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2022 (8) TMI 1470 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Dismissal of Application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 - dismissed on the ground that it does not fulfil the threshold as provided in Section 4 of the Code - HELD THAT:- Section 4 of the Code provided initially threshold of Rs. 1 Lakh which was substituted vide Notification dated 24th March, 2020 to 1 Crore. The Submissions which has been pressed by the Learned Counsel for the Appellant is that the notification being prospective as has been held by this Tribunal in “Madhusudan Tantia” [2020 (10) TMI 547 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] it should not apply on the default which had occurred prior to 24th March, 2020 - this Tribunal categorically held that Notification dated 24th March, 2020 is only prospective and not a retrospective. This Tribunal held that the said notification will not apply to pending application of IBC.
It is clear that Applications under Section 9 filed prior to 24th March, 2020 shall not be affected by the Notification dated 24th March, 2020 and notification being prospective shall apply to Applications filed thereafter. The provision is clear that the amendment shall come into force after its publication in the Gazette and Application filed thereafter has to fulfil the threshold as provided in Section 4 i.e. threshold of Rs. 1 Crore.
The Application in the Appellant’s case filed on 27th March, 2021 was rightly hit by threshold of Rs. 1 Crore as implemented with effect from 24th March, 2020. There is no error in the Order of the Adjudicating Authority - Appeal dismissed.
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2022 (8) TMI 1469 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Application filed u/s 7 of the IBC, 2016 dismissed on the sole ground being barred by limitation - HELD THAT:- The issue regarding the appreciation of the balance sheets which has now become part of record is to be looked into by the Adjudicating Authority to hold as to whether the application filed under Section 7 of the Code is within limitation or not. Therefore, this matter requires a relook by the Adjudicating Authority especially after the amendment has been made in the application filed under Section 7 of the Code to find out as to whether the application filed under Section 7 is within limitation in terms of the alleged acknowledgment of the part of the Respondent by way of the entries made in the balance sheets.
The matter is remanded back to the Adjudicating Authority to reconsider the amended application, filed under Section 7 of the Code, at the instance of the Appellant - Appeal allowed by way of remand.
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2022 (8) TMI 1468 - ITAT DLEHI
Addition u/s 56(2)(vii)(b) - determining value of shares - CIT(A) deleted addition holding DCF method is in place, which was rejected by the AO being not backed by scientific method or by any data - Assessee in the instant case adopted DCF method on the basis of report determining the fair market value by Accountant as per the discounted free cash flow method - HELD THAT:- We observe that the Assessee has adopted one of the method available for valuing its shares u/s. 56(2)(viib) of the Act, on the basis of the valuation report certified by the Ld. Chartered Accountant, which is not only based upon scientific valuation and financial position for the next seven years in the normal market/business scenario but also prepared in accordance with the prescribed Rules as applicable thereto.
AO rejected the method adopted by the Assessee mainly on the ground that figures adopted in the F.Y. 2014-15 and 15-16 did not match with the actual performance of the company, whereas varying of actual results depends upon various marketing/economic/social conditions and even otherwise, projections in the instant case, on the basis of which the valuation was determined has been made while taking into consideration the historical performance of the company and not held contrary to the provisions of the Act, as applicable to the instant case, by the AO.
DCF analysis is an important tool or method to value a project and the statute itself gives an option to choose either of the two method, i.e., ‘book value method’ or ‘discounted cash flow method’ to the Assessee for determining the value of its shares. From the figures as mentioned by the ld. Commissioner and not denied by the ld. DR that there is a growth in the turnover of the Assessee for F.Y. 2016-17 and 2017-18 and doubled to 44.18 Crs. In F.Y. 2014-15, from 22.70 Crs. in F.Y. 2013-14 despite not matching the PAT with the actual.
Therefore, we are in agreement with the findings of the ld. Commissioner that there is no infirmity in the valuation report, as the same is appropriate, detailed and provide the necessary basis of computation of projection and growth factors etc. The valuation arrived at by the expert under the scheme allowed under the IT Act needs to be accepted. We observe that in the case of Social Media India Ltd. [2013 (10) TMI 414 - ITAT HYDERABAD] has held that the Assessee’s valuation has to be accepted as it was supported by an independent valuer. In the cumulative effect, we are inclined not to interfere in the conclusion drawn by the ld. Commissioner on the instant issue. Consequently, ground No. 1 & 2 stand dismissed.
Late deposit of employees’ contribution towards PF u/s. 36(1)(va) - Assessee has paid the contribution towards PF after the due date prescribed under the relevant statute but before the due date of filing the return u/s. 139(1) - CIT(A) deleted addition - HELD THAT:- We are inclined to uphold the decision of the ld. Commissioner in deleting the addition made by the Assessing Officer on account of delay in depositing the employees’ contribution towards PF but deposited prior to the due date of filling of return of income u/s 139(1) of the Act. Consequently, ground stands dismissed.
Addition of interest on delayed payment of indirect tax liabilities - Whether allowable expense u/s. 37(1)? - DR submitted that the delayed payment of indirect tax liability is penal in nature and therefore, the order of the ld. Commissioner to the extent of deleting the addition on account of delay in deposit of interest on tax liabilities (service tax, Sales Tax and TDS) is not justified - HELD THAT:-Commissioner by considering the issue in hand observed that there is nothing on record to suggest that these payments of interest on sales tax and Service tax were penal in nature. The ld. Commissioner also quoted the judgments of the Tribunal in the case of DCIT vs. Messee Dusseldorf of India Pvt. Ltd [2009 (12) TMI 1034 - ITAT, DELHI] and in the case of Remfry & Sugar Consultants Pvt. Ltd [2012 (9) TMI 190 - ITAT DELHI] wherein it was held that interest on service tax is compensatory in nature and has the same characters as service tax and therefore, it is an allowable deduction - Hon’ble Apex Court in the case of Prakash Cotton Mills P. Ltd. [1993 (4) TMI 3 - SUPREME COURT] held that where the payment of interest is automatic for the delayed payment, the imposition is compensatory in nature. Prakash Cotton Mills Pvt. Ltd. [1993 (4) TMI 3 - SUPREME COURT] also held “where the payment of interest is automatic for delayed payment, the imposition is compensatory in nature and there can be no manner of doubt that in view of the decision of Apex Court, the interest payment for delayed payment of tax is deductible under section 37.” Thus Commissioner deleted the addition that qua payment of interest for delay in payment of Service Tax or Sales Tax . Decided against revenue.
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2022 (8) TMI 1467 - SC ORDER
Benami transaction - indulgence in prohibited transactions - second appellant passed an order provisionally attaching the property of the respondent company under Section 24(4)(b)(i) of the Act pending adjudication by the first appellant - period of limitation for filing an appeal - HELD THAT:- In terms of our order [2022 (4) TMI 1575 - SUPREME COURT] it is stated that the appellants have preferred an appeal under Section 46 of the Prohibition of Benami Property Transactions Act, 1988.
In view of the aforesaid position, we clarify that the observations made in the impugned judgment on merits would not, in any way, affect the decision of the appeal and would not be treated as findings on merits. Further, it will be open to the appellants to rely upon the judgment of “Union of India v. Ganpati Dealcom Pvt Ltd.” [2022 (8) TMI 1047 - SUPREME COURT]
Recording the above, the appeal is allowed in the aforesaid terms, without making any comments on the merits.
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2022 (8) TMI 1466 - CALCUTTA HIGH COURT
Validity of reopening of assessment - petitioner against the impugned assessment order as been passed in total violation of principle of natural justice since before passing the aforesaid impugned assessment order all the formal notices were issued under the old surrendered PAN - HELD THAT:- On perusal of the relevant record annexed to the writ petition, as find that the return relating to the relevant assessment year 2017-18 was filed by the petitioner under the aforesaid new PAN which was allotted to the petitioner and in spite of that, the assessing officer concerned has passed the impugned assessment order under the old PAN. On a similar grievance relating to the assessment year 2015-16, the assessment against the petitioner was dropped by the order dated 29th July, 2022.
Considering the submission of the parties, and facts and circumstances as appears from record the impugned order to the writ petition is quashed. However, quashing of the impugned assessment order will not prevent the respondent assessing officer to initiate any fresh proceeding and pass an order under Section 147 of the Act in accordance with law.
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2022 (8) TMI 1465 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Offences by companies - Preferential allotment of shares - public shareholding of atleast 25% not followed - Restrain orders against Director,Executive Chairman and Non-Executive Director - allotment to the assignee companies was not a genuine consequence or outcome of the Assignment Deeds was based on the fact that the three companies had no business activity and their net worth was nowhere close to the assigned amounts - WTM found that the preferential allotment to the three assignee companies was not a genuine assignment and, therefore, the shareholding of the assignee companies has to be clubbed together with the shareholding of the promoter group which taken together would reach 87.27% and, therefore Falcon which had time till June 03, 2013 to achieve the minimum public shareholding of 25% as mandated under Rule 19(A)(1) of the SCRR was not achieved.
HELD THAT:- A loan was given by Manali/ Stephens which is not disputed and if the loan is not repaid Falcon/ Dunlop in their wisdom allotted shares to the assignee companies through preferential allotment of shares in order to square off the loan amount which is permissible in law.
The three assignee companies are not promoter group companies of Falcon or Dunlop. Similarly, there is no evidence to show that the three assignee companies were group companies/ subsidiary companies of Manali/ Stephens. In the absence of any such evidence coming on record the WTM committed a manifest error in clubbing the shareholding of the three assignee companies, namely, Regus, Suncap and Sulputri with the shareholdings of Manali/ Stephens respectively and then clubbing it as the group shareholding with Falcon/ Dunlop. Such clubbing of shares, in our opinion, was not permissible in the eyes of law.
We are of the view, that the company had rightly shown the shareholdings of the three assignee companies as public shareholdings. We are further of the view, that the shareholdings of the assignee companies cannot be clubbed together with the shareholding of the promoter group of Falcon or Dunlop respectively.
The appellant as an Independent Director has been penalized for non-compliance of the MPS requirement under Clause 40A of the Listing Agreement read with Rule 19(A) of the SCRR. As stated earlier, the obligation to comply with the MPS requirement is upon the company, namely, Dunlop. In the instant case, Dunlop has not been made a party. No show cause notice has been issued to Dunlop and, consequently, in the absence of the company being made a party, no proceedings can be initiated against the Director of the Company.
As if an offence is committed by the company then every person who was responsible to the company for the conduct of the business of the company would be guilty of the offence. Thus, violation of Clause 40A of the Listing Agreement read with 19(A) of the SCRR has to be first found against the company and only thereafter SEBI can proceed against the Directors who were responsible for the conduct of the business of the company at the time when the violation was committed. Thus, we are of the confirmed opinion, that no proceedings could have been initiated against the appellant Mohan Lall Chauhan without first initiating proceedings against its company Dunlop.
The impugned order against the appellants cannot be sustained and to that extent the order is quashed. The appeals are allowed with no order as to costs. The misc. application is disposed of accordingly.
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2022 (8) TMI 1464 - MADRAS HIGH COURT
Exemption u/s 11 and 12 denied - assessee was granted registration u/s 12AA for claiming exemption u/s 11 with retrospective effect from 01.04.2002, by order dated 16.06.2008 - assessee is not entitled to claim exemption, when no valid return was filed by them - as per revenue mere registration would not entitle the assessee to claim exemption under sections 11 and 12 of the Act and they have to fulfil the other re-requisite conditions stipulated thereon - HELD THAT:- Section 11 provides for the incomes from the property held for charitable or religious purposes which are liable to be exempted from total income of the assessee. Section 13 on the other hand, precludes the application of section 11 in certain cases. As such, while registration is the precondition to apply section 11, the entitlement of an assessee for exemption under section 11 depends on non-disqualification under section 13 and satisfaction of conditions under section 11. Therefore, this court is of the opinion that mere registration does not guarantee exemption under section 11 and it only entitles the assessee to claim exemption and the same will be granted to them, subject to fulfilment of other prescribed conditions.
The overall analysis of the provisions of law viz., sections 11, 12, 12AA and 13, would compel this court to hold that the grant of registration under section 12AA in favour of the assessee cannot ipso facto give them exemption under sections 11 and 12 and an independent examination by applying the relevant provisions of law, is required by the authorities qua satisfaction of other conditions by the assessee for grant of exemption. In view of the same, the direction given by the Tribunal to the assessing officer to grant exemption to the assessee under sections 11 and 12 of the Act, merely on the basis of the registration obtained under section 12AA, is not correct and hence, the orders passed by the Tribunal to that effect, warrant interfere by this court.
Accordingly, the orders impugned herein are set aside and the matters are remitted to the Assessing Officer to consider afresh, as to the entitlement of exemption by the assessee, in the light of the provisions of sections 11, 12 and 13 of the Act and by conducting appropriate enquiry, after giving due opportunity to the assessee. Both the contentions raised on the side of the appellant / Revenue are accordingly, answered.
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2022 (8) TMI 1463 - SC ORDER
Petitioners seeking urgent listing of the matter - HELD THAT:- It is deemed appropriate to direct the Registry to list the matter before the Bench presided over by Hon’ble Mr. Justice Sanjay Kishan Kaul.
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2022 (8) TMI 1462 - PUNJAB AND HARYANA HIGH COURT
Maintainability of appeal filed by the petitioner under Section 37(2) of the Arbitration Act - direction to deposit the amount to the extent of 7.5% of the claim amount in terms of Section 25(A)(viii) of the Contract - failure to to perform contractual obligations on the part of respondents.
HELD THAT:- A similar controversy was sought to be raised in M/S GARG AND COMPANY VERSUS STATE OF HARYANA AND OTHERS. [2022 (4) TMI 1565 - PUNJAB AND HARYANA HIGH COURT] and other connected writ petitions, which have been dismissed on 08.04.2022. Question raised for adjudication in the said writ petitions was also whether the clause in question requiring a pre-deposit for invocation of Arbitration is unreasonable, unconscionable and liable to set aside. Clause in question in the abovesaid writ petitions was identical as clause 25(A)(vii) involved in the instant writ petition.
Reliance had been placed on M/s ICOMM Tele Limited [2019 (3) TMI 600 - SUPREME COURT] as is the case in the present writ petition. However, while dealing with the contentions as raised and dismissing the said writ petitions, judgment of the Three Judge Bench of the Hon’ble Supreme Court in S.K. Jain v. State of Haryana [2009 (2) TMI 926 - SUPREME COURT] was duly considered. It was also noticed that Hon’ble Supreme Court itself in the case of M/s ICOMM Tele Limited referred to the case of S.K. Jain and infact upheld the clause regarding pre-deposit in S.K. Jain’s case.
Thus, the question sought to be raised has been clearly answered against the petitioner. Learned counsel for the petitioner is unable to point out any distinguishing feature in the present writ petition which calls for interference. Insofar as the argument raised on behalf of the petitioner that once Chief Engineer has appointed Arbitrator on demand raised by the petitioner without any condition of pre-deposit, thus, the same amounts to waiver of said condition, is of no avail to the petitioner, for the reason that it is specifically observed by the learned Arbitrator in order dated 15.01.2022 that appointing authority did not waive the condition of pre-deposit but rather asked the Arbitrator to decide the disputes as per clause 25 and 25 (A) of the Contract instead of passing any other order after taking note of the claimant’s plea that it was not liable to deposit 7½% of the claimed amount - It has been rightly held that appointment of Arbitrator in this manner cannot be construed as waiver of condition of pre-deposit.
This Court is clearly bound by the judgment of the Hon’ble Supreme in the case of S.K. Jain which has admittedly not been over ruled till date.
Petition dismissed.
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2022 (8) TMI 1461 - CHHATTISGARH HIGH COURT
Seeking grant of bail - Money Laundering - assisting the main accused in commission of the offence - co-accused persons have been already granted anticipatory bail - HELD THAT:- Considering the facts and circumstances of the case, the fact that complaint has already been filed; co-accused persons have been granted anticipatory bail by this Court vide order dated 23.8.2022 in MCRCA No.949/2022; there is no apprehension of the applicant absconding or tampering with the evidence or influencing the witnesses and that conclusion of the trial is likely to take some time, without commenting anything on merits of the case, this Court is inclined to release the applicant on anticipatory bail.
Accordingly, the application is allowed.
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2022 (8) TMI 1460 - ITAT BANGALORE
Revision u/s 263 - cash deposit in the Bank Account unexplained - as dispute is settled under VSV Scheme, PCIT held that the same would be valid only to the extent of addition made by the AO and not the entire cash deposit in the Bank Account - HELD THAT:- The case was picked up for limited scrutiny of cash deposits in Bank Account during demonetization period. AO examined cash purchases and sales and came to a conclusion that purchases and sales from May, 2016 to October, 2016, were inflated and to the extent of such inflation, the AO drew an adverse inference.
PCIT is of the view that the addition should have been on actual purchases and sales proved by the assessee and not on an ad hoc basis. The law is well settled that power u/s 263 of the Act cannot be exercised to substitute the view of the PCIT with that of the AO when the view taken by the AO was a possible view.
It is equally well settled that the PCIT cannot invoke powers u/s 263 of the Act directing a fishing or raving enquiry. In a case where enquiry is directed to be made by the PCIT, he must give a finding as to how the enquiry made by the AO was wrong.
In the present case, the enquiry made by the AO was proper and the AO has drawn proper conclusions on material available before her. The view taken by the AO was a possible view rather a very pragmatic view. The PCIT may not agree with that view. However, the powers under section 263 of the Act cannot be exercised to substitute the view of the PCIT with that of the AO.
Since we have quashed the order on merits, we do not wish to go into the question regarding VSV Scheme and its effect on the power under section 263 of the Act. We also hold that the question of invoking the provisions of section 40A(3) of the Act does not arise firstly because the limited scrutiny was only to verify cash deposit in Bank Account. Secondly, the issue was not subject matter of SCN under section 263 of the Act nor was the assessee put on notice regarding the said issue by the PCIT in the proceedings under section 263 of the Act. Appeal of the assessee is allowed.
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2022 (8) TMI 1459 - GUJARAT HIGH COURT
Demand for period prior to the approval of the Resolution Plan by the NCLT - Extension of benefit of concessional rate of duty exemption under sr. No. 34 of Notification No. 21/2002-Cus dated 1.03.2002 as amended - ignoring the report of the Government institution, in absence of the same being demonstrated to be erroneous, relying only on a private report - carotene value in crude palm oil decreases due to passage of time or not.
HELD THAT:- In the facts of the present case also, no claim was filed by the appellant-Commissioner of Customs with regard to demand after the issuance of the notice under IBC for initiation of the resolution process before the Resolution Professional - In terms of the provisions of the IBC, Resolution Plan was approved by the Committee of Creditors on 20.04.2019 and thereafter the same was approved by NCLT and the corporate insolvency resolution process was completed on 6.09.2019. It is also not in dispute that plan has been successfully implemented and consequently change in control and ownership of the respondent has taken place with effect from 18.12.2019 and there is no involvement of any erstwhile promoters and erstwhile directors on the Board of Directors of respondent.
In view of provisions of Section 32A of the IBC which clarifies that upon completion of corporate insolvency resolution process, even liability of corporate debtor for an offence committed earlier would cease and hence the appellant department cannot proceed further with the present appeal in absence of any claim lodged with the Resolution Professional during the insolvency resolution process before the NCLT.
Taking into consideration the fact of the completion of the resolution process of the respondent by the NCLT and undisputed fact that the appellant has not lodged any claim in the capacity of the Operational Creditor before the Resolution Professional, this appeal is required to be disposed of as having become infructuous and abated with regard to any liability of any nature whatsoever having extinguished in view of the implementation of the Resolution Plan and change in management and control of the assessee in view of the provisions of section 31 and section 32A of the IBC.
Appeal disposed off as abated.
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2022 (8) TMI 1458 - ITAT AHMEDABAD
Rectification u/s 254 - Validity of reopening of assessment - ITAT has erred in holding that the reason to believe for escapement of income was recorded without application of mind and without specifying failure on the part of the assessee to disclose all the material facts before AO in the regular assessment - HELD THAT:- ITAT after elaborate discussion on the issue of reason to believe has taken a view that reason recorded by the AO was nothing but borrowed satisfaction. In holding so the ITAT analyzed the facts available on record, given various reasoning and also referred several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon’ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. [2021 (12) TMI 211 - SUPREME COURT]
ITAT erred in holding that no addition was made based on reasons to believe recorded - Again it is noted that the ITAT has considered all the materials available on record and also made comparable reference to the income identified by the AO in reasons recorded and final addition made by the AO in the assessment order passed under section 143(3) read with 147 of the Act. Thus, in our considered view, there is no mistake apparent in the order of the ITAT. At the this juncture we again feel pertinent to refer the judgment of Hon’ble Supreme Court in case of CIT vs. Reliance Telecom Ltd [2021 (12) TMI 211 - SUPREME COURT] where it was held that even if the order passed by the ITAT is erroneous on merit the only remedy available to the aggrieved party to prefer appeal before Hon’ble High Court.
It is also not out of place to mention that the Revenue against the order of the ITAT has already preferred an appeal before the Hon’ble High Court which has been admitted. This argument of the ld. AR was not controverted by the ld. DR appearing on behalf of the Revenue.
We hold that there is no apparent mistake in the order of ITAT as alleged by the Revenue in its miscellaneous application as discussed above. Therefore, we do not find any merit in the argument of Ld. Counsel for the Revenue.
Rectification u/s 254 - Validity of assessment u/s 153A - ITAT has erred in holding that in the proceeding u/s 153A of Act addition or disallowance can only be made on the basis of incriminating material found in the course of search and in holding so ITAT misinterpreted the judgment of Saumya Construction (P) Ltd. [2016 (7) TMI 911 - GUJARAT HIGH COURT] and Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] - HELD THAT:- ITAT has considered all the materials available on record and the ITAT also analyses the decision of Hon’ble SC in case of VLS Finance Ltd [2016 (4) TMI 1133 - SUPREME COURT] and after making reference to other judgment of Hon’ble High Court held that principles laid down by the Hon’ble SC are not applicable to the facts on the hand. Thus, in our considered view, there is no mistake apparent in the order of the ITAT. At the this juncture we again feel pertinent to refer the judgment of Hon’ble Supreme Court in case of CIT vs. Reliance Telecom Ltd [2021 (12) TMI 211 - SUPREME COURT] where it was held that even if the order passed by the ITAT is erroneous on merit, the only remedy available to the aggrieved party is to prefer an appeal before Hon’ble High Court.
We hold that there is no apparent mistake in the order of ITAT as alleged by the Revenue in its miscellaneous application as discussed above. Therefore we do not find any merit in the argument of Ld. Counsel for the Revenue. Hence, the MA filed by the Revenue is dismissed.
Whether materials found during the search on the basis of which proceedings under section 153C of the Act were initiated, were not belonging to the assessee? - ITAT after elaborate discussion on the issue whether search materials belong to assessee or not, has taken a view that such materials do not belong to the assessee. In holding so the ITAT analyses the fact available on record, gives various reasoning and also refer the several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. M.A’s in this segment filed by the Revenue are hereby dismissed.
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2022 (8) TMI 1457 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - purchase of flat - Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in the price of Flat - contravention of of Section 171 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- It is clear from the plain reading of section 171 (1) that it deals with two situations:- One relating to the passing on the benefit of reduction in the rate of tax and the second on the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP"s Report that there has been no reduction in the rate of tax in the post-GST period. Hence, the only issue to be examined is whether there was any net benefit of ITC with the introduction of GST. The Authority finds that the ITC, as a percentage of the turnover, that was available to the Respondent during the pre-GST period (April 2016 to June 2017) was 0.92%, whereas, during the post-GST period (July 2017 to December 2019), it was 4.26%. This confirms that in the post-GST period, the Respondent has benefited from additional ITC to the tune of 3.34% (4.26%-0.92%) of his turnover, and the same is required to be passed on by him to the recipients of supply, including the Applicant No. 1, if not already passed on. The Authority finds that the computation of the amount of ITC benefit to be passed on by the Respondent to the eligible recipients works out to Rs. 1,45,87,404/-.
This Authority concurs with the DGAP's report dated 28-10-2020. The Authority determines that the Respondent has profiteered by Rs. 1,45,87,404/- in respect of the project "Ruparel Orion" during the period from 1-7-2017 to 31-12-2019 which includes Rs. 86215/- of the Applicant No. 1 and orders refund/return/passing on of the profiteered amount, if not already done, along with the interest @18% thereon, from the date, when the above determined profiteered amount was profiteered by him till the date of such payment, in line with the provisions of rule 133 (3) (b) of the CGST Rules 2017 - This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from homebuyers/customers/recipients commensurate with the benefit of ITC received by him.
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2022 (8) TMI 1456 - ITAT CUTTACK
Revision u/s 263 - deposit of specified bank notes - As per CIT perusal of the order of the AO passed u/s. 143(3) shows that in the assessment order there is no discussion of the deposit of the specified bank accounts in two bank accounts - HELD THAT:- As applying the principle of law laid down in the case of Deepak Kumar Garg [2007 (5) TMI 186 - MADHYA PRADESH HIGH COURT] would show that the ld. Pr. CIT has only done a semblance of enquiry by examining the assessment records and has rejected the explanation of the assessee without any proper enquiry.
With this in mind, applying the principle of law laid down in the case of Orissa State Police Housing & Welfare Corporation Ltd. (2022 (4) TMI 1395 - ORISSA HIGH COURT), one comes to the clear conclusion that Pr. CIT did not have any basis on which he could have come to a view that the specified bank notes deposited by the assessee in the bank accounts had not been examined by the AO to its logical conclusion.
A perusal of the order of the ld. Pr. CIT would clearly show that no enquiry has been done nor caused to be done as required u/s. 263(1) of the Act by the ld. Pr. CIT before setting aside the assessment order passed u/s. 143(3) of the Act and directing the AO to examine the issue. In fact, the direction of the ld. Pr.CIT, directing the AO to examine the issue of the deposit of the specified bank notes, is nothing but a direction for re-examination of an already examined issue. This is not permissible under the provisions of Section 263 of the Act.
In the instant case, the assessee has categorically shown and proved that the specified bank notes have been deposited and is out of its cash book. This has not been refuted by the ld. Pr. CIT but only an allegation has been made that the cash balance as on 08.11.2016 has not been verified. This being so, order passed u/s. 263 of the Act by the ld. Pr. CIT stands quashed. Decided in favour of assessee.
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2022 (8) TMI 1455 - GUJARAT HIGH COURT
Validity of faceless assessment u/s 144B - gross violation of the principles of natural justice - As argued respondents ought not to have shown undue haste in framing the assessment for the year under consideration without affording an opportunity of personal hearing to the petitioner - HELD THAT:- Personal hearing in era of Faceless assessment is to be provided through video conferencing.
It is not in dispute that in facts of the case no draft assessment along with show cause notice as required under section 144B(1) and section 144B(7) is given to the petitioner so as to enable the petitioner to give explanation for proposed addition during the hearing before the National Faceless Assessment Centre. Section 144B(1)(xii) provides that on receipt of show cause notice, assessee may furnish his response to the National Faceless Assessment Centre and as per clause (xiv), assessment unit shall make a revised draft assessment order after considering the response of the assessee and send it to the National Faceless Assessment Centre.
As per the provisions of section 144B(7) in case of variation prejudicial to the assessee as proposed in the draft assessment order, the assessee is entitled to request for personal hearing and upon such request, the personal hearing may be provided by the authority, if the case of the assessee is covered by circumstances provided therein in exercise of powers under sub-clause (h) of clause (xii) of section 144B(7) of the Act, 1961.
It can be safely be said that the impugned order was passed by the respondent in violation of principles of natural justice without affording an opportunity of personal hearing by not following the prescribed procedure laid down as per the provisions of section 144B for Faceless assessment.
Petition succeeds and is accordingly allowed. The impugned order of assessment passed by the respondent under Section 147 r.w.s. 144B and demand notice un/s 156 are quashed and set aside.
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2022 (8) TMI 1454 - NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD
Maintainability of application u/s 10 of IBC - initiation of CIRP - Inability to pay the debt of various Banks - whether the application is complete as per provisions of Section 10 (3) (a) (b) and (c) of the Insolvency and Bankruptcy Code, 2016? - HELD THAT:- The Insolvency and Bankruptcy Code, 2016 is a beneficial legislation inacted for resolution of Insolvency of the Corporate Person and, hence, only because any recovery proceedings is pending against the Corporate Person is not a ground to reject this application. Moreover, it is seen from the material available on record that this application was filed on 30.07.2021 whereas the HDFC Bank has given a notice under Section 13(2) of the SARFAESI Act, 2002 on 18.12.2021 i.e. after filing of this application. SBI has served the notice of default on 28.05.2021 i.e. 3 months prior to filing of this application. In short there is no material before us to show that the Corporate Person has filed this application with some ulterior motive. There is no dispute to the fact that the debt is more than One Crore payable by the Corporate Person to the various Banks and the Corporate Person committed default in paying the same.
It is a fit case where the Corporate Person can be admitted in CIRP - Application admitted.
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2022 (8) TMI 1453 - CALCUTTA HIGH COURT
Revision u/s 264 - appellant has slept over his rights and had not been diligent in prosecuting the matter - HELD THAT:- In our considered view, the appellant cannot be stated to be a habitual defaulter but nevertheless did not take active steps to follow up the matter with the consultants/Advocate, who was engaged to file the appeal before the tribunal.
Though the appeal was presented against an order passed u/s 264 such appeal was not maintainable and the registry of the learned tribunal had entertained the appeal and it was assigned [2014 (9) TMI 1277 - ITAT KOLKATA] - Therefore, the explanation offered by the appellant that he was under the belief that the appeal would be heard and decided on merits appears to be reasonable as the appeal was not returned by the registry of the learned tribunal on the ground of maintainability.
No instruction was given by the appellant to withdraw the appeal to the earlier consultant etc., are of self-serving statement of the appellant of which we cannot take any cognizance - Nevertheless, we are convinced that the conduct of the appellant cannot be stated to be so bad to hold that he had slept over his rights. The appellant had been prosecuting the matter before a wrong forum. In any event, the appellant should not be left remediless and should not be non-suited even to avail the revisional remedy, more particularly when the appellant chose not to avail a statutory appeal before the first appellate authority against the assessment. Therefore, the only remedy available to the appellant is to file a revision petition under section 264 of the said Act, which was done by the appellant and such revisional application was made as early as on 5th March, 2012.
Revisional authority also has not dealt with the matter though it appears that the revisional authority had called for a report from the assessing officer on the grounds raised by the assessee. We also find from the order assed by the revisional authority, the report called for from the assessing officer has been received by the revisional authority
Revision ought to be heard and disposed of on merits. However, noting that the matter is a long pending matter and the appellant has been pursuing his remedy before a wrong forum and the appeal before the tribunal was withdrawn and the appellant would state that he never instructed his consultant to withdraw the appeal etc., we are of the view that if the appellant requires one more opportunity to contest the revision petition on merits, he should be put on terms.
It is not clear as to whether any recovery proceedings have been initiated against the appellant for recovery of the said tax, as computed by the assessing officer. However, in order to afford an opportunity to contest the matter on merits, we direct the appellant that the appellant shall deposit 15% before the assessing officer within three weeks from the date of receipt of the server copy of this judgment and order. If such deposit is effected, the appellant is directed to file a petition before the Commissioner of Income Tax-II, Kolkata along with the receipt requesting the revisional application to be taken up on merits.
If such petition is filed, the revisional authority shall take into consideration the same and decide the revision petition filed under section 264 of the said Act on 5th March, 2012 on merits and in accordance with law.
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2022 (8) TMI 1452 - ITAT DELHI
TP Adjustment - Notional Interest - Outstanding receivables - DRP directed to allow the credit of 60 days resulting which an amount has been added on account of interest on outstanding receivables by taking 6 months LIBOR + 400 basic points - HELD THAT:- As decided in assessee's own case [2021 (10) TMI 1420 - ITAT DELHI] period of 90 days has been allowed and the amounts have been received within the range of 90 to 95 days. In the absence of any fact to prove that the assessee is liable to payment of interest, no adjustment is warranted.
There cannot be one straight jacketed formula to allege that the assessee has received interest or the delay was allowed to confer an undue advantage to the other party. See Kusum Health Care Pvt. Ltd. [2017 (4) TMI 1254 - DELHI HIGH COURT] wherein held that the inclusion in the Explanation to Section 92B of the Act of the expression 'receivables' does not mean that de hors the context, every item of ‘receivables' appearing in the accounts of an entity which may have dealings with the foreign AEs, would automatically be characterized as an international transaction.
There can be a delay in the collection of monies for the supplies made, even beyond the agreed limit, due to various factors which would be investigated on a case to case basis and also the case of Gillette India Limited [2017 (7) TMI 1188 - RAJASTHAN HIGH COURT] wherein affirmed the order of the Tribunal wherein it was held that the transaction of allowing credit period to the AE for realization of its sale proceeds is not an independent international transaction but is closely linked with the sale transactions of the AE. Decided in favour of assessee.
Deduction u/s 43B - assessee being the legal successor claimed deduction to discharge of liabilities taken over by the Appellant from companies as pursuant to their amalgamation with the Appellant - HELD THAT:- From April 1, 2015 onwards, all assets, rights, powers, liabilities and duties of the Amalgamating companies were transferred to the Appellant and the Appellant stepped into the shoes as the legal successor of Convergys Stream and Convergys In fowavz from such date. The Scheme of Amalgamation provided that all debts, liabilities, contingent liabilities, duties, obligations and guarantees of the Amalgamating companies shall be taken over by the Appellant with effect from April 01, 2015.
It is a settled law that an order of a High Court approving a scheme of arrangement and amalgamation under Section 391 of the Companies Act does not operate as a mere arrangement, but it becomes a statutory force and thus, becomes statutorily binding on everyone including statutory authorities.
We cannot concur with the observation by the ld. DRP. The liabilities that were taken over by the assessee were in the nature of Leave Encashment, Bonus, Gratuity and Professional Tax and thus, fall within the ambit of section 43B of the Act. Accordingly, we hold that the assessee is eligible to claim deduction u/s 43B in respect to discharge of such liabilities taken over by the Appellant pursuant to their amalgamation with the assessee.
Credit u/s 115JAA - assessee, being the legal successor, claimed in its return of income, the MAT credit taken over pursuant to the amalgamation while computing its tax liability - AO contended that only the company which paid tax under section 115JB of the Act is entitled to carry forward and set-off the MAT Credit - HELD THAT:- DRP unfortunately concurred with the view of the AO and confirmed that non-allowance MAT credit. When all assets and liabilities, rights and obligation of company transferred to the assessee with effect from April 01, 2015, the MAT credit being an asset of the earlier company would be available to the assessee at its disposal for utilization. There cannot be any dispute on the utilization of the assets of the amalgamated company by the amalgamating company. No doubt MAT credit is one of such assets. Hence, the appeal of the assessee on this ground is allowed.
Applicability of Section 56(2)(viia) - face value of the shares taken for the purpose of section 56(2)(viia) - DRP has concurred with the view of the AO and observed that the entire valuation was a make-believe exercise, thus confirmed the addition proposed by the AO - as argued independent chartered accountant arrived at a valuation of INR 242.03 per share on the basis of Net Asset Value (NAV) Method - HELD THAT:- In order to arrive at FMV of such property i.e., unquoted shares, the valuation is to be done in accordance with the method prescribed under Rule 11UA of the Income Tax Rules. It is settled law that where the Act prescribes a rule, it has to be strictly and mandatorily followed and further, if the statute has conferred a power to do an act and has laid down the method in which that power is to be exercised, it necessarily prohibits the doing of the act in any other manner than that has been prescribed.
The adoption of the face value at INR 250 by the AO/DRP with respect to the above transaction is not inconformity with Rule 11UA which prescribes that in order to arrive at FMV of the unquoted shares.
FMV of unquoted equity shares shall be the value, on the valuation date, of such unquoted equity shares as determined applying formula (A-L)/(PE) * (PV) - The adoption of the value at Rs.250/- per share by the ld. DRP is not in accordance with prescribed Rule 11UA of the Rules, hence, we hold that the addition made is liable to be deleted.
Granting of TDS and Advance Tax Credit - HELD THAT:- As pertaining to ad judication on the issues of Section 43B and MAT credit u/s 115JAA, we hereby direct that the credit for TDS and credit for advance tax pertaining to Convergys Stream and Convergys In fowavz, which were taken over by the assessee pursuant to their amalgamation with the assessee be allowed.
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2022 (8) TMI 1451 - CALCUTTA HIGH COURT
Detention of vehicle - levy of penalty - expiry of eway bill for more than 24 hours - HELD THAT:- The expiry of eway bill is more than 24 hours and as such no interim relief can be granted.
The respondents are directed to file affidavit-in opposition within four weeks. Petitioner to file reply thereto, if any within two weeks thereafter - The matter will be listed for final hearing in the Monthly list of November, 2022.
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