|
Advanced Search Options
Case Laws
Showing 61 to 80 of 2034 Records
-
2018 (3) TMI 1977 - ITAT MUMBAI
Exemption u/s 11 - whether assessee performs a charitable purposes within the meaning of proviso to section 2(15) of the Income Tax Act? - HELD THAT:- Respectfully following the order of the Tribunal in assessee’s own case [2015 (9) TMI 1736 - ITAT MUMBAI] we do not find any infirmity in the order of CIT(A) for allowing assessee’s claim of exemption u/s.11 r.w.s. 2(15) - Decided against revenue.
-
2018 (3) TMI 1976 - ITAT KOLKATA
Deduction u/s 80IC - excise duty refund claiming allowance u/s 80IC - HELD THAT:- Issue is covered in assessee’s own case for A.Y 2005-06 [2012 (4) TMI 802 - ITAT KOLKATA] held that refund is not on account of excess payment of excise duty but is basically designed to give effect to the exemption and to operationalise the exemption give by the notifications. The Central Excise duty refund does not appear to bear the character of income since what is refunded to the assessee is the amount paid under the modalities provided by the Department of Revenue for giving effect to the exemption notifications. There is also nothing to suggest that the assessee has recovered or passed on the excise duty element to its customers.
Even assuming the refund does amount to income in the hands of the assessee, it is a profit or gain directly derived by the assessee from its industrial activity. The payment of Central Excise duty has a direct nexus with the manufacturing activity. The issue of payment of Central Excise duty would not arise in the absence of any industrial activity. Therefore, an inextricable link between the manufacturing activity, the payment of Central Excise duty and its refund. - Decided against revenue.
-
2018 (3) TMI 1975 - ITAT MUMBAI
Assessment u/s 153C - Date of initiation of search or making of requisition - HELD THAT:- It is prescribed that for the purposes of examining the efficacy of the second proviso to Sec.153A(1) - reference to the date of initiation of search or making of requisition contained therein, shall be construed as reference to the date of receiving of books of account or documents or assets seized or requisitioned by the AO having jurisdiction over the other person from the AO of the searched person. In the present case, it transpires that the AO of the searched person, as also the AO of the captioned assessee, who is the ‘other person’, are the same.
Onus was on the AO to canvass as to what is the date on which he formed a satisfaction that the material found in the search of M/s. Reliable Paper (India) Ltd. related to the captioned assessee. The said onus obviously has not been discharged by the Assessing Officer inasmuch as it has been canvassed before CIT(A) that he was unable to do so.
Be that as it may, under these circumstances, the only option left to the CIT(A) was to take the date of issuance of notice u/s 153C of the Act as the date referred to in the first proviso to Sec 153C(1) - Considered on that basis, CIT(A) concluded that the original assessments for the captioned assessment years did not abate, as the same were not pending on that date.
As perused the additions which have been made to the returned income and find that none of them contain any averment by the AO that the same flow out of any incriminating material found in the course of search. This finding has also been arrived at by the CIT(A), and in the absence of any rebuttal by the Revenue, we hereby affirm the same. In this fact-situation, the ratio of the judgment in the case of Continental Warehousing Corporation (Nhava Sheva Ltd) [2015 (5) TMI 656 - BOMBAY HIGH COURT] is squarely attracted, and CIT(A) made no mistake in deleting the additions. The order of CIT(A) is hereby affirmed. Thus, the appeals of the Revenue for AY 2004-05 to 2009-10 are dismissed as above.
Insofar as the reliance placed by the Revenue on the judgments of the Hon'ble Kerala High Court in the case of CIT vs. St. Francis Clay Decor Tiles [2016 (6) TMI 378 - KERALA HIGH COURT], CIT vs. Dr. P. Sasikumar [2016 (7) TMI 1227 - KERALA HIGH COURT] and E.N. Gopakumar vs. CIT [2016 (11) TMI 72 - KERALA HIGH COURT], are concerned, in our view, the same are untenable since the judgment is directly available on the point and the same has been justifiably invoked by the CIT(A) to delete the impugned additions, which is hereby affirmed. - Decided against revenue.
-
2018 (3) TMI 1974 - ITAT VISAKHAPATNAM
Exemption u/s 11 - assessment of trust - assessee had received the voluntary contributions for the purpose of building infrastructure in the educational institution - HELD THAT:- As decided in case of Touching Heart Ministries [2017 (12) TMI 111 - ITAT VISAKHAPATNAM]. Donations received for specific purpose should not be treated as income u/s 2(24) of the Act and accordingly, we uphold the order of the CIT(A) and dismiss the appeal of the revenue.
Addition u/s 40(ba) - AO disallowed the salary paid to the Joint Secretary by applying section 40(ba) - CIT(A) deleted the addition holding that the section does not apply to the assessee since it is a society registered under Societies Act - HELD THAT:- Plain reading of section 40(ba) of the Act clearly shows that the disallowance is applicable in case of an association of persons, body of individuals other than a company or a cooperative society registered under Societies Registration Act, 1860. Since the assessee is a registered cooperative society, section 40(ba) of the Act has no application. Accordingly, the orders of the CIT(A) on this ground is upheld and the appeals of the revenue are dismissed.
Disallowance of notional interest @ 12% on the sums advanced and the same was reduced from the interest debited to the profit & loss account - HELD THAT:- We have gone through the balance sheet and found that sufficient interest free funds are available to the assessee in the current liabilities and the AO has not made out a case that the advances were given out of interest bearing fund. The assessee is free to give the interest free funds to make the advances as per the business requirements and contingencies. Hence we are of the view that the said advance was given out of interest free funds and for the purpose of business and accordingly, delete the disallowance made by the A.O. and set aside the orders of the lower authorities.
Disallowance of notional interest on the amounts advanced to be Secretary of the institution - assessee argued that Mr. Narasimha Rao has advanced more funds to the assessee society and if interest is to be calculated, society would be liable to pay interest to Mr. Narasimha Rao. Therefore, no part of the interest payment was disallowed by the assessee - HELD THAT:- While deciding the issue with regard to the notional interest on CALFPL we observed that the assessee is having interest free funds and the assessee is free to make use of the funds for giving advances. Therefore, we do not see any reason to sustain the addition. Accordingly, we set aside the order of the Ld. CIT(A) and allow the appeal of the assessee.
Disallowance u/s 40(a)(ia) - assessee has made the payments without deduction of taxes - HELD THAT:- Since the payment was already made, the CIT(A) placing reliance on the special bench decision in the case of Merilyn Shipping & Transports [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] allowed the appeal of the assessee. Since the issue is settled by Hon’ble Supreme Court in the case of Palam Gas Company [2017 (5) TMI 242 - SUPREME COURT] in favour of revenue, we set aside the order passed by the CIT(A) and confirm he addition made by the assessing officer. The cross objection on this ground is dismissed.
Disallowance being interest paid on capital work in progress u/s 36(1)(iii) - HELD THAT:- The assessee has borrowed the funds and used for the work in progress for building the capital assets. Therefore, the interest accrued on the borrowing required to be capitalized to the concerned asset. Therefore, we do not find any infirmity in the order of the Ld. CIT(A) and the same is upheld. The cross objection of the assessee on this ground is dismissed.
-
2018 (3) TMI 1973 - ITAT CHENNAI
Rectification of mistake u/s 154 - petition for consideration of additional grounds - AO/TPO erred in denying the appellant’s claim of deduction of expenditure incurred towards advertisement as business expenditure - appellant submits that even if the expenditure is said not be incurred by the appellant for its business activity but was incurred in the course of business, the same being an irretrievable loss, would be allowable as deduction from business income - HELD THAT:- We find that the Tribunal did not adjudicate the above additional grounds raised by the assessee.
Also we find that while concluding the ground with regard to imputation of interest on advertisement advances, by following the decision of the Tribunal in assessee’s own case for the assessment year 2003-04, the Tribunal concluded with the phrase “inclined to dismiss the ground taken by the petitioner” at para 5 page 7 is a mistake apparent on record.
While adjudicating the ground with regard to apportionment of common expenses on the basis of turnover for the purpose of deduction under section 80IC of the Act, the Tribunal followed assessee’s own case for the assessment year 2003-04 and reproduced para 8.4 of the order, in which, the claim relates to deduction under section 80IB of the Act, whereas, the ground raised in the appeal of the assessee for the assessment year 2006-07 relates to claim of deduction under section 80IC of the Act, which requires to be adjudicated afresh. In view of the above facts and circumstances, to reconsider the above grounds, referred hereinabove, the order of the Tribunal dated 03.04.2017 is recalled and directed the Registry to post the appeal for hearing on regular course by issuing notice to both the parties. MP filed by the assessee is allowed.
-
2018 (3) TMI 1972 - PUNJAB AND HARYANA HIGH COURT
TDS on interest received on the compensation - whether interest received by an assessee on the compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received? - Direction to present petitioner-Insurance Company to release an amount which was deducted as TDS and pay the same to the claimants. Further, it was ordered that the difference of interest amount of ₹ 333/- shall also be released to the claimants - HELD THAT:- At the first instance, the tax on the interest of compensation is to be deducted at source in the financial year, in which it is received.
Secondly, in a case pertaining to interest on the compensation awarded by the Motor Accident Claims Tribunal, no tax is payable on the interest up to ₹ 50,000/- and beyond ₹ 50,000/- the tax is to be deducted source on the aggregate of the amount of such income paid during the financial year.
The cases of the payment of compensation under the Workmen Compensation Act, 1923, are not covered under the said provisions. In such case, the appropriate remedy before the person concerned is to seek a refund from the Income Tax Department as permissible under the rules at time of filing of the return. However, since the Insurance Company had deducted the tax at source on the interest component, they cannot be directed to again pay the tax deducted at source to the claimants, since the same was lawfully deducted for the payment of compensation.
It being so, the impugned order passed by the Commissioner, Employee's Compensation Act, 1923, Hisar, Circle at Hisar, is hereby set aside leaving the claimants to file income tax return and claim the refund, if permissible under the law.
-
2018 (3) TMI 1971 - SUPREME COURT
Appointment to the post of Veterinary Compounder without approval of the Competent Authority - whether the appointment of the respondent to the post of Veterinary Compounder, made by the Director Incharge at the relevant point of time without approval of the Competent Authority, was a nullity or a mere irregularity, which could be glossed over by the department to avert disruption of his services? - whether his services could be disrupted without giving him an opportunity of hearing? - violation of principles of natural justice or not.
HELD THAT:- The recruitment procedure in relation to the post of Veterinary Compounder is governed by the statutory rules titled ‘Central Cattle Breeding Farms (Class III and Class IV posts) Recruitment Rules, 1969, as amended from time to time and including the executive instructions issued in that behalf. As per the stated dispensation for such recruitment, the appointment letter could be issued only by an authorised officer and after grant of approval by the competent authority. Nowhere in the Original Application filed by the respondent, it has been asserted that such prior approval is not the quintessence for issuing a letter of appointment - for the time being, that the then Director Incharge H.S. Rathore, Agriculture Officer had the authority to issue a letter of appointment. Nevertheless, he could do so only upon obtaining prior written approval of the competent authority. No case has been made out in the Original Application that due approval was granted by the competent authority before issue of the letter of appointment to the respondent. Thus, it is indisputable that no prior approval of the competent authority was given for the appointment of the respondent.
Whether the appointment letter issued to the respondent, would be a case of nullity or a mere irregularity? - HELD THAT:- If it is a case of nullity, affording opportunity to the incumbent would be a mere formality and non-grant of opportunity may not vitiate the final decision of termination of his services. The Tribunal has rightly held that in absence of prior approval of the competent authority, the Director Incharge could not have hastened issuance of the appointment letter. The act of commission and omission of the then Director Incharge would, therefore, suffer from the vice of lack of authority and nullity in law.
In the case of State of Manipur [2007 (2) TMI 693 - SUPREME COURT], the appointment letters were cancelled on the ground that the same were issued without the knowledge of the department of the State. The Court after adverting to the reported decisions concluded that the candidates were not entitled to hold the posts and in a case of such nature, principles of natural justice were not required to be complied with, particularly when the same would result in futility.
Reverting to the impugned decision of the High Court, the High Court has not analysed the efficacy of the crucial reason recorded in the subject office order dated 29.08.2000 in its correct perspective. Indeed, the High Court has noted that prior approval of the competent authority was not mandatory. That observation, in our opinion, is manifestly wrong. The view expressed by the Tribunal is affirmed that the appointment of respondent was not in conformity with the governing Rules and executive instructions in that regard - Further, the High Court could not have interfered with the subject office order solely on the ground that it was issued without affording an opportunity to the respondent.
Thus, there are no hesitation in concluding that in the fact situation of the present case, giving opportunity of hearing to the respondent before issuance of the subject office order was not an essential requirement and it would be an exercise in futility - appeal allowed.
-
2018 (3) TMI 1970 - ITAT MUMBAI
Disallowance of Guarantee Commission u/s. 37(1) - Guarantee Commission u/s 37 paid to Promoters Share Holder & Directors at the rate of 1% of the each guarantee for the purpose of business - HELD THAT:- For the assessment year 1989-90, the assessee had reduced the payment of handling charges to 9.5 per cent and had been allowed after due scrutiny. For the assessment year 1990-91, claim of the assessee at the rate of 9.5 per cent had been allowed though it not been dealt with by the Assessing Officer specifically in the order. For the assessment year 1993-94, the rate of 9.5 per cent had been held reasonable and had been allowed. When the matter reached before the Hon 'ble Bombay High Court [2008 (8) TMI 208 - BOMBAY HIGH COURT] the Court observed that the Tribunal was correct in coming to the conclusion that the Commissioner of Income-Tax (Appeals) was wrong in disallowing half per cent commission paid to the sister concern of the assessee during assessment years 1991-92 and 1992-93 and accordingly dismissed the appeal filed by the Revenue. Since the facts involved in this appeal are similar to the facts in the case of Indo Saudi Services (Travels) P. Ltd.[2008 (8) TMI 208 - BOMBAY HIGH COURT] respectfully following the same, we set aside the order of the ld. CIT(A) and delete the disallowance.
Considering the fact that similar set of fact the addition was deleted by Guarantee Commission of Tribunal. We do not find any justification in sustaining the disallowance when the order of Tribunal was brought in the notice of Ld. CIT(A). Even there are no variations of fact related with the issue under consideration in this year. Thus, respectfully following the principle of consistency, the Ground No. I of the appeal is allowed.
Disallowance of Travelling Expenses - AO disallowed 50% of the expenditure on his observation that no evidence has been furnished by the assessee - CIT(A) after considering the comparative rate furnished by assessee for Guest house charges and prevalent rate of Five Star hotel concluded that the rate of Guest house are not less than the Five Star hotels - HELD THAT:- Hon'ble Gujarat High Court in Sayaji Iron & Engineering Co. [2001 (7) TMI 70 - GUJARAT HIGH COURT] while considering the grounds related with Business Expenditure for use of vehicle of assessee-company by its Director held that when vehicle were used by Directors in a limited company “Even if they proportionately used by the Director, because the limited company by its nature cannot have personal use”, the limited company is an any intimate person and there cannot be anything person about such entity. Once the expenditure in question was in term as provided in section 309 and 198 of Companies Act, therefore, not be any non-business purpose so far as the assessee companies are concerned.
It was wrong in disallowing 1/6 of the total Car expenditure and depreciation claimed by assessee-company on account of personal use of the Car which has been used by the Directors - it is settled law that the Revenue authority cannot step into the shoes of businessmen to dictate them how to make the expenditure for running their business. The lower authorities have not brought anything on record that visit of the Directors namely Suchitra Hegde and Ritvik Hegde was not for the purpose of business. In absence of any finding or any material on record that the visit and stay of Directors was for stay of personal use, this ad-hock disallowance in not justifiable. Thus, we do not find any justification in adhoc disallowance on account of Travelling Expenses. In the result, Ground No.II of the appeal is allowed.
Disallowance of Prior Period Expenditure - HELD THAT:- Hon'ble Delhi High Court in case of CIT Vs. Exxon Mobile Lubricants (P) Ltd. (2010 (9) TMI 36 - DELHI HIGH COURT] while considering the ground related with Prior Period Expenditure held that when the liability of the assessee under agreement had arisen and accrued in August 2002 when agreement was executed, therefore, the liability of the assessee to pay for the period January 2002 to March 2002 arose and crystallized in August 2002. If the assessee had shown the Prior Period Expenses and the AO had not excluded while working out the current year taxable income than there was no reason on the part of AO to disallow only one part of the Prior Period Adjustment i.e. Prior Period Expenditure. It was held that the addition by Assessing Officer was not sustainable. We have noted that the facts of the present case in principle are similar.
In view of the above legal position, the liability to make the ex-gratia payment was crystallized during the year under consideration. In our view, the assessee was entitled for deduction of the said Prior Period Expenses. In the result, this ground of appeal is allowed.
-
2018 (3) TMI 1969 - MADRAS HIGH COURT
Prayer for suspension of sentence and bail - Sections 341, 294(b) and 307 of the Indian Penal Code - HELD THAT:- In the considered opinion of this Court, an order of dismissal of application for suspension of sentence and bail is not a final order and is only an interlocutory order and, therefore, no revision is maintainable in view of the bar under Section 397(2) of the Code of Criminal Procedure. It is open to the petitioners to work out their remedy in the manner known to law.
This Criminal Revision Case is closed.
-
2018 (3) TMI 1968 - GUJARAT HIGH COURT
Dishonor of Cheque - Existence of legally enforceable debt or not - rebuttal of presumption - Jurisdiction of Appellate Tribunal - initial burden to prove existence of legally enforceable debt - assailing/rebuttal of positive proof - amendment made in law in the year 2003 would have applicability to the case of applicant so far as enhancement of punishment is concerned - entitlement to compensation to appellant - Whether the Appellate Court committed any error or illegality which would warrant interference or the view taken by the Appellate Court is a possible view and hence, in appellate jurisdiction deserves no interference? - HELD THAT:- The Apex Court in case of C. ANTONY VERSUS KG. RAGHAVAN NAIR [2002 (11) TMI 353 - SUPREME COURT] has held that even if the other view is possible, from the very set of evidence, to arrive at, that also is not the ground to interfere by the Appellate Court.
Whether appellant-original complainant succeeded in proving the initial burden of existence of legally enforceable debt? - whether the respondent was in a position to assail/rebut that positive proof? - HELD THAT:- So far as the question of proving legally enforceable debt by the complainant is concerned, the law has been laid down by the three Judges Bench of the Hon'ble Apex Court in case of RANGAPPA VERSUS SRI MOHAN [2010 (5) TMI 391 - SUPREME COURT] wherein it is held that presumption mandated by Section 139 of the Act include the existence of legally enforceable debt or liability and this being a rebuttal presumption, of course, such presumption can be rebutted by the accused by raising the defence and on contesting liability.
It of course, is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, what can be undoubtedly said is that there is an initial presumption that favours the complainant and Section 139 is an example of a reverse onus clause, which has been included in furtherance of the legitimate objection of improving the credibility of the negotiable instruments. To that extent the Apex Court held that the observations made in case of Krishna Janardhan Bhatt Vs. Dattatraya G. Hedge [2008 (1) TMI 827 - SUPREME COURT] would not be correct.
The provision of section 118 of NI Act, is subject to the rule of evidence is applicable to the matters under the NI Act. The presumption made available is one of law and the Court is obliged to presume that the instrument has been endorsed for consideration. The initial burden, hence, lies on the person to prove that there exists legally enforceable debt and once that is proved by the Payee, it would be upon the other side, i.e. the drawer, to prove non-existence of the consideration, which would lead the Court to believe either from direct evidence or from preponderance and probabilities that the existence of consideration was improbable, doubtful or illegal - Section 139 of the Act would also require reference at this stage. This is also a presumption, which is a rebuttable presumption when unless the accused proves to the contrary, this legal presumption of Section 139 of the NI Act is to the effect that the cheque is issued in discharge of an existing liability and that presumption can be rebutted only by the person, who drew the cheque.
Whether proof of existence of legally enforceable debt, could be established by the Appellant? - HELD THAT:- In absence of the original promissory note, which the complainant could not produce and in wake of the deposition of the complainant, both examination-in-chief as well as the cross examination, it could be said that the complainant had succeeded in proving the legally enforceable debt.
This Court is also aware of the fact that so far as the promissory note is concerned, according to the complainant-appellant, it was given by the respondent herein. However, the original promissory note, at no point of time, was brought on record. At the fag end of trial, a request was made by the appellant before the Court concerned to permit the original promissory note to be brought on record and further allow the affidavit of two persons, viz. Mr. Natvarlal Gandalal and Mr. Jagdishbhai Mafatlal - The trial Court denied such a request on the ground that this being a private complaint, the complainant ought to have shown those persons as his their witnesses. If they had not been shown as witnesses, the permission of the Court ought to have been taken. However, directly no person can be permitted the production of affidavit.
It is since mandatory for any party to issue notice as provided under the provisions of the NI Act, before he prosecutes a person for dishonor of the cheque, a notice has been issued within a period of 30 days from the date of receipt of the information from the bank with regard to the return of the cheque, and thus, such requirement has been duly fulfilled by the present applicant - It is also not in dispute that the cheque had returned, as per the Bank memo on account of insufficient balance in the account of the drawer. The cheque bearing No.574147 for the sum of Rs.36 lakh had returned due to insufficient balance.
This Court holds firmly that the trial Court committed no error in believing that the complainant succeeded in discharging the burden that there exists a legally enforceable debt or liability, and thereafter, the legal presumption was required to be dislodged or rebutted by the accused-respondent, which he miserably failed to do with preponderance of probabilities, and therefore, findings and the conclusions arrived at by the Sessions Court deserve to be quashed and set aside - The respondent No.2 was required to discharge the burden under Section 118 and 139 of the N.I. Act that the cheque he issued of Rs.36 lakh was not issued towards discharge of legal debt but was issued in view of security or was obtained unlawfully or was issued otherwise, since the appellant succeeded in proving the initial burden reasonably existence of legal debt as was required under the law.
None of the matters brought on record either by way of crossexamination or by further statement or otherwise, are such which can make the existence of those facts so probable that their existence would be believed by a prudent man so as to displace and dislodge the positive proof available on record.
Appeal allowed.
-
2018 (3) TMI 1967 - ITAT MUMBAI
Carry forward of speculation loss and short term capital loss - HELD THAT:- Sec. 73 of the Act prescribes that any loss computed in respect of a speculation business shall not be set off except against the profit and gains, if any, of any speculation business.
In the case before us, the assessee claimed that it has incurred a speculation loss during the year and in the absence of any speculation income, he sought to carry forward the same to the subsequent assessment year. For the reasons noted by us in the earlier part of this order, the Assessing Officer inferred that the speculation loss was not genuine and he denied the carry forward of the same.
Whether it was permissible to carry forward and set-off such loss in the subsequent years for not more than four assessment years immediately succeeding the instant year? - It has been factually brought out that in the returns of income filed for the subsequent four assessment years, such loss was not set-off in the absence of any eligible income, i.e. speculation income. The aforesaid assertions of the assessee have been consistently made before the lower authorities and we find that the same is duly supported by the copies of returns of income placed in the Paper Book filed before us for Assessment Years 2008-09 to 2012-13. Under these circumstances, we find merit in the plea raised by the assessee that the action of the AO in denying the benefit of carry forward of speculation loss on the ground of it being non-genuine is of no consequence so far as the determination of assessee’s tax liability in the instant as well as in the subsequent years is concerned. The action of the AO is quite nugatory and does not result in any variation in tax liability determined by the assessee in its returns of income in the instant as well as in the assessment years up to 2012-13 qua the said speculation loss is concerned. Therefore, we do not find any reasons to uphold the action of the income-tax authorities on this aspect.
Carry forward of short term capital loss transacted through broker - As the preliminary plea by the assessee has not been properly adjudicated. Notably, the entire assessment is based on the findings and information resulting from search proceedings in the case of Shri Mukesh Choksi and his group concerns. The counter argument by the assessee was that M/s. Alankit Assignments Ltd. was not a concern related to Shri Mukesh Choksi and, in support, the relevant documents being broker note, bank statement, etc. was produced. We find that the said plea has not at all been addressed by the Assessing Officer or by the CIT(A). The aforesaid plea is a fundamental aspect, which needs to be thrashed out at the beginning itself, an approach which is conspicuous by its absence in the orders of the authorities below. Therefore, we deem it fit and proper to set-aside the aspect relating to assessment of assessee’s claim of carry forward of short term capital loss back to the file of the Assessing Officer.
Appeals of all the assessee are partly allowed.
-
2018 (3) TMI 1966 - NATIONAL COMPANY LAW TRIBUNAL MUMBAL
Maintainability of application - Initiation of CIRP - petition filed by Corporate Debtor u/s 10 of IBC - financial Creditor - Non-performing asset - existence of debt and dispute - HELD THAT:- As per the ‘Preamble’ a practical motive is intended behind the incorporation of this Code. The I&B Code, 2016 was enacted to consolidate and amend the laws relating to reorganization and Insolvency Resolution of Corporate persons, that too in a time bound manner, for maximization of value of assets of a Corporate Debtor. The purpose of CIRP is to promote entrepreneurship, side by side to balance the interest of all stakeholders. A Petition either filed under section 7, under section 9 or under section 10 is to be Admitted to achieve the said goal also to consider the objectives enshrined in the Preamble and the purpose for which this Code came into operation.
Although on the face of such a Petition it appears strange that why a Corporate Body itself is taking step to be declared Insolvent by moving an Application under section 10; but the answer is obvious that sometimes it becomes impossible to run the business due to pressing demand of recovery by the Creditors. It is to be made clear at this moment itself that Section 10 be not used or considered as a scapegoat for the defaulters, or that an exist route be made possible under the guise of Bankruptcy. The procedure of Section 10 is to be applied to facilitate the restructuring of the Stressed Assets as well as to reorganize the finances of a defaulted Company.
Considering the voluminous evidences annexed along with the Application and in the light of the provisions of Section 10 of the Code, it is held that the conditions as prescribed under section 10 of The Code have duly been fulfilled. Since this is a Petition of “Corporate Debtor”, therefore, the Insolvency Process shall commence as prescribed under Section 10 of IBC 2016.
On one hand the existence of Financial Debt as well as Operational Debt is proved, on the other hand the occurrence of “default” is also established. The Corporate Debtor had failed to pay the amounts due and also failed to adhere to or comply with the other terms of Facility agreements. The Financial Debts have been classified as “Non-Performing Asset” in the books of the Financial Creditor. The Petition under consideration therefore deserves “Admission”.
Petition admitted - Moratorium declared.
-
2018 (3) TMI 1965 - ITAT CHENNAI
Deduction u/s 80P(2) - assessee was disbursing loans through its member primary banks which were treated as associate members - HELD THAT:- Neither ld. Assessing Officer nor other authorities had the benefit of the judgment of Hon’ble Apex Court in the case of The Citizen Co-Operative Society Ltd [2017 (8) TMI 536 - SUPREME COURT ] while deciding whether assessee was eligible for claiming deduction u/s.80P(2)(a) (i) of the Act. In fact ld. Commissioner of Income Tax (Appeals) had allowed the claim of the assessee u/s.80P(2)(a) (i) of the Act, considering an alternative ground of the assessee. In the circumstances, we are of the opinion that the issue requires a fresh look by the ld. Assessing Officer. We therefore set aside the orders of the lower authorities and remit the issue back to the file of the ld. Assessing Officer for consideration afresh in accordance with law. Appeal of the Revenue for both the years are allowed for statistical purpose.
-
2018 (3) TMI 1964 - SUPREME COURT
Invocation of Sections 4 & 6 for the alleged public purpose - divestment of valuable and fertile land at throwaway prices under the threat of acquisition to the private persons - prayer for enquiry/investigation through an independent agency in respect of the entire fraud played by the respondents and their officials - HELD THAT:- In the light of the principles emerging from the decisions rendered by this Court, the decisions taken to confer advantages and benefits upon the builders/private entities rather than to carry out or effectuate public purpose. The record indicates that various entities including certain “middlemen” cornered unnatural gains and walked away with huge profits taking the entire process of acquisition for a ride. Substantial sums have exchanged hands in the form of settlement money. All the steps and stages show that the builders/private entities were well aware that the acquisition would not go through but the landholders were confronted with the smoke screen of acquisition and were cornered and persuaded in entering into transactions with the builders/private entities. The transactions so entered into between the landholders and the concerned builders/private entities could not be said to be voluntary and free from any influence. The unnatural and unreasonable bargain was forced upon the landholders by creating façade of impending acquisition.
The inescapable conclusion, therefore, is that there was an unholy nexus between the governmental machinery and the builders/private entities in devising a modality to deprive the innocent and gullible landholders of their holdings and jeopardize public interest which the acquisition was intended to achieve - the initiation of class action and filing of Writ Petition in the present matter was perfectly justified and all the submissions made by the learned Counsel appearing for various builders/private entities are dismissed - The appeals stand allowed.
-
2018 (3) TMI 1963 - CESTAT KOLKATA
Maintainability of appeal - compliance with the requirement of pre-deposit - appellant submits that his client is suffering with acute shortage of fund, for which, he is unable to make pre-deposit - it is also submitted that the relevant period is prior to amendment where the pre-deposit has not been made mandatorily - HELD THAT:- The appellant will have to make pre-deposit as required by law at the rate of 7.5%. When pre-deposit has not been made, then, the appeal as well as the stay petition are dismissed.
-
2018 (3) TMI 1962 - ITAT CHENNAI
TP Adjustment - Comparable selection - adopting M/s. Infosys BPO as comparable while arriving at the NCP margin in the case of the assessee - HELD THAT:- M/s. Infosys BPO Ltd., cannot be treated as a comparable company while arriving at the average NCP margins in the case of the assessee. We also draw strength from the decisions pointed out before us by the Ld.AR in the case H & S Software Development and Knowledge Management Centre Pvt Ltd. [2018 (1) TMI 1548 - DELHI HIGH COURT] wherein it was held that M/s. Infosys BPO has a significant brand presence and cannot be compared to the assessee’s transactions whose turnover is comparatively minimal.
The Bangalore bench of the Tribunal in the case M/s. Flextronics Technologies India Pvt. Ltd. [2015 (10) TMI 2653 - ITAT BANGALORE] has also held that M/s. Infosys BPO cannot be treated as the comparable company because it enjoys substantial brand value and market leadership. Similar view was taken in the case Maersk Global Service Centers (India) P Limited [2016 (7) TMI 1437 - ITAT MUMBAI] Therefore following the above ratios laid down by the Tribunal and Hon’ble Delhi High Court referred by the Ld.AR, we hereby direct the Ld.AO to exclude M/s. Infosys BPO as comparable company while arriving at the NCP margin in the case of the assessee - Appeal of the assessee is allowed.
-
2018 (3) TMI 1961 - SUPREME COURT
Interpretation of statute - Rajasthan Municipalities Election Petition Rules, 2009 - Rejection of application preferred Under Order VII Rule 11(d) and (e) read with Order XIV Rule 2 read with Section 151 of the Code of Civil Procedure (CPC) - rejection of the election petition on the foundation that there had been non-compliance of the Rajasthan Municipalities Election Petition Rules, 2009 - HELD THAT:- The discussion can be categorized into three compartments. First, the deposit is mandatory and the mode of deposit is directory; second, the non-deposit will entail dismissal and irregular deposit is curable and third, in other areas like verification, signature of parties, service of copy, etc., the principle of substantial compliance or the doctrine of curability will apply. In the case at hand, Rule 3(5)(d) commands that the election petition shall be accompanied by the treasury challan. The word used in the Rule is 'accompanied' and the term 'accompany' means to co-exist or go along. There cannot be a separation or segregation. The election petition has to be accompanied by the treasury challan and with the treasury challan, as has been understood by this Court, there has to be a deposit in the treasury.
The election petition has to be accompanied by the treasury challan and with the treasury challan, as has been understood by this Court, there has to be a deposit in the treasury. The 2012 Rules, when understood appropriately, also convey that there has to be deposit in the treasury.
The deposit of treasury challan which means deposit of the requisite amount in treasury at the time of presentation of the election petition is mandatory. Therefore, the inevitable conclusion is that no valid election petition was presented. In such a situation, the learned Additional District Judge was bound in law to reject the election petition.
The order passed by the High Court that has affirmed the order of the Additional District Judge as a result of which the election petition shall stand rejected - Appeal allowed.
-
2018 (3) TMI 1960 - ANDHRA PRADESH HIGH COURT
Dishonor of Cheque - insufficiency of funds - criminal breach of trust or not - section 138 of NI Act - offences punishable under Sections 420 and 406 IPC - HELD THAT:- Every breach of trust may not result in a penal offence of criminal breach of trust, as the act of breach of trust involves a civil wrong in respect of which a civil action can be initiated. A breach of trust with mens rea is an important aspect to attract the provisions under Sections 406 and 420 IPC. In this particular case, the petitioner is subscriber of a chit. He became the successful bidder and received the bid amount. However, he could not pay the last five instalments, for which he has issued a cheque, which was dishonoured because of insufficiency of funds. For dishonour of cheque, the 2nd respondent/complainant has got the remedy of approaching the appropriate Court under Section 138 of the Negotiable Instruments Act. Instead of resorting to the said remedy, the 2nd respondent/complainant has filed the present private complaint against the petitioner, which is nothing but an abuse of the process of law and hence, the petitioner is entitled for quashing of the proceedings against him.
This Criminal Petition is allowed by quashing the proceedings against the petitioner/sole accused for the offences punishable under Sections 420 and 406 IPC.
-
2018 (3) TMI 1959 - ALLAHABAD HIGH COURT
Dishonor of Cheque - time limitation - jurisdiction of the court where the proceedings under Section 138 N.I. Act could be initiated - legal notice was not given to the revisionist- accused within thirty days of receiving information about dishonour of cheques.
Jurisdiction - section 142 of NI Act - HELD THAT:- Clause (2) of the Section 142 of NI Act clearly states that if the cheque is delivered for collection through an account, the branch of the bank, where the payee or holder in due course, as the case may be, maintains account, is situated or if the cheque is presented for payment by the payee or holder in due course otherwise through an account, the branch of the drawee bank, where the drawer maintains the amount is situated.
The above provision has been brought about in the enactment through an Amendment on 15.6.2015. In the case at hand, three cheques, which are alleged to have been dishonoured, are of the year 2014 which according to the complainant/opposite party No. 2, were dishonoured on 23.8.2014 but it's information was received by the opposite party No. 2 on 20.9.2014, therefore, it is apparent that the occurrence in this case is of the period prior to the said Amendment in the N.I. Act, but it would be pertinent to mention here that in DASHRATH RUPSINGH RATHOD VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (8) TMI 417 - SUPREME COURT], the matter of jurisdiction was considered at length in the matters related to Section 138 N.I. Act.
Thus, the position of law is absolutely clear that even in pending cases, the jurisdiction of filing a complaint under Section 138 of N.I. Act would lie at a place where drawee bank is situated, where the drawer maintains his account and from where it was reported that there was no sufficient amount in the account of drawer and accordingly, the cheques got dishonoured - From the perusal of cheques, it is apparent that they were presented by the opposite party No. 2-complainant in Aligarh, but in view of above position of law, it is immaterial where these cheques were presented for being encashed. Since these cheques were drawn on the ICICI bank situated in New Delhi, where the drawer or the account holder i.e. the revisionist- accused was having his account and these cheques got dishonoured because of there being insufficient amount in the said account at Delhi, the drawee bank would be treated to be located in Delhi and not at Aligarh, therefore, in view of above position of law, the jurisdiction of this case would lie at Delhi and not at Aligarh. This point seems to have escaped the attention of both the courts below.
In this case the proper course would be for the courts below to return the complaint to the presenter of the same to be presented before the court having jurisdiction, but this course has not been adopted by the courts below which is found erroneous.
Whether the case was hit by proviso to Section 138 (b) N.I. Act? - HELD THAT:- It is apparent from the above provision that the period for issuing notice by payee or holder in due course is thirty days from the date of receipt of information by him from the bank regarding return of the cheque as unpaid. The question is, therefore, that in the case at hand, when the information was received by the payee/holder in due course opposite party No. 2-complainant - In the case at hand, the notice has been issued on 1.10.2014, therefore, the said notice would not entail any infirmity and would be held to have been issued within thirty days.
In the case at hand, the opposite party No. 2- complainant had clearly stated on oath that information could be received by him about the cheque having been dishonoured/bounced on 20.9.2014. In case there was any controversy with regard to the said fact, the parties could have led evidence on this point before the court below during the trial. Therefore, the finding in this regard by the learned revisional court below cannot be held to be wrong that since the opposite party No. 2- complainant had stated on oath about the knowledge of cheques having been bounced to have occurred to him on 20.9.2014, the same could not have been dis-believed by the Magistrate's court outright to reject the complaint. This court's view is in consonance with the view expressed by learned revisional court below and finds that this was a matter which could have been decided only after taking evidence from both the sides during trial.
The judgment and order dated 16.10.2015 of the revisional court is upheld as regards maintainability of the complaint and for remand of the matter to the court below for proceeding with the complaint in accordance with law. To that extent this revision is rejected.
-
2018 (3) TMI 1958 - ITAT JAIPUR
Revision u/s 263 - survey U/s 133A - excess stock worked out by the survey team and the stock adopted by the survey team as per books of account - Confession of additional Income during the course of search &seizure and survey operation - Excess stock worked out by the survey team and the stock adopted by the survey team as per books of account are disputed by assessee - HELD THAT:- ITO had referred to the fact that consequent upon the survey, the assessee had filed a revised return offering 8 per cent of the contract receipts as net profit before allowing deduction of salary payment made to partners - 8 per cent profit disclosed was deemed to have been arrived at after allowing depreciation and interest on capital paid to the partner - assessee had not paid the amount of ESI on due date and, accordingly, that amount and amount of P.F. were disallowed and added to the total income of the assessee.
It could, thus, be seen that the ITO had not accepted the income declared by the assessee in a mechanical way but applied his mind to the various aspects of the matter before completing the assessment.
In the statement in the course of survey, the managing partner only stated that an amount of ₹ 19 lakhs was introduced towards advance for sale of land but confirmed only six lakhs. It was on that basis that the balance of ₹ 13 lakhs was offered for the assessment year 1998-99. That was confirmed by the creditors. The Income-tax Officer also verified the above aspects. Therefore, the assumption that what was offered in the statement as ₹ 43 lakhs was in addition to what had been assessed and on that basis, that statement had got evidentiary value, was erroneous and materials collected during the course of survey had been borne in mind by the Assessing Officer who was well aware of the evidentiary value of the statement. At the same time, such survey conducted unearthed certain income and the ITO on the basis of accounts and offer made and admission made before him, came to the conclusion that what was offered in the written offer made by the assessee was reasonable.
Admission contained in the statement of the managing partner of the assessee obtained under section 133A was only a qualified one and the assessee had clearly explained the same before the Assessing Officer by cogent materials and the same was accepted by the said officer. [Para 18]
The view taken by the ITO could not be said to be unsustainable in law, so as to call it an order passed erroneously. ITO had seized books of account and elicited certain answers which had no evidentiary value. ITO was satisfied about the actual amount received towards advances and only an amount of ₹ 6 lakhs out of the balance was to be further explained and they were telescoped. The entire sum of ₹ 19 lakhs was considered for the block assessment completed in the case of the creditor much before the survey. In those circumstances, the statement of the assessee that the amount of ₹ 13 lakhs offered by him in the statement during the course of survey was only a mistake of fact, could not be brushed aside. Further, in the light of the voluntary disclosure in the letter given in writing by the assessee, the facts given by him had been verified with the books of account and it was only after consideration of the various aspects of the matter and related facts, that the Assessing Officer accepted the offer made by the assessee. In such circumstances, the view taken by the ITO could not be said to be prejudicial to the revenue nor could it be said to be erroneous. Nothing was found in the order of the ITO to warrant a finding that it was unsustainable in law. The Commissioner was not justified in law in invoking the power under section 263 as the twin conditions precedent to exercise the power had not been satisfied in the instant case. Hence, the orders of the Tribunal and the Commissioner were set aside and the order of the ITO was confirmed - we allow the appeal of the assessee.
........
|
