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2018 (10) TMI 1952 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Approval of Resolution Plan for Corporate Debtor - section 31of I&B Code - HELD THAT:- Section 31 of I&B Code requires that the Adjudicating Authority to approve the plan as approved by the CoC upon being satisfied that the plan meets all the requirements as referred to in sub-section (2) of section 30 of I&B code. Sub-section (2) of section 30 of I&B Code mandates that the resolution plan must provide (a) insolvency resolution process costs; (b) repayment of the debts of operational creditors subject to provision of section 53 of I&B Code; (c) provides the mechanism of the management of the affairs of the corporate debtor after the approval of the resolution plan; (d) provide mechanism of implementation and supervision of the resolution plan. The Authority has also to be satisfied with the fact that the plan does not contravene any provisions of law and it is in conformity with all the requirements of law.
In Part-A of the Resolution Plan, it is found that the provision is made for payment of insolvency resolution process costs. It appears to be somewhat at higher side because provision of amount of Rs.12.20 crores is made to incur resolution costs, which includes fees of resolution professional amounting to Rs.6.33 crores (page 29). However, since it is approved by the CoC and this authority has no reason to doubt wisdom of CoC, it is held that the provisions of section 30(2)(a) of I&B Code is complied with. The plan also provides that repayment of debts of operational creditor - the provisions of section 30(2)(b) and 30(2)(c) of I&B Code are complied with. One, Mr. Nitesh Kumar sworn an affidavit on behalf of the resolution applicant stating that the resolution applicant, Consortium of United Tradeco FZC and QVC Exports Pvt. Limited does not suffer from any disqualification as stated under section 29A of the I&B Code. The plan does not contravene any provisions of law and the same is in conformity with the provisions of I&B code. Resolution Professional has produced the certificate under Regulation 39(4) of the I&B Code in Form H stating that the plan is in conformity with all legal requirements.
The Resolution Plan submitted for approval of this Authority complies with all the requirements stated under section 30(2) of the I&B code - Resolution Plan for Corporate Debtor is approved - application allowed.
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2018 (10) TMI 1951 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Territorial Jurisdiction - Appellant being located at Delhi, National Company Law Tribunal, New Delhi - registered office of Corporate Debtor is situated at Haryana - HELD THAT:- It is clear that the Adjudicating Authority in relation to ‘insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof’ shall be the National Company Law Tribunal having territorial jurisdiction that means that it will be the Corporate Debtor against whom the resolution process or liquidation is initiated, the National Company Law Tribunal has the jurisdiction, Adjudicating Authority having jurisdiction to entertain such application. It is not in dispute that with regard to Corporate Debtor whose registered office is situated in Haryana, the National Company Law Tribunal Chandigarh has been made the Adjudicating Authority.
In the present case, the Corporate Debtor/ Corporate Person’s registered office is situated in Gurgaon, Haryana, therefore, the Hon’ble President, NCLT for New Delhi Bench (Adjudicating Authority) rightly observed that petition at New Delhi is not maintainable - appeal dismissed.
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2018 (10) TMI 1950 - ITAT PUNE
TP Adjustment - adjustment to the value of international transactions entered into by the Appellant with its Associated Enterprise with respect to receipt of advisory services - extraordinary expenses during the year - DRP calculating arm's length price of advisory services as NIL - HELD THAT:- As ratio has been laid down by Mumbai Bench of Tribunal in Pangea3 & Legal Database Systems (P.) Ltd. [2017 (3) TMI 267 - ITAT MUMBAI] wherein it was held that where a material difference had arisen in case of assessee due to abnormal feature (abnormal loss on cancellation of forward contract) which admittedly was absent in cases of comparables, a suitable adjustment had to be made to factor in material difference in PLI and thus, loss on account of cancellation of forward contracts out of total forex loss needed to be eliminated from operating cost.
Looking at the wastage cost of units scrapped, both the TPO and DRP has commented on the wastage in the months of July and August. 2007 at 49.17% and 23.58%, respectively, though it has gone down in subsequent months but in January, 2008 it was 21.56%, in February, 2008, it was 20.06% and in March, it was 20.47%. Hence, the total wastage of the year is to be taken into consideration for adjudicating the issue in hand. We find no merit in the stand of authorities below in not excluding the cost on account of extraordinary event during the year. Accordingly, we direct the Assessing Officer/TPO to take the margins of assessee after excluding wastage cost, which was extraordinary event of the year.
MAM - While applying TNMM method which has been applied by both the Assessing Officer and TPO, percentage of margins of assessee is to be compared with the margins of comparables and the advisory fees paid by assessee cannot be taken at Nil especially ignoring the evidences filed by assessee during the course of proceedings. TPO has failed to come to a finding in this regard as to whether advisory services have been availed by the assessee or not but has gone to take the value of same at Nil. Where an expenditure or payment has been incurred for the purpose of business, the same cannot be disallowed on any extraneous reasoning.
TPO cannot determine arm's length price at Nil without going into merits of rendition of services by the assessee to associated enterprises. The TPO in the final analysis has only commented that since unadjusted margins of assessee are (-) 11.56% and that of comparables are at 6.39%, hence TNMM analysis used for benchmarking was not correct and further held the advisory services were not at arm's length price and hence, taken at Nil. We find no merit in the stand of TPO in this regard, which has been upheld by DRP. In any case, we have already allowed the claim of adjustment to be made on account of extraordinary cost to be reduced while arriving at operating margins of assessee and the same would work out to 7.13%.
Rejection of three comparables by the TPO - The assessee was engaged in auto ancillary units, wherein the assessee was manufacturing headliners, door panels, parcel trays, etc. The concern K.R. Rubberite Ltd. which was selected by assessee was also engaged in production of auto parts and hence, the same could not be rejected as not being functionally comparable.
Similarly, the concern Lifelong India Ltd. was engaged in the manufacture of auto parts i.e. Air cleaner assembly, handle assembly, moulded parts and aluminum die-casting, which get covered under the term ‘auto ancillary’ i.e. segment in which the assessee is operating. Hence, the same is functionally comparable to the assessee.
Bright Autoplast Ltd., which is wholly owned subsidiary of Sintex Holdings BV, Netherlands and the related party transactions were very high. In view of comparable not fulfilling RPT filter, the said concern cannot be selected as comparable. Accordingly, we direct the Assessing Officer to re-compute mean margins of comparables after including K.R. Rubberite Ltd. and Lifelong India Ltd. and also to adopt the PLI of assessee after reducing extraordinary cost wastage of Chennai plant and determine the arm's length price of international transactions, if any. However, adjustment is to be restricted to international transactions only. The Assessing Officer/TPO shall afford reasonable opportunity of hearing to the assessee in this regard. Hence, the grounds of appeal No.2 to 4 and additional ground of appeal are allowed and the ground of appeal No.3 is partly allowed.
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2018 (10) TMI 1949 - MADHYA PRADESH HIGH COURT
TDS liability on Insurance company - TDS u/s 194A - interest paid to the owners of the land acquired - payment of interest for belated payment of compensation for the land acquired - deduction of the payment of interest at source under section 194-A by the Land Acquisition Collector - HELD THAT:- In the case at hand the apportionment of the compensation being not established and since the income from interest exceeds fifty thousand rupees during financial year, the act of the insurance company in deducting the income tax at source cannot be faulted. The issue as to whether the expression Accident Claims Tribunal can be treated to be a Commissioner, Employees' Compensation is kept open to be decided in appropriate case.
In view of above analysis, since it was obligatory on the part of the insurance company under Section 203 of 1961 read with Section 194-A(3)(ix) of 1961 Act to deduct the income tax at source on income from interest which exceeded fifty thousand rupees during financial year when it is paid, the impugned order directing the petitioner/insurance company to deposit the amount so deducted is set aside.
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2018 (10) TMI 1948 - SC ORDER
Validity of assessment u/s 144C - Failure to pass a draft assessment order under Section 144C - final assessment orders passed by the AO without jurisdiction on account of the failure, by the AO, to first pass a draft assessment order - HELD THAT:- Delay condoned. Issue notice.
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2018 (10) TMI 1947 - ITAT CHENNAI
TP Adjustment - comparable selection - HELD THAT:- Clearly the assessee has admitted itself in the business of content developments and on line tutoring, thus the assessee itself is in the KPO services, therefore it would be held that ICRA Online Ltd., or E4e Health Business, or in any different functioning, consequently the same has correctly taken as comparable. M/s.R.Systems has been additionally identified by the assessee as comparable, but has been excluded by the TPO and DRP on account of different financial years, cannot be excluded in so far as the said M/s.R.systems is also doing the system of KPO and the finance of the said M/s.R.Systems has been re-worked on quarterly basis and the average of the same has also been determined by the assessee. The average of which has been produced before the TPO and the DRP. The same being comparable to the assessee’s business, the ld. TPO is directed to re-work the PLI after taking into consideration M/s.R.systems as the comparable. The assessee is to provide the financial re-working to the TPO for the necessary adjustments. In the circumstances, the prayer of exclusion of M/s.Harton Communictions, M/s.Infosys BPO Ltd., M/s.ICRA Online Ltd., and E4e Health Business from the list of comparables stands rejected and the assessee’s request for including of M/s.R.Systems as comparable stands accepted.
Working capital adjustments - As mentioned earlier the methodology applied herein is TNMM, no specific adjustments towards working capital is permitted, in so far as making only an adjustment of one item being working capital will make the financials of the comparable unworkable. What is comparable is the percentage of the margins, and obviously when arriving at the margins for each of the comparables, such comparables would have taken into consideration their cost of working capital. Therefore, any tinkering to that would have a negative impact, which could be many of the financials of comparables unworkable. It must be remembered that when arriving at margins, various components would go into its calculations, such as the cost of capital, the number of employees, number of working days, type of assets, cost of assets etc. If each of these is to be adjusted, then there would be no comparison. Basically, TNMM what is being looked at, is the margin that normally comparable business would generate. This being so, the working capital adjustments applied for stand rejected.
Depreciation on the software - Whether software integral part of the computer? - HELD THAT:- A perusal of the decision of the Bombay High Court in the case of CIT Vs.I-Flex Solutions Ltd., [2014 (3) TMI 1162 - BOMBAY HIGH COURT] says that the Appellate Authority therein had held that the software therein was an integral part of the computer. The software in the case of the assessee is not an integral part of the computer, but are softwares which are used in the computers for the specific business purpose of the assessee. For computer to run there are basic specific software, these softwares are an integral part of the computer. As without such software, the computer would be just a box incapable of doing anything or function as a computer. Now to such a computer, further softwares are added, depending upon the business requirements of the assessee, those softwares are not an integral part of the computers. In the present case, the softwares on which the assessee is claiming depreciation @ 60% are not such softwares, which are the integral part of the computers, but that the list of software mentioned by the assessee, which are used for the specific business purpose of the assessee, in consequence the same cannot be held as integral part of the computer, and cannot be eligible for depreciation @ 60%. Ground No.12 of the assessee’s appeal stands dismissed.
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2018 (10) TMI 1946 - SUPREME COURT
Reopening of assessment u/s 147 - disallowance u/s 80-IB(8A) - change of opinion - as per HC claim of deduction was examined and processed after calling for detailed explanation from the petitioner, and the same was accepted after forming an opinion on the activities carried out by the Company. There was no failure on the part of the petitioner as to full and true disclosure - HELD THAT:- SLP dismissed.
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2018 (10) TMI 1945 - ITAT SURAT
Deduction u/s 80IB (10) - Denial of deduction as assessee did not meet one of the most critical condition i.e. completion of the project within five years as per section 80IB(10)(a)(iii) - HELD THAT:- As competent authority did not reject the application of the assessee seeking completion certificate but pointed out some deficiencies, which were required to be eliminated or cured before the authority grants permission to live in the building constructed by the assessee. Therefore, adverse view taken by the AO on the basis of said letter is not correct and justified as the deficiencies pointed by the competent authority were with regard to unauthorized construction of COP; putting instruction board for entrance and exit way, car parking, visitors parking, scooter parking etc; for making provision for percolated borewell and signature of site supervisor in Form- 8 of living application/permission to live application and no deficiency has been pointed out in tower 2, 5 & 7 and therefore, even in existence of above noted deficiencies, which are rectifiable and curable, it cannot be denied that the building was completed on 17.03.2012 and application for issuance of completion certificate was submitted on 23.03.2012.
Unauthorized/additional construction and was not regarding noncompliance of building and this deficiency does not establish in any manner that the building was not completed on the date of application i.e., 23.03.2012 and thus, we safely presume that some addition construction was made in contravention or beyond the scope of construction permission, which was required to be removed and it cannot be interpretated as an allegation of incomplete construction. The Gujarat Development and Construction Rules (GDCR) provides certain other requirement to be fulfilled before issuance of building completion certification such as certificates of competent technical expert/authority regarding the structural stability, completion of building under stipulated supervision, existence of certain facilities such as lift, provision of proper marked parking, lift and fire safety, and certain other provisions for environmental protection in the form of tree planation and rain water harvesting and as we have noted above, the assessee along with application seeking building completion certificate filed certificates/letters showing above mandatory compliances.
Lack of marking of entrance & exit way, visitors parking, car parking and scooter parking etc. which are required to be completed by way of putting some marking boards and the same is not substantially related to the deficiency in the construction of building but the same are related with the lack of indication/marking boards/displays. It is not a case of the AO that the assessee did not provide entrance & exit way and parking places for residents & visitors therefore, in absence of certain indication or marking boards, it cannot be hold that the building was not completed on the date of application seeking certificate of construction as on 23.03.2012.
Provision for percolated borewell is concerned, this is also relating to rain water harvesting system as the SMC Inspector reported that the water flow to borewell was not ok, which shows that the construction was percolated borewell, as required by the GDCR was made but the flow of water was not up to required mark and this deficiency does not establish that the building was not completed but only shows that the water flow in the percolated borewell was not proper functioning and the same was not up to required standard or mark. In our considered opinion on the basis of said deficiency also it cannot be presumed that the building was not completed on the date of application as on 23.03.2012.
Missing signature of Supervision of Form No.8 and the ld. CIT(A) noted that the copy of Form- 8 dated 17.03.2012 was signed by the owner of project and structural Engineer Shri Jalil A sheikh, which certifies that the building has been constructed according to sanctioned plan, and structural design under supervision of qualified engineer. In our considered opinion, this deficiency is not attributable to the allegation of the AO regarding incompleteness in the building but the same was merely related to a deficiency in the papers submitted along with application seeking building completion certificate and this shortcoming does not establish that the construction of tower No.2, 5 & 7 was not completed as on 17.03.2012 and on 23.03.2012 i.e., the date on which said application was submitted before the competent authority of SMC.
We are inclined to hold that the ld. First appellate authority was right in concluding and holding that the BUC has been granted by the competent authority of SMC on the basis of completion certificates of March, 2012 on the basis of supporting evidences filed by the assessee establishing and showing completion of building viz. completion certificate of Govt. approved Charted Engineer, stability certification of Structure Engineer, license to use the lift certificate & existence of required fire fighting equipments and possession letter issued to the allottees and the construction of project including tower no. 2, 5 & 7 was completed on 17.03.2012 and application seeking building completion certificate before the competent authority in the prescribed form along with supporting documents and certificates was filed before the competent authority/Asst. Engineer of SMC on 23.03.2012 i.e., before the required date i.e., 31.03.2012, which supports the factum that the project qualifies the conditions for eligibility of deduction u/s. 80-IB(10) of the Act.
Thus we reach to a logical conclusion that the ld. CIT(A) was right in allowing claim of the assessee for deduction u/s. 80IB(10) - Decided in favour of assessee.
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2018 (10) TMI 1944 - ITAT HYDERABAD
Estimation of income - CIT (A) confirming the estimation of income from wine shop at 5% of stock put to sale as against 3% being approved by the Tribunal - HELD THAT:- We find that this issue is covered in favour of the assessee by various decisions of the Tribunal wherein we have upheld the estimation of income at 3% of the cost of goods put to sale.
Addition u/s 68 - unexplained investment credit - Assessee was required to pay License fee and the assessee has paid the same but with no explanation to source - HELD THAT:- AO has verified the evidence filed by the assessee such as Bank statement of the partner, loan a/c, etc., and has accepted that the sources for ₹ 32,50,000 are explained. Even with regard to the balance of ₹ 2,16,000, the AO has held that considering the fact that the assessee is into business since long, the statement of the assessee alongwith the evidences may be accepted. We find that the CIT (A) has however, has not accepted on the ground that the assessee has not produced the evidence. Since admittedly the assessee is in this business for long and the AO has accepted the assessee’s contention of the availability of funds of ₹ 2,16,000 from the earlier years after verification, we are of the opinion that the CIT (A) ought to have deleted even the addition of ₹ 2,16,000. Therefore, grounds 3 & 4 are allowed.
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2018 (10) TMI 1943 - MADRAS HIGH COURT
Seeking return of seized goods - one gold chain and two gold bangles - prohibited goods or not - initiation of appropriate action in accordance with Section 124 of the Customs Act, 1962 - HELD THAT:- Admittedly, the authorities have not proceeded with the enquiry in this regard. In the event, the respondent is found guilty, it is always open to the authorities to proceed in the manner known to law. Though in the writ petition quashing of the seizure order was sought, the learned single Judge, has only directed the return of the gold seized. It is for the Department to proceed with the show cause notice and any reply filed by the respondent to be considered. When it is open to the authorities to proceed in the manner known to law, the appeal filed by them is unwarranted and the same does not merit any consideration and it is dismissed.
Appeal dismissed.
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2018 (10) TMI 1942 - ITAT MUMBAI
Addition u/s 68 - Bogus share application money - HELD THAT:- Hon'ble Delhi High Court had an occasion to consider an identical issue in the case of CIT Vs. Usha Stud Agriculture Farms Ltd. [2008 (3) TMI 91 - DELHI HIGH COURT] wherein it was held that addition should not be made in respect of cash credit, if the same was received during the year under consideration.
In the instant case also, the Assessing Officer was not justified in law in making addition during the year under consideration, since the assessee has not received impugned share application money during the year under consideration. Accordingly, we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to delete the addition made u/s. 68.
Addition u/s. 2(22)(e) - Deemed dividend addition - HELD THAT:- Cause of action u/s. 2(22)(e) of the Act shall arise in the hands of the shareholder and not in the hands of the company, which paid loan or advance to shareholder. In the instant case, the assessee-company has paid money to its shareholder as advance and hence the cause of action u/s. 2(22)(e) of the Act, if any, shall arise in the hands of the shareholders only. However, we notice that the Assessing Officer has invoked provisions of section 2(22)(e) of the Act in the hands of assessee-company, which is not in accordance with law. Accordingly, the learned CIT(A) was not justified in confirming the addition made by the Assessing Officer. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete the addition made u/s. 2(22)(e).
Appeal of assessee allowed.
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2018 (10) TMI 1941 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI
Seeking direction to Resolution Professional to admit the entire claim with interest - Resolution Professional had rejected part of the claim - HELD THAT:- At the outset it is worth to mention that as per Regulation 7 of IBBI Regulations, 2016 in respect of “Insolvency Resolution Process for Corporate Persons” a claim can be made by an Operational Creditor. However, under Regulation 14 it is prescribed “Determination of Amount of Claim” according to which where the amount claimed by a Creditor is not precise due to any contingency, the IRP or the Resolution Professional shall make the best estimate of the amount of the Claim based on the information available. The IRP/ Resolution Professional can revise the amount of claim admitted as soon as he comes across additional information warranting such revision. In my humble opinion the Resolution Professional has been provided this authority to adjudge the veracity of a Claim. The amount which according to him is not admissible can be revised as prescribed under Regulation 14 of the Regulations, 2016.
Whether such decision of revising a claim can be challenged before NCLT? - HELD THAT:- The answer of this question is that considering the various provisions of the Insolvency Code to be read with Regulations, the NCLT has inherent power to supervise the decision of IRP/ Resolution Professional. Although Resolution Professional is authorised to determine an amount of Claim by making certain adjustments but the correctness of the adjustments can be examined by NCLT. In view of this interpretation it is hereby held that the NCLT has inherent power to go into the details of the claim made and thereafter examine the correctness of adjustment, if any, made by the Resolution Professional and finally pronounce its decision - Under the present circumstances it was implied that the delay in payment shall bear the Interest burden. It was logically argued that in the absence of any express condition agreed upon between the parties that no Interest would be charged even if payment is defaulted, the claim along with Interest is legally permissible.
Disallowance of Inventory Cost - HELD THAT:- Prima facie this Bench is not convinced with the reasoning given by Ld. Resolution Professional to disallow this substantial claim in its entirety. At best, a decision could have been taken only after a reasonable investigation/ enquiry. This Bench is of the view that the Ld. Resolution Professional shall re-examine this claim on the basis of the Accounts and evidences of BHEL and if the evidences corroborate the claim, the same should also be taken into account while finalising the total claim of BHEL. Rest of the decisions of the Ld. Resolution Professional need no interference at this stage.
Application allowed in part.
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2018 (10) TMI 1940 - CESTAT KOLKATA
Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- The amount involved in this case is below the monetary limit of RS.20 lakhs which has been notified vide instruction being F. No. 390/Misc./116/2017-JC dated 11.07.2018. The present case falls under exclusion Clause 3 (c) of the National Litigation Policy introduced vide Board’s Instruction dated 17.12.2015 which has been deleted vide Instruction F. No. 390/Misc./116/2017-JC dated 04.04.2018.
The appeal is dismissed under litigation policy.
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2018 (10) TMI 1939 - ITAT DELHI
Income deemed to accrue or arise in India - nature of the payments received from licensing of manufacturing and distribution rights of Microsoft Operations Pte Ltd - taxable as “royalty” under the provisions of Section 9(1)(vi) of the Act or not? - HELD THAT:- In the present case, it is noticed that the issue under consideration was also a subject matter of the assessee’s appeal for the assessment years 2007-08 to 2010-11 [2016 (9) TMI 1566 - ITAT DELHI] wherein we set aside the whole issue to the file of the assessing officer to decide it afresh in accordance with the decision of the Hon‘ble Delhi High Court in case of DIT V Infrasoft Limited [2013 (11) TMI 1382 - DELHI HIGH COURT] - Appeal of the assessee is allowed for statistical purposes.
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2018 (10) TMI 1938 - DELHI HIGH COURT
Criminal Conspiracy - Prior sanction required to be taken by the Central Bureau of Investigation (CBI) from the State government in terms of Section 6 of the Delhi Special Police Establishment Act, 1946 (DSPE Act) prior to investigating an offence in the concerned State - HELD THAT:- In the present case, the charge-sheet has already been filed and there is no doubt that the CBI is indeed relying on what transpired during the investigation conducted in Raipur as far as the present Petitioner is concerned. However, the Court is not able to view the judgment in VVIRBHADRA SINGH & ANR. VERSUS CENTRAL BUREAU OF INVESTIGATION & ORS. [2017 (3) TMI 1886 - DELHI HIGH COURT] as having considered the possibility of investigations requiring actions to be taken by the CBI in several States although the registration of the case was in one State. While consent of the State Government might be necessary for registration of a case in that particular State, to say that the CBI must seek the prior consent of every State where the investigation is thereafter conducted would make the scheme of Sections 5 and 6 DSPE Act unworkable - A State Government need not consent only because some other State Government has accorded its consent. Therefore, on the logic of the judgment in Virbhadra Singh (supra), if the consent of eight different States had to be taken and the consent is obtained only of five States, that would mean that the investigation conducted in the remaining three States cannot be considered by the CBI and has to be jettisoned from the charge-sheet. The trial Court, on this reasoning would not be able to look into that part of the evidence.
The purpose of the provisions of the DSPE Act is to facilitate the CBI in carrying out its investigations. It would, therefore, be counter-intuitive if the task of the CBI is frustrated beyond the point of practicality. If in every such case the investigation is stalled because of the absence of sanction of a particular State other than the State where the case is registered, then the scheme of Sections 5 and 6 of the DSPE Act and their purpose would be defeated - In the present case, the actions of the Petitioner spoken of in the charge sheet, though performed at Raipur, were pursuant to the criminal conspiracy entered into between some of the accused in New Delhi. According to the CBI, those actions of the Petitioner were in continuation of and, in a sense, a completion of the criminal acts that were planned to be undertaken in that conspiracy. They are inseparable from the main criminal conspiracy itself. According to the CBI, it is not, therefore, as if separate and distinct offences unconnected with the main criminal conspiracy in New Delhi were undertaken by the Petitioner in Raipur.
The CBI’s case is that offence of criminal conspiracy for which the case has been registered was committed not in Chhattisgarh but in New Delhi. That explains why the CBI has registered the case in New Delhi. The Court finds merit in the contention of the CBI that merely because the further acts pursuant to that criminal conspiracy were performed by the co-accused in a place outside Delhi, in this case Raipur, there would be no necessity for the CBI to seek the prior sanction of Respondent No.3 under Section 6 DSPE Act to take further steps to investigate that case in Raipur or other places in Chhattisgarh - Whether the charge-sheet makes out a case against the Petitioner for the framing of charges as prayed for by the CBI is a question that has to be considered by the learned Special Judge on merits and in accordance with law.
Petition dismissed.
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2018 (10) TMI 1937 - GUJARAT HIGH COURT
Validity of SCN - Time limitation - HELD THAT:- The earlier decisions of the appellate authority not contained comments/opinion etc., but decision was rendered after considering relevant aspects namely, facts as well as law and in turn the competent authority was directed to decide the case based on observations made therein by the appellate authority.
The matter deserves consideration, hence, Rule returnable on 20.12.2018.
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2018 (10) TMI 1936 - ITAT MUMBAI
Reopening of assessment u/s 147 - Estimation of income - Bogus purchases - HELD THAT:- We find that tangible and cogent incriminating material were received by the AO which clearly showed that the assessee was beneficiary of bogus purchase entries from bogus entry providers which formed the reason to believe by the AO that income has escaped assessment. The information so received by the AO has live link with reason to believe that income has escaped assessment. On these incriminating tangible material information, assessment was reopened. At this stage there has to be prima facie belief based on some tangible and material information about escapement of income and the same is not required to be proved to the guilt. See Rajesh Jhaveri Stock Brokers P. Ltd [2007 (5) TMI 197 - SUPREME COURT]
Addition of the bogus purchases - CIT(A) sustaining 12.5% disallowance - It will not be appropriate to consider and take away the relief already granted by the Assessing Officer and ld. Commissioner of Income Tax (Appeals) to the assessee. Hence, we confirm the order of ld. CIT(A).
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2018 (10) TMI 1935 - ITAT KOLKATA
Addition as income of assessee representing consideration said to have been received by the assessee under development agreement - Development right agreement with Bengal Shelter Housing Development Ltd - whether agreement does not fall u/s. 53A of Transfer of Property Act r.w.s 2(47)(v) of the IT Act 1961 in the absence of registration of JDA having been executed after amendment came into force? - HELD THAT:- As decided in the case of Balmir Singh Maini [2017 (10) TMI 323 - SUPREME COURT] when there is no income on a transaction which never materialized is at best a hypothetical income which cannot be brought to tax. Therefore, respectably following the decisions above referred to and discussed in the aforementioned paragraphs, the addition made by the AO as confirmed by the CIT-A is deleted. Ground no’s 1 and 2 raised by the assessee are allowed.
Addition made u/s 40A(3) - AO found that assessee paid registration fee in cash above ₹ 20,000/- - HELD THAT:- The assessee explained the said payments made for registration of land and flats and such cost includes stamp duty and registration cost. The assessee also filed evidences in support of its contentions and submitted the said payments does not attract the provision Sec. 40A(3) - But it is noted from the record that the AO disallowed such amount by observing the assessee did not furnish any valid or tenable explanation - CIT(A) held the payment has to be directly paid to the government’s account and rejected the contention of assessee and confirmed the addition made by the AO. Before us the Ld. AR pointed to page No.48 of the paper book and referring to the transactions at Sl. No. 12 and submitted that the major portion of said addition was made towards stamp duty cost and only minor portion is belonging to other expenditures - AR further referred to page No.s 58 & 59 of the paper book to show the said amount has reflected at Sl. No.12 at page No.48 of the paper book was being paid towards stamp duty under TR Form No.7 which is a challen for depositing of money in the account of Govt. of West Bengal. Likewise, it is seen from the pages 48 to 91 of the paper book which supports the contentions of the Ld AR. - DR did not controvert the same - assessee carried on transactions with two parties showing the reimbursements of expenses in connection with registration of flats / properties at Beharampur. Considering the submissions of Ld AR, facts and circumstances of the case and evidence available on record from pages 48 to 91 of the paper book we find force in the contentions of Ld AR, therefore, the addition made by the AO has confirmed by CIT(A) is deleted. Thus, ground No. 3 raised by the assessee is allowed.
Addition being paid to Beharmpur Municipalities on account of business proficiency - HELD THAT:- The said payment was authenticated by the Chairman Behrampur Municipality by affixing revenue stamp. But however, no submissions were made before us as well as before authorities below in terms of Rule 6DD of the Income Tax Rule 1962 and in the absence of such evidence covering the exception provided under Rule 6DD of the IT Rules, we find no infirmity in the order of CIT(A) and it justified. Thus, ground No.4 raised by the assessee is dismissed.
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2018 (10) TMI 1934 - DELHI HIGH COURT
Seeking ex parte ad interim injunction - Seeking to restraint the defendants No.1 to 15 from pledging, mortgaging, encumbering, disposing of, selling or alienating any of their assets, shares, properties (movable and immovable) in any manner whatsoever without obtaining the prior written permission of the Receiver of the plaintiff - HELD THAT:- It is pleaded that a Facility Agreement has now been executed on 14.5.2018 by defendant No.3/ SARE Gurugram Private Limited with defendants No.16 and 17 pursuant to which the loan facility vide an aggregate amount of INR 100 Crores is proposed to be advanced to defendant No.3 on security of the assets of defendant No.3 and other subsidiaries of SARE Group. It is pleaded that this arrangement which has yet not been completed is wholly contrary to the Agreement between the parties and will cause irreparable loss and injury to the WAFRA Group if the securities are allowed to be further pledged or given as lien.
Plaintiff has made out a prima facie case in its favour. Defendants No.1 to 10 are restrained from creating any encumbrance/charge or lien or mortgage of any of their assets, shares, properties (movable or immovable) to any third party till the next date of hearing. Defendants 16 and 17 are also restrained from giving effect to the Facility Agreement dated 14.5.2018 to the extent of their taking lien charge, security, mortgage or pledge of any of the assets of defendants No.1 to 15 till the next date of hearing.
Plaintiff to comply with provisions of Order 39 Rule 3 CPC within three days.
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2018 (10) TMI 1933 - ITAT CHANDIGARH
Revision u/s 263 by CIT - claim of exemption u/s 54F arising out of sale of immovable property - HELD THAT:- In order to justify the exercise of the power vested by the Statute u/s 263, it was incumbent upon the Pr.CIT to demonstrate that at the time of investment, the property was not a residential property and in terms of the relevant provisions of the Act i.e. Explanation 2(a), the Pr. CIT was required to demonstrate that the order passed was without making enquiries or investigation. The order passed fails on both these counts. The issue has been enquired into and nowhere in the order, the Pr. CIT he is able to show that the order passed either suffers from any error let alone such an error which is prejudicial to the interests of the Revenue.
In the facts of the present case, we have noted that it is sufficiently established that at the time of the purchase of the specific property, the property purchased was a shop-cum-flat wherein admittedly the assessee’s share was the first floor. The fact that as per the Inspector’s report, sometime between November,2016 and March,2017, it is alleged that it was being used as a godown, in the face of the judicial precedent is not relevant.
Admittedly as per the Chandigarh Administration Town Planning, the specific property is described as SCF i.e. shop-cum-flat wherein detailed shop-cumresidential flat plan etc. as per the map approved is available. The issues have been enquired into by the AO in the course of the assessment proceedings as for this specific purpose, admittedly the case was selected for scrutiny in CASS. Before the AO, the assessee’s explanation has been offered. The plan and the map site etc. have all been made available. Nothing has been brought out in the order to show the status of the property at the time of investment. Accordingly, in the peculiar facts and circumstances of the present case, the Explanation 2(a) of Section 263 of the Income Tax Act is not attracted. - Decided in favour of assessee.
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