364A inserted in the Indian Penal Code by Act 42 of 1993 - ultra vires the Constitution to the extent the same prescribes death sentence for anyone found guilty - HELD THAT:- The need to bring in Section 364A of the Indian Penal Code arose initially because of the increasing incidence of kidnapping and abduction for ransom. This is evident from the recommendations made by the Law Commission to which we have made reference in the earlier part of this judgment. While those recommendations were pending with the government, the specter of terrorism started raising its head threatening not only the security and safety of the citizens but the very sovereignty and integrity of the country, calling for adequate measures to curb what has the potential of destabilizing any country. With terrorism assuming international dimensions, the need to further amend the law arose, resulting in the amendment to Section 364A, in the year 1994. The gradual growth of the challenges posed by kidnapping and abductions for ransom, not only by ordinary criminals for monetary gain or as an organized activity for economic gains but by terrorist organizations is what necessitated the incorporation of Section 364A of the Indian Penal Code and a stringent punishment for those indulging in such activities.
Given the background in which the law was enacted and the concern shown by the Parliament for the safety and security of the citizens and the unity, sovereignty and integrity of the country, the punishment prescribed for those committing any act contrary to Section 364A cannot be dubbed as so outrageously disproportionate to the nature of the offence as to call for the same being declared unconstitutional. Judicial discretion available to the Courts to choose one of the two sentences prescribed for those falling foul of Section 364A will doubtless be exercised by the Courts along judicially recognized lines and death sentences awarded only in the rarest of rare cases. But just because the sentence of death is a possible punishment that may be awarded in appropriate cases cannot make it per se inhuman or barbaric. In the ordinary course and in cases which qualify to be called rarest of the rare, death may be awarded only where kidnapping or abduction has resulted in the death either of the victim or anyone else in the course of the commission of the offence.
All that we are concerned with is whether the provisions of Section 364A in so far as the same prescribes death or life imprisonment is unconstitutional on account of the punishment being disproportionate to the gravity of the crime committed by the Appellants. Our answer to that question is in the negative. A sentence of death in a case of murder may be rare, but, if the courts have, upon consideration of the facts and evidence, found that the same is the only sentence that can be awarded, it is difficult to revisit that question in collateral proceedings like the one at hand.
Appeal dismissed.
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2015 (8) TMI 1507
Eligibility of deduction u/s.10A - as per revenue assessee simply providing legal services to its clients and not doing any type of business mentioned in Section 10A - CIT-A allowed deduction - HELD THAT:- As decided in own case services rendered by the assessee falls under the definition of computer software and it was eligible for deduction u/s.10A of the Act. Nothing was brought by the Department to warrant a different view for the present assessment year. Assessee was carrying on the same business. We are therefore not inclined to interfere with the order of the CIT (A). - Decided against revenue.
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2015 (8) TMI 1506
TP Adjustment - Upward adjustment due to brand promotion expense attributable to the assessee's holding company - main grouse of the Revenue is that the appellant company being the user of the Holding Company's brand name and logo indirectly benefits the Holding Company. The appellant company instead of promoting its own brand has been promoting the brand logo of the Holding company - Whether Bright-Line-Test (BLT) is the only method to be adopted to arrive at the value of brand development expense receivable by the assessee company from its Holding Company with respect to the promotion of brand of the assessee's Holding Company? - HELD THAT:- As decided in LG. ELECTRONICS INDIA P. LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX [2013 (6) TMI 217 - ITAT DELHI] we hereby direct the Ld. Assessing Officer to delete the ad hoc addition of 196 on sales which is treated as brand development fee by following the decision of the Tribunal cited supra. The aforesaid decisions of the Tribunal has also held that Bright Line Test would be the best method for determining developer of the intangible property, which the Ld. A.R. claimed that such test was made on the assessee by DRP; however no additions were made because on the computation of the same it was found not warranted. The same was also not controverted by the Ld. D.R. Therefore, we hereby restrain ourselves from remitting back the matter for the computation of bright line test. Thus, this issue is decided in favour of the assessee.
Addition on account of advertisement and sales promotion expenses which ought to have been receivable from the assessee's holding company u/s. 92B - TPO had held that the assessee had incurred advertisement expenses on behalf of the parent company and therefore, considered the same as international transaction invoking the section 92B - HELD THAT:- We hereby accept the concept of Bright Line Test (BUT) as held by our predecessors with respect to the concept of Bright Line Test for distinguishing between the routine and non-routine expenditure incurred on advertisement and brand promotion wherein advertisement and marketing promotion expenses to the extent incurred by uncontrolled comparable distributors is to be regarded within the "Bright Line Limit" of the routine expenses and the advertisement and market promotion expenses incurred by the distributors beyond such "Bright Line Unit" constituted non-routine expenditure resulting in creation of economic ownership in the form of marketing intangibles which belong to the owner of the brand. However, in this case even after computing the ALP by following the Bright Line Test the Ld. TPO has deleted the addition - Decided against assessee.
Disallowance being royalty paid by the assessee to its Holding Company - appellant company had entered into technical know-how agreement with its Holding Company for all the models of the cars manufactured by it - HELD THAT:- TPO has herself accepted the high-tech technology passed on to the assessee company by its Holding Company and also after detailed study of 35 licenses arrived at a conclusion that the royalty payment of 4.7% is prevalent in the automotive sector. Therefore from these circumstances, we do not find it appropriate on the part of the Revenue to make addition on account of ALP of royalty payment. Therefore, we hereby delete the addition made by the Ld. TPO following the directions of Ld. Members of the DRP.
Disallowance of depreciation on capital subsidy - HELD THAT:- We are of the opinion that the matter requires a categorical finding as to how the cash received as subsidy from SIPCOT has been utilized by the company in order to address merits of the case. Therefore, we hereby remit the issue back to the file of Ld. DRP in order to examine the complete facts.
Disallowance u/s. 14A - HELD THAT:- Details of investment made were not brought before us. But as pointed out by the assessee Rule 8D was introduced by the Income-tax Fifth Amendment Rules, 2008 with effect from 24.03.2008. Therefore, it would not be applicable to the case of the assessee for the assessment year 2007-08. Moreover under such circumstances, various judicial authorities have held that 296 to 5% of the dividend earned may be disallowed in order to justify the provisions of Section 14A of the Act. However, in the present case before us, the Ld. A.R. has claimed that the assessee had not received any dividend during the year, which has not been rebutted by the Ld. D.R. Therefore, we hereby hold that disallowance of Section 14A is not warranted.
Disallowance of expenditure towards 100 cars given to Police Department - Whether assessee had justified the action as fulfilment of obligation towards "Corporate Social Responsibility"? - difference of opinion between the Hon'ble the Accountant Member and the Judicial Member - HELD THAT:- The Hon'ble Vice President, sitting as the Third Member has agreed with the Hon'ble Judicial Member and has held that the expenditure incurred by the assessee was not incidental to carrying on the business and there is no commercial expediency in incurring this expenditure and therefore, the view of the learned Judicial Member is upheld. Therefore by the majority view, this ground raised by the assessee is dismissed.
Addition on account of export incentives accrued to the assessee on target plus scheme and focus market scheme - HELD THAT:- The export incentive towards target plus scheme is bestowed as a reward in order to encourage the accelerating growth in exports. The incentive on target plus scheme is also nothing but an entitlement for a duty credit based on incremental exports which should be substantially higher than the general annual export target that is fixed. The incentive on focus market scheme is to offset high freight cost and other externalities to select international market with a view to enhance India's export competitiveness in these countries. It is pertinent to note that the assessee will be entitled to such benefit only after verification of the claim of the assessee by the relevant Govt. authorities and issuance of the license by such Government authorities - As relying on EXCEL INDUSTRIES LTD. AND MAFATLAL INDUSTRIES P. LTD. [2013 (10) TMI 324 - SUPREME COURT] notional income computed by the assessee cannot be treated as taxable income of the assessee during the relevant to assessment year, however the same shall be taxed in the previous year in which the assessee has received the licenses and derived such income. Thus, this issue is also decided in favour of the assessee.
Disallowance of additional depreciation in respect of assets used in regional offices - as argued stating that as per provisions of Section 32(1)(iia) of the Act, the assessee will be entitled to the claim of additional depreciation since the assessee is engaged in the business of manufacture of production of any article or thing - HELD THAT:- The assessee is entitled to additional depreciation if it has satisfied the condition that it is engaged in the business of manufacture or production of any article or thing. There is no condition stipulated in the Act that additional depreciation shall be allowed only if the asset is deployed in the factory of the assessee and not the office of the assessee. Therefore, we accept the argument of the Ld. A.R. and reject the observations of the Revenue on this regard and accordingly direct the Ld. Assessing Officer to allow the claim of additional depreciation if the other conditions of the Act remains satisfied.
Non granting the credit for the tax deducted at source - HELD THAT:- In the interest of justice we remit this matter back to the file of the Ld. Assessing Officer for examining the relevant documents furnished by the assessee and pass appropriate speaking order as per merits and law after giving opportunity to the assessee of being heard. We further make it clear that the assessee is at liberty to produce before the Revenue any relevant documents supporting its claim.
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2015 (8) TMI 1505
Assessment u/s 153C - HELD THAT:- The assessee’s claim that no incriminating documents were found during the course of search and the proceedings u/s 153C of the Act are not factually correct. There are certain documents seized during the search which reflect certain receipts which are not reflecting in the books of accounts. Since there were incriminating documents which were seized during the search operation, the CIT(A) was justified in sustaining the issue of notice issued u/s 153C of the Act as legal and valid.
Addition on account of receipts of bank OCR (owners contribution receipt) - HELD THAT:- Issue needs verification at the level of the Assessing Officer wherein the cross-verification from the bank with regard to margin money is required to be established. The requirement of certification with respect to disbursement of loan needs verification. The investigation from the purchasers is necessary to know the correct facts. Considering all these aspects, we remand this issue to the file of the Assessing Officer for verification and then decide the issue.
Deduction u/s 80IB(10) - Approval of housing project - HELD THAT:- The assessee got the project sanctioned. The assessee got approved housing project on 17.6.2004 in its own name as colonizer. The project was completed in F.Y. 2007-08, as per the sanctioned plan from Municipal Corporation, Bhopal. None of the residential units was sanctioned for more than 1500 sq.ft. The assessee completed the project in the stipulated period of four years as per the approved plans. The assessee has developed and completed the infra-structure, approach road, water line sewerage line and electrification work as per the norms laid down by 28.1.2008. The possession letter was also issued to the customers on the completion of the residential units in all respect. These possession letters were signed by all the customers. The purchasers got permanent electricity connection from M.P. Electricity Board as customer. The permanent electricity connections are given only on the completion of the houses/flats. The persons who have purchased these units have paid property taxes to the Municipal Corporation, Bhopal. All these evidences show that the assessee has constructed and developed the project and completed well within time provided u/s 80IB(10
Visakhapatnam Bench of the ITAT in the case of M/s Vishnu Builders vs. ACIT [2011 (11) TMI 638 - ITAT VISAKHAPATNAM] observed that completion certificate was not filed before the Assessing Officer and the proof of municipal tax assessment of various flat owners establishing that the housing project was completed before September, 2008 was filed. Since there was no practice of issuing the project completion certificate, therefore, it was held that it was not a condition precedent of filing the completion certificate for allowing deduction u/s 80IB(10).
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2015 (8) TMI 1504
Provisional release of seized goods - levy of ADD - Classification of goods - L-ASCORBATE 2-PHOSPATE - 35 PCT - It is the contention of the learned counsel for petitioner that the respondents ought to have at least allowed provisional clearance and release of the goods, pending the dispute - HELD THAT:- The issue relating to classification of items viz, whether the goods would attract Anti Dumping Duty or not, can be looked into by the authority concerned by adopting proper adjudication process followed by a speaking order, which is yet to be made. Hence, such exercise shall be completed by the respondents within a period of four weeks from the date of receipt of a copy of this order. In the meanwhile, for the purpose of release of goods i.e., L-ASCORBATE 2-PHOSPATE - 35 PCT, 50% of the Anti Dumping Duty as determined shall be paid by the petitioner and for the balance amount, a bond as directed by the authority concerned is directed to be executed by the petitioner. On such compliance, the goods shall be released forthwith. As far as the other item viz., MONO POTASSIUM PHOSPATE, it is mutually agreed by both the counsel on record that there is no dispute. Hence, the respondents are directed to release the said goods forthwith.
Petition disposed off.
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2015 (8) TMI 1503
Sanction of the proposed scheme of amalgamation - only observation made by the Regional Director in his report is that the scheme may be made effective subject to sanction of the scheme of amalgamation in favour of the transferor companies by the Delhi High Court in whose jurisdiction those companies are registered - HELD THAT:- Having regard to the report of the Regional Director, South Eastern Region, Ministry of Corporate Affairs, Hyderabad and as no objections/claims have been received in pursuance of the advertisement got published by the petitioner in the newspapers, this Court is of the opinion that the proposed scheme of amalgamation is in conformity with the provisions of the Act and the same does not in any manner affect the interests of any of the stake holders including the public.
Therefore, the proposed scheme of amalgamation is sanctioned with effect from the appointed date i.e., 01.04.2015, subject to sanction of the scheme of amalgamation in favour of the transferor companies by the Delhi High Court. The petitioner shall cause a certified copy of this order to be delivered to the Registrar of Companies for the State of Telangana and State of Andhra Pradesh, Hyderabad, within 30 days of its receipt and take all other consequential steps in pursuance of the approval of the scheme of amalgamation.
Petition allowed.
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2015 (8) TMI 1502
Appropriate final orders after considering the reply given already - HELD THAT:- A perusal of the order impugned would show that it is prima facie in nature. The enquiry is almost completed except filing written submissions. In a matter of this nature, touching upon Revenue and technical aspects involving economy, this Court is expected to adopt a dignified reluctance to leave the issues open to be decided by the statutory authority.
Thus without going into the merits of the Case, this Court directs the first respondent to pass appropriate final orders after considering the reply given already and to be given in the form of written submission within a period of four weeks from the date of receipt of a copy of this order. The petitioner is at liberty to give the written submissions to the first respondent within a period of one week from the date of receipt of a copy of this Order.
Writ petition stands disposed of by directing the first respondent to pass final order on merits after considering the relevant materials.
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2015 (8) TMI 1501
Publication and service of notice - HELD THAT:- Notice of the hearing of the petition to be advertised in English daily, “Indian Express”, Ahmedabad edition, and Gujarati daily, “Sandesh”, Ahmedabad edition, as submitted by learned advocate for the petitioner. Publication of notice shall appear in the aforesaid newspapers, at least, 10 days before the date of hearing so fixed.
Notice of the hearing of the petition be served on the Central Government through the Regional Director, ROC Bhavan, Opp. Rupal Park Society, B/h. Ankur Bus Stop, Naranpura, Ahmedabad, pursuant to Section 394A of the Companies Act, 1956. Notice shall also be issued to Official Liquidator, who if required, may appoint Chartered Accountant.
Notice of the hearing of the petition on the Regional Director, and to the Official Liquidator, shall be served at least 10 days before the of hearing so fixed.
Publication of the notice in the Gujarat Government Gazette is hereby dispensed with.
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2015 (8) TMI 1500
Eligible deduction u/s.10B - whether expenditure incurred in foreign exchange towards telecommunication expenditure and travel expenditure deducted from export turnover should also be deducted from total turnover for arriving at the eligible deduction ? - HELD THAT:- Issue is squarely covered by the decision of the Tribunal in the assessee’s own case [2011 (10) TMI 619 - ITAT CHENNAI] and case of ITO Vs. Sak soft Ltd. [2009 (3) TMI 243 - ITAT MADRAS-D] wherein it was held that such expenditure ought to be excluded both from export turnover as well as from the total turnover. Also see M/S. ALLSEC TECHNOLOGIES LTD. [2015 (9) TMI 219 - ITAT CHENNAI].
Loss on account of conversion of the amount outstanding in EEFC account in foreign currency to Indian currency - CIT held that the loss from EEFC account should be set off against the other business income or any other income of the assessee - HELD THAT:- No infirmity in the order of the Ld. CIT (A). Any loss incurred by the assessee has to be allowed to be set off against the same business income or against the other business income or any other income as per the provisions of the Act - Tribunal on the earlier occasion in the assessee’s own case has only decided the issue of granting deduction U/s.10B of the Act with respect to the gain derived from EEFC account which does not have direct nexus with the profits earned out of export by holding that such gains should be excluded for the purpose of deduction U/s.10B. This is only for the limited purpose of granting deduction U/s.10B - as per the provisions of the Act, any gain or loss incurred by the 10-B unit of the assessee, though not eligible for deduction while computing the income of the assessee, such gains or losses have to be considered in accordance with the normal provisions of the Act.
Direction of AO to re-compute the deduction U/s.10B of the Act for the earlier years - CIT (A) directing the AO to re-compute the profit of the business eligible for deduction U/s.10B for the earlier years by not increasing the profit due to disallowance U/s.40(a)(ia) - HELD THAT:- AO for the earlier years have incorrectly granted deduction U/s.10B of the Act i.e., even for the increase in profits due to disallowance U/s.40(a)(ia) - While granting deduction U/s.10B of the Act, the disallowance made U/s.40(a)(ia) cannot be taken into consideration for the purpose of granting the benefit of deduction because Section-10B is a provision with fiction and Section.40(a)(ia) is also a provision with fiction and a provision with fiction cannot be super imposed on another provision with fiction - CIT (A) has rightly directed the Ld. Assessing Officer to re-compute the deduction U/s.10B of the Act for the earlier years, however, subject to the period of limitation provided under the Act.
Invoking the provisions of Section-14A - AO observed in his order that the management recharge expenses and software expenses were also expenses related to earning of exempt income U/s.10B of the Act and therefore, cannot be allowed against the taxable income in view of the provisions of section 14A - CIT (A) directed AO to re-compute the income of the assessee for the earlier assessment years 2002-03 to 2005-06 - HELD THAT:- As assessee contented that CIT (A) had exceeded his jurisdiction by directing AO to re-comptue the deduction U/s.10B for the earlier assessment years other than the year under appeal, since we have already held in the earlier grounds that the Ld. CIT (A) has powers under the provisions of the Act to direct the Ld. Assessing Officer to modify the assessment of the earlier years based on the findings in the subsequent assessment year under appeal before the Ld. CIT (A), this ground is also accordingly disposed off.
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2015 (8) TMI 1499
Prima facie view contained in the ex-parte ad interim order sustained after hearing the appellants - exercise of the powers conferred upon under sections 11(1), 11(4) and 11B of the SEBI Act - HELD THAT:- The documents and details available on record, the prima facie view taken in the interim order is correct. Further, the directions of not collecting any funds from the investors under the existing schemes/existing company within the group and not to launch any new schemes or plans, is in the interest of lay investors who may fall in the trap of the alleged schemes of the Company. In so far as existing investors as concerned, SEBI has directed that the Company shall not dispose of or alienate any of the properties/assets obtained directly or indirectly through money raised by Citrus and not to divert the funds raised from public.
It was necessary for SEBI that such unauthorized collection of money be stopped immediately in order to prevent further damage to the general public by unregistered CIS activities. As the activities of the Company and its directors are prima facie found to be illegal and in violation of the SEBI directions, revoking the directions issued vide the interim order, at this stage will not be in the interest of the investors. Further, as also discussed above, in terms of the SEBI order dated August 21, 2015 in the matter of Royal Twinkle Star Club Limited, the directors of the Citrus namely Mr. Omprakash Basantlal Goenka, Mr. Prakash Ganpat Utekar, Mr. Venkatraman Natrajan and Mr. Narayan Shivram Kotnis cannot be permitted to carry out any fund mobilization activity. In view of the same, in my considered opinion revoking/modifying the directions issued vide the interim order in any form is not appropriate.
As also noted earlier the documents/details submitted by the Company have to be examined in detail, in the light of submissions made and the discussion in the interim order. In view of the same, I am convinced that the directions in the interim order in respect of the entities need to be continued, till further directions. These directions have been imposed in the interest of investors and to ensure that the noticees do not continue with the money mobilization activities through its plans/schemes. SEBI is directed to conduct an investigation into the operations of the Company, in order to form a final view as to whether the activity of the Company is in the nature of CIS as prima facie observed in the interim order. SEBI is advised to expeditiously conclude the investigation and proceed in accordance with law.
In exercise of the powers conferred upon me under sections 11(1), 11(4) and 11B of the SEBI Act, 1992 read with Regulation 65 of SEBI (Collective Investment Schemes) Regulations, 1996, hereby confirm the directions issued vide the SEBI interim order dated June 03, 2015 against Citrus Check Inns Limited, Mr. Omprakash Basantlal Goenka, Mr. Prakash Ganpat Utekar, Mr. Venkatraman Natrajan and Mr. Narayan Shivram Kotnis.
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2015 (8) TMI 1498
Direction to pay defaulted amount - direction to applicant to pay a sum of ₹ 1,00,00,000 on or before 7.7.2015 out of a total principal amount of ₹ 4,00,00,000 with an interest @ 12% p.a. on the entire principal amount - HELD THAT:- The order dated 22.5.2015 was passed with the consent of the parties, wherein it was recorded that “It is also agreed between the parties that in the event of default of payment of 25% of principal amount within the time stipulated, the entire suit shall stand decreed.” Insofar as the said amount has not been paid, there is default of the aforesaid direction passed on 22.5.2015. There is no ground for extension of time, which, in any case, is opposed by the non-applicant.
Application dismissed.
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2015 (8) TMI 1497
Revision u/s 263 - understatement in the value of closing stock because the appellant has not debited the value of excise duty to Profit & Loss Account at the time of accounting purchases - assessment order being erroneous and prejudicial to the interest of the Revenue or not? - HELD THAT:- The assessee has stated before the ld.Pr.CIT which is not rebutted by the Revenue that there is no understatement in the value of closing stock because the appellant has not debited the value of excise duty to Profit & Loss Account at the time of accounting purchases and the excise duty component has been accounted and recognized separately in the financial statements as current assets for the year under consideration. There is another aspect of the matter also, the contention of the assessee is that MODVAT Scheme provides for instant credit of the input only on the raw-material consumed. The credit has a direct linkage with the consumption of the raw-material. It is obtained on the date when the raw material is purchased. Hence, it is clear that whether one applies the net method or the gross method the gross profit remains the same.
Assessment order is not erroneous. Moreover, it is undisputed fact that the Assessing Officer raised a specific query and reached to a conclusion that method adopted by the assessee has not caused any prejudicial to the Revenue since there is no understatement of closing stock. This conclusion of AO is not absurd or erroneous. Therefore, the exercise of Jurisdiction u/s.263 of the Act by ld.Pr.CIT fails.
In the case of Malabar Industrial Co.Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME COURT] has held that the CIT has to be satisfied of twin conditions, namely, (i) the order of the AO sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent, if the order of the ITO is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue, recourse cannot be had to s.263(1).
It is not pointed out by the ld.Pr.CIT as to what prejudice has caused to the Revenue. In the absence of specific finding by the ld.Pr.CIT, we cannot confirm his order revising the assessment order. Therefore, in our considered view twin conditions as laid down in Section 263 of the Act, i.e. order being erroneous so far it is prejudicial to the interest of Revenue are not satisfied - unable to sustain the findings of ld.Pr.CIT, same are hereby quashed. Therefore, the impugned order is set aside and quashed. Thus, grounds raised in the appeal are allowed.
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2015 (8) TMI 1496
Disallowance of expenditure by way of claims settled - HELD THAT:- Respectfully following the orders of the Co-ordinate Bench in assessee’s own case [ 2013 (9) TMI 633 - ITAT, MUMBAI] the disallowance made by the AO is deleted. These grounds are accordingly allowed.
Disallowance made u/s. 14A - HELD THAT:- Respectfully following the decision of the Co-ordinate Bench [2013 (9) TMI 633 - ITAT, MUMBAI] we hold accordingly and direct the AO to follow the findings/directions of the Tribunal given for A.Yrs 2000-01, 2001-02 and 2003-03. Ground No. 3.1 and 3.2 with all sub-grounds are accordingly allowed.
Disallowance of Legal and Profession Charges, disallowance of repairs and maintenance charges and disallowance of Repairs and Maintenance - Plant & Machinery - HELD THAT:- A perusal of the order of the First Appellate Authority show that the Ld. CIT(A) has called for a remand report from the AO. However, we find that the First Appellate Authority has decided these issues without waiting for the remand report. In our considered opinion and in the interest of justice and fair play, these issues need to be reconsidered at the assessment stage. We, therefore set aside these grounds to the file of the AO. The AO is directed to decide these issues afresh after giving a reasonable and fair opportunity of being heard to the assessee. Accordingly, ground No. 6, 8 and 11 are treated as allowed for statistical purpose.
Deduction u/s. 80HHC - confirmed the disallowance.
Deduction u/s. 80HHC relating to DEPB credits - HELD THAT:- In assessee’s own case in A.Y. 2003-04 the Tribunal following the order of the Hon’ble High Court of Gujarat in the case of Avani Exports Vs CIT [2012 (7) TMI 190 - GUJARAT HIGH COURT] has restored this issue to the file of the AO for denovo assessment on this claim of the assessee u/s. 80HHC of the Act. Respectfully following this finding of the Tribunal, we set aside this issue to the file of the AO to be decided afresh in the light of the findings given in A.Y. 2003-04. Accordingly, this ground is treated as allowed for statistical purpose.
Claim of deduction u/s. 80HHC - HELD THAT:- We set aside this issue to the file of the AO to be decided as per the directions of the Tribunal in A.Y. 2003-04 in the light of the decision of the Hon’ble Supreme Court in the case of Topman Exports Vs CIT [2012 (2) TMI 100 - SUPREME COURT] - This ground is allowed for statistical purpose.
Claim of deduction u/s. 80HHC - AO ought to have excluded from total costs - Direct costs attributable to exports and domestic sales of manufactured goods - HELD THAT:- Respectfully following the findings of the Tribunal in own case we decide this grievance in favour of the assessee. claim of deduction u/s. 80HHC which is without prejudice to assessee’s claim that unrealized export sale proceeds not excludible from trading export turnover.
Claim of deduction u/s. 80HHC - claim of the assessee that in computing the total turnover following item should have been excluded as Sales tax and Excise duty - HELD THAT:- Issue decided in favour of assessee as relying on its own case.
Claim of deduction u/s. 80HHC - claim of the assessee that in computing profits of the business under Explanation (baa) 90% of net receipts and no gross receipts by way of commission earned and interest earned ought to be reduced - HELD THAT:- As decided in own case [2013 (9) TMI 633 - ITAT, MUMBAI] in the light of the decision of the Hon’ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. Vs CIT [2012 (2) TMI 101 - SUPREME COURT] we decide this claim of deduction in favour of the assessee
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