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2022 (9) TMI 1515 - ITAT RAJKOT
Addition of expenditure incurred u/s 57 - assessee during the assessment proceedings failed to furnish the details of the expenses - HELD THAT:- In the case on hand, the assessee has shown gross income from other sources against which a deduction of was claimed u/s 57 - But both the authorities below have disallowed the same i.e. deduction/expenses in the absence of necessary documentary evidence. Even at the time of hearing before us, AR in the written submission has submitted that the gross amount of income cannot be taxed without allowing the corresponding expenses which were claimed in the return of income.
However, the onus lies upon the assessee to furnish the necessary documentary evidences in support of the claim made in the income tax return. If the assessee fails to discharge the onus, there is no remedy available to the revenue to disallow the claim of the assessee. Nevertheless, in the interest of justice and fair play we are inclined to give one more opportunity to the assessee to produce the necessary documentary evidence in support of his contention before the AO. Hence, the ground of appeal raised by the assessee is allowed for the statistical purposes.
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2022 (9) TMI 1514 - ITAT BANGALORE
Rectification of mistake u/s 254 - Income chargeable to tax - Waiver of Principal amounts of loan/borrowings - one time settlement (OTS) with banks and financial institutions - Assessee also received waiver of interest due on the aforesaid loans - While the principal amount waived was claimed as not taxable in the return of income, the interest component that was waived on the loans were offered to tax by the Assessee u/s.41(1) - HELD THAT:- In the case of CIT v. T.V. Sundaram Iyengar & Sons Ltd [1996 (9) TMI 1 - SUPREME COURT] the court observed that the moneys had arisen out of ordinary trading transactions. The assessee had received certain deposits from customers in the course of carrying on his business, which were originally treated as capital receipts. Since these credit balances, standing in favour of assessee’s customers, were not claimed by the customers, the assessee transferred such amounts to its profit and loss account. The assessee did not include such amounts in its total income. The Court held that although the amounts received originally were not of income nature, the amounts remained with the assessee for a long period unclaimed by the trade parties. By lapse of time, the claim of the deposit became time barred and the amount attained a totally different quality. It became a definite trade surplus. Although it was treated as deposit and was of capital nature at the point of time it was received, by efflux of time the money has become the assessee’s own money. What remains after adjustment of the deposits has not been claimed by the customers. The claims of the customers have become barred by limitation. Here we see the concept of ‘changing of character of receipt by efflux of time’ and the action of the assessee of crediting it to profit & loss account which shows that the assessee treats it as revenue, as in the present case, where receipts have been shown as extraordinary items in the profit and loss account (Note 14 of notes to Profit & Loss Account). It is based on these decisions that the AO made the impugned additions in AY 2005-06 & 2006-07.
Waiver of working capital loan was taxable. Therefore, the view taken by the Tribunal in it’s order [2022 (1) TMI 1399 - ITAT BANGALORE] cannot be said to be an unsustainable view. The tribunal has given reason as to why waiver of principal portion of working capital loan is taxable and has taken a conscious decision after considering the Tribunal’s order for AY 2005-06. It is no doubt true that to the extent the waiver of loan was towards term loan, it was not taxable as was held by the Tribunal in it’s earlier order for AY 2005-06. Therefore, to the extent that the Tribunal order dated 21.1.2022 holding that the waiver of principal of loan availed for capital account purpose is not taxable.
Whether any mistake can be rectified in exercise of powers u/s.254(2)? - The Hon’ble Supreme Court in the case of CIT Vs. Saurashtra Kutch Stock Exchange case [2008 (9) TMI 11 - SUPREME COURT] has held that non-consideration of the decision of the jurisdictional high court/Supreme Court constitutes mistake apparent from record and is rectifiable within the meaning of section 254(2) of the Act.
It can be said that in the case of Reliance Telecom [2021 (12) TMI 211 - SUPREME COURT] the Hon’ble Supreme Court based its conclusion by holding that a detailed order was passed and issue decided and such order cannot be recalled in exercise of powers of rectification u/s.254(2) of the Act. By doing so, it has not diluted the ration laid down in the case of Saurashtra Stock Exchange [2008 (9) TMI 11 - SUPREME COURT] or Honda Siel [2007 (11) TMI 8 - SUPREME COURT] and the power to rectify orders which do not follow binding decision of Supreme Court or High Court or earlier order of Tribunal in Assessee’s own case.
The mistake apparent on the record of the tribunal is in not distinguishing the nature of loan waived in AY 2005-06 from the one waived in AY 2006-07, which mistake is apparent from the details of the loan waived
In the given facts and circumstances, we are of the view that there is a mistake apparent on the face of record which requires to be rectified.
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2022 (9) TMI 1513 - MADRAS HIGH COURT
Cheating - Default in repayment of loan - Deposit of bogus share certificates in the Central Bank of India to obtain loans.
HELD THAT:- The ingredients to constitute an offence under Section 420 of IPC are as follows :- (i) A person must commit the offence of cheating under Section 415 and (ii) The person cheated must be dishonestly induced to (a) deliver property to any person or (b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security - Cheating is an essential ingredient for an act to constitute an offence under Section 420 of IPC.
It is relevant to rely upon the judgment made by the Honourable Supreme Court of India in the case of INDIAN OIL CORPORATION VERSUS NEPC INDIA LTD & ORS [2006 (7) TMI 575 - SUPREME COURT] held that the civil liability cannot be converted into criminal liability and it is necessary to take notice of a growing tendency in business circle to convert purely civil dispute in criminal case. This is obviously on account of prevalent impression that civil law remedies are time consuming and do not adequately protect the interest of lender/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claim which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and dishonoured.
The term "forgery" used in these sections is defined in Section 463 of IPC. Whoever makes any false documents with intent to cause damage or injury to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into express or implied contract, or with intent to commit fraud or that the fraud may be committed, commits forgery. Section 464 of IPC defines "making a false document". The condition precedent for an offence under Sections 467, 468 and 471 is forgery. The condition precedent for forgery is making a false document. This case does not relate to any false record and all the documents are more than 30 years old and with proper custody.
On perusal of all the proceedings pertaining to the subject properties categorically shows that the matter has been settled by the orders of this Court 50 years ago and the same sought to be re-opened for investigation which is clearly not permissible. The petitioner came into the picture only in the year 1995, when the shares transferred to M/s. V.K.K. Charities, who was the successful bidder in the auction. All the proceedings from the initiation of auction are sanctioned by the BIFR by sanctioning the scheme of rehabilitation.
The FIRs in Crime Nos.2 & 3 of 2016 cannot be sustained as against the petitioner and they are liable to be quashed - Petition closed.
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2022 (9) TMI 1512 - CALCUTTA HIGH COURT
Revision u/s 263 - disallowance of claim of deduction u/s 80IA - tribunal granted relief to assessee - HELD THAT:- Tribunal has noted the factual contend namely with regard to the purchases which were undertaken by the respondent/assessee as also the terms and conditions of the agreement entered into by the assessee with the concerned highways department and having been factually satisfied that the deduction claimed by the assessee is admissible, had granted relief. More importantly the Tribunal had taken note of the fact that for the previous assessment years 2010-11 the learned Tribunal had adjudicated the issue and had granted relief for assessee and for the subsequent years 2013-14 and 2014-15 no disallowance has been made u/s 80IA .
That apart the Tribunal has also taken note of various decisions of the Hon’ble Supreme Court which had laid down the legal principle as to what and under what circumstances the Commissioner of Income Tax can exercise power under Section 263 of the Act.
The revenue has not disputed before us that no disallowance was made in the previous two assessment years as well as the subsequent two assessment years. Thus in the absence of any distinguished feature in the nature of contract the Rule of Consistency has to be applied - No substantial question of law.
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2022 (9) TMI 1511 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - construction service supplied by the Respondent - Respondent had not passed on the benefit of Input Tax Credit to him by way of commensurate reduction in the price - contravention of section 171 of CGST Act - Time Limitation - HELD THAT:- The Authority, without going into the merits of the case, directs the DGAP to re-examine/re-investigate and recalculate the amount of profiteering under rule 133(4) of the CGST Rules, 2017 strictly in respect of the findings made in para 7(i) to 7(iii) above and submit its Report within 3 months of this order.
Further, the Hon'ble High Court of Delhi in the case of Nestle India Ltd. v. Union of India [2020 (2) TMI 671 - DELHI HIGH COURT] has held that it appears to us that the limitation of period of six months provided in rule 133 of the CGST Rules, 2017 within which the authority should make its order from the date of receipt of the report of the Directorate General of Anti-Profiteering, appears to be directory inasmuch as no consequence of non-adherence of the said period of six months is prescribed either in the CGST Act or the rules framed thereunder.
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2022 (9) TMI 1510 - ITAT COCHIN
Maintainability of appeal on low tax effect - Revenue seeks to recall of the order of Tribunal dismissing the appeals of the Revenue in view of low tax effect - DR has placed on record copy of Revenue Audit Objection and contended that the same falls within the exceptions referred to in the CBDT Circular No.3/2018, to recall the order of the Tribunal.
HELD THAT:- Tribunal while disposing of the appeal of the Revenue, has given liberty to the Revenue to move an application for recalling the impugned order of the Tribunal, if the Revenue fulfills any of the exceptions referred to in the CBDT Circular No.03/2018 dated 11.07.2018. Admittedly, the Revenue Audit Objection placed on record by the learned DR, falls within the exceptions referred to in the CBDT Circular. Accordingly, we recall the impugned order of the Tribunal and post this case for hearing on 14.10.2022 or immediate next date of hearing, when this Bench functions.
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2022 (9) TMI 1509 - DELHI HIGH COURT
Seeking grant of bail - Criminal Conspiracy - co-location and passing of confidential information to M/s. OPG Securities by officials of NSE - wrongful gain to M/s. OPG Securities - tampering the evidence/influencing the witnesses without any material particulars.
Whether filing of charge sheet by the respondent/CBI before concerned court on 21.04.2022 pertaining to offences punishable under sections 13(1)(d) and 13(2) of the PC Act and section 120B IPC is sufficient compliance of section 167(2) of the Code to deny statutory bail or default bail to the petitioner/accused as argued by the respondent/CBI or said charge sheet is incomplete or piece meal charge sheet and does not fall within ambit of section 167(2) of the Code as argued by the learned Senior Counsel for the petitioner/accused?
HELD THAT:- Pertaining to section 167(2) of the Code as discussed hereinabove, section 173 of the Code only permits filing of a final report after completion of the entire investigation in respect of all offences and does not permit a piece-meal investigation and filing of incomplete charge sheet before Court. The charge sheet filed by the respondent/CBI is a piece meal charge sheet and is not filed in respect all offences subject matter of present FIR. The respondent/CBI is not legally permitted to pick one portion of investigation and to complete it and thereafter file piece meal charge sheet in respect of few offences subject matter of FIR and to left open investigation in respect of other offences and subsequent filing of charge sheet in respect of left over offences. This would be complete negation of section 167(2) of the Code. The investigating agency cannot be permitted to fragment or break FIR for the purpose of different charge sheets and this will tantamount to negation of section 167(2) and would against mandate of Article of 21 of the Constitution. The practice of filing such types of charge sheets to seek extension of remand beyond the statutory period was deprecated by the Superior Courts in past. The investigating agency is required to form opinion regarding all offences subject matter of FIR after completion of entire investigation.
There is no force in the arguments advanced by the Special Public Prosecutor for the respondent/CBI that the right of the applicant/accused under section 167(2) of the Code has come to an end immediately after filing of charge sheet on 21.04.2022 and said right under section 167(2) cannot be revived due to reason that further investigation is pending within the meaning of sub-section 8 of Section 173 of the Code.
In Dinesh Dalmia V. C.B.I. [2007 (9) TMI 686 - SUPREME COURT], the Supreme Court observed that a charge sheet is a final report within the meaning of Sub-section (2) of Section 173 of the Code and is filed if it enables the court to apply its mind as to whether cognizance of the offence thereupon should be taken or not and the power of the investigating officer for making further investigation in terms of section 178(8) of the Code is not taken away only because a charge sheet under Sub-section (2) thereof has been filed. A further investigation is permissible even if order of cognizance of offence has been taken by the Magistrate. The investigation arising out of present FIR is incomplete investigation as only one part of investigation regarding alleged appointment of the petitioner/accused is completed and pending investigation qua other offences for which charge sheet is not filed is still pending. It is not a case of further investigation as argued by the Special Public Prosecutor.
There cannot be any dispute to the legal proposition that the purpose of police report under section 173(2) of the Code is to enable the Magistrate to satisfy himself on issue of taking cognizance or not. The concerned Special Court can take cognisance only in respect of some of offences for which charge sheet was filed on 21.04.22 but cannot take cognizance in respect of offence for which investigation is still pending and charge sheet is not filed. It is not permissible within mandate of legal provisions as contained in sections 173(2) and 167(2) to take cognizance in piece meal or in parts. It would amount to negation of indefeasible right given to the accused under section 167(2) of the Code - In the present case, the respondent/CBI itself preferred to club investigation of issues arising out of SEBI order dated 11.02.2022 with investigation of offences subject matter of present FIR. The investigating agency cannot circumvent section 167(2) of the Code by filing incomplete charge sheet and cannot be filed within the meaning of section 173(2) till the investigation is completed and any report sent before the investigation is completed will not be a police report within the meaning of section 173(2) of the Code. The respondent/CBI cannot take shelter of filing charge sheet in respect of offences pertaining to alleged illegal appointment of the petitioner/accused by giving nomenclature of complete charge sheet or final report as per section 173(2) of the Code to defeat the right of statutory bail under Section 167(2) of the Code.
The Special Judge" while dismissing application for grant of statutory bail vide order dated 28.05.2022 did not appreciate legal provisions pertaining to section 167(2) in right perspective by holding that the charge sheet was complete containing all the details and was filed by mentioning therein the relevant sections. The Special Judge did not appreciate difference between incomplete investigation and further investigation and accepted both phrases as carrying same meaning. The Special Judge did not correctly observed and held that the charge-sheet filed on 21.04.2022 clearly describes details of all the material collected by the IO/Investigating agency during the investigation regarding role played by the co-accused and the petitioner/accused.
The respondent/CBI has failed to complete investigation in respect of all the offences as mentioned in FIR and to file a Final Report under section 173 of the Code within stipulated time i.e. sixty days from the date of the arrest of the petitioner/accused and filed an incomplete/piece-meal charge sheet before the concerned court on 21.04.2022 i.e. 57th day from the date of arrest.
The applicant is admitted to bail as per section 167(2) of the Code on furnishing a personal bond in the sum of Rs. 5,00,000/- with one surety of the like amount to the satisfaction of the concerned trial Court subject to the conditions imposed - application allowed.
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2022 (9) TMI 1508 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - reduction in rate of tax or additional benefit of ITC availed by the Respondent after implementation of GST - Respondent had not passed on commensurate benefit of ITC by way of reduction in the price - contravention of Section 171 of the CGST Act, 2017 - HELD THAT:- It is clear from the plain reading of Section 171(1) that it deals with two situations:- one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post GST period; hence the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. It is observed from the DGAP's report that the ITC, as a percentage of the turnover, that was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 5.07%, whereas, during the post-GST period (July-2017 to September, 2020), it was 5.60% for the project 'Victoria Vista'.
The profiteering amount determined by the DGAP during the period 1-7-2017 to 30-9-2020 is in respect of the units in respect of units which belong to Sh. Narendra Kumar Bardia (unit no. 8B) Rs. 11,872/- (including GST), Sh. Swapan Ghosh (unit no. 9B) Rs. 1,60,626/- (including GST), Sh. Harish Agarwal (unit no. 18B) Rs. 2,01,339/- (including GST) and Sh. Firoz Bei (unit no. 19B) Rs. 6,530/- (including GST). Further, it also appears from the report of the DGAP that the commensurate proportion of benefit of ITC is to be calculated as discussed supra and needs to be passed on to the eligible recipients proportionate to their share at the time of supply (sale of their share of flats) as envisaged in the Notification No. 4/2018-(Central Tax).
The Authority finds that this case needs to be reinvestigated by the DGAP based on the above findings in the para 11 to 13 supra of this Authority. Thus the Authority directs the DGAP to reinvestigate the matter as per the provisions of Rule 133(4) of the CGST Rules 2017 for the period 1-7-2017 to 18-5-2022 i.e. till the date of Completion Certificate of the Project.
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2022 (9) TMI 1507 - SC ORDER
Addition u/s 68 - unexplained unsecured loans - HC confirmed ITAT order deleting the addition made u/s 68 on account of unexplained unsecured loans obtained by the assessee observing that the alleged lenders were not shell companies - HELD THAT:- Delay condoned. Issue notice, returnable on 11.10.2022.
Dasti service, in addition, is permitted.
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2022 (9) TMI 1506 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - purchase of a Flat No. F-3/401 in the Respondent's project "Kritika & Swati Apartment" situated at Chak, Gajaria, Lucknow - Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in the price - contravention of section 171 of GST Act - HELD THAT:- It is clear from the plain reading of section 171(1) that it deals with two situations: - one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post-GST period; hence the only issue to be examined is whether there was any net benefit of ITC with the introduction of GST. It is observed from the DGAP's report that there was no sale of flats in pre-GST regime. However, the Authority finds that Respondent had invited applications for the allotment of flats in his new housing scheme 2016 named as "LDA Swati Apartment". Besides, this scheme, the Respondent was also offering flats in "Kritika Apartment". In the scheme, flats were available for registration from 15-7-2016 to 16-8-2016 which was offered by the Respondent. The Respondent had finally announced the lottery draw on 15-6-2017 for the project "Kritika & Swati Apartment".
It was clear that the base price of the flats was already fixed before the introduction of GST at the time of advertisement only and hence the benefit of additional ITC accrued to the Respondent post-GST could not have been factored in base prices determined prior to introduction of GST. The Respondent has not produced any evidence or document to prove that the prospective buyers were aware of the fact that the benefit of the ITC arising out of implementation of GST is already factored in the price or cost of the flat, bookings of which were made during the pre-GST period. The first allotment made by the Respondent in the said project was on 4-7-2017. Though the flats were available for registration from 15-7-2016 to 16-8-2016 - it is observed from the report of the DGAP that the Respondent had received Rs. 898.28 lacs of ITC for the project "Kritika & Swati Apartment" after introduction of GST. The Respondent, on his own. has taken cognizance of Anti-Profiteering provision of section 171 of the CGST Act, 2017 and suo motu calculated the amount to be passed on as benefit of addition of ITC to all homebuyers.
Since the Respondent has profiteered in the instant project, there is every likelihood that he has profiteered in other projects also under GST No. 09AAALL0016F1ZK. The Authority has reason to believe that the Respondent may have resorted to profiteering in the other projects also and hence, directs the DGAP under rule 133(5) to investigate all the other projects of the Respondent under the same GST registration which have not yet been investigated from the perspective of section 171 of the CGST Act, 2017 and submit the complete investigation report for all the Projects under this single GST Registration.
The Authority finds that this case needs to be investigated by the DGAP based on the above findings in the paras 9 and 10 supra of this Authority. Thus the Authority directs the DGAP to investigate the matter as per the provisions of rule 133(4) and rule 133(5) of the CGST Rules 2017 for the period 1-7-2017 to 30-9-2020 or till the date of Completion Certificate of the Project.
A copy of this order be sent to both the Applicant No. 1, the Respondent, Commissioners CGST/SGST Lucknow, the Principal Secretary (Town and Country Planning) free of cost for necessary action.
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2022 (9) TMI 1505 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- Metro Shoes Ltd. wherein trading income as a percentage of the total revenue is more than 25% - TPO has applied trade filter of 75% while selecting fresh comparable companies and according to the above working the company fails the trade filter of more than 75%. We further notice from the financials of Metro Shoes Ltd., that the company has paid customs duty. We do not see any merit in the contention of the DRP that Metro Shoes is also primarily engaged in trading of footwear similar to the business of the assessee while rejecting the plea of the assessee on the application of trade filters. In view of this discussion we hold that Metro Shoes fails the trade filter of more than 75% and therefore should be excluded from the comparable companies.
Sreeleather Ltd is engaged in both wholesale and retail trading of footwear and leather articles - We notice that Rule 10B(2)(d) of the Act, the relevant extract is reproduced below provide that the company is in the wholesale trading and retail trading have to be considered separately for the purpose of comparison and for the purpose of comparability with an uncontrolled transaction, whether the market in which the companies are operating is wholesale or retail needs to be considered - In view of the above and considering the provisions contained in Rule 10B (2)(d) we are of the considered view that Sreeleather Ltd. should be excluded as comparable.
VF Brands Pvt. Ltd. and Tommy Hilfiger Arvind Fashion Pvt. Ltd. - As per the working submitted by the learned A.R. during the course of hearing the margin of VF Brands Pvt. Ltd. is at 12.07% while the TPO has considered it at 14.56%. Similarly the margin as per computation submitted for Tommy Hilfiger Arvind Fashion Pvt. Ltd. is at 3.23%. The TPO has considered the percentage at 8.24%. We therefore remit this issue back to the TPO to look at the financials of these two companies and arrive at the margins afresh in accordance with law. This issue is allowed for statistical purposes.
TPO is directed to re-compute the ALP based on the directions given in this order.
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2022 (9) TMI 1504 - MADRAS HIGH COURT
Refund of excess stamp duty and registration charges - Rule 9(6) of the Security Interest (Enforcement) Rules 2002 - HELD THAT:- If a direct question is to be posed, as to whether, a certificate of sale issued by a Court or a Revenue Officer, if evidence of a sale conducted by public auction requires registration or not, the answer has to be a firm 'no'. This would be the natural inference from a reading of the provisions.
The other question that may arise is who is a Civil or a Revenue Officer, the term Civil or a Revenue Officer has not been defined either under the Stamp Act or under the Registration Act - It is pointed out that the bar that this question is no longer res integra. The earliest decision of the Hon'ble Supreme Court on this issue could be found in SMT. SHANTI DEVI L. SINGH AND ANOTHER VERSUS TAX RECOVERY OFFICER AND OTHERS [1990 (4) TMI 53 - SUPREME COURT], wherein the Hon'ble Supreme Court pointed out the procedure for filing of a certificate of sale issued by a Tax Recovery Officer and the Court after considering the provisions of Section 89(4) held that a Tax Recovery Officer under the Income Tax Act would be a Revenue Officer and the certificate of sale issued by him is not compulsorily registrable.
In B. ARVIND KUMAR VERSUS GOVERNMENT OF INDIA AND ORS. [2007 (5) TMI 657 - SUPREME COURT], the scope of Section 17(2)(xii) of the Registration Act was considered and the Hon'ble Supreme Court held that a sale certificate is merely an evidence of title and it does not convey title - The very same question arose before another Division Bench of this Court in THE INSPECTOR GENERAL OF REGISTRATION AND ORS. VERSUS KANAGALAKSHMI GANAGURU [2017 (8) TMI 1708 - MADRAS HIGH COURT]. This court had held that the authorised officer appointed by the Bank under the provisions of the SARFAESI Act, cannot be called a Civil or Revenue Court or Collector or Revenue Officer.
In view of the pronouncement of the Hon'ble Supreme Court in ESJAYPEE IMPEX PVT. LTD. VERSUS ASST. GENERAL MANAGER AND AUTHORIZED OFFICER, CANARA BANK [2021 (1) TMI 1308 - SUPREME COURT], the law as it stands today is that an Authorised Officer, who conducts a sale under the provisions of the SARFAESI Act, would be a Revenue Officer and the certificate issued by him in evidence of such sale, would be a document which is not compulsorily registrable under Section 17(2)(xii) of the Registration Act.
Amount of stamp duty and registration charges payable, if such certificate is presented for registration - HELD THAT:- Article 18 of the Stamp Act, provides for Stamp Duty payable on a certificate of sale granted by a Civil or Revenue Court or Collector or other Revenue Officer. Clause (c) of Article 18 makes the duty payable for a conveyance would apply to a sale certificate also. Under Article 23 of the Stamp Act, the Stamp Duty payable on a sale is 5% as per G.O. Ms. No. 46-CT and All Department dated 27.03.2012.
The Writ Petition has to be necessarily allowed and the excess fee and the stamp duty collected will have to be refunded by the respondents. The Writ Petition stands allowed.
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2022 (9) TMI 1503 - KERALA HIGH COURT
Suspension of License of Customs Broker - concealment of red sanders, (prohibited for export), in a cargo of oil tankers exported using the services of the petitioner - HELD THAT:- Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent- Department, this writ petition is disposed of, directing that the show cause notice issued to the petitioner on 13.09.2022 shall be adjudicated in accordance with law, within a period of three months from the date of receipt of a certified copy of this judgment. The interim order dated 29.08.2022 will continue till the final orders are passed (in the adjudication).
Learned counsel appearing for the petitioner undertakes that the petitioner will co-operate with the adjudication proceedings and will adhere to the timelines for submission of reply etc., and no unnecessary adjournments will be sought in the matter. This is recorded. It is also clarified that the observations in the interim order dated 29.08.2022 are only for the purpose of considering the entitlement of the petitioner for interim relief and shall not be treated as a finding by this Court on any point.
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2022 (9) TMI 1502 - SC ORDER
Maintainability of SLP - filing of fresh IA (Interim Application), when no relief granted on previous IA - HELD THAT:- The filing of successive IAs before the High Court, after no relief had been granted in a previous IA, was manifestly an abuse of the process. On these grounds, we see no reason to entertain the Special Leave Petition.
However, it needs to be clarified that the observations in the impugned order of the High Court are confined to the issue as to whether the Single Judge was justified in declining to exercise the discretion in an application for the grant of ad interim relief.
SLP dismissed.
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2022 (9) TMI 1501 - ITAT INDORE
Exemption u/s 11 - claim of the assessee for deduction u/s 11 has been rejected by AO holding that the assessee’s activities were not for ‘charitable purposes’ within the meaning of 2(15) - HELD THAT:- We have perused the orders passed by the authorities below including the order passed by the Co-ordinate Bench [2019 (1) TMI 289 - ITAT INDORE] by allowing the issue in favour of the assessee, assessee society was constituted by the State Govt. for the benefit of General Public to provide them information regarding employments, education institutions and other information of the govt. schemes.
The objectives of the assessee society are publication of weekly newspaper namely "Rozgar Aur Nirman" to supply the material related to advertisement of public welfare schemes of Government of Madhya Pradesh and its undertaking and do such all other acts that are necessary for achievement of the objectives of the society. Therefore, the Revenue Authorities are not justified in holding that the assessee was involved in carrying on the activity in the nature of trade, commerce or business.
The main object of the assessee is for the benefit of General Public to provide them information regarding employments, education institutions and other information of the govt. schemes, therefore, we find force in the contention of the assessee that profit making is not the driving force or objective of the assessee and income generated by the assessee does not find its way into the pockets of any individuals or entities. It is to be utilized fully for the purposes of the objects of the assessee.
We are of the view that since the object of promoting employments/educational institutions/govt. schemes for the general public is a charitable purpose, the expression 'charitable purpose', as defined in section 2(15) cannot be construed literally and in absolute terms. It has to take colour and be considered in the context of section 10(23C)(iv) as also held in the above judicial pronouncements. We are of the view that the authorities below are not justified in disallowing the entire exemption. We, therefore, direct the AO to delete the disallowances. - Decided in favour of assessee.
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2022 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Maintainability of Section 9 application - application rejected on the ground that for breach of settlement agreement, application - dues arising out of settlement may not be an ‘operational debt’ - HELD THAT:- Present is a case where the Appellant was awarded the contract to carry on construction and structural work and the dues claimed by the Appellant are operational debt. The Memorandum of Understanding entered between the parties was only with regard to mode and manner of payment, that too after final bill certificate which was duly signed by both the parties - Adjudicating Authority did not consider the nature of transaction between the parties and has erroneously come to the conclusion that section 9 application was not maintainable. The judgement of Adjudicating Authority cannot be sustained.
The appeal is allowed by setting aside the order of Adjudicating Authority directing the Adjudicating Authority to pass an order of admission and other consequential order within a period of four weeks from the date of receipt of this order.
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2022 (9) TMI 1499 - ITAT RAIPUR
Penalty u/s. 271(1)(c) - Defective notice - non striking of irrelevant portion - HELD THAT:- As not only for the failure on the part of the AO to validly put the assessee bank to notice as regards the specific default for which penalty was sought to be imposed on it under Sec. 271(1)(c) of the Act reveals beyond doubt the invalid assumption of jurisdiction on his part; but also the fact that he had while culminating the assessment initiated the penalty proceedings for the reason that the assessee had concealed its income OR furnished inaccurate particulars of such income, but thereafter imposed the same vide his order passed u/s. 271(1)(c) of the Act, dated nil for both the defaults i.e. concealment of income and furnishing of inaccurate particulars of income, therefore, on the said count too the impugned penalty could not be sustained and is liable to be struck down. We, thus, for the aforesaid reasons not being able to persuade ourselves to subscribe to the imposition of penalty by the A.O, therefore, set-aside the order of the CIT(A) who had not only upheld but in fact enhanced the same. Accordingly, the penalty imposed under Sec. 271(1)(c) - Decided in favour of assessee.
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2022 (9) TMI 1498 - TELANGANA HIGH COURT
Money Laundering - proceeds or crime - stand-alone offences or not - preceding the trial under scheduled offence - Seeking a correction in the appropriate procedure to be followed while conducting enquiry and trial of offences classified as "scheduled offences" under the Prevention of Money Laundering Act, 2002 - HELD THAT:- The proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. The Explanation clarifies that proceeds of crime would include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence - Scheduled offence is defined in Section 2(1)(y) to mean offences specified under Part A of the Schedule; or offences under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or offences specified under Part C of the Schedule. Schedule means the Schedule to the PMLA (Section 2(1)(x)).
In Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], Supreme Court was called upon to deal with the pleas concerning validity and interpretation of certain provisions of PMLA and the procedure followed by the Enforcement Directorate while inquiring into/investigating offences under PMLA. Following the decision of the Supreme Court in NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR [2017 (11) TMI 1336 - SUPREME COURT], Parliament amended Section 45 of PMLA vide Act 13 of 2018 so as to remove the defect noted in the said decision and to revive the effect of the twin conditions specified in Section 45 to offences under PMLA.
Thus, Supreme Court has expressed the view that expression proceeds of crime which is the very essence of the offence of money laundering needs to be construed strictly. Only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. On the above basis, Supreme Court has held that in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction either on account of discharge or acquittal or quashing of the criminal case (scheduled offence), there can be no action for money laundering against such a person or a person claiming through him in relation to the property linked to the stated scheduled offence. No other view is possible.
The Supreme Court posed the question as to whether the offence under Section 3 is a standalone offence? - Supreme Court has rendered a clear and categorical finding that offence under Section 3 of PMLA is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. If the person is finally discharged/acquitted of the scheduled offence or criminal case against him is quashed by a Court of competent jurisdiction, there can be no offence of money laundering against him or anyone claiming such property being the property linked to stated scheduled offence through him.
Section 44 of PMLA clarifies that notwithstanding anything in Cr.P.C., any scheduled offence and an offence punishable under Section 4 of PMLA are to be tried by the Special Court having territorial jurisdiction. However, if the Court which had taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money laundering, the authority authorized under the PMLA to file complaint shall file an application before the Special Court trying the scheduled offence and on such application being filed, the Special Court shall commit the case relating to the scheduled offence to the Special Court, which shall thereafter proceed with the case from the stage at which it is committed. The purpose behind this provision is to ensure that the scheduled offence and the offence of money laundering under PMLA are not tried by two different Courts which may lead to contrary/conflicting verdicts - The investigation, enquiry or trial under PMLA would not be dependent upon any "order" in respect of the scheduled offence. An "order" as is understood in Cr.P.C. is not a conclusive pronouncement at the end of the trial. Section 235 of Cr.P.C. says that after hearing arguments and point of law, the judge shall give a judgment in the case, which may either be of acquittal or of conviction. It is on this basis, Supreme Court has observed that conviction under Section 4 of PMLA for committing offence under Section 3 is dependent upon conviction for a scheduled offence; if there is no crime there cannot be any proceeds of crime. And if there are no proceeds of crime, the offence of money laundering cannot be sustained. It is on this logic, Supreme Court has held as above in Vijay Madanlal Choudhary.
Thus, the position which emerges is that existence of scheduled offence and proceeds of crime being the property derived or obtained as a result of criminal activity relating to the scheduled offence are sine qua non for not only initiating prosecution under PMLA, but also for continuation thereof. In the absence of these two conditions, the Special Court dealing with the offence under PMLA would not be competent to pronounce on the guilt or otherwise of the person concerned accused of money laundering.
Petition allowed.
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2022 (9) TMI 1497 - TELANGANA HIGH COURT
Money Laundering - proceeds or crime - stand-alone offences or not - preceding the trial under scheduled offence - Seeking a correction in the appropriate procedure to be followed while conducting enquiry and trial of offences classified as "scheduled offences" under the Prevention of Money Laundering Act, 2002 - HELD THAT:- The proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. The Explanation clarifies that proceeds of crime would include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence - Scheduled offence is defined in Section 2(1)(y) to mean offences specified under Part A of the Schedule; or offences under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or offences specified under Part C of the Schedule. Schedule means the Schedule to the PMLA (Section 2(1)(x)).
In Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], Supreme Court was called upon to deal with the pleas concerning validity and interpretation of certain provisions of PMLA and the procedure followed by the Enforcement Directorate while inquiring into/investigating offences under PMLA. Following the decision of the Supreme Court in NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR [2017 (11) TMI 1336 - SUPREME COURT], Parliament amended Section 45 of PMLA vide Act 13 of 2018 so as to remove the defect noted in the said decision and to revive the effect of the twin conditions specified in Section 45 to offences under PMLA.
Thus, Supreme Court has expressed the view that expression proceeds of crime which is the very essence of the offence of money laundering needs to be construed strictly. Only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. On the above basis, Supreme Court has held that in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction either on account of discharge or acquittal or quashing of the criminal case (scheduled offence), there can be no action for money laundering against such a person or a person claiming through him in relation to the property linked to the stated scheduled offence. No other view is possible.
The Supreme Court posed the question as to whether the offence under Section 3 is a standalone offence? - Supreme Court has rendered a clear and categorical finding that offence under Section 3 of PMLA is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. If the person is finally discharged/acquitted of the scheduled offence or criminal case against him is quashed by a Court of competent jurisdiction, there can be no offence of money laundering against him or anyone claiming such property being the property linked to stated scheduled offence through him.
Section 44 of PMLA clarifies that notwithstanding anything in Cr.P.C., any scheduled offence and an offence punishable under Section 4 of PMLA are to be tried by the Special Court having territorial jurisdiction. However, if the Court which had taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money laundering, the authority authorized under the PMLA to file complaint shall file an application before the Special Court trying the scheduled offence and on such application being filed, the Special Court shall commit the case relating to the scheduled offence to the Special Court, which shall thereafter proceed with the case from the stage at which it is committed. The purpose behind this provision is to ensure that the scheduled offence and the offence of money laundering under PMLA are not tried by two different Courts which may lead to contrary/conflicting verdicts - The investigation, enquiry or trial under PMLA would not be dependent upon any "order" in respect of the scheduled offence. An "order" as is understood in Cr.P.C. is not a conclusive pronouncement at the end of the trial. Section 235 of Cr.P.C. says that after hearing arguments and point of law, the judge shall give a judgment in the case, which may either be of acquittal or of conviction. It is on this basis, Supreme Court has observed that conviction under Section 4 of PMLA for committing offence under Section 3 is dependent upon conviction for a scheduled offence; if there is no crime there cannot be any proceeds of crime. And if there are no proceeds of crime, the offence of money laundering cannot be sustained. It is on this logic, Supreme Court has held as above in Vijay Madanlal Choudhary.
Thus, the position which emerges is that existence of scheduled offence and proceeds of crime being the property derived or obtained as a result of criminal activity relating to the scheduled offence are sine qua non for not only initiating prosecution under PMLA, but also for continuation thereof. In the absence of these two conditions, the Special Court dealing with the offence under PMLA would not be competent to pronounce on the guilt or otherwise of the person concerned accused of money laundering.
Petition allowed.
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2022 (9) TMI 1496 - TELANGANA HIGH COURT
Money Laundering - proceeds or crime - stand-alone offences or not - preceding the trial under scheduled offence - Seeking a correction in the appropriate procedure to be followed while conducting enquiry and trial of offences classified as "scheduled offences" under the Prevention of Money Laundering Act, 2002 - HELD THAT:- The proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. The Explanation clarifies that proceeds of crime would include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence - Scheduled offence is defined in Section 2(1)(y) to mean offences specified under Part A of the Schedule; or offences under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or offences specified under Part C of the Schedule. Schedule means the Schedule to the PMLA (Section 2(1)(x)).
In Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], Supreme Court was called upon to deal with the pleas concerning validity and interpretation of certain provisions of PMLA and the procedure followed by the Enforcement Directorate while inquiring into/investigating offences under PMLA. Following the decision of the Supreme Court in NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR [2017 (11) TMI 1336 - SUPREME COURT], Parliament amended Section 45 of PMLA vide Act 13 of 2018 so as to remove the defect noted in the said decision and to revive the effect of the twin conditions specified in Section 45 to offences under PMLA.
Thus, Supreme Court has expressed the view that expression proceeds of crime which is the very essence of the offence of money laundering needs to be construed strictly. Only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. On the above basis, Supreme Court has held that in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction either on account of discharge or acquittal or quashing of the criminal case (scheduled offence), there can be no action for money laundering against such a person or a person claiming through him in relation to the property linked to the stated scheduled offence. No other view is possible.
The Supreme Court posed the question as to whether the offence under Section 3 is a standalone offence? - Supreme Court has rendered a clear and categorical finding that offence under Section 3 of PMLA is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. If the person is finally discharged/acquitted of the scheduled offence or criminal case against him is quashed by a Court of competent jurisdiction, there can be no offence of money laundering against him or anyone claiming such property being the property linked to stated scheduled offence through him.
Section 44 of PMLA clarifies that notwithstanding anything in Cr.P.C., any scheduled offence and an offence punishable under Section 4 of PMLA are to be tried by the Special Court having territorial jurisdiction. However, if the Court which had taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money laundering, the authority authorized under the PMLA to file complaint shall file an application before the Special Court trying the scheduled offence and on such application being filed, the Special Court shall commit the case relating to the scheduled offence to the Special Court, which shall thereafter proceed with the case from the stage at which it is committed. The purpose behind this provision is to ensure that the scheduled offence and the offence of money laundering under PMLA are not tried by two different Courts which may lead to contrary/conflicting verdicts - The investigation, enquiry or trial under PMLA would not be dependent upon any "order" in respect of the scheduled offence. An "order" as is understood in Cr.P.C. is not a conclusive pronouncement at the end of the trial. Section 235 of Cr.P.C. says that after hearing arguments and point of law, the judge shall give a judgment in the case, which may either be of acquittal or of conviction. It is on this basis, Supreme Court has observed that conviction under Section 4 of PMLA for committing offence under Section 3 is dependent upon conviction for a scheduled offence; if there is no crime there cannot be any proceeds of crime. And if there are no proceeds of crime, the offence of money laundering cannot be sustained. It is on this logic, Supreme Court has held as above in Vijay Madanlal Choudhary.
Thus, the position which emerges is that existence of scheduled offence and proceeds of crime being the property derived or obtained as a result of criminal activity relating to the scheduled offence are sine qua non for not only initiating prosecution under PMLA, but also for continuation thereof. In the absence of these two conditions, the Special Court dealing with the offence under PMLA would not be competent to pronounce on the guilt or otherwise of the person concerned accused of money laundering.
Petition allowed.
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