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2020 (9) TMI 1288
Maintainability of appeal of low tax effect - monetary limit prescribed by the Board for filing of appeals before the Tribunal by the Department - HELD THAT:- Undisputedly, the tax effect in the present appeal is less than the monetary limit prescribed by the Board for filing of appeals before the Tribunal by the Department. The CBDT vide circular dated 08-08-2019 (supra) has amended Para 3 of Circular No. 3 of 2018 dated 11-07-2018 thereby enhancing monetary limit of tax effect from Rs.20 Lakhs to Rs.50 Lakhs for filing of appeals by the Department before the Tribunal. Thus, without going into merits of the issue raised in the appeal, the present appeal by the Revenue is dismissed on account of low tax effect.
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2020 (9) TMI 1287
Estimation of income - bogus purchases - CIT-A sustaining addition only 12.5% - HELD THAT:- The facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expenses of exchequer - thus 12.5 % disallowance out of the bogus purchases done by the learned CIT(A) meets the end of justice. Accordingly uphold the order of learned CIT(A). Decided against revenue.
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2020 (9) TMI 1286
Disallowances made on account of quality rejects, breakage leakage etc, expired inventory, stock of Genosys, stock difference in error - HELD THAT:- Breakage, Leakage etc - Assessee in order to establish breakage leakage etc had filed a chart showing the ratio of the law is on such breakage to sales during the relevant years which is negligible as compared to huge turnover of assessee. We therefore direct assessee to file identical details for year under consideration to establish the claim in view of the observations made by this tribunal in immediately preceding years.
AO is directed to verify the same and allow the claim of assessee is signed in accordance with the observations of this tribunal in assessee’s own case for immediately preceding assessment years.
Expired inventory - This Tribunal dealt with this disallowance, based observations in following decisions - Alpha level India Ltd [2003 (9) TMI 43 - BOMBAY HIGH COURT] AND CIT vs Wolkem India Ltd [2009 (1) TMI 241 - RAJASTHAN HIGH COURT]
This Tribunal, based on ratio laid down in these decisions, observed that, ratio of such expired inventory to sale was only 0.12% on sales and 0.18% on cost of goods sold. Further it has not been disputed that, goods of assessee nearing expiry date have to be written off. We therefore, direct assessee to file requisite details in order to ascertain percentage of expired inventory on sales and on cost of goods sold. Ld.AO is directed to verify the same and allow the claim of assessee is signed in accordance with the observations of this Tribunal in assessee’s own case for immediately preceding assessment years.
Stock issued for Genesis production as consumables - We note that DRP while allowing claim of assessee, held that the substance and spirit of transaction is more important than the form and as income from production has been booked the cost of consumables also needs to be allowed to assessee.
In the present facts also the DRP accepted assessee’s contentions without verifying the same - Accordingly, respectfully following the view taken by this Tribunal in assessee’s own case for preceding assessment years, we direct Ld.AO to verify contentions of assessee and if found correct no disallowance shall be made.
Quality rejects - AO denied claim on assumption that, as assessee is in the business of high-quality organic and inorganic chemicals for a long time it should be meeting the quality standards which are usually known beforehand and also the process goes through different levels of checks before entering the market.
We note that in preceding years assessee had filed charged highlighting the ratio of on sales and on cost of goods sold quality rejection. Assessee is directed to provide such details for year under consideration. Ld.AO is directed to verify the same and allow the claim of assessee in accordance with observations of this Tribunal in assessee’s own case for immediately preceding assessment years. Grounds raised by revenue stands allowed for statistical purposes.
Direction to Ld.AO to adopt profit before depreciation interest and taxes on cost as against profit before interest and taxes - We do not find any in infirmity in such observations of DRP as it is in consonance with the Transfer Pricing regulations for computing arm’s length margin of international transaction. Accordingly these grounds raised by revenue stands dismissed.
TP Adjustment - ITES segment - Comparable selection - exclusion of 2 comparables by DRP - HELD THAT:- AO excluded Clinigene International Ltd., after verifying RPT being more than 25% which was in consonance with the directions of DRP. And in respect of cyber media research Ltd., has been excluded for being functionally different which has not been objected before us - Under such circumstances we do not find any infirmity in rejection of these 2 comparables by Ld.AO.
Non-granting of under capacity utilisation for manufacturing segment and R&D - We note that this Tribunal in case of M/s SKF Technologies India Pvt.Ltd [2019 (2) TMI 2023 - ITAT BANGALORE] relying on observations, upheld adjustment towards differences level of capacity utilisation. This view has also been affirmed by Hon’ble Karnataka High Court [2018 (6) TMI 1592 - KARNATAKA HIGH COURT].
We understand that assessee has not filed details for examining in accordance with the observations made by Hon’ble Delhi Tribunal in above in support of its claim which requires examination by Ld. AO/TPO. Accordingly, we remand this issue back to Ld.AO/TPO for examining the claim of assessee in light of observations made by Hon’ble Delhi tribunal (supra).
Exclusion and not considering depreciation as an operating expense for computing margin in case of comparables under R&D segment - TPO selected 12 comparables for manufacturing segment is by applying the same filters adopted by assessee with certain modifications. Now at this stage before this Tribunal in assessee is alleging that companies with export income less than 25% needs to be excluded. Further we note from the records placed before us that assessee manufactures its products for its group entities on need basis. No ground has been raised before DRP in respect of this issue. Assessee has raised additional ground in respect of not applying export filter in manufacturing segment. As we note that this issue has not been dealt with by authorities below, in the interest of Justice we remand this issue back to Ld. AO/TPO in respect of comparables alleged by assessee here in. The Ld. AO/TPO shall verify applicability this filter and then consider alleged comparables accordingly.
Considering depreciation as operating expense - We note that assessee had considered manufacturing and R&D segment as composite unit, which was subsequently separated by Ld.TPO in transfer pricing proceedings. It has not been disputed by authorities below that both segments are interrelated to each other and that there will be overlapping of products/machineries/manpower being used under 2 segments. When DRP directed depreciation as an operating expense to manufacturing segment, R&D segment cannot be looked contrary. We therefore direct Ld.AO/TPO to grant depreciation as operating expense while computing margins to determined the arm’s length price under R&D segment.
Comparable Vimta Labs should be excluded from R&D segment due to high turnover as compared to assessee - As submitted that this comparable is a contract research service provider and its research activities not as same as that of assessee. On perusal of orders passed by authorities below, we note that this aspect has not been verified by DRP/AO/TPO.
Accordingly we remand this comparable to Ld. AO/TPO to verify contentions alleged by assessee in respect of this comparable. In the event the claim alleged by assessee is found to be correct, this comparable deserves to be excluded.
ITES segment wherein assessee seeks exclusion of certain comparables - Nothing has been brought on record by revenue to establish any functional difference between assessee and e-4-e Business Solutions India Ltd [2016 (3) TMI 356 - ITAT BANGALORE] In view of the above discussion by coordinate bench, we hold these comparables as not functionally similar to assessee.
Exclusion of Lee & Nee software (exports) Ltd, Calibre Point Business Solutions Ltd and RS Systems International Ltd. - TPO rejected these comparables for having different year ending - We note that in respect of Lee & Nee Software (exports) Pvt.Ltd., there has been no finding in respect of whether this company is having functions that of ITES a software developer. Insofar as 2 comparables are concerned, reason for its exclusion by Ld.TPO is only because, they have a different year ending. Ld.TPO do not object functional dissimilarities with assessee. Therefore, In our view, in the event results could be extrapolated, these comparables needs to be included.
We therefore remand these comparables back to Ld.AO/TPO to ascertain financial results by extrapolating from the annual accounts. Also in respect of Lee& Nee Software, Ld.AO/TPO is directed to ascertain functions performed being whether ITES or software development company. In the event it is found to be having ITES segment, the same may be considered for purpose of comparability with assessee.
Not allowing MAT Credit - AR submitted that details of MAT credit has been placed AND MAT credit in computing tax liability was claimed in its return dated 29/09/2009, however, Ld.AO while computing tax liability for year under consideration was not taken into account - Also submitted that MAT credit paid by it during earlier u/s.115JB is allowable to assessee, as it was assessed under normal provisions of the Act for year under consideration - HELD THAT:- AO is directed to verify and allow the claim in accordance with law.
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2020 (9) TMI 1285
Disqualification of Directors - defaulting directors - Use of DSC and DIN no by the disqualified director - Interpretation of statute - provisions of Section 164(2) and Section 167(1)(a) of the Companies Act, 2013 - default on the part of concerned companies in filing the annual returns and financial statements for the financial years 2014-2016.
Respondents submits that the petition is liable to be dismissed on the ground of delay and laches.
HELD THAT:- A Coordinate Bench of this Court, in its judgment in SANDEEP AGARWAL AND ANR. VERSUS UNION OF INDIA ANR. ORS. [2020 (9) TMI 175 - DELHI HIGH COURT] has already rejected such submission.
Petition disposed off.
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2020 (9) TMI 1284
TP adjustment - MAM selection - import of raw materials from associated enterprises (AEs) - assessee benchmarked said transaction in its transfer pricing report applying Cost Plus Method (CPM) as Most Appropriate Method (MAM) - HELD THAT:- Respectfully following the decision rendered by this Tribunal [2019 (10) TMI 437 - ITAT MUMBAI] in assessee’s own case, we hold that CUP must be the Most Appropriate Method for benchmarking the international transaction of import of raw materials in view of the fact that direct comparable prices are available of TIPS Data Base for 95.79% of the total raw material imports from AEs by using the portfolio approach.
TPO is directed to verify the additional evidences filed before this Tribunal by the assessee providing CUP data on the TIPS data base. Needless to mention that CUP method and comparable prices available in TIPS Data Base using portfolio approach covers 95.79% of total import of raw materials transaction from its AEs, if on verification, it is found by the ld. TPO that the import prices of the assessee to be lower than the comparable prices reported by the TIPS Data Base, the remaining imports i.e.4.21% are also be considered to be at arm’s length and therefore, no adjustment to ALP would be warranted in such a scenario.
Disallowance of foreign exchange loss - cancellation of forward contracts - In order to mitigate the risk of foreign exchange fluctuation, the assessee enters into forward exchange contracts with the banks - assessee submitted additional evidences as Certificate from the Citi Bank along with the cross referencing of related contract copies and details of exchange gain or loss realized/ unrealized on such contract - HELD THAT:- Respectfully following the order of this Tribunal in assessee’s own case [2019 (10) TMI 437 - ITAT MUMBAI], we deem it fit to remand this matter to the file of the ld. AO for verification of the bank certificate and decide this issue in accordance with the aforesaid direction. Accordingly, the ground No. 10 raised by the assessee is allowed for statistical purposes.
Addition in respect of sundry creditors as unexplained credit - HELD THAT:- Sundry creditors had apparently emanated out of purchases or revenue expenses incurred by the assessee. We find that nowhere in the orders of the lower authorities, the revenue has brought out the fact that the corresponding purchases / expenses to the sundry creditors were either ingenuine or were incorrect. Once, the purchases made from the parties involved has been accepted by the revenue, there cannot be any addition in respect of closing balance of the very same sundry creditor by treating it as unexplained credit within the meaning of Section 68 - Thus we direct the ld. AO to delete the addition made in respect of sundry creditors balance outstanding at the end of the year - Decided in favour of assessee.
Disallowance of legal and professional fees on adhoc basis - HELD THAT:- As most of the payments were made for securing services in respect of tax audit and other professional work from various parties. However, these evidences require factual examination of the ld. AO and hence, in the interest of justice and fair play, we deem it fit to remand this issue to the file of the ld. AO for denovo adjudication in the light of various additional evidence submitted by the assessee which are admitted herein and the ld.AO is directed to decide the issue in accordance with law. The assessee is hereby given liberty to furnish further evidence, if any, in support of its contention.
Disallowance of interest u/s.36(1)(iii) which includes bank charges - assessee had given loans and advances as interest free - AO disallowed the interest on proportionate basis on the ground that on one hand,assessee has paid interest on its borrowings and on the other hand, no interest has been charged on the advances given - HELD THAT:- We find that the assessee had pleaded that it has made mandatory deposits with excise department, electricity department, rent advance for housing etc., These deposits are to be made in the course of running of the business of the assessee company. Considering the huge volume of transactions by the assessee company and considering the huge volume of mandatory deposits given by the assessee as claimed by the assessee, we deem it fit and appropriate in the interest of justice and fair play to remand this issue also to the file of the ld. AO for giving a proper finding with regard to nature of each deposits after due verification of the evidences submitted by the assessee in that regard. The assessee is also directed to furnish the entire list of mandatory deposits (as claimed by it before the ld. AO) afresh together with supporting evidences thereon to justify its contentions. The ld. AO is directed to give a factual finding in this regard.
Alternative argument made by the ld. AR that assessee having sufficient own funds for the purpose of making these advances - We find that this issue is already decided by the Hon’ble Jurisdictional High Court in the case of HDFC bank [2014 (8) TMI 119 - BOMBAY HIGH COURT] and accordingly we direct the ld. AO to verify the availability of the own funds with the assessee. If the assessee is having sufficient own funds, then there cannot be any disallowance of interest on borrowed funds, in any case.
AO is directed to give findings on all the aforesaid aspects before proceeding to make any disallowance of interest on borrowed funds. The ground raised by the assessee are allowed for statistical purposes.
Disallowance of depreciation on additions made to fixed assets - HELD THAT:- We find that no proper finding has been given by the ld. AO with regard to these documents containing the day on which each of the assets were actually put to use. From the details of each of the assets being put to use, we find that innumerable assets were purchased during the year from various parties. The ld. AO should also be practical in understanding the business model of the assessee and without the existence of these innumerable assets, the assessee could not have conducted its manufacturing activities by producing the finished goods and generating sales thereon, which has been duly offered to tax. Hence. We deem it fit and appropriate in the interest of justice and fair play to set aside this issue to the file of the ld. AO for denovo verification in accordance with law. The assessee is directed to furnish the details of each of the additions which were being put to use as certified by the Tax Auditor (which are filed before us along with the fact sheet). AO is directed to examine the same in accordance with law and grant depreciation on additions to fixed assets as per law. Accordingly, the ground raised by the assessee is allowed for statistical purposes.
Not granting of set off of brought forward unabsorbed business losses of A.Y.2008-09 and 2009-10 - HELD THAT:- This matter requires factual verification from final assessment records of the relevant assessment year. Hence, we direct the ld. AO to verify the same and grant set off of losses as per law. Accordingly, the ground raised by the assessee is allowed for statistical purposes.
Non-grant of credit for TDS granting - HELD THAT:- This matter requires factual verification with the corresponding TDS certificates or any other supporting documents thereon by the ld. AO. Accordingly, we direct the ld. AO to grant credit for TDS after due verification of the relevant documents as per law.
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2020 (9) TMI 1283
Grant of ad-interim injunction restraining the respondent therein, (appellant before us), from disseminating the information declaring the applicants therein as wilful defaulters - HELD THAT:- Apparently, a recourse to the provisions of the Arbitration and Conciliation Act, 1996 is permissible. If a person is aggrieved with the information disseminated by credit institution like the present appellant in the public domain and there is a dispute with regard to the same, the person aggrieved by such information can either approach the concerned credit institution itself for correction of such information or can approach the Reserve Bank of India, for such grievance. Therefore, the remedial measures to be undertaken by the aggrieved parties have a necessary recourse to the provisions of the Arbitration and Conciliation Act, 1996. Section 9 of the said Act, as quoted above, provides for interim relief to the aggrieved party before or during the course of arbitral proceedings - In the present case, it seems that the dispute as of now, does not stand referred to any Arbitrator appointed by the Reserve Bank of India.
The parties do not seem to have raised these issues before the learned Single Judge in appropriate manner and there is no discussion in the order impugned before us dated 31.1.2019 passed by the learned Single Judge. Therefore, we are deprived of the benefit of reasoned opinion of the learned Single Judge on these two important issues raised in this appeal.
Appeal disposed off.
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2020 (9) TMI 1282
TP Adjustment - comparable selection - DRP excluded E-Infochips Ltd. on the ground of having service income less than 75% of sales, which is alleged to be contrary to observations of Ld.TPO - HELD THAT:- This Tribunal in case of Autodesk India Pvt Ltd. [2018 (12) TMI 1742 - ITAT BANGALORE] excluded E- Infochips Ltd., by following view taken by this Tribunal in case of Comscop Network (India) Pvt. Ltd. [2017 (2) TMI 1383 - ITAT BANGALORE] wherein, this company was excluded for reason that, there is no segmental information regarding diverse functions performed by this company and that there was major fluctuation in its profits, which influenced turnover of this company.
Tribunal consistently in various decisions for A.Y: 2011-12 held that, this company does not satisfy service income filter being 75%. We therefore, do not see any reason to set aside this company to Ld.TPO - Ground raised by revenue stands dismissed.
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2020 (9) TMI 1281
TP Adjustment - comparable selection - characterisation of the assessee as a KPO/high-end ITeS service provider - HELD THAT:- We hold that the authorities were not correct in re characterisation of the assessee as KPO/high-end ITeS service provider instead of provider of nonbinding investment advisory services and related support services.
We also hold that following comparables should be included for the analysis - Almondz Global Securities Ltd., Crisil Risk & Infrastructure Solutions Ltd., ICRA Management Consulting Services Ltd.
We also hold that Eclerx Services Ltd. comparable should be excluded. The assessing officer/transfer pricing officer is directed to make the necessary competition in light of directions as above.
In the result this appeal by the assessee is partly allowed.
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2020 (9) TMI 1280
Jurisdiction exercised by the National Company Law Tribunal (NCLT), Kolkata - Respondent No.2/the Company in liquidation is being also proceeded against under the Prevention of Money Laundering Act, 2002 - Section 32A of the IBC - HELD THAT:- This Court is satisfied that the petitioners have made out a prima facie case for grant of an interim order.
Application allowed.
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2020 (9) TMI 1279
Seeking grant of interim bail - Right to speedy trial - conducting illegal mining of iron ore - Whether right to speedy trial which flows from Article 21 of the Constitution of India is a remote control in the hands of prosecution prosecuting an accused in a criminal case, so that it can take the trial speedily whenever it desires and slow it down to create frightening moments for the accused to carry an impression that he is fighting an endless battle?
Can an accused be left to become a puppet in the hands of the prosecuting agency?
Will the trial Court remain as a silent spectator when either from the side of the prosecution or accused, dillydallying or shilly-shallying attitude is adopted for some oblique purposes?
HELD THAT:- If the order sheet of the learned trial Court is perused from 05.09.2019 onwards till the end of December 2019, it cannot be said that the delay which was caused was unavoidable or on account of any administrative factors over which the prosecution has no control. During the said period, the trial court was functioning normally and no adjournment was sought for from the side of the petitioner and therefore, the delay which has been caused by the trial Court even after the receipt of the order this Court on 22.08.2019 passed in BLAPL No.1053 of 2019, in my humble view, is unreasonable and unexplained. Of course after the last two witnesses i.e. P.W.24 and 25 were examined on 4.01.2020, the Presiding Officer was transferred on 10.01.2020 and the new Presiding Officer joined on 23.03.2020 and then the lock-down was imposed in the State since 23.03.2020 which was extended from time to time and during the said period, there was restricted functioning of the Subordinate Courts in the State as per the direction of this Court and no summons were issued to witnesses during the said period and now the letter dated 10.09.2020 of the learned trial Court makes it clear that the normal functioning of the Court has not been restored.
The trial Court shall take all possible steps to stop the dillydallying or shilly-shallying attitude adopted either from the side of the prosecution or accused and ensure that the constitutional right of speedy trial of the accused as guaranteed under Article 21 of the Constitution of India is not flouted causing mockery of the trial. It seems unnecessary lengthy cross examination has been made by different set of defence counsel to the witnesses to make it a gallery show, which needs to be regulated by the learned trial Court keeping in view the provisions under sections 146, 148, 150, 151, 152 and 165 of the Indian Evidence Act, 1872.
In absence of any substantial change of circumstances after the rejection of the last bail application on merit and particularly since there is strong prima facie case against the petitioner relating to his involvement in the commission of grave economic offence, I am not inclined to reconsider his prayer for bail on merit and release him on bail pending disposal of trial - the petitioner is entitled for grant of interim bail with the terms and conditions imposed.
Bail application disposed off.
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2020 (9) TMI 1278
Supply or not - service provided by the assessee to its members - applicability of principal of mutuality - assessee and its members are one and same or not - Central/ Jharkhand Goods and Services Tax Act, 2017 - HELD THAT:- The applicant is not a company which provides shareholding to its members rather its liabilities/debts are guaranteed by the members - Now, once it has been established that the applicant is not doing any business in terms of section 2(17) of the CGST Act, 2017, it can be deduced that activities carried out by the applicant would not come under the scope of supply as envisaged under section 7(1) of the CGST Act, 2017.
Principal of mutuality - HELD THAT:- The applicant is giving service to its members but the club is formed on the principle of mutuality and, therefore, any transaction by the club to its member is not a transaction between two parties. However, when the club is dealing with its members, it is not a separate and distinct individual. Further, we find that it is a mutuality which constitutes the club and, therefore, supply by a club to its member and its services rendered to the members, is not a supply or service by club to the members.
Thus, the applicant is governed by the principal of mutuality - the applicant and its members are one and same.
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2020 (9) TMI 1277
Revision u/s 263 - As per CIT, AO failed to initiate penalty proceedings u/s 271(1)(C) of the Act, hence the assessment order passed by the AO was erroneous and prejudicial to the interest of Revenue - HELD THAT:- ITAT Coordinate Bench, Jaipur [2007 (5) TMI 274 - ITAT JAIPUR-A] had already deleted the entire addition mainly with respect to which the ld. CIT (Adm) invoked Section 263 - Since the very additions are not in existence at this stage, therefore, sustaining the present order of ld. Pr.CIT u/s 263 of the Act is not in accordance with law. However, the ld. DR submitted before us that they have challenged the order passed by the ITAT Jaipur bench before the Hon'ble Rajasthan High Court as ITAT has wrongly deleted the addition.
No order of Hon'ble Rajasthan High Court staying operation of the order of ITAT Jaipur Bench in deleting the addition has been placed before us. Therefore, in such circumstances as of now, there are no additions in existence as those very additions on the basis of which the Pr. CIT had invoked the provisions of Section 263 of the Act had already stood deleted by the ITAT Coordinate Bench, Jaipur. Therefore, we allow the present appeal of the assessee.
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2020 (9) TMI 1276
Maintainability of petition - the impugned order passed by the Arbitral Tribunal on 08.01.2017 was challenged only 2½ years late and the petitioner filed the writ petition at the last minute after the arguments had concluded before the Arbitral Tribunal - writ petition has been dismissed, filed under Article 227 directly against a section 16 application without following the drill of section 16 of the Arbitration Act - patent lack of inherent jurisdiction to interfere with deposit orders - HELD THAT:- A foray to the writ Court from a section 16 application being dismissed by the Arbitrator SLP (C) No. 8482/2020 can only be if the order passed is so perverse that the only possible conclusion is that there is a patent lack in inherent jurisdiction. A patent lack of inherent jurisdiction requires no argument whatsoever - it must be the perversity of the order that must stare one in the face.
Unfortunately, parties are using this expression which is in our judgment in Deep Industries Ltd. [2019 (11) TMI 1632 - SUPREME COURT], to go to the 227 Court in matters which do not suffer from a patent lack of inherent jurisdiction. This is one of them. Instead of dismissing the writ petition on the ground stated, the High Court would have done well to have referred to our judgment in Deep Industries Ltd. and dismiss the 227 petition on the ground that there is no such perversity in the order which leads to a patent lack of inherent jurisdiction. The High Court ought to have discouraged similar litigation by imposing heavy costs. The High Court did not choose to do either of these two things.
In any case, now that Shri Vishwanathan has argued this matter and it is clear that this is not a case which falls under the extremely exceptional category, we dismiss this special leave petition with costs of Rs.50, 000/- to be paid to the Supreme Court Legal Services Committee within two weeks - Application disposed off.
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2020 (9) TMI 1275
Addition of sundry creditors outstanding at the close of the A.Y under consideration - assessee vehemently stated that the creditors are outcome of the purchases made from them and the Assessing Officer has not drawn any adverse inference in so far as total purchases are concerned - HELD THAT:- Power of the CIT(A) are co terminus to that of the A.O and, therefore, he should have examined the transaction if he wanted to invoke the provisions of Section 68 of the Act. Failing which the action of the CIT (A) cannot be upheld. The contention of the DR that fresh opportunity should be given to the CIT (A) to examine the transaction does not have any force.
As no merit in the addition made by the Assessing Officer and sustained by the ld.CIT(A). accordingly, direct the Assessing Officer to delete the impugned addition. - Decided in favour of assessee.
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2020 (9) TMI 1274
Dishonor of Cheque - petitioner was director of the company during the relevant time or not - vicarious liability of the director - Section 141 of NI Act - HELD THAT:- The petitioner was a Director of the 1st accused company till 07.04.2015. The business transaction between the 1st accused company and the respondent/complainant was during the year 2012-2013. The cheque had been issued for the liability for the said business. During the relevant point of time, the petitioner was a Director. The other two Directors are none other than his parents. The petitioner had resigned three months prior to the date of the cheque. Further, the petitioner's resignation being registered with the ROC has not been conclusively proved. In view of the same, the petitioner's contention that he was not the Director of the company during the relevant period cannot be accepted.
From the complaint, it is seen that the cheque has been issued by the 1st accused company and the cheque has been signed by A2 as a Director and Authorised Signatory. Admittedly, the petitioner had not signed the cheque and from the complaint, it is seen that except for a bald averment, there is no specific averment to show that at the time of the offence committed, the petitioner was in charge and responsible for the conduct of the business of the company. This averment is an essential requirement to attract Section 141 of the Negotiable Instruments Act. Without this averment made in the complaint the requirement of Section 141 cannot be said to be satisfied.
From the complaint, it is seen that there is no such averment to rope in the petitioner. The Director would not automatically become vigorously liable. Merely being the Director of the company could not make such person liabile under Section 141 of the Negotiable Instruments Act - Petition allowed.
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2020 (9) TMI 1273
Maintainability of appeal on low tax effect - Reopening of assessment u/s 147 - HELD THAT:- Both the parties before us mutually agreed that this revenue appeal is to be dismissed as not maintainable in view of the recent Circular issued by the CBDT dated 08/08/2019 wherein the revenue has been directed to withdraw the appeal preferred by it before the Tribunal if the tax effect on the disputed issues is less than or equal to Rs.50,00,000/-. It is well settled that this Circular is binding on the revenue authorities.
Respectfully following the said Circular, the appeals filed by the revenue are dismissed as not maintainable.
In case, if the revenue is able to provide evidence that the case falls under any of the exceptions provided in the circular issued by the CBDT, then the revenue may prefer miscellaneous application for recalling of this order, if they so desire, in which circumstance this order shall be recalled by this Tribunal.
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2020 (9) TMI 1272
Detention of goods - etitioner has submitted that apart from the tax and penalty huge amount of Fine under Section 130 has also been imposed to the tune of Rs. 19,37,529/- - HELD THAT:- The matter requires consideration - List this petition in the 1st week of November, 2020.
The goods seized and vehicle detained on 20-8-2019 are directed to be released in favour of the petitioner forthwith on payment of Rs. 20 lacs in cash and on furnishing of security in the shape of indemnity bond for the balance amount (fine). It is made clear that the Mobile Squad Authority/assessing authority or the competent authority will release goods immediately without any delay.
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2020 (9) TMI 1271
Addition as deemed notional rent on unsold stock of flats - deemed notional rent upon unsold stock of flats of the builder and developer - diversified decisions - HELD THAT:- There is a decision of honourable Delhi High Court [2012 (11) TMI 323 - DELHI HIGH COURT] in favour of the revenue and the decision of honourable Gujarat High Court [2006 (8) TMI 105 - GUJARAT HIGH COURT] is in favour of the assessee. There is no direct decision of honourable jurisdictional High Court on this subject. In this view of the matter in my considered opinion the ratio from honourable Supreme Court in the case of Vegetables Product Ltd. [1973 (1) TMI 1 - SUPREME COURT] is applicable. Hence respectfully following the decision of honourable Gujarat High Court in the case of Neha Builders Pvt. Ltd. (supra) direct that the addition on account of deemed notional rent in this case is liable to be deleted. Appeal filed by the assessee stands allowed.
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2020 (9) TMI 1270
TDS u/s 195 - disallowance u/s 40(a)(ia) - non-deduction of TDS on reimbursement of expenses to overseas group entities - HELD THAT:- The expenses were disallowed by the AO for the reason that on the amount of expenses which have been claimed by the assessee, no TDS was deducted by it. CIT(A) has given finding that the assessee was not required to deduct TDS on the reimbursement of the expenses made to the overseas entities as it was on cost to cost basis.
We further find that the coordinate Bench of Tribunal while deciding the identical issue in assessee’s own case in A.Y. 2010-11, 2011-12 & 2012-13 has held that the provision of section 195 are not attracted on the amounts paid by assessee to its overseas group Companies as it was mere reimbursement and that no disallowance u/s 40(a)(ia) are attracted. Before us, Revenue has not pointed out any distinguishing features in the fact of the case for the year under consideration and that of earlier years nor has placed any material on record to demonstrate that the order of Tribunal in assessee’s own case for A.Y. 2010-11 to 2012-13 [2019 (1) TMI 1990 - ITAT DELHI] and [2018 (2) TMI 1628 - ITAT DELHI] has been set aside/ stayed or overruled by higher judicial forum. We find no reason to interfere with order of CIT(A). - Decided against revenue.
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2020 (9) TMI 1269
Seeking grant of Regular Bail - criminal conspiracy - fraudulent withdrawal of money from the Bank Accounts of different persons - operation of inoperative accounts of the customers by issuing Cheque Books in the name of those customers of the Bank and used to withdraw the amount from their accounts fraudulently - HELD THAT:- Admittedly the Challan has been submitted against him more than four months ago and there is no requirement for his further detention especially in view of the fact that he was taken into custody in the present case before he could be released on bail granted to him by the Himachal Pradesh High Court. Ld. State Counsel has nevertheless also contended that considering the nature of offences involved there is every likelihood that the Petitioner will abscond and flee from justice on account of which he should not be released on bail. This submission, however, does not appear to be substantiated considering the previous background of the Petitioner's arrest and implication in FIR No.161 dated 21.9.2018.
Inspite of having been granted bail on 24.5.2019 in FIR No.161 of 2018 of the same Police Station, the Pettioner had never misused his liberty and was diligent in attending the Court till 18.12.2019, after which he was arrested, and there is no material to indicate that he had tried to flee away.
This Court finds the Petitioner to be entitled to regular bail in the present case considering his long detention exceeding 6½ months, and the fact that Challan against him has been filed long ago. He is, therefore, ordered to be released on bail subject to imposition of appropriate terms and conditions to ensure his attendance, which are left to the discretion of the Ld. Trial Court/Duty Magistrate concerned - Petition allowed.
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