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2018 (8) TMI 2074 - TELANGANA HIGH COURT
Offences punishable u/s 276-C(2), 278-B of the Income Tax Act - petitioners failed to comply with the requirement under Section 140-A of the Act, it directly amounts to wilful evasion of the tax liability, though admitted as the self-assessed tax - HELD THAT:- From the definitions of Tax Evasion, any act done to avoid payment of tax by illegal means either intentionally understating the income or overstating the deductions and exemptions to avoid the maximum tax liability legally due to the revenue. If, the definitions of ‘Tax Evasion’ referred supra are applied to the present facts of the case, the petitioners though admitted the tax liability by filing a revised return on 03.03.2015, they are under obligation to comply with the mandatory requirement under Section 140-A of the Act.
Obviously, for different reasons, the petitioners did not choose to comply with the mandatory requirement under Section 140-A of the Act, even till date, but raised several contentions claiming additional expenditure of ₹ 54 lakhs, out of ₹ 66 lakhs disclosed in the revised return which is filed on 03.03.2015. But, the Income Tax Officer did not accept it. However, the Commissioner of Appeals passed an order which is extracted in the earlier paragraphs and aggrieved by the Warranty Service Charges (WSC) appeal is pending before the Tribunal. Till date, the petitioners did not pay the tax due to the revenue and having filed revised return admitting the tax liability it can be certainly held to be wilful evasion of tax, as it is a conscious, deliberate and calculated act of the petitioners in failing to pay the tax directly, adhering to Section 140-A of the Income Tax Act, prima facie.
When the petitioners prima facie committed an offence under Section 276(C)(2) of the Act, the proceedings at this stage, more particularly, when major part of trial is completed in C.C.No.200 of 2016 on the file of Special Judge for Economic Offences at Hyderabad, the same cannot be quashed. Since, powers of this Court are limited and power under Section 482 Cr.P.C has to be exercised only in exceptional circumstances only to give effect to the orders passed by the Court and to prevent abuse of process of the Court or to meet the ends of justice.
In view of the guidelines laid down by the Apex Court in Bhajan Lal’s case [1990 (11) TMI 386 - SUPREME COURT] if the facts on its face value are accepted, it constitutes an offence, prima facie if proved. The Court cannot interfere, except when the Court comes to a conclusion that it is an out come of abuse of process of law.
The allegations made in the chargesheet and other material filed along with the petition, including the attempts made by these petitioners would constitute offences punishable under Sections 276-C(2), 278-B of the Act. But, the contention of the learned counsel for the petitioners is that, the cause of action is ceased to subsist for continuation of proceedings, in view of the order passed by the Commissioner of Appeals is without any substance. Therefore, the grounds urged in this petition are not sufficient to quash the proceedings at this stage in C.C.No.200 of 2016 on the file of Special Judge for Economic Offences at Hyderabad. Moreover, the allegations made in the charge-sheet coupled with the material produced prima facie disclosed commission of offences by these petitioners punishable under Sections 276-C(2), 278-B of the Act.
We find no ground to quash the proceedings on the file of Special Judge for Economic Offences at Hyderabad, registered for the offences punishable under Sections 276-C(2), 278-B.
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2018 (8) TMI 2073 - ITAT BANGALORE
Revision u/s 154 - reassessment order passed by the A.O. is bad in law because no separate order was passed by the AO to dispose of the objections of the assessee against the validity of reassessment proceedings - HELD THAT:- AO has provided the reasons and also disposed of the objections although not by way of a separate order but in the body of the assessment and the tribunal has only restored back the matter to the file of the AO for afresh decision. Under these facts, it is clear that there is no apparent mistake in the tribunal order. We hold accordingly.MP filed by assessee dismissed.
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2018 (8) TMI 2072 - BOMBAY HIGH COURT
Dishonor of cheque - insufficiency of funds - rebuttal of statutory presumption - Section 138 of NI Act - HELD THAT:- The respondent/accused has not disputed the handwriting on the two cheques and has not denied that the signature on the two cheques is of the respondent/accused. The respondent/accused has not denied that the transaction in respect of Plot No. 28 had taken place and the respondent/accused admitted that he had received ₹ 09,00,000/- - the accused only denied that he had not received ₹ 13,60,000/as claimed by the accused.
The learned Magistrate should have granted benefit of statutory presumption created by Section 139 of the Act of 1881 and should have rejected the defence of the respondent/accused. The learned Magistrate has committed an error by placing the burden on the complainant to show that the transaction in respect of Plot No. 28 had taken place. The learned Magistrate has further committed an error by delving into the genuineness of the transaction in respect of plot No. 28, when the accused had also not denied the transaction and admitted that he had received ₹ 09,00,000/- towards part payment as per the agreement of sale.
The impugned judgments are unsustainable - Appeal allowed - decided in favor of appellant.
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2018 (8) TMI 2071 - ITAT BANGALORE
Exemption u/s 11 - receipts of the assessee as deployed in FDs - accumulation of unutilized income u/s.11(2) - assessee submitted that the maturity proceeds of the FDs go to the SB Account and monies are spent for charitable purpose from the SB account - HELD THAT:- The entire discussion in the order of assessment is academic for the present AY 2012-13 because ultimately there is no tax implication in AY 2012-13. If the stand of the Assessee is accepted, the Assessee will get one more year to apply the accumulated income of AY 2012-13. If the stand of the revenue is accepted, the Assessee will have to spend the accumulation of AY 2011-12 within the period allowed in law and period of one year will lapse without application thereby leaving a shorter period for application of accumulation of AY 2011-12.
The accumulation of unutilized income of AY 2011-12 u/s.11(2) of the Act as well as the income of AY 2012-13 are deployed in the form of fixed deposits in bank accounts. The fixed deposits as and when they mature are again renewed and reinvested in fixed deposits. Therefore, the identification of funds of the Assessee as identifiable to accumulation of unutilized income of AY 2011-12 or that of receipt as income of AY 2012-13 is not possible in the present case. In such circumstances, we are of the view that the plea of the Assessee ought to have been accepted by the CIT(A).
The provisions require that the income earned from the property held under trust must be first applied to the objects of the trust and if any income is remaining then accumulation to the extent of 15% of such income is permitted and if the total income could not be utilised towards the objects of the trust then the assessee can resort to further accumulation u/s. 11(2) over and above the amount of 15%. The CIT(A) has used the word “first” in his order whereas the expression “first” is not found in Sec.11(1)(a) or Sec.11(2) of the Act.
If the sum of ₹ 1,89,01,520 spent for charitable purpose in AY 2012-13 is reduced from ₹ 7,88,84,408 the resultant figure of ₹ 5,99,82,888/- which would be the deficit in applying 85% of the total income of AY 2012-13 u/s.11(2) of the Act. 15% of the receipts of AY 2012-13 of ₹ 9,28,05,186 which can be accumulated as a matter of right would be a sum of ₹ 1,39,20,778. The above claim of the Assessee for accumulation is in order in the given facts and circumstances of the case where the identity of the monies as accumulation of AY 2011- 12 or the income of AY 2012-13 is not possible. We therefore direct the AO to accept the claim of the Assessee as made by the Assessee. - Decided in favour of assessee.
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2018 (8) TMI 2070 - ITAT DELHI
TP Adjustment - comparable selection - Functional differences - HELD THAT:- Companies functionally dissimilar with that of assessment need to be deselected from final list.
We do not agree with the submissions of Ld. Counsel for the assessee that this Company ought to be removed from the list of comparables only on account of disclosure of 'Amalgamation' in the Annual Report being undertaken during this relevant period
Benefit of capacity adjustment - Assessee is entitled to the benefit of capacity adjustment whilst benchmarking the international transaction of SIM Card Assembly.
Computation of capacity adjustment - The methodology adopted by TPO/DRP in computing 'capacity adjustment' whilst only considering the depreciation, is erroneous. Recently, the issue of computation of capacity adjustment has been considered by the coordinate Bench of the Delhi Tribunal in DCIT vs. Claas India (P) Ltd [2015 (8) TMI 755 - ITAT DELHI] - the issue of computation of capacity adjustment requires reconsideration and is thus, restored to file of AO/TPO for re-computation in light of our observations in the preceding paragraph, after granting sufficient opportunity of hearing to the assessee.
Allowability of working capacity adjustment - We are of the opinion that once the TPO/Ld. DRP has principally allowed the claim of working capital adjustment with respect to Software Development Segment than there is no occasion to disallow similar claim for SIM Card Assembly Segment. Now there are various guidelines and factors that have been laid down to work out the working capital adjustment and accordingly, we direct the assessee to provide the detailed working of the working capital adjustment to the TPO and he is directed to verify the correctness of the amount and the working capital adjustment as given by the assessee and allow the same in accordance with settled principles. Thus, with this direction, this issue is treated as allowed for statistical purposes.
Levy of interest under section 234B - We direct the AO to verify and allow the claim of the Assessee regarding granting full credit of advance tax of ₹ 20,698,500/- paid by the Assessee and also short credit of tax deducted at source.
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2018 (8) TMI 2069 - ITAT MUMBAI
Reassessment passed in the name of Legal heir of Late Vrajlal Chandulal Mehta instead of Estate of Late Vrajlal Chandulal Mehta - locus standi of “Estate of late Vrajlal C Mehta” in filing this appeal - HELD THAT:- What was assessed in the year under consideration by the AO was the income declared by “Estate of Late Vrajlal C Mehta” in the revised return of income filed for AY 2007-08, even though the AO had rejected the same. In response to the notice issued u/s 148 of the Act, only Estate of Vrajlal C Mehta has filed return of income and not “Anoop Mehta, Legal heir of late Vrajlal C Mehta”. The said return has been acted upon by the assessing officer, but the assessment order was passed in the name of “Anoop Mehta, legal heir of late Vrajlal C Mehta”. In view of the above said facts and in accordance with the law laid down in the case laws relied upon by the Ld A.R, we hold that the appeal filed by the Executors in the name of “Estate of late Vrajlal C Mehta” is valid.
The legal heirs have not disputed the right of the Executors to get the money transferred from Switzerland to India. In fact, Shri Anoop Mehta has given in writing to the revenue that he has informed the Executors about the HSBC bank accounts and also requested them to make arrangements for transfer of money to India.
CIT(A) has also observed that it is the primary responsibility of the executors of the Will to clear all the tax dues of Shri Vrajlal Mehta as applicable on all the incomes/properties standing in his name before they are distributed. Hence, it is nobody’s case that the deposit found in HSBC account was not forming part of assets of “Estate of late Vrajlal C Mehta”. The provisions of Indian Succession Act, which have been relied upon by Ld CIT-DR, deals with procedural aspects of dealing with the assets and liabilities of the Estate. As per the Will of Shri Vrajlal C Mehta, it is the duty of the Executors to distribute the assets in accordance with the directions given in the Will. Since the impugned income has accrued after the date of death of Shri Vrajlal C Mehta and since the Executors have taken responsibility to get the funds and distribute them, in our view, it may not be correct to contend that the same does not form part of the Estate.
Even if we accept the contentions of Ld CIT-DR that the HSBC accounts do not form part of assets of Estate as correct for a moment, then those assets shall devolve upon the legal heirs as per the law. Since the year under consideration falls after the death of Shri Vrajlal C Mehta, the income relating to the impugned deposits has to be assessed only in the hands of legal heirs in their individual capacity, since they have inherited the assets of the deceased in their own right. In that kind of situation also, the assessment in the hands of Late Vrajlal Mehta through his legal heir Shri Anoop Mehta could not be possible.
Assessment framed on the Legal heir, i.e., on Shri Anoop Mehta as legal heir of late Vrajlal C Mehta in respect of income arising after the date of death is not in accordance with the provisions of sec. 159 r.w.s. 168 of the Income tax Act, 1961. Accordingly, shri Anoop Mehta cannot be asked to pay tax as legal representative of late Vrajlal C Mehta u/s 159 of the Act. We also hold that it is the “Estate of late Vrajlal C Mehta”, which is liable to pay tax in terms of sec. 168 of the Act in respect of impugned income. Since the assessing officer has assessed wrong person for the above said income and since the Ld CIT(A) has also confirmed the same, in our view, orders passed by them are not sustainable in law for the reasons discussed above. Accordingly we quash the orders passed by the tax authorities.
Enhancement of income by the learned CIT(A) by an amount relating to HSBC Bank account standing in the name of a company called Investment Lexcor SA. - We notice that the Shri Anoop Mehta, from the very beginning, has been claiming that the bank accounts standing in the name of M/s Euro Investment Ltd and M/s Investment Lexcor SA belong to his brother Shri Rajesh Mehta, who happens to be an NRI for several years. He has also filed affidavit before the Investigation wing accepting the ownership of both the bank accounts. During the course of assessment proceedings also, the AO made enquiries about these two accounts and Shri Anoop Mehta has reiterated his earlier submissions. Accordingly the assessing officer did not make any addition in respect of these two accounts. Out of the two accounts, the account standing in the name of M/s Euro Investment Ltd was closed in 2003 itself and hence the dispute arose in respect of M/s Investment Lexcor SA. Besides the above, the assessing officer has initiated proceedings u/s 153C of the Act in respect of the above said account in the hands of Shri Rajesh Mehta and a specific query was also raised in this regard. The query raised by the AO and the reply given by shri Rajesh Mehta is extracted in the preceding paragraphs. After considering the reply, it is stated that the proceedings u/s 153C of the Act were dropped.
CIT(A) has not duly considered above facts and he has been mainly influenced by the fact that Shri Anoop Mehta is also shown as one of the beneficiaries in the above said account. Further the Ld CIT(A) has also stated that Shri Anoop Mehta is entitled to residual assets of Late Vrajlal Mehta as per the Will. In our view, the reasoning given by Ld CIT(A) is not sustainable. Under the Income-tax Act, the income tax is levied on the person who earned the income. The fact that Shri Anoop Mehta may be entitled to the residual assets may not be relevant to determine the person on whom the income is required to be assessed. For the same reasoning, the details of beneficiaries are also not relevant for that purpose.
Claim for credit of tax paid by the assessee in AY 2012-13 in respect of income now offered in AY 2007-08 - There is merit in the claim of the assessee. As per the provisions of sec. 5 of the Act, income received in India is taxable in the year of receipt. Hence the assessee appears to have offered the income in AY 2012-13. However, when the revenue chose to assess the income on accrual basis, the assessee has accepted the same and has accordingly filed revised returns of income, though they were beyond the prescribed time. No information was placed before us about the fate of those return of income and revised return of income filed for AY 2012-13 by Estate of late Vrajlal C Mehta. Since we have quashed the assessment order passed in the name of Shri Anoop Mehta, legal heir of late Shri Vrajlal C Mehta, the return of income as well as revised returns of income filed by Estate of late Vrajlal C Mehta shall remain intact. Hence this issue shall really arise only when the revenue is acting on those returns. Hence, at that point of time, the revenue may consider the claim of the assessee liberally in accordance with the decision rendered by Hon’ble Gujarat High Court in the case of Naresh Bhavani Shah (HUF) [2017 (7) TMI 819 - GUJARAT HIGH COURT] - Assessee appeal allowed.
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2018 (8) TMI 2068 - DELHI HIGH COURT
Transfer of shares - existence of revenue stamp as fixed on the transfer certificates on the date of the issuance thereof - HELD THAT:- The evidence in the matter is yet to commence and the case is still at the initial stage despite protracted rounds of litigation in the same. As observed vide the impugned order, the entire basis of the case of the plaintiff relies on the share transfer certificates. In these circumstances the permission granted vide the impugned order dated 3.4.2018 to the respondents No.4 to 6 to amend their written statement to bring on record preliminary objections as vide paragraphs 7, 8 and 9 to amend cannot be held to be inappropriate.
The petition is declined in as much as the merits or demerits of the amendment would apparently be and are a matter of trial. The petition is thus declined.
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2018 (8) TMI 2067 - PATNA HIGH COURT
Dishonor of Cheque - framing of charges against the petitioners - criminal breach of trust - whether the allegations made in the FIR when taken on their face value would constitute the offences punishable under Sections 406 and 420 of the IPC? - HELD THAT:- In the opinion of this Court, simply because the company withheld payment either to the milk suppliers or it failed to make payment due to the milk van and salary to the informant, the same would not constitute an offence punishable under Section 406 of the IPC - In order to make out a case of criminal breach of trust, it is not sufficient to show that the money has been retained by the company but also that the company dishonestly disposed of the same or dishonestly retained the same. The mere fact that the accused persons did not pay the amount due would not amount to criminal breach of trust.
It is well settled position in law that in order to attract the provisions of Section 420 IPC, the guilty intent at the time of making the promise is a prerequisite and an essential ingredient thereto, and subsequent failure to fulfil the promise by itself would not attract the provisions of Section 420 IPC - In Dalip Kaur & Ors. Vs. Jagnar Singh & Anr. [2009 (7) TMI 1365 - SUPREME COURT], the question for determination before the Supreme Court was whether breach of contract of an agreement for sale would constitute an offence under Section 406 or Section 420 of the IPC. After examining the fact of the case and relevant Sections of the IPC, the Supreme Court held that an offence of “cheating‟ would be constituted when the accused has fraudulent or dishonest intention at the time of making of promise or representation. A pure and simple breach of contract does not constitute the offence of “cheating‟.
In the present case, what has been alleged by the informant in his written report is that the company did not make appropriate payment to the milk suppliers. It also failed to make payment due to the milk van and salary of the informant as also wages due to the labour of the milk van. Apart from the allegation of non-payment of dues to various persons, as discussed above, there is no iota of allegation they had dishonest intention in misappropriation of property. There is no allegation that the company or the petitioners made any willful misrepresentation. There is also no allegation that the petitioners induced the informant to believe anything to be true which was false and which the petitioners knew or believed to be false - in view of the allegation made by the informant, the agreement, if any, was between the milk suppliers and the company and the informant had got no concern with such agreement. In the event, the company failed to fulfill its liability under the agreement, the aggrieved persons would have been the milk suppliers.
Apart from the fact that the allegations made in the FIR lacks necessary ingredients of sections 406 and 420 of the IPC, concept of vicarious liability is unknown to criminal law. The IPC does not provide for vicarious liability upon the directors of the comapny for any offences alleged to be committed by a company.
From perusal of the cheques, it would be apparent that the alleged cheques were issued under the signature of petitioner no. 1 on behalf of Natural Dairy Pvt. Ltd. Thus, the liability to pay, if any, was of the company of which the petitioner no.1 was the authorized signatory - It is settled position in law that when a cheque, which is drawn by the company, is dishonoured, the company will have to be made a party to the proceedings under Section 138 of the NI Act and failure to do so will vitiate the prosecution.
This Court is of the opinion that the criminal proceedings initiated against the petitioners in the present case, is an abuse of the process of law and, as such, the criminal proceedings as well as the impugned order cannot be sustained. The Court is also of the opinion that the learned Judicial Magistrate-1 st Class, Patna without appreciating the facts and considering the settled provisions of law rejected the application filed by the petitioners under Section 239 of the CrPC in the most mechanical manner.
Application allowed.
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2018 (8) TMI 2066 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Doctrine of Estoppel - HELD THAT:- The fact remains that all the group companies represented by their Authorised Representative had approached the banks and signed the documents together projecting themselves as one entity. Here an example has to be given wherein five persons put together approach a lender for a loan facility treating them as one unit and the lender consents for advancing/ disbursing the money as per the request of the parties concerned or to whomsoever suggested by the entire group together, then, in the event of default, the lender shall have to treat all the five members as one unit and can proceed against them singly or jointly as per law - the obligor and co-obligors to the debt are a single unit and disbursement to one obligor amounts to disbursement to all of them put together and hence the Videocon group companies are jointly and severally liable.
The appointment of different IRP’s to each group company separately is perfectly legal and perhaps it’s the only way the procedure has to be worked out. Therefore, we are completely in tune with the explanation given by the Ld. Senior Counsel appearing on behalf of the Petitioner and we hereby hold that appointment of different IRP’s to each company differently is not hit by any provisions of the Code and hence is perfectly maintainable.
The ‘Doctrine of Estoppel’ is clearly applicable and tilts the entire case in favour of the Petitioner. Apart from that it can be noticed from the documentation that term “obligor” and “co-obligor” is used for the entities which means, in so far as the loan agreement, there is no distinction between an obligor and a co-obligor as far as the liability is concerned and legally all of them must be considered as “Debtors” for the purpose of this Code - the arrangement and the manner in which the documentation was done for the purpose of advancing loans is perfectly legal and the Corporate Debtor herein is liable to pay the debt and is bound by the proceedings as projected in Form 1 and since there is a default in the repayment of the same, the application is hereby admitted.
It is satisfied that a debt and default is in existence, therefore this Company Petition is hereby admitted - moratorium declared.
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2018 (8) TMI 2065 - KARNATAKA HIGH COURT
Vires of first and second provisos to sub-section (1) of Section 40 of the Karnataka Value Added Tax Act, 2003 - enlarging the period of limitation substituted by Act No.17 of 2012 only with prospective effect from 01.04.2012 - HELD THAT:- The issue involved in the present writ petitions have already been considered and decided by this Court in the case of M/S CIFTECH SOLUTIONS PVT. LTD., M/S. SREE SHEELE PRIVATE LIMITED, M/S. STEEL AUTHORITY OF INDIA LIMITED, M/S. SRI NIDHI GRANITES PRIVATE LIMITED, M/S. NARAYANA DEVADIGA, WIPRO LIMITED, M/S SRIDEVI AGENCIES, M/S INTERNATIONAL FLAVORS & FRAGRANCES INDIA PVT. LTD., M/S. ALCOATS, SRI M.S. SRINIVAS PROPRIETOR, M/S S.V. INDUSTRIES M/S. RAMACHANDRA PHARMA CHEM M/S BINDU PROMOTERS AND DEVELOPERS M/S AYYAPPA INDUSTRIES VERSUS STATE OF KARNATAKA & OTHERS [2015 (8) TMI 1389 - KARNATAKA HIGH COURT]. The said order passed by the Co-ordinate Bench has reached finality.
Petition dismissed.
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2018 (8) TMI 2064 - BOMBAY HIGH COURT
Dishonor of Cheque - discharge of legally enforceable debt or not - rebuttal of presumptions - Section 118 and 139 of the NI Act - Cross-examination of witnesses - preponderance of probabilities - HELD THAT:- The defence has to only show that its stand is probable and that would lead to rebuttal of presumptions. In the present case, the reply notice dated 01.04.2014 issued by the respondent assumes significance, because not only did the respondent deny the claims made by the appellant in her statutory notice, but defence of the respondent was clearly indicated in the reply notice. Despite the respondent calling upon the appellant not to deposit the remaining two cheques, the appellant went ahead to deposit the same.
A perusal of the cross-examination of the appellant in the witness box shows that a specific objection was raised on behalf of the respondent in respect of the receipt at Exh. 31 and signature on the same was denied. In the face of such denial by the respondent, it was incumbent upon the appellant to have proved signature of the respondent on the said receipt. No effort was taken by the appellant to do so - it was for the appellant to have taken appropriate steps to prove that the receipt was indeed signed and executed by the respondent. As no such steps were taken, the receipt at Exh. 31 could not have become a basis for the appellant to claim that the respondent had admitted of having taken loan from the appellant.
The trial Court in the impugned judgments and orders has taken into consideration the entire oral and documentary evidence on record. It was found that there were transactions between the parties pertaining to immovable property. It was found that the presumptions in the present case were satisfactorily rebutted by the respondent by responding to the statutory notice and also effectively cross-examining the appellant. It is settled law that an accused in such cases can rebut the presumption not only by placing on record positive evidence and examining witnesses, but also by discrediting the complainant by effective cross-examination - In the present case, the admissions given by the appellant in cross-examination read with the documents produced by the appellant herself, show that the entire story put forth on behalf of the appellant was not proved beyond reasonable doubt and that the respondent had successfully proved his defence on the touchstone of preponderance of probabilities.
It is trite in criminal jurisprudence that the one that accrues in favour of the accused is to be adopted - Appeal dismissed.
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2018 (8) TMI 2063 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Liquidation of Corporate Debtor - resolution plan was submitted by him - without giving any opportunity to the appellant, the ‘Committee of Creditors’ decided to request the Adjudicating Authority for liquidation - HELD THAT:- Taking into consideration the fact that the ‘resolution plan’ was submitted on 178th day and on the next day i.e. 179th day the ‘Committee of Creditors’ decided to go for liquidation as 180th day was to be completed and order under Section 31 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) was required to be passed and in absence of any good reason for extension of time, we are not inclined to grant any relief.
In view of Section 12A even during the liquidation period if any person, not barred under Section 29A, satisfy the demand of ‘Committee of Creditors’ then such person may move before the Adjudicating Authority by giving offer which may be considered by the ‘Committee of Creditors’, and if by 90% voting share of the ‘committee of creditors’, accept the offer and decide for withdrawal of the application under Section 7 of the I&B Code, the observation as made above or the order of liquidation passed by the Adjudicating Authority will not come in the way of Adjudicating Authority to pass appropriate order.
Appeal dismissed.
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2018 (8) TMI 2062 - SUPREME COURT
Reforms in the administration of cricket proposed by a Committee - Issues relating to membership and Associate Membership - Number of members in Selection Committee and related matters - Cooling off period - Disqualifications - Constitution of the Apex council - Conditions imposed on State Associations - Power/Duties of Office Bearers and Professional Management (CEO) - No interference at all in the functioning of BCCI - Binding value of Frequently Asked Questions issued by the Hon’ble Justice Lodha committee.
Issues relating to membership and Associate Membership: One State – One Vote - HELD THAT:- The one state – one vote norm and the principle of territoriality have given rise to specific objections. Historically in the State of Maharashtra, there have been three associations, each of which fields its own cricket team in the Ranji Trophy : (i) Maharashtra; (ii) Mumbai and; (iii) Vidarbha. Similarly, in the State of Gujarat, there have been three associations representing: (i) Gujarat; (ii) Baroda; and (iii) Saurashtra. In both the states, these associations have made a signal contribution to the cricketing history of the nation. Besides, fielding teams for the Ranji Trophy, these associations have produced players of national and international repute. The amicus has responded to the plea before this Court for allowing full membership to the three associations each in the States of Maharashtra and Gujarat - The amicus while recognising the circumstances of history pertaining to Maharashtra and Gujarat submits that the recommendations of the Lodha Committee which have been accepted in the principal judgment seek to bring about uniformity in the structure of management and a certain amount of domestic equality. However, he suggests that the releasing of grants and such other requirements as may be necessary for constituents must be suitably addressed by the CoA and by the regularly elected Apex Council.
It is clarified specifically that the representative from Railways who would exercise voting power must be a former cricketer who has represented Indian Railways and who is elected by an association of former players from the Indian Railways and not a person nominated by the government or the Railway Sports Promotion Board.
Services and Association of Indian Universities - HELD THAT:- The Services team represents the Armed Forces of the nation. The Services have a long history of association with Indian sports in general and with cricket as well. Having regard to the pre-eminent position occupied by the Services including the Army, Navy and Air Force in propagating the cause of sports and cricket, we are of the view that the same principle which we have followed in the case of Railways should be followed in their case. Similarly, the Universities are a nucleus for encouraging the game of cricket among players of the college going generation in the country - The amendment which has been proposed to the draft constitution by the amicus in the case of the Railways shall be suitably modified to also cover the Services and the Association of Indian Universities. The representative respectively for Services and the Association of Indian Universities shall be a former cricketer who has played for them respectively and is elected by an association of former players and not a person nominated by the government/ sports control board.
Number of Selectors - HELD THAT:- The Lodha Committee restricted the number of selectors to three. While doing so, it opined that with the constitution of a Cricket Talent Committee, a three-member selection committee will be more compact, increase the authority of the Selection Committee and make it accountable for team performance - Until the elections to the BCCI take place, the CoA is empowered to consult with the Cricket Advisory Committee, comprising of reputed former international cricketers and to constitute a Committee of Selectors.
Cooling off period - HELD THAT:- The Committee has been guided by the need to ensure that vested interests do not emerge out of the indefinite continuation in office of one or more individuals. These recommendations seek to enforce a rule against self-perpetuation by stipulating the period of each term of office, the number of terms which a single individual may hold and the requirement of a break between successive terms. The recommendations can be construed as an effort to ensure a dispersal of authority so that control over BCCI and the state associations is not concentrated in the hands of one or a limited group of persons. The proposals for setting limits on tenures and terms were incorporated in a section which the Committee describes as the “end of the innings”.
While dealing with the objections to a cooling off period, it is necessary at the outset to emphasise that the term of an office bearer cannot be regarded either as an opportunity “to enrich himself” or as a matter involving “continuity of service”. The expression “enriched himself” may have a legitimate connotation if it adverts only to experience gained. Otherwise, enrichment in the form of personal aggrandisement is precisely what was frowned upon by the Lodha Committee, and for justifiable reasons. The position of an office bearer in the state associations and in the BCCI is not a matter of ‘service’ in the conventional sense. Office bearers should not construe their position as employees with a vested right to a particular tenure of service. Undoubtedly, the submission that individuals must continue for a period which enables them to develop experience in the administration of the game cannot be discounted - the requirements that the term of office of an office bearer should be three years; and that an individual should not hold office in the BCCI for a period excess of nine years (regardless of the post held) with a similar stipulation of nine years for the state associations is manifestly in public interest. Both the stipulations are valuable safeguards to ensure against the concentration of power.
A cooling off period has several features which are of utmost importance : (i) it is a safeguard against the development of vested personal interests; (ii) it ensures against the concentration of power in a few hands; (iii) it facilitates a dispersal of authority; and (iv) it encourages the generation of a wider body of experienced administrators. Cooling off must be accepted as a means to prevent a few individuals from regarding the administration of cricket as a personal turf. The game will be better off without cricketing oligopolies.
The Registrar of Societies under the Tamil Nadu Societies Registration Act, 1975 shall upon the presentation of the said Constitution by the CEO, register the documents forthwith and report compliance by way of a report to the Secretary General of this Court within four weeks - Upon the registration of the said Constitution of BCCI, each of the members shall undertake registration of their respective Constitutions on similar lines within a period of 30 days thereafter. A compliance certificate must be furnished to the CoA, which shall file a status report before this Court with reference to the compliance undertaken by the State Associations - In the event that any State Association does not undertake compliance with the abovesaid directions, the directions contained in the orders of this Court dated 7 October 2016 and 21 October 2016 shall revive.
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2018 (8) TMI 2061 - KARNATAKA HIGH COURT
TPA - adjustments on account of national interest for the excess period allowed by the assessee - company to its AE for realization of its dues - substantial question of law or fact - Maintainability of appeal in High court - HELD THAT:- This Court in a recent judgment in M/s. Softbrands India Pvt. Ltd [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] has held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellants, the appeal at the instance of an assessee or the Revenue under Section 260-A of the Act is not maintainable. No substantial question of law arises in the present case also
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2018 (8) TMI 2060 - ITAT COCHIN
Deduction u/s. 80P(2)(a)(i) - Whether the interest earned on investment made with sub-treasury and Banks is entitled for deduction u/s. 80P(2)(a)(i)? - HELD THAT:- Admittedly, the assessee is a primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. The Hon'ble High Court of Kerala in the case of Chirakkal Service Co-op Bank Ltd.[2016 (4) TMI 826 - KERALA HIGH COURT] had held that a primary agricultural credit society, registered under the Kerala Cooperative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2) - Thus we hold that the assessee-Society is entitled to the benefit of deduction u/s. 80P(2) of the Act.
Whether the assessee was entitled to deduction u/s 80P(2)(a)(i) of the I.T. Act for the interest received on investment made with sub-treasuries and banks? - As relying on Padne Service Co-operative Bank Limited [2018 (1) TMI 602 - ITAT COCHIN] Interest earned from investment with sub-treasuries and Banks was part of the banking activities, and therefore, the said income was entitled to deduction u/s 80P(2)(a)(i) of the I.T. Act. Hence, we hold that the CIT(A) is justified in directing the A.O. to grant deduction u/s 80P(2)(a)(i) of the I.T. Act for the interest earned on the investments made with sub-treasuries and Banks. Appeal filed by the Revenue is dismissed.
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2018 (8) TMI 2059 - ITAT COCHIN
Deduction u/s. 80P(2)(a)(i) - assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969 - assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969 - HELD THAT:- Admittedly, the assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. The Hon'ble High Court of Kerala in the case of Chirakkal Service Co-op Bank Ltd.[2016 (4) TMI 826 - KERALA HIGH COURT] had held that a primary agricultural credit society, registered under the Kerala Cooperative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2) - Decided in favour of assessee.
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2018 (8) TMI 2058 - SUPREME COURT
Time limitation for submission of caste validity certificate by elected councilor - mandatory in nature or not? - failure on the part of person elected as Councilor to produce the caste validity certificate within the period of six months from the date on which he was declared elected - validation of caste claim of elected Councilor by the Scrutiny Committee beyond the prescribed period would automatically result into termination of such Councilor with retrospective operation - HELD THAT:- Section 9A of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 and Section 5B of the Maharashtra Municipal Corporations Act (Act No. 59 of 1949) require a member of the Scheduled Castes, Scheduled Tribes or other Backward Classes to enclose with the nomination for election his/her Caste Certificate issued by the Competent Authority and also the Validity Certificate issued by the Caste Scrutiny Committee - A proviso to the aforesaid main provision of the statute was brought in subsequently which permitted a candidate to file his/her nomination even in the absence of the validity certificate provided he/she encloses with the nomination a true copy of the application filed by him/her before the Scrutiny Committee and an undertaking that he/she shall submit, within a period of six months from the date of his/her election, the validity certificate issued by the Scrutiny Committee.
The High Court very rightly came to the aforesaid conclusion along with the further finding that equities in individual case(s) would not be a good ground to hold the provision to be directory. In fact, the High Court has supported its decision by weighty reasons to hold that reading the provisions to be directory would virtually amount to rendering the same to be negatory - Compounded is the fact that the proviso was deleted in the year 2008 and reintroduced in the year 2012. The same would go to show that sans the proviso the main provision would debar a candidate who does not possess a validity certificate from contesting the election as a reserved category candidate. If that is so the proviso has to be strictly construed and the deeming provision contained in the second proviso together with the plain language used can lead to only one conclusion, namely, that the legislative intent was to make the provision of the statute mandatory irrespective of individual hardships.
The High Court of Bombay was perfectly justified in coming to the impugned conclusion on the basis of the reasoning that was adopted, which is affirmed - SLP dismissed.
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2018 (8) TMI 2057 - KARNATAKA HIGH COURT
TP Adjustment - comparable selection - Substantial question of law or fact - HELD THAT:- After exclusion of the comparables as directed by us, the A.O./TPO is directed to recomputed the ALP by considering the remaining 8 comparables and correct margin in respect of Mega Soft Ltd. Needless to say the benefit under proviso to section 92 C shall be considered.
Additional ground of assessee with regard to claim of ESOP expenses - Tribunal has allowed the claim by following when no such claim is made before assessing authority and as well as in return of income filed for the year in question - HELD THAT:- This Court in a recent judgment in Prl. Commissioner of Income Tax & Anr. –v- M/s Softbrands India Pvt. Ltd.[2018 (6) TMI 1327 - KARNATAKA HIGH COURT]held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue under Section 260-A of the Act is not maintainable.
No substantial question of law arises in the present case.
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2018 (8) TMI 2056 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Winding-up against the Debtor Company was ordered or not - HELD THAT:- Initially the Hon’ble Bombay High Court had ordered for Winding-up of the Debtor Company and the said Order has been set aside by the Appellate Court. Hence, consequently the conclusion can be drawn that at present there is no Winding-up order is operative against the Debtor Company and therefore there is no legal hurdle to proceed in this matter in its own merits.
While going through the submissions it is noticed that admittedly the Debtor has availed the Loan Facilities from the Financial Creditor however, the Debtor has defaulted in making the payment - admittedly the modalities for the restructuring of Debt had been agreed between the consortium of Banks and the Debtor Company. However there is nothing on record which will prove that the modalities agreements were acted upon / implemented by the Financial Creditors. Consequently any of one from the Consortium had not enhanced the facilities of the Debtor.
As the agreements were not acted upon the amount of Debt has never been restructured and therefore there is an existence of debt and the Debtor Company is liable to make the payment to the Financial Creditor - there is no dispute about the existence of default and the default is also evident from the order of DRT, Ahmedabad.
On the basis of the evidences on record the Financial Creditor has established that the loan was sanctioned and duly disbursed to the Corporate Debtor but there is non-payment of the Balance Debt on the part of the Corporate Debtor - keeping admitted facts in mind that the Financial Creditor had not received the outstanding Debt from the Corporate Debtor and that the formalities as prescribed under the Code have been completed by the Financial Creditor this Petition deserves ‘Admission’.
Petition admitted - moratorium declared.
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2018 (8) TMI 2055 - CESTAT NEW DELHI
Levy of service tax - business of freight forwarding, clearing and forwarding and other allied activities - difference between the amounts paid by the appellants to the shipping lines/airlines and the amounts recovered by the appellants from their customers (exporters/importers), is called the “mark-up” - HELD THAT:- The issue is covered in favor of appellant by various benches of the Tribunal - reliance placed in the case of GREENWICH MERIDIAN LOGISTICS (INDIA) PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI [2016 (4) TMI 547 - CESTAT MUMBAI] where it was held that notional surplus earned thereby arises from purchases and sale of space and not by acting for a client who has space or slot on a vessel. Section 65(19) ibid will not address these independent principal-to-principal transactions of the appellant and, with the space so purchased being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed.
The appeal is allowed.
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