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2018 (9) TMI 2141
Constitutional validity of the Goa Rural Improvement and Welfare Cess Act, 2000 and the Goa Rural Improvement and Welfare Cess Rules, 2006 - Validity of demand notices issued under the impugned enactments and the notification issued on 8 October 2010 - HELD THAT:- Considering substance and object of the Goa Cess Act and Rules vis-a-vis the MMDR Act and the Rules framed there under, it is found that there is no irrevocable conflict between the concerned Union Legislation and the State Legislations. The Goa Cess Act and Rules are targeted for augmentation of revenue to provide infrastructures in the State without impinging on the mineral regulation. The Act is traceable to the entries relied upon by the State.
Sufficient evidence placed on record of spending the money, both on road infrastructure and welfare activities. It cannot be said that the Petitioners do not benefit at all from the services rendered and that there is not even a remote connection. The Goa Cess Act and the Rules are a device for the State to augment its resources. The services rendered by the collection of the levy benefits the Petitioner as well, and there exists a co-relationship. Therefore, the Goa Cess Act and the Rules, whether it imposes a tax or fee, cannot be said to be unconstitutional - It needs to be noted that by Notification dated 6 April 2016 the levy where royalty is paid to the Government has been reduced to 'nil'.
Thus, the challenge of the Petitioner on the constitutional validity of the Goa cess Act and the Rules on the ground of legislative competence must fail.
Retrospective levy of the Cess - HELD THAT:- The State has argued that when the notification dated 23 January 2006 was published, it was clear that 1 February 2006 would be the appointed date on which the Act would come into force, as well as the same would be the date on which the levy would be made applicable and collected, and it was only a typographical error that Section 3(1) was not mentioned. A corrigendum to that effect was issued. Perusal of the said notification shows that it a corrigendum to the original Notification dated 23 January 2006, by which it was clarified that under Section 1(3) and 3(1), the Goa Cess Act notified the appointed date as 1 February 2006 for the purpose of Section 1(3) and for the purpose of Section 3(1). Therefore, it cannot be held that the power to levy cess was available only after 8 October 2010.
The impugned enactments cannot be struck down on the basis of the challenge levied by the Petitioner. The impugned Notification is valid and lawfully issued and the demands made under the impugned Act, Rule and Notification are valid and legal. This being the position, there is no question of refund of the cess collected. The Petitioner is not entitled to any relief in this Petition.
The Writ Petition is dismissed.
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2018 (9) TMI 2140
Refusal to grant the input tax credit - Section 28(2)(i) U.P. VAT Act - HELD THAT:- After perusal of record, there is no justification that the Tribunal has allowed the appeal and has ignored the findings recorded by the First Appellate Authority while remanding the matter back to the Assessing Authority to reexamine the material and evidence against the claim by the assessee.
The matter is remanded to the Assessing Authority with the direction that the entire proceedings must be concluded, after providing an opportunity to the assessee, within a period of three months from today - Revision allowed.
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2018 (9) TMI 2139
Validity of action of the respondents of not releasing goods provisionally without permission/compliance of the conditions for transport/storage of hazardous cargo - HELD THAT:- Without commenting upon the merit of the subject writ petition and in view of willingness on the part of the petitioners to furnish full bank guarantee towards security for the amount of Rs. 9 lakhs for releasing goods provisionally, the respondent authorities are directed to release the seized goods of subject matter upon petitioner furnishing the bank guarantee within 7 days from today subject to adjudication qua the notice dated 13.04.2018 and also outcome of the sample testing report by CRCL, New Delhi.
This writ petition is disposed off.
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2018 (9) TMI 2138
Validity of assessment order - levy of Entry Tax - HELD THAT:- After the perusal of record, there is no justification that the Tribunal has allowed the appeal and has ignored the findings recorded by the First Appellate Authority while remanding the matter back to the Assessing Authority to re examine the material and evidence against the claim by the assessee.
The order of the Tribunal is set aside - The revision is allowed by directing the assessing authority to pass an appropriate reasoned order, as directed by the First Appellate Authority, in accordance with law, after providing adequate opportunity to the assesse opposite party.
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2018 (9) TMI 2137
Jurisdiction - power of NCLT to strike down the provisions of Section 36A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016 - expression of interest already issued.
HELD THAT:- At this stage, this Court is not inclined to interfere with the impugned order. However, it is pointed out that in some cases, the "Expression of Interest" has already been issued by the Resolution Professionals. This Court is of the view that the process in those cases, need not be interdicted.
Therefore, it is directed that the impugned order dated 05.09.2018 passed by NCLT in the matter of State Bank of India vs. Su Kam Power Systems Ltd. [2018 (9) TMI 2103 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI PRINCIPAL BENCH] shall not come in the way of the matters where "Expression of Interest" has already been issued.
List on 27.11.2018.
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2018 (9) TMI 2136
CENVAT Credit - inputs - C.R. Sheets, Rounds, H.R. Coils - denial on the premise that the said inputs itself are finished goods for some other industry, therefore, the same cannot be input for the appellant - no investigation has been conducted by the Revenue to establish the fact that these inputs have not been received by the appellant - HELD THAT:- Revenue has made allegation only on the basis of the fact that the inputs which have been shown by the appellants that they have received inputs are finished goods for some other industry and it can be used as input, these are finished goods by other industry. Therefore, the same cannot be inputs for the appellant but no investigation was conducted whether the appellant has received these inputs in their factory or not, how these inputs have been diverted by the appellants or the supplier. The allegation made against the appellant is merely on the basis of assumption and presumption, therefore, the said allegation is not sustainable.
CBEC Circular No. 690/6/2003-CX dated 20.01.2003 has explained the position holding that Since the “Steal former” is actually consumed and is contained in the ingots and billets manufactured in the units, it is in the nature of an “input”.
The Cenvat credit cannot be denied to the appellant - the impugned orders are set-aside - Appeal allowed.
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2018 (9) TMI 2135
Rejection of bail application - Territorial Jurisdiction of Noida Police - Fraudulent transactions with the company - misappropriation of funds of the Company - It was alleged the flats and shops were sold in favour of the co-accused persons at a much lower price than the scheduled price, who in their turn, sold the flats and shops to the bona fide purchasers at a higher price - Prosecution for offences - Jurisdiction of the Civil Court as per the provision of Section 430 of Companies Act.
Territorial Jurisdiction of Noida Police - first contention raised by the Counsel for the applicant is that the registered office of the Company is situated in Noida and all the decisions were taken at Noida, therefore, only the Noida police has territorial jurisdiction to investigate the matter and the Police Station Sirol, Distt. Gwalior, has no territorial jurisdiction to entertain the matter - HELD THAT:- The entire offence has taken place in Gwalior. In the considered opinion of the Court, the offence has been committed within the territorial jurisdiction of Police Station Sirol, Distt. Gwalior. Even otherwise, if for the sake of argument, it is accepted, that the decision taken at Noida, can also be treated as a part of cause of action/offence, then it is well-established principle of law that where the offence has taken place within the territorial jurisdiction of more than one police stations, then each of the police stations will have jurisdiction to investigate the offence - the objection of the applicant, with regard to the lack of territorial jurisdiction of Police Station Sirol, Distt. Gwalior is hereby rejected.
Prosecution for offences - it is contended by applicant that in view of the specific provisions of Sections 439(1), (2), 436(1)(2),441, 442, 435 and 445 of Companies Act, the applicant cannot be prosecuted for offences punishable under Penal Code - HELD THAT:- It is fairly conceded by the Counsel for the applicant, that there is no provision in Companies Act, which ousts the applicability of the provisions of Indian Penal Code - The Supreme Court in the case of STATE OF NCT OF DELHI VERSUS SANJAY AND JAYSUKH BAVANJI SHINGALIA VERSUS STATE OF GUJARAT has held Reading the provisions of the Act minutely and carefully, prima facie we are of the view that there is no complete and absolute bar in prosecuting persons under the Penal Code where the offences committed by persons are penal and cognizable offence - This Court is of the considered opinion, that the second contention of the applicant, that he cannot be prosecuted for offences under the Indian Penal Code, and can be prosecuted for punishments provided under the Companies Act only, cannot be accepted, hence, it is rejected.
Jurisdiction of the Civil Court as per the provision of Section 430 of Companies Act - HELD THAT:- The submission made by the Counsel for the applicant, that the word "Civil Court", should be read as "Criminal Court", is misconceived. If the intention of the Legislature was to exclude the provisions of Indian Penal Code, then nothing had prevented the Legislature from making such a provision. Even otherwise, it is a well-established principle of law that the exclusion of the jurisdiction of the Court has to be specific and cannot be inferred, and the provisions excluding the jurisdiction have to be construed strictly. Thus, the word "Civil Court", cannot be read as "Criminal Court", as suggested by the Counsel for the applicant.
Thus, this Court is of the considered opinion, that the F.I.R. in Crime No. 27/2017 registered at Police Station Sirol, Distt. Gwalior for offence under Sections 420, 467, 409 and 120-B of I.P.C. read with Section 166, 188-B of Companies Act, as well as the criminal proceedings in S.T. No. 437/2017 pending in the Court of 9th A.S.J., Gwalior cannot be quashed.
Application dismissed.
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2018 (9) TMI 2134
Jurisdiction - quasi judicial order - Suo moto proceedings, initiated against the petitioner by the Chairman of the Debt Recovery Tribunal - interdicting the continuance of the disciplinary proceedings.
It is the contention of the petitioner that, where a compromise is entered into, between litigating parties, it is a contract between them, and a court has only to see that the same is lawful.
Whether in the facts of the present case, the Tribunal had erred in holding that the Articles of Charge were not sustainable since they were based on quasi-judicial orders passed by the respondent in his capacity as CIT (Appeals)?
HELD THAT:- There is no allegation, against the petitioner, of corrupt motives, ulterior considerations, or mala fides. The error, on the part of the petitioner, as the respondent perceives the petitioner to have committed, is only in allowing the matter to be compromised, between the Bank and the debtors, at a figure which was much less that the actual debt which, it is sought to be alleged, might have been liquidated, had the compromise not taken place. In other words, it is the commercial expediency of the decision of the petitioner, which is being sought to be called into question, in the disciplinary proceedings pending against him. To borrow the words used in the charge-sheet (whatever they may mean), what was alleged against the petitioner was “incapacity to function as a Presiding Officer in a befitting manner”. In what more “befitting” manner, placed in the circumstances in which he was, the petitioner could have acted, the charge-sheet does not, significantly, condescend to disclose.
De hors the correctness, judicially examined, of the decision of the petitioner to compromise the matter by allowing the joint application filed by the Bank and the debtors, the said decision, not being alleged to be tainted by any ulterior motives, could not have legitimately constituted the basis for initiating disciplinary proceedings against the petitioner. Even of the sole ground, therefore, the proceedings would be liable to be quashed in their entirety.
On merits, too, however, the proceedings against the petitioner are, on the face of it, thoroughly misconceived. It is clear, from the authorities relied upon by the petitioner, of this court, that the petitioner had, when faced with the application of the Bank, and the proposal for compromise, signed by all parties, no option but to settle the disputes in terms thereof. It was not open for the petitioner to go behind the said compromise and start dissecting the compromise by examining its commercial expediency or otherwise. Any such attempt, on the part of the petitioner, would have amounted, in fact, to exceeding his authority, and the jurisdiction vested in him by law.
It is ironical, therefore, that, for proceeding in the manner sanctified by authorities of this court, the petitioner has been visited with the presently impugned disciplinary proceedings, which deserve, therefore, to be eviscerated even at this juncture, without subjecting the petitioner to the ignominy of having to further negotiate the distasteful course thereof.
The impugned memorandum/chargesheet dated 28th March, 2018, issued to the petitioner, as also all proceedings that follow thereupon, are held to be unsustainable on facts as well as in law and, consequently, quashed and set aside - Petition allowed.
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2018 (9) TMI 2133
TP Adjustment - recomputing the Appellant's net margin by treating liabilities no longer required written back and foreign exchange gain as non-operating items - treating foreign exchange gain as operating revenue - HELD THAT:- As in the light of Rule 10B(3) of the Rules and the business cycle in the relevant business, the comparability will not be materially affected if the foreign exchange gain is considered as reflected in the accounts of the comparable companies as available in public domain.
Hon'ble Delhi High Court in the case of Ameriprise India (P.) Ltd. [2016 (3) TMI 1272 - DELHI HIGH COURT] supports the plea of the Assessee. We are therefore of the view that there is merit in contention raised by the Assessee and we hold that the TPO/DRP were not justified in reversing the Assessee's action in reducing an amount being foreign exchange gain, from its operating expenses i.e. by treating it as a non-operating item. Therefore respectfully following the decision of the ITAT Bangalore in the case of SAP Labs [2010 (8) TMI 676 - ITAT, BANGALORE] we hold that the foreign exchange gain or loss should be treated as operating in nature and that such gain or loss as reflected in the books of accounts of the Assessee for the relevant previous year should be adopted as the basis. We therefore hold that the foreign exchange gain ought to either be included in the assessee's operating income or reduced from its operating costs, as it has done in its TP study.
Whether write back of the liabilities no longer required and also to be regarded as operating in nature? - The decisions referred to by Assessee supports the plea of the Assessee write back of the liabilities no longer required are also to be regarded as operating in nature. In this regard it has not been disputed by the TPO/DRP that the liabilities written back as no longer required were all relating to operating expenses which had been treated as an operating item in the years they were expected to have been incurred. Therefore, the write back of such liabilities ought to also be considered as an operating item in computation of the operating margin of the Assessee. We hold and direct accordingly.
Comparable selection - action of the TPO in not including CG Vak Software & Exports Limited ('CO Vak' for short), as comparable to the assessee - It is an admitted position that for inclusion of companies as comparable company the employees cost incurred by a company should not be less than 25% of the revenue and this filter is regularly applied and accepted in Transfer Pricing Analysis in SWD services companies.
As seen that both before the TPO and the DRP employee cost incurred by CG Vak is not separately disclosed in its financial statements, and that, instead, CG Vak includes the said sum under the heads 'Cost of Services - Domestic' and 'Cost of Services - International', with the result that the total cost incurred by the company on its employees is not available in the public domain. It is the plea of the learned counsel for the Assessee before us that in the absence of such information, it is not possible to accurately determine the percentage of the company's employee cost to its total revenue and, thus, it was submitted that there is no basis on which the said company could have been said to have failed the filter applied by the TPO.
As submitted that if CG Vak's entire employee costs for FY 2008-09 are properly considered, it would then pass the employee cost filter applied by the TPO. Thus, it is submitted that CG Vak is comparable to the Appellant in all respects and, but for its rejection on the above ground, it passed all the filters applied by the TPO.
Assessee seeking comparability of CG-Vak to be remanded to the TPO for computation of the correct employee cost. We are of the view that the request made by the Assessee in this regard deserves to be accepted. Accordingly, the TPO/AO is directed to consider the employee cost vis-a-vis turnover of the Assessee by taking the correct sum of employee cost.
Also companies functionally dissimilar need to be deselected form list of comparability .
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2018 (9) TMI 2132
Maintainability of application - Whether the Insolvency Application can be Admitted against the Co-obligor where the CIRP against the Principal Borrower is already commenced? - HELD THAT:- This Petition/Application is filed much before the passing of Resolution Plan or any Order for Liquidation in the case of Principal Borrower hence, as regards to the submissions made by the Learned Advocate for the Debtor/Co-obligor about Discharge of Surety it is worth to place on record the legal position that, the surety is discharged as soon as the Principal Borrower is discharged from his liabilities. It is noticed that in the Insolvency Proceedings the discharge of the liabilities of Principal Borrower happens at the time of approval of Resolution Plan and the Debt of the Principal Borrower is not discharged in absence of the Resolution Plan in the case of Principal Borrower. And therefore the provisions of the S. 134 of the Indian Contract Act, 1872 cannot be applied upon the Debtor/Co-obligor. If the Resolution Plan got approved in the case of Principal Borrower, then, in that case the Debt would have been Discharged. But here the case is not so.
Since the Debtor/Co-obligor is a co-obligor to the VIL he is bound to fulfil an obligation of the VIL. Further VIL is not a Third Party to the Debtor/Co-obligor thus jointly to be called as "Guarantor" to the Principal Debtor/Co-obligor.
The Bench is also acquainted with the decision of this very Bench in the case of Schweitzer Systemtek India Private Limited [2017 (8) TMI 1678 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] wherein it was held that the Moratorium is only applicable to the assets of the Debtor/Co-obligor and not to the assets of the Guarantors - And also with the decision of this very Bench in the case of Bell Finvest (India) Limited v. Asha's Hospitality and Management Facility Private Limited wherein this Bench has Admitted the Insolvency Application against the Corporate Guarantor and also against the Principal Borrower.
There is no cause for dissenting from the co-ordinate Benches and therefore this Petition/Application deserves to be Admitted - Application admitted - commencement of the Corporate Insolvency Resolution Process shall be effective from the date of receipt of the certified copy of this Order.
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2018 (9) TMI 2131
Deduction u/s 80-IA - initial assessment year for claim of deduction - whether the lower authorities are right in law and facts of the case in concluding that A.Y 2006-07 is to be taken as the initial assessment year for claim of deduction u/s 80-IA(4)(ii) by the assessee? - HELD THAT:- We find that an eligible assessee has the option for claiming deduction under Sec. 80IA(1) for a period of ten consecutive years falling within a period of fifteen years beginning from the year in which the undertaking or the enterprise had started providing telecommunication services. However, as can be inescapably gathered from the term “consecutive‟ used in sub-section (2) of Sec. 80-IA, once the assessee has exercised such option and claimed deduction under Sec. 80-IA(1) then his entitlement to claim deduction would stand restricted to the ten consecutive years beginning from the year in which it was first claimed.
We are of the considered view that the fact as to when the assessee had for the first time exercised its option and claimed deduction under Sec. 80-IA, as observed by us at length hereinabove, would be the only decisive factor for identifying the “initial assessment year” opted by the assessee for claim of deduction u/s 80-IA. We thus not being impressed with the adverse inferences drawn by the lower authorities by referring to the opinion of Mr. Bharat Agarwal(consultant-an associate of the auditor of the assessee company), thus vacate the adverse inferences drawn by the lower authorities on the said count in the hands of the assessee.
Before parting, we may herein observe that as concluded by us hereinabove after necessary deliberations that no infirmity emerges arises from the claim of the assessee that it had opted A.Y 2007-08 as the initial assessment year for claim of deduction under Sec. 80-IA(4)(ii) and the same had wrongly been taken by the lower authorities as A.Y 2006-07, thus the observations of the A.O that the assessee alongwith its authorized representatives, CAs and tax auditors had intentionally provided misleading information to the department would not survive and are thus vacated.
We herein conclude that as the assessee had opted A.Y 2007-08 as the initial assessment year for claim of deduction u/s 80IA(2), therefore, it would be entitled for 100% deduction from A.Y 2007-08 to A.Y 2011-12 and thereafter 30% from A.Y 2012-13 to A.Y 2016-17, subject to satisfaction of all other conditions.
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2018 (9) TMI 2130
TP Adjustment - royalty payment made to associate enterprise - while the royalty rate was 0.5% of net revenue, the ALP determined by the revenue was 1.67% of net revenue - HELD THAT:- As decided in own case [2018 (7) TMI 2328 - ITAT KOLKATA] lower authorities have been very fair in not holding the assessee’s royalty transactions to be a sham ones. They have applied benefit and commercial expediency test in the instant case whilst computing nil ALP. We see no reason to approve the same these two tests of benefits and commercial expediency are not to be invoked as per the above legal position. The impugned action of the lower authorities under challenge is therefore held to be not sustainable.
Quantification of the impugned ALP - TPO admittedly applied ‘CUP' method in his order - He appears to have treated the tax payer itself as a valid comparable as it had not paid any royalty to the very payee in earlier assessment years. This made him to adopt nil price of the impugned royalty so as to make the adjustment in question. We see no reason to concur with such a course of action since the assessee itself having paid Nil amount in the past to the AE, cannot be taken as a valid comparable. This tribunal in the case of Technimont ICB India (P) Ltd. [2013 (9) TMI 595 - ITAT MUMBAI] has concluded long back that a transaction between payee and its AE is not an uncontrolled one so as to be taken as a comparable. We accept the assessee’s instant first substantive ground both on legality as well as on quantification therefore. The impugned ALP adjustment stands deleted accordingly.
Disallowing provision for leave encashment u/s 43B(f) - HELD THAT:- This issue deserves to be remitted back to the Assessing Officer for taking a fresh call after the hon’ble apex court’s decision in the Revenue’s special leave petition converted to appeal staying operation of hon’ble jurisdictional high court’s judgment in Exide Industries Ltd.. [2007 (6) TMI 175 - CALCUTTA HIGH COURT] deleting identical disallowance as well as holding the statutory provision itself to be unconstitutional. We accept this fair stand and direct the AO to keep the instant issue in abeyance to be decided after the hon’ble apex court’s final verdict in the department’s appeal hereinabove.
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2018 (9) TMI 2129
Anti-competitive agreements - Joint tender floated by Public Sector Oil Marketing Companies (PSU OMCs/OMCs) on 02.01.2013 for procurement of anhydrous alcohol - quoting an exorbitant price for supply of ethanol to OMCs - contravention of the provisions of Section 3 of Competition Commission Act, 2002 - levy of monetary penalty.
Whether the joint tender floated by OMCs is in violation of provisions of Section 3(1) read with Section 3(3) of the Act? - HELD THAT:- The Commission holds that floating of joint tender by OMCs for procurement of ethanol per se cannot be construed as anti-competitive particularly when such process has evident efficiency benefits, as detailed above. Resultantly, the Commission finds no merit in the allegations levelled by the Informants in laying challenge to the joint tendering resorted to by the OMCs. In this connection, the Commission notes that even the presumption of appreciable adverse effect on competition is not applicable in respect of agreements entered into by way of joint ventures if such agreements increase efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services by virtue of the proviso engrafted to Section 3(3) of the Act.
In the factual matrix of the present case, OMCs have demonstrated efficiencies resulting from the joint tendering process and in the absence of any rebuttal thereto or any other material available on record, the Commission has no hesitation in holding that no case whatsoever has been made out against OMCs of contravention of the provisions of Section 3 of the Act due to the impugned act of floating a joint tender. Such a system is beneficial to suppliers and all other stakeholders as it has demonstrable efficiency in improving the production and distribution of ethanol in an equitable manner.
Before concluding on this count, the Commission is constrained to note the brazen conduct of India Glycols Limited in laying repeated challenges to the joint tendering process which was evidently adopted by PSU OMCs in order to avoid multiplicity of tendering exercise and to attain equitable distribution of procured ethanol amongst OMCs, to carry out the mandate of the Government. Such a procedure has also saved wastage of time, money and resources of the stakeholders besides minimizing the attendant costs to the national exchequer.
Whether the tender floated on 02.01.2013 by PSU OMCs was rigged by sugar mills/ISMA/EMAI/NFSCF in contravention of the provisions of Section 3 of the Act? - HELD THAT:- No plausible explanation could be offered by the bidders as to how the freight charges could match exactly despite substantial variance in distance between the distilleries of the bidders and the depots for which they participated in the bidding process. It is also found that the freight charges quoted by the bidders were neither based on the actual figures of past supplies nor the same were found to have any connection with the actual charges paid by them to the transporters after award of tender. On the contrary, as noted above, despite difference in the distance between the depot and factory, identical freight charges have been quoted by the bidders. Such conduct can only be an outcome of collusive behavior and not the result of free market forces.
The Commission also finds no merit in the plea that the DG has only picked few depots and players for the purpose of investigation to arrive at a finding of contravention against few bidders leaving the rest. The Commission notes that bidding was depot-wise and therefore the DG was justified in focussing investigation on the depots where the bidding pattern appeared to be collusive - the Commission is of the considered opinion that the bidders who participated in respect of the depots located in UP, in response to the joint tender floated by OMCs, have acted in a concerted and collusive manner in submitting their bids. This is evidenced from the prices quoted, quantities offered and the explanations given by the parties. Moreover, such collusion is also strengthened from bidders utilizing the platform of ISMA as also from the signals emitted by EMAI which influenced the bidding behavior of the parties.
ISMA was proactively facilitating coordinated action by ethanol manufacturers. As noted above, ISMA even invited Bajaj in the meetings as it was the largest ethanol manufacturers controlling more than 40% of the market share in UP. Needless to add, no coordination amongst ethanol manufacturers of UP could have been successful without Bajaj being a party to such concerted effort. Such actions coupled with evasive responses of ISMA representatives lead to inescapable conclusion that ISMA acted as fulcrum to the whole arrangement - considering the past history of ISMA in facilitating concerted bidding in respect of the tenders floated by OMCs, as recorded by the DG, the Commission has no hesitation in holding that ISMA was actively involved with the bidding parties during the relevant period of the tender of January 2013. The evidence adumbrated hereinabove establishes that ISMA has violated the provisions of Section 3(3)(a), 3(3)(b) read with Section 3(1) of the Act.
In the present case, the Commission is of the considered view that the bidders through their impugned conduct have contravened the provisions of Section 3(3)(d) read with Section 3(1) of the Act by acting in a collusive and concerted manner which has eliminated and lessened the competition besides manipulating the bidding process in respect of the impugned tender floated by OMCs - the Commission holds that the bidders who participated in respect of the depots located in UP/Gujarat/Andhra Pradesh in response to the joint tender floated by OMCs have colluded in submitting the bids by quoting collusive prices and sharing quantities using the platform of ISMA and signals provided by EMAI.
The sugar mills and ISMA/EMAI are directed to cease and desist from indulging in conduct that has been found to be in contravention of the provisions of the Act.
Monetary penalty - HELD THAT:- It may be noted that the twin objectives behind imposition of penalties are: (a) to reflect the seriousness of the infringement; and (b) to ensure that the threat of penalties will deter the infringing undertakings. Therefore, the quantum of penalties imposed must correspond with the gravity of the offence and the same must be determined after having due regard to the mitigating and aggravating circumstances of the case.
The Commission imposes monetary penalties upon the parties for contravention of the provisions of Section 3(1) read with Section 3(3) of the Act - Commission directs the parties to deposit the penalty amount within 60 days from the receipt of this order.
It is evident that Dhampur was granted sufficient opportunity which it did not avail and as such the plea that it was denied opportunity of cross-examination is not only fallacious but is reflective of its contumacious conduct in not complying with the directions given by the Commission.
The Secretary is directed to communicate to the parties, accordingly.
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2018 (9) TMI 2128
Arbitration for resolution of disputes - Corporation has now raised a contention that the application for setting aside the arbitral award may be competent before the Commercial Court, however, the Execution Petition of the Contractor would not be, since the claim of the contractor in such Execution Petition is below Rs. 1 Crore - HELD THAT:- As is well known, once an award is passed by the Arbitral Tribunal, the same can be challenged in terms of Section 34 of the Arbitration Act. Subsection [1] thereof provides for recourse to a Court against an arbitral award that may be made only by an application for setting aside such award in accordance with subsection [2] and subsection [3]. If such an application for setting aside arbitral award is not filed, or if filed and the same is not entertained, the award could be enforced in terms of Section 36 of the Arbitration Act.
Since in the present case, jurisdiction of the subject matter which was part of the arbitration proceedings ordinarily lies with the Commercial Court and it was because of this reason that the application for setting aside the arbitral award was transferred to the Commercial Court, it was the Commercial Court which was competent to enforce the arbitral award; as if it were a decree of that Court - there are no force in the contentions of the Corporation - Division Bench of this Court in case of M/s. OCI Corporation vs. Kandla Export Corporation & Ors., [2018 (2) TMI 412 - SUPREME COURT] in which the question as to which Court would be competent to entertain execution petition to enforce award from an international commercial arbitration came up for consideration before the Court.
Petition dismissed.
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2018 (9) TMI 2127
Principle of estoppel - Rule of Judicial policy - Setting aside a confirmed auction sale - No objection for the sale was raised - HELD THAT:- Through their conduct, in failing to file objections to the auction sale and making an application and accepting the excess amount recovered from the auction sale, the private Respondents have waived off their rights in respect of the auction sale and have acquiesced in the auction sale. Today, the private Respondents are estopped through their conduct from challenging the auction sale in any manner whatsoever.
The doctrine which the courts of law will recognise is a Rule of judicial policy that a person will not be allowed to take inconsistent position to gain advantage through the aid of courts.
In view of the law, the High Court erred in ignoring the basic and primary facts on record and setting aside the auction sale in favour of Sachdeva, and thereby also prejudicing Pawan Kumar Agarwal - Appeal allowed.
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2018 (9) TMI 2126
Maintainability of appeal - Non-prosecution of the case - HELD THAT:- The matter has been repeatedly coming up on Board and the appellant was unrepresented on all the dates. It seems that the appellant is not interested in pursuing the appeal.
Accordingly, the same is dismissed for non-prosecution with liberty to the appellant to apply for restoration on sufficient cause being shown for non-appearance.
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2018 (9) TMI 2125
Exemption u/s. 11 - activity of micro finance squarely falls under the definition of trade, commerce or business which shall not be regarded as a 'charitable purpose' - Charitable activity u/s 2(15) or not? - As per revenue assessee obtained loan from financial institutions with interest and advanced loans to self help groups at a higher rate of 0.5% than the rate at which the loan is obtained from the bank/financial institutions - CIT(A) allowed exemption - HELD THAT:- The assessee explained before us that in the activity of micro financing, the assessee obtained loan from banks and or financial institutions and advanced the same to self help group and poor persons. Above submissions of the assessee could not be controverted by the department.
No material could be brought on record to show that the loan was advanced of any big amount or loan was advanced to any economically affluent persons. Thus, we find merit in the contention of the assessee that the activity was carried out with the object of providing relief to the poor.
In the circumstances, we find no error in the order of the CIT(A), which was passed following the decisions of Spandana (Rural & Urban Development Organisation) [2010 (2) TMI 1166 - ITAT VISAKHAPATNAM], Bharatha Swamukhi Samsthe [2008 (12) TMI 310 - ITAT BANGALORE], Disha India Micro Credit [2011 (1) TMI 693 - ITAT NEW DELHI], Bharat Integrated Social [2011 (5) TMI 1143 - ITAT CUTTACK], Agricultural Produce and Market Committee [2007 (3) TMI 213 - BOMBAY HIGH COURT] and Sai Publication Fund [2002 (3) TMI 45 - SUPREME COURT]. Therefore, we confirm the findings of the CIT(A). Appeal of the revenue is dismissed.
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2018 (9) TMI 2124
Refusal to give bona fide residence certificate - form was returned to the complainant with a report that bona fide residence certificate cannot be issued as family of the complainant was residing in Agra (U.P.) for last 30 years - no dowry demanded or with regard to pendency of work - HELD THAT:- In the present case in hand, complainant himself when he moved to the Anti Corruption Department mentioned that petitioner had returned the form without making report. From the transcript which is available on record, it is evident that some prior transactions pertaining to bank file was pending between the parties and matter pertained to Rs. 4,850/- out of which as per the petitioner, Rs. 4,000/- was to be paid to the bank and in the transcript he has explained the total amount which was payable by the complainant. There is no specific demand for making a bona fide residence certificate, rather, petitioner had mentioned in the transcript that as the complainant and his son are residing in Agra (U.P.), a bona fide residence certificate cannot be issued.
No trap proceedings were conducted in the case and the matter has remained pending with the Anti Corruption for a period of more than five years. There is no specific demand of money by petitioner and on the date of transcript no matter was pending before him.
There being no ground for presuming that the accused has committed any offence, the order vide which charge has been framed against the petitioner deserves to be quashed.
Revision petition allowed.
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2018 (9) TMI 2123
Deduction @100% u/s 80IC - initial assessment year - fresh claim on undertaking substantial expansion from the year of completion of substantial expansion - HELD THAT:- For orders, see M/s Admac Formulations [2018 (10) TMI 1001 - PUNJAB AND HARYANA HIGH COURT] decided negative whether the assessee who had availed deductions at the rate of 100% for first five years on the ground that they had set up a manufacturing unit as prescribed under sub section (2) of Section 80IC of the Act can start claiming deduction at the rate of 100% again for the next five years as they had undertaken substantial expansion during the period mentioned in sub section (2) thereof. Issue decided against the assessee.
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2018 (9) TMI 2122
MAT computation u/s 115JA - Agricultural income - proceeds from the sale of agricultural land and rubber trees could be deemed to be agricultural income u/s 10 - same granted exemption from computation of income as per Section 115JB - HELD THAT:- We see that the AO had considered the aspect and ruled against the assessee. Tribunal has not considered this specific issue and had merely followed the decision in Harrisons Malayalam Ltd [2009 (5) TMI 124 - ITAT COCHIN] to grant exemption to the profit received on sale of estate from computation of the book profits. In such circumstances, we are of the opinion that the aforesaid appeals have to be remanded back to the Tribunal to consider the issue afresh. We do this despite the fact that the assessee has not filed an appeal, which was not necessary since the Tribunal had allowed the appeal on a different ground which we have answered against the assessee following the Division Bench judgment of this Court.
Disallowance of employees' contribution to Provident Fund and Welfare Fund u/s 36(1) (va) - HELD THAT:- This Division Bench has answered the question against the assessee and in favour of the Revenue in Popular Vehicles and Service (P) Ltd [2018 (8) TMI 133 - KERALA HIGH COURT] Hence the aforesaid question has to be answered in favour of the Revenue and against the assessee.
Slump sale for a lumpsum consideration - Whether the sale of Boyce Estate has to be treated as capital gain u/s 50B? - Revenue admits that it cannot be treated both as being included under the Minimum Alternate Tax (MAT) and under Section 50B, but prays that the alternate contention be left open for consideration, if at all the Hon'ble Supreme Court interferes with the finding of this Court that it is possible of computation under the MAT Scheme as provided in 115JB - HELD THAT:- All the investments, deposits, receivables, stock and such other current assets in the form of financial and other assets remained with the assessee Company along with the liabilities. Only those assets enumerated in the Schedules and Annexure were sold to the vendee. The consideration had also been specifically assigned to the sale of immovable property and separate consideration has been assigned to the sale of movable properties including vehicles, buildings and so on and so forth. We do not find any reason to interfere with the finding of fact by the Tribunal that there is no case of slump sale for a lumpsum consideration. The consideration is not attributable to any particular item of asset. We hence decline to answer the question framed for reason of the findings of facts being unassailable raising no question of law.
Gain on sale of shares - Speculation loss or long-term capital gains - HELD THAT:- The Tribunal found that the assessee had held the shares as an investment and not as a stock in trade. Loss arising out of the sale of shares would hence be in the nature of capital loss and not in the nature of speculation loss, was the clear finding. There was also no evidence on record to show that the assessee was indulging in the business of buying and selling of shares. The shares held by the assessee Company were clearly investments and on finding no dispute on facts, the Tribunal directed it to be treated as capital gains. Again, we refuse to answer the third question raised for reason of the Tribunal having answered it on facts and there arising no question of law. When the third question is thus answered in favour of the assessee, necessarily the fourth question also, in the matter of set off, has to be answered in favour of the assessee and against the Revenue.
Addition u/s 14A being re-plantation expenses - AO found that the expenditure was dis-allowable u/s14A - HELD THAT:- The decision of Commissioner of Income Tax v. Essar Teleholdings Ltd. [2018 (2) TMI 115 - SUPREME COURT] which held that the applicability of Section 14A can only be from the assessment year 2007-08 has to be noticed. We, hence, answer the question in favour of the assessee and against the Revenue, upholding the order of the Tribunal.
Revision u/s 263 - the income from the sale of old rubber trees, indexation allowed in the case of sale proceeds of Grevellea trees, proportionate interest paid relatable to the investment in subsidiary companies dis-allowable u/s 14A and dis-allowance of expenses claimed under the head "share transfer expenses" - HELD THAT:- As far as income from the sale of old rubber trees, the decision to treat it as subjected to Central Income Tax would go contrary to the findings of Thiruvambadi Rubber Company [2011 (6) TMI 452 - KERALA HIGH COURT]. We, hence, do not think that any interference can be caused to the order of the Tribunal on that count.
Indexation allowed of sale proceeds of Grevellea trees Tribunal has found that the said issue was the subject matter of an appeal before the CIT (Appeals) and then before the Tribunal. Under Clause (c) of Explanation to Section 263(1) since the issue was subject matter of appeal, there could not have been any suo motu power exercised by the Commissioner under Section 263. We are in agreement with the findings of the Tribunal and we answer the question of law against the Revenue and in favour of the assessee.
Disallowance u/s 14A - We have already held, following the decision of the Hon'ble Supreme Court in Essar Teleholdings Ltd. [2018 (2) TMI 115 - SUPREME COURT] that the same would be applicable only from 2007-08. We, hence, answer the said issue in favour of the assessee and against the Revenue.
Expenditure incurred in connection with the transfer of shares - Tribunal has found that as a matter of fact the said expenses have been incurred in connection with the maintenance of share-holders' register. Tribunal has relied on the instructions issued by the CBDT, vide F.No.10/25/63-IT(A.a) dated 18.06.1964, wherein it was clarified that "the remuneration paid by the Company to its Registrar for performing duties in connection with the Company's legal obligations to be discharged under the Company Law, should be regarded as revenue expenditure". We do not think that the finding on the said issue also calls for any interference.
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