TMI Tax Updates - e-Newsletter
January 1, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Highlights / Catch Notes
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GST:
Jurisdiction - proper officer - Power to issue show cause notice (SCN) u/s 74(1) of CGST Act - Additional or Joint Commissioner of Central Tax - Admittedly the monitory limit in the present case is above ₹ 2,00,00,000/- (Rupees two crores). In such circumstances, and having regard to the above, it cannot be said with any degree of certainty that respondent No.4 is not the ‘proper officer’ competent to issue the impugned show cause notice. - HC
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GST:
Applicability of GST - transactions of sale of vouchers - the vouchers traded by the Appellant are goods and not actionable claims - The supply of vouchers by the Appellant is a supply of goods in terms of Section 7 of the CGST Act - on the aspect of value of the vouchers for the purpose of GST, the rate of tax and the time of supply of the vouchers by the Appellant. Since the Appellant is not the issuer of the voucher, the provisions of time of supply under Section 12(4) will not apply and the time of supply will be governed by the provisions of Section 12(5) of the CGST Act. - AAAR
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GST:
Classification of services - principal supply or not - services of coaching to students which also includes along with coaching, supply of goods/printed material/test papers, uniform, bags and other goods to students - Total consolidated amount charged for which Tax invoice issued by the applicant to the student shall be the value of mixed supply by the applicant following the respective arrangement under section 15 of the CGST Act, 2017. - AAR
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GST:
Seeking grant of bail - fake issuance of GST invoices without actual supply and receipt of goods - Considering the seriousness and gravity of the economic offence in which ₹ 48 crores evasion of taxes at the instance of applicants, investigation is at crucial stage, chance to tamper prosecution evidence and flee over justice, it is held that all the applicants does not deserve sympathy for enlargement on bail - Bail application dismissed. - DSC
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Income Tax:
Disallowance of interest paid by the assessee on the pretext that assessee has given loans and advances to its employees without charging any interest - advances given by the assessee are for the purposes of the business. It can also not said that there is an absence of business expediency in giving loans to staff. There is no contrary evidences recorded by the lower authority that advances given to the staff are bogus or for any non-business purposes and is not in accordance with the nature of business policy of the assessee as well as the custom of the trade. - Claim of interest allowed - AT
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Income Tax:
Assessment u/s 153C - Short Term Capital Gain - transfer within the meaning of section 2[47] - As per the sec.2(47)(i), transfer in relation to capital asset includes sale and exchange are realized on the asset so as to relinquish the asset. The assessee shall be in a possession of impugned property but in the present case, the property which was said to be existed or relinquished was not in the possession of the assessee and both purchase and sale agreement were unregistered agreement and it cannot be said that the assessee was in a physical possession of the property so as to relinquish the same in favour of the assessee. Being so, we are of the opinion that sec.2(47)(i) cannot be complied. - AT
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Income Tax:
Revision u/s 263 by CIT - addition of share premium - addition u/s 68 - Pr. CIT has made a bald statement that the AO’s assessment order attracts Explanation 2(c) u/s. 263 of the Act. However, he failed to spell out in his impugned order how the action of AO while framing the assessment order is not in accordance to any order, direction or instruction issued by the Board under section 119 of the Act. So, the deeming fiction as envisaged in Explanation (2) u/s. 263 of the Act cannot be used to interfere with the order of AO. - AT
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Income Tax:
Penalty levied u/s 271AAB - Undisclosed income - Assessee has neither made any surrender of any undisclosed income during the search action nor the penalty has been initiated on the basis of undisclosed income found during such search action. In view of the above factual position, the impugned order of the AO imposing the penalty on the assessee under section 271AAB of the Act does not pass the mandate of the provisions of section 271AAB of the Act - No penalty - AT
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Income Tax:
Addition u/s 56(2)(viib) - difference between the fair market value (FMV) of the shares and the value actually received - the balance sheet drawn up as on 31/03/2013 was rightly taken by the Assessing Officer as well as the ld. CIT(A) for the determination of the FMV of the shares sold by the assessee on 15/07/2013 as per Clause (b) of Rule 11U for the purpose of sub-rule (2) of Rule 11UA being the balance sheet drawn up immediately preceding the valuation date. - AT
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Income Tax:
Penalty u/s. 271AAB - commodity profit as falling in the ken of the 'undisclosed income' - since the amount on which penalty is levied has been found at the time of search and which has been found recorded in the 'other document' marked by the search team as SA/1, we are of the considered opinion that for the purpose of 271AAB of the Act, this amount from SA/1 cannot be termed as 'undisclosed income' u/s 271AAB - No penalty - AT
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Customs:
Extended period of limitation - Certificate of Origin furnished by the petitioner was valid or not - Even if the Appellate Commissioner does not accept the contention of the petitioner, the petitioner is not remedyless. The petitioner can recover the same from the 2nd respondent in accordance with the provisions of the Sale of Goods Act, 1930. - HC
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Corporate Law:
Seeking rectification of register of members of the Company - Even though the Respondents stated that they have inducted the new members with the approval of the Board, they have not produced any record to show that this was approved by any General Body of the Respondent Company, which is mandated under the Rules/Articles of Association of the Company. - It is declared that enrolment of R2 to R20 as members of 1st Respondent Company was done in clear violation of the Articles of Association of the Company. As such they are directed to be removed from the Register of Members of the 1st Respondent Company and rectify the Register of Members accordingly - Tri
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IBC:
Seeking release of security interest from the liquidation estate - If the respondent wants to proceed with the liquidation proceedings without relinquishing his security interest he has to follow Section 52 of the I&B Code in which it is specified that the CIRP cost due from the secured creditors who realize the security interest in the manner provided in Section 52 has to deduct the proceeds from the sale of the asset and shall transfer such amounts to be included in the liquidation estate. - Tri
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IBC:
Seeking direction to 1st Respondent to admit the claim - The excess amount claimed by the Applicant has already been received by them from the Corporate Debtor and this amount was adjusted by the Applicant against the dues of Matheel. Hence the Resolution Professional has not accepted that amount which has already been paid. If that amount is also accepted by the Resolution Professional, that would be violation of the IBC and detrimental to the interests of other creditors of the Corporate Debtor. - Tri
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Service Tax:
Maintainability of appeal - pre-deposit of the amount of certain percentage of duty demanded or penalty imposed - Perusal of section 35F of Central Excise Act, 1944 makes it apparent and clear that the requirement of this section is mandatory requirement and the failure thereof results in rejection of appeal ‘in limine’ - matter be remanded back to the Commissioner (Appeals) with the direction to the appellant to make good the absence of payment of amount of mandatory pre deposit prior for the appeal being heard by Commissioner (Appeals) - AT
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Service Tax:
Work contract service - Period of limitation - The facts of the case are sufficient to hold that there was no clarity about the individual liability of the sub contractor towards the payment of service tax. Even the Department was not clear on the interpretation of the circulars issued, judgements made and practice followed on sub contractors liability. As such in the case where the main contractor had discharged the Service Tax on entire value of service. - The impugned show cause notice is held to be barred by limitation - AT
Articles
Notifications
Companies Law-
G.S.R. 888 (E) - dated
28-12-2021
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Co. Law
Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund), Third Amendment, Rules, 2021.
Customs-
60/2021 - dated
30-12-2021
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Cus
Seeks to amend FTA/PTA notification to align with HSN 2022 w.e.f. 1.1.2022
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106/2021 - dated
30-12-2021
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Cus (NT)
Amendment in Notification No.98/2021-CUSTOMS (N.T.), dated 16th December, 2021.
DGFT-
48/2015-2020 - dated
31-12-2021
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FTP
Extension of Last Date for Submitting applications for Scrip based FTP Schemes
GST - States-
(20/2021) FD 55CSL 2021 - dated
29-12-2021
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Karnataka SGST
Amendment in Notification No. (21/2018) FD 48 CSL 2017, dated the 26th July, 2018
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(18/2021) FD 55 CSL 2021 - dated
29-12-2021
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Karnataka SGST
Seeks to amend Notification No. (01/2017) No. FD 48 CSL 2017, dated the 29th June, 2017
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(22/2021) FD 16 CSL 2021 - dated
10-12-2021
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Karnataka SGST
Government of Karnataka appoints the officers
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(19/2021) FD 55 CSL 2021 - dated
29-11-2021
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Karnataka SGST
Amendment in Notification No. (02/2017) FD 48 CSL 2017, dated the 29th June, 2017
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F.12(1)FD/Tax/2021-97 - dated
31-12-2021
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Rajasthan SGST
Seeks to amend Notification No. F.12(56)FD/Tax/2017-Pt-II-77 dated the 26th July, 2018
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F.12(1)FD/Tax/2021-96 - dated
31-12-2021
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Rajasthan SGST
Amendment in Notification No. F.12(56)FD/Tax/2017-Pt-I-41 dated the 29th June, 2017
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F.12(1)FD/Tax/2021-95 - dated
31-12-2021
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Rajasthan SGST
Seeks to amend Notification No. F.12(56)FD/Tax/2017-Pt-I-40 dated the 29th June, 2017
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F.12(1)FD/Tax/2021-90 - dated
31-12-2021
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Rajasthan SGST
Rajasthan Goods and Services Tax (Tenth Amendment) Rules, 2021
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1217/XI-2-21-9(47)/17- U.P.Act- 1-2017-Order- (215)-2021 - dated
23-12-2021
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Uttar Pradesh SGST
Regarding Seeks to amend Notification No. 335/X1-2-21-9(47)/17-U.P.Act-1-2017-Order-(176)-2021 dated 06 April, 2021
Income Tax-
141/2021 - dated
29-12-2021
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IT
Notifies the Income-tax authorities to exercise the powers and perform functions, in order to facilitate the conduct of e-appeal Proceedings, in respect of such territorial area or persons or class of persons or incomes or class of incomes or cases or class of cases as specified by the Board
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (12) TMI 1301
Detention of goods alongwith vehicle - goods and the conveyance were accompanied by E-way Bills and Invoices, however doubting the genuineness of the cosigner and consignee both, the detention order was passed - HELD THAT:- On a query raised by the Court learned AGP, Maithili Mehta is not sure as to whether the adjudication has been finally made by the concerned officer or is it a Mobile Squad Officer, who has on the spot decided the issue. Issue Notice, keeping the right of the respondent open of agitating the issue of alternative remedy, making it returnable on 09.12.2021.
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2021 (12) TMI 1300
Jurisdiction - proper officer - case of petitioner is that it is the sine qua non that the officer who issues the show cause notice under Section 74(1) of CGST Act, has to be perforce a proper officer - HELD THAT:- In terms of Board s Circular No.31/05/2018-GST dated 09.02.2018, more particularly in paragraph No.4 thereof, it is clarified that all officers up to the rank of Additional / Joint Commissioner of Central Tax are assigned as the proper officer for issuance of show cause notices and orders under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of Sections 73 and 74 of the CGST Act, corresponding to Section 3 read with Section 20 of the IGST Act. As per the table appended thereto, Additional or Joint Commissioner of Central Tax have been assigned functions as the proper officer , and the monetary limit of the said officers for issuance of show cause notice and orders under Sections 73 and 74 of the CGST Act and Section 20 of the IGST Act, in the case of central tax and integrated tax not paid, or short paid, or erroneously refunded, or input tax credit of central tax and integrated tax wrongly availed of or utilized, is above ₹ 2,00,00,000.00 (Rupees two crores). Admittedly the monitory limit in the present case is above ₹ 2,00,00,000/- (Rupees two crores). In such circumstances, and having regard to the above, it cannot be said with any degree of certainty that respondent No.4 is not the proper officer competent to issue the impugned show cause notice. The issue before the Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] was completely different and distinct from what is being canvassed by learned counsel for the petitioner to support his contention that respondent No.4 is not the proper officer under Section 74(1) of the CGST Act. The writ petition is dismissed.
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2021 (12) TMI 1299
Applicability of GST - transactions of sale of vouchers - the vouchers traded by the Appellant are goods or actionable claims - Whether the vouchers themselves, or the act of supplying them is taxable, and at what stage, for each of the three categories of transactions undertaken by the Appellant? - rate of tax at which this would be taxable i.e what category would this be taxed under - HELD THAT:- The vouchers in question are undoubtedly payment instruments recognised by RBI. The question is however, whether these vouchers can be considered as 'money'. The finding of the lower Authority is that these vouchers are not used by the Appellant to settle an obligation and hence cannot be considered as 'money' ; that it takes on the colour of money only when it is redeemed by the beneficiary at the time of purchase of goods and/or services - The voucher in the hands of the Appellant, does not settle an obligation but rather creates an obligation. The settlement of the obligation occurs at the time when the ultimate beneficiary uses the voucher to purchase goods and/or services. The definition of money also makes it clear that it is only when the payment instrument is used as consideration to settle an obligation, does it qualify as 'money'. This occurs only when the voucher is redeemed. Until then it is just an instrument recognised by the RBI but is not money'. Therefore, the voucher in the hands of the Appellant cannot be termed as 'money'. In the instant case, the definition of goods in the CGST Act is much more explicit and states clearly what goods mean, what is excluded from the meaning of goods and what is included in the meaning. Further, the nature of the transaction in the case before us is different from the nature of the transaction by Sodexo in as much as the Appellant is clearly not the issuer of the vouchers nor is he authorized by RBI to issue vouchers. The Appellant is buying vouchers from entities authorized to issue them and is selling the same to his clients. In other words, the Appellant is purely trading in vouchers - the vouchers being traded by the Appellant are in the nature of goods. The supply of vouchers by the Appellant is a supply of goods in terms of Section 7 of the CGST Act - on the aspect of value of the vouchers for the purpose of GST, the rate of tax and the time of supply of the vouchers by the Appellant. Since the Appellant is not the issuer of the voucher, the provisions of time of supply under Section 12(4) will not apply and the time of supply will be governed by the provisions of Section 12(5) of the CGST Act.
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2021 (12) TMI 1298
Classification of services - principal supply or not - services of coaching to students which also includes along with coaching, supply of goods/printed material/test papers, uniform, bags and other goods to students - what shall be the value of service provided by Applicant (REL) to students and by channel / network partner to Applicant (REL)? - eligibility of Input Tax Credit - HELD THAT:- In the instant case, supply of a package consisting of coaching service as well as goods/printed material/test papers, uniform, bags and other goods to students when supplied for a single price is constitute a mixed supply as each of these items can be supplied separately and is not dependent on any other. Whether such supply of coaching services shall be considered as composite supply under section 2(30) of CGST Act, 2017? If yes what shall be the principal supply as per section 2(90) of CGST Act, 2017? - HELD THAT:- In the instant case, the applicant along with coaching services provides goods in the form of uniforms, bags, umbrellas, study material etc. These goods and services can be supplied separately and are not dependent on any other. Thus, the Supply in question shall qualify as 'mixed supply'. Further, it is clear that there are supplies of goods as well as services of various classification (i.e. HSN/SAC) having various tax rates which constitutes the predominant element of a mixed supply. Thus, in the present case, the supply is a mixed supply of goods as well as services and highest rate of tax is 18%. Applicant provides coaching services under a new business model through Channel / Network Partners as per sample agreements attached, containing obligations of Applicant (REL) and such channel / Network partners. According to agreement, the channel / network partner provides the services to the students on behalf of Applicant. In such a situation, who shall be considered as supplier of coaching (REL) service and recipient of such service under the agreement? - HELD THAT:- Where coaching services are provided by the applicant to the students, students shall be regarded as 'recipient' as consideration is payable by the students to the applicant. Similarly, Network partner shall be regarded as provider of service to the applicant (recipient). The place of supply in both the cases (i.e. services provided to the students and service provided to the applicant by the network partner). What shall be the value of service provided by Applicant (REL) to students and by channel / network partner to Applicant (REL)? - HELD THAT:- The applicant has been incurring the cost of goods i.e. printed material test papers, uniform, umbrellas, bags and other goods etc.) and service (coaching service etc.) supplied to the students, therefore, in light of Sections 15 of the Act, the values of goods and value of service shall be the value of supply as charged in lump sum amount by the applicant from the students. Whether the Applicant (REL) shall be eligible to avail Input Tax Credit (ITC) for the supplies? - HELD THAT:- Yes, as per Section 16 of the CGST Act, 2017, the applicant shall be eligible to take ITC of the GST paid on goods or services used or intended to be used in the course or furtherance of business subject to the conditions as prescribed and the provisions of the Section 17 of the CGST Act, 2017.
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2021 (12) TMI 1297
Seeking grant of bail - fake issuance of GST invoices without actual supply and receipt of goods - Section 132 of the CGST Act, 2017 - HELD THAT:- It is to be noted that both additional places of business of two recipients of M/s. SRK Ventures i.e., M/s. Wonderkids Metrics Pvt. Ltd., and M/s. Suumaya Retail Ltd., are same therefore, it appears that M/s. Suumaya Retail Ltd and M/s. Wonderkids Metrics Pvt Ltd., are mutually interlinked and it further appears that all the three entities 1) M/s. Rangoli Tradecomm Ltd. (now known as M/s. Suumaya Corporation Ltd.), M/s Suumaya Retail Ltd., and M/s. Wonderkids Metrics Pvt. Ltd., are mutually interlinked and the same has been admitted by the applicant Sushil Dilipkumar Mehta in his voluntary statement and therefore, applicant no.1 with the help of other applicants has created M/s. SRK Ventures and its suppliers as well as the recipients companies are created for name sake for bogus supply without actual movement of goods and all the companies are being operated by the same person and therefore, this is nothing but contravention of section 132(1)(b) of CGST Act, 2017, which is mandatory to show the turnover and same has been initiated by the applicant in the category of (taxable service) in CGST on return for the month of April, 2021. The goods are not entitled for exempted services. This is nothing but huge loss to the Government. This is nothing but while collar crime which needs to be investigated in detail. The investigation is at crucial stage. More than 5000 invoices are included which are used as bogus invoices and needs to be recovered at the instance of applicants. Applicant nos.2 and 3 have supported the applicant no.1 in this conspiracy of evasion of taxes. Considering the seriousness and gravity of the economic offence in which ₹ 48 crores evasion of taxes at the instance of applicants, investigation is at crucial stage, chance to tamper prosecution evidence and flee over justice, it is held that all the applicants does not deserve sympathy for enlargement on bail - Bail application dismissed.
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Income Tax
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2021 (12) TMI 1296
Reopening of assessment u/s 147 - non passing of speaking order - petitioner has not been filed a reply to Section 143(2) notice - HELD THAT:- Assessment orders have to be passed within the time. Therefore, no fault can be found with the respondent as otherwise entire exercise taken would have lapsed due to limitation. The fact remains that the petitioner has also sent a representation/objection on 28.12.2018, the date on which the Impugned Orders have been passed without a speaking order proceeding these orders. As the Impugned Assessment Orders are quashed and the cases are remitted back to the respondent to pass a speaking order in terms of the decision in GKN Driveshafts (India) Limited Vs. Income Tax Officer and Ors [ 2002 (11) TMI 7 - SUPREME COURT] and to thereafter pass appropriate Assessment Order. Since the dispute pertains to the Assessment Years 2010-2011 and 2011-2012, the respondent may pass a speaking order preferably within a period of thirty (30) days from the date of receipt of a copy of this order based on the representation/objection filed by the petitioner on 28.12.2018 in accordance with law and on merits. The respondent shall pass Assessment order within a period of thirty (30) days thereafter.
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2021 (12) TMI 1295
Disallowance of delayed deposit of employees contribution to provident fund and Employees state Insurance scheme - HELD THAT:- We find for the month of December, 2016 of employees contribution towards provident fund which was required to be deposited according to the respective Provident Fund Act on or before 15th January, 2017 was deposited on 16th January, 2017. The Ministry of Labour and Employment has issued a letter dated 12/01/2017 wherein as a special case due to the problems on the portal on allotment of UAN, the due date for payment of contribution for the month of December, 2016 was extended upto 20th January, 2017. Assessee has already deposited the same on 16th January 2017, therefore, there is no delay in payment of employees contribution of provident fund for the month of December, 2016. Therefore, the disallowance is incorrectly confirmed by the learned CIT(A). With respect to the employees contribution to ESIC undisputed facts shows that though such contribution is deposited after the due date prescribed under the respective law, but before filing of the return of income. We find that identical issue is GHATGE PATIL TRANSPORTS LTD. [ 2014 (10) TMI 402 - BOMBAY HIGH COURT] which is the jurisdictional High Court wherein it has been held that both employees and employer s contribution are covered under the amendment to section 43B of the Act relying on the decision of the Hon ble Supreme Court in CIT vs Alom Extrusions Ltd [ 2009 (11) TMI 27 - SUPREME COURT] and therefore, if such payments are made on or before the due date of filing of the return of income, same are not disallowable. We find that instead of following the decision of jurisdictional High Court, the learned CIT(A) has followed the decision of non jurisdictional High Court, that is, Gujarat High Court.GUJARAT STATE ROAD TRANSPORT CORPORATION [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] - As the jurisdictional High Court decision squarely covers the issue in favour of the assessee, we direct the learned assessing officer to delete the disallowance on account of delayed payment of employees contribution to ESIC. - Decided in favour of assessee.
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2021 (12) TMI 1294
Unexplained expenditure u/s 69C - difference of balances of creditors - HELD THAT:- Provisions of section 69 C of the Act provide if assessee for which no explanation incurs any expenditure or unsatisfactory explanation is provided. In the impugned appeal, there is no evidence that the difference in the credit balance in the books of assessee with the debit balance in the books of creditor is an expenditure incurred by assessee during financial year. It is not the case of the revenue that creditor has received sum but it are not recorded in books of assessee as payment. Therefore, according to us provision of section 69C cannot be attracted in this case, unless revenue brings on record any proof of incurring such expenditure. Hence, we reverse the orders of lower authorities and direct ld AO to delete the addition made u/s 69C of the Act. Accordingly, Ground no 1 of the appeal of the assessee is allowed Disallowance of interest paid by the assessee on the pretext that assessee has given loans and advances to its employees without charging any interest and, therefore, interest to that extent is not allowable under section 36(1)(iii) - HELD THAT:- The natures of advances are festival loans, medical advances, educational advances and personal loans. Looking into the nature of the operation of the company where the employee benefit expenses are incurred and the annual turnover is shown, amount of advances to the staff is in the nature of business advances. The assessee has also stated that advances are given in accordance with the company policy. Therefore, we find that advances given by the assessee are for the purposes of the business. It can also not said that there is an absence of business expediency in giving loans to staff. There is no contrary evidences recorded by the lower authority that advances given to the staff are bogus or for any non-business purposes and is not in accordance with the nature of business policy of the assessee as well as the custom of the trade. In view of this, the amount disallowed by AO and confirmed by the learned CIT(A) is unsustainable. Accordingly, we reverse the orders of the lower authorities and direct the assessing officer to delete the above disallowance.
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2021 (12) TMI 1293
Rectification of mistake u/s 154 - disallowance u/s 43B - HELD THAT:- Auditors have specifically answered as NO to the question as to whether any Sales Tax/GST, Customs Duty, Excise Duty or any indirect tax has been passed through profit loss account. In response to intimation u/s 143(1), the assessee submitted that GST payable was not routed through the profit loss account and therefore, disallowance u/s 43B was not warranted but these contentions were not accepted. The assessee also filed application u/s 154 mentioning the facts of the case. The application u/s 154 was also rejected and aggrieved by the intimation u/s 154, the assessee filed this appeal. I find that the documents placed on record prove that the GST outstanding declared in the balance sheet was not routed through the profit loss account and therefore, the addition sustained by learned CIT(A) u/s 43B is not warranted. In the case of CIT vs. S. B. Foundry [ 1990 (4) TMI 43 - ALLAHABAD HIGH COURT] has dismissed the appeal of the Revenue wherein under similar circumstances the additions were made by the Assessing Officer and Appellant Assistant Commissioner had deleted the same which were confirmed by the Tribunal. As decided in INDIA CARBON LIMITED VERSUS INSPECTING ASSISTANT COMMISSIONER OF INCOME-TAX AND ANOTHER [ 1992 (9) TMI 83 - GAUHATI HIGH COURT] in the instant case, the question was whether section 43B would apply and not the question whether or not the sales tax collected formed part of the business or trading receipts. What would be the effect of showing such sum as payable by way of tax on the liabilities side in the balance sheet without actually paying the same was a different question. The petition, was, therefore, allowed and the addition was quashed. - Decided in favour of assessee.
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2021 (12) TMI 1292
Deduction u/s 80IA - Deduction in respect of Land Fill project No.I by holding it as not a new undertaken - HELD THAT:- We are of the view that once, the assessee has fulfilled all the conditions as laid down in section 80IA(4) of the Act and was allowed deduction in the earlier assessment years in respect of land fill project No.I in AY 2002-03 that is in the initial year, therefore, deduction under section 80-IA in respect of the infrastructure facility should have been allowed to the assessee. So far as the objection of the Ld. Sr DR for the revenue is concerned that the assessee has made agreement with GIDC only after the claim of the assessee was disallowed by A.O and at the time of establishment of Land fill Project II, no new establishment came in to existence. The nature of work being done by both the project is identical, therefore, the claim of the assessee based on the backdate agreement cannot be considered. We find that the submissions of the Ld. DR for the revenue is based on the finding of Ld. CIT(A). The assessee has entered into a separate agreement dated 16th October 2012 with GIDC with effect from 12th March 2007 and commenced its Land Fill Project-II in FY 2006-2007 and claimed deduction under section 80-IA of the Act from AY 2008-09 since the said unit is a separate infrastructure facility. Thus, Land fill II is a distinct and separate undertaking from Landfill I. In the result, the assessee succeeds on this ground of appeal. Land fill project No. I and land fill project-II are not separate undertaking for deduction under section 80IA(4) - As brought to our notice that the assessee has also entered into a separate agreement dated 16th October 2012 with GIDC with effect from 12thMarch 2007. The assessee had commenced its Land Fill Project-II in FY 2006-2007 and claimed deduction under section 80-IA of the Act from AY 2008-09 since the said unit is a separate infrastructure facility. These facts are not controverted by ld SR DR for the revenue. Moreover, the Land Fill Project-II is set up on the separate land allotted by GIDC in Bharuch District, which was allotted to the assessee and separate agreement was entered with GIDC on 16th October 2012 with effect from 12.03.2007. We find that in appeal for AY 2007-08, the Ld. CIT(A) held that both the unit of the assessee i.e. Land fill Project No. I Land Fill Project-II are different and independent unit by way of process, method, machine and infrastructure. Incinerator is not a separate undertaking eligible for deduction under section 80IA(4) - AO while passing the assessment order allowed deduction under section 80IA in respect of Land Fill I, Land Fill II and Incinerator project by treating the said undertakings as a composite undertaking. The ld CIT(A) held that Incinerator is a new infrastructure facility and hence eligible for deduction under section 80- IA(4) of the Act for 10 years from AY 2007-08. This finding of ld CIT(A) is not challenged by revenue before Tribunal, thus, it has attained finality. So far as finding of the ld CIT(A) with regard to Incinerator-II is concerned it was not a subject matter of appeal before ld. CIT(A) for the year under consideration, therefore, we are in agreement with the submissions of the learned Senior Counsel for the assessee that such finding given by the CIT(A) is totally incorrect and uncalled for while deciding the appeal for AY 2008-09. Disallowance of post closer expense - disallowance of provisions of pit covering expenses - HELD THAT:- Considering the consistent decision of the Tribunal on similar set of fact on similar component of income, and following the principle of consistency, we direct the AO to follow the order of Tribunal in AY 2007-08 [ 2017 (2) TMI 1493 - ITAT AHMEDABAD] and allow / delete the disallowance of provisions of post closer expenses.
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2021 (12) TMI 1291
Addition u/s 68 - unexplained cash credit being the amount received from issuance of shares - HELD THAT:- AO examined this issue at length and noticed that the assessee had shown investment in shares in the name of M/s. Nakshatra Electricals and Engineers Pvt. Ltd. at ₹ 25 lakhs. On perusal of the return of income of M/s. Nakshatra Electricals and Engineers Pvt. Ltd., it was noticed that the said company had shown investment of ₹ 25 lakhs as on 31.03.2011 and 31.03.2012. But, in fact, the payment received only on 03.05.2011. DR submits before the Bench that it is not certain whether share capital relates to assessment year 2011-12 or assessment year 2012-13? We find merit in the submissions of ld DR for the Revenue and therefore, we remit this issue back to the file of the assessing officer to examine the fact whether share capital was introduced in assessment year 2011-12 or in assessment year 2012-13, and after ascertain this basic facts the assessing officer should adjudicate the issue afresh in accordance with law. Therefore, statistical purposes, ground no.1 and 2 raised by the assessee are allowed. Disallowance of interest on account of interest free loan to the sister-concern - assessee has accepted interest bearing funds from bank and have been utilized for giving interest free loans and advances to P G Glass Pvt. Ltd. Moreover, M/s P G Glass Pvt. Ltd. is a related party covered u/s 40A(2)(b) - HELD THAT:- As AR submits before the Bench that assessee-company has interest free own fund, out of that interest free advance have been given to assessee, therefore no disallowance should be made - As DR argues that interest free advance to the sister concern was given out of cash credit account bearing interest burden, therefore addition made by the assessing officer should be upheld. We find merit in the submissions of Revenue, therefore, we remit this issue back to the file of the assessing officer to examine whether interest free advance to the sister concern was given out of cash credit account bearing interest burden. Thus, ground no.3 raised by the assessee is allowed for statistical purposes. Disallowance of expenditure on repairs - Revenue or capital expenditure - HELD THAT:- On perusal of the details available on record, learned CIT(A) observed that except for 2 items of expenditure being bills of Vijay engineering, Vadodara at ₹ 1,34,102/- and ₹ 1,69,298/-, other items pertained to so called road repairing. Looking to the quantum of expenditure, it emerges that the assessee had constructed the new roads in its business premises. Since, the construction of road has got enduring benefits, the cost incurred has to be capitalized. We note that ld CIT(A) allowed routine repair expenses to the tune of ₹ 1,34,102/- and ₹ 1,69,298/- respectively. Thus, ld CIT(A) has passed a reasoned and speaking order and we do not find any infirmity in the order of ld CIT(A). That being so, we decline to interfere in the order passed by ld CIT(A), therefore, we dismiss ground no. 4 raised by the assessee.
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2021 (12) TMI 1290
Assessment u/s 153C - Short Term Capital Gain - transfer within the meaning of section 2[47] - Assessee has relinquished his rights in the property - AO held that the assessee's right to transfer further in the property and earn out of it have been extinguished upon entering into of the agreement dated 21/02/2012 - HELD THAT:- Since extinguishment of right in the immovable property in the impugned property, the AO brought on the difference between purchase and sale price as short terms capital gain in the assessment year under consideration. The contention of the ld.DR is that the assessee having acquired the right in a property under an agreement with the owners and later relinquishment of his right in favour of new purchaser for the year under consideration by the assessee for relinquishing the right for the property would attract provisions of sec.45(1) of the Act, which arises to short term capital gain and as such the ld.CIT(A) order to be confirmed. But in the present case, vide an agreement dated 20/12/2012, the assessee has not received the possession of the property and the delivery of the possession of property will be given to the assessee only on payment of balance consideration of 3.5 crores out of 4.5 croers. As per the sec.2(47)(i), transfer in relation to capital asset includes sale and exchange are realized on the asset so as to relinquish the asset. The assessee shall be in a possession of impugned property but in the present case, the property which was said to be existed or relinquished was not in the possession of the assessee and both purchase and sale agreement were unregistered agreement and it cannot be said that the assessee was in a physical possession of the property so as to relinquish the same in favour of the assessee. Being so, we are of the opinion that sec.2(47)(i) cannot be complied. Accordingly, we allow the appeal of the assessee. Chargeability of penalty u/s 271AAB - As decided in the case of Shri Suresh H. Kerudi [ 2019 (10) TMI 1175 - ITAT BANGALORE] we are of the view that the penalty in the case of assessee cannot be sustained as the assessee was not a person who was subjected to search u/s. 132 of the Act and consequently the provisions of section 271AAB could not be invoked in his case. - Decided in favour of assessee.
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2021 (12) TMI 1289
Employees contribution to PF and ESI which has been deposited beyond the due date prescribed under relevant Act and deposited within due date by filing the return on u/s 139(1) - DR contention is that as per sec.43B(b) of the Income-tax Act and explanatory notes to Finance Act 1983, that Employees Contribution was never intended to be covered by sec.43B - scope of amendment - HELD THAT:- We find no merit in the argument of the DR since the explanation as provided in Finance Act 2021 prescribes that the amendment in both sec.36(va) as well as 43B by inserting corresponding explanation that although impugned PF comes in the form of provision and the same is applicable from 1/4/2021 onwards only. In the present case we are concerned with the asst. year 2017-18 and the amended provision could not be applied retrospectively as it is only applicable w.e.f 1/4/2021. Being so no disallowance could be made by the AO in respect of PF/ESI paid within the due date of filing return of income. Though, it was beyond the date mentioned in the respective Act. - Decided in favour of assessee.
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2021 (12) TMI 1288
Deduction u/s 80P(2)(a)(i) - entitlement to deduction u/s 80P(2)(a)(i) on interest income - HELD THAT:- Assessee has not claimed deduction of interest from bank under section section 80P(2)(a)(i) of the Income Tax Act, therefore, no disallowance should be made. However, the assessing officer made disallowance under section section 80P(2)(a)(i) of the Income Tax Act, on account of interest other than co-operative bank. As the assessee society had received interest other than from Co-op. Societies which was not claimed by the assessee but disallowed by the assessing officer. Therefore, we remit this issue back to the file of the assessing officer to examine whether assessee has claimed the deduction or not? If the assessing officer finds that assessee has not claimed deduction then in that situation the assessing officer should not make addition, hence, for statistical purposes, the additional ground raised by the assessee is treated to be allowed.
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2021 (12) TMI 1287
Rejection of books of accounts - addition to the extent of 1.00 % of Gross Profit - HELD THAT:- AR simply made is submission that addition restricted by the ld. CIT(A) is on higher side and concluded his submissions in a single sentence. We find that even before ld CIT(A), the assessee only submitted that in one of the comparable companies in Hari Om Agro Products Pvt. Ltd., the ld.CIT(A) restricted addition to the extent of 0.5% and in case of Jalaram Cultivation addition was restricted to 1% by the ld.CIT(A). We find that no documentary evidence was furnished before ld CIT(A). In our view the ld. CIT(A), in a very reasonable manner restricted the addition to 1.00 % of total sale/turnover of assessee. Even now neither the copy of order in case of Hari Om Agro Products Pvt. Ltd. nor any other comparable company or the alleged audited accounts of the assessee is placed. At the addition cost of repetition, we may note that this appeal pending appeal for more than five years, the assessee failed to bring any evidence on record to substantiate their plea that their books result should be accepted. In view of the aforesaid discussion, we do not find any reason to interfere with the order of ld. CIT(A), which we affirm. In the result the ground No. 1 2 of the appeal is dismissed.
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2021 (12) TMI 1286
Revision u/s 263 by CIT - addition of share premium - addition u/s 68 - CIT in second assessment/re-assessment order proposed to exercise his revisional jurisdiction - second round before the AO for de novo re-assessment, the second AO as per the direction of the First Ld. Pr. CIT conducted the reassessment proceeding - HELD THAT:- Second AO has conducted enquiry on the specific subject matter i.e. share capital and premium collected by the assessee-company (CASS items). Therefore, the finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is flowing from suspicion only. And as discussed, the allegation/fault pointed out by the Second Ld. Pr. CIT that the Second AO failed to collect total facts also cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order what he meant by total facts or in the alternative when the assessee has discharged its onus, as required by the law in force in this AY 2012-13, then the Ld. Pr. CIT ought to have called for which ever additional documents/materials or issued summons or issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then demonstrated that those actions/documents which he collected in that process gave result to a different finding of fact which will turn upside down the claim of the assessee and thus able to show that the actions/omission of AO in conducting the investigation was erroneous, which unfortunately is not the case before us. Second Pr. CIT has not carried out any such exercise or even spelled out in his impugned order, which all documents the second AO failed to collect for considering the total facts; and even if we presume he has conducted such an exercise, then he has not been able to bring out any adverse factual finding to upset the view of Second AO. So we find no merit in the vague allegation of second Pr. CIT that the second AO has not collected the full facts necessary to decide the issue of share capital premium. Second Ld. Pr. CIT 4 by passing the second revisional order dated 15.03.2019 has substituted the First Pr. CIT s order passed u/s. 263 of the Act dated 28.03.2016 with his own order which he cannot do since the second assessment order/re-assessment of the Second AO dated 08.06.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on the very same subject matter which inter alia was the issue flagged by CASS, which exercise since having been complied by the AO, brings into operation the doctrine of merger the subject matter i.e. share capital premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake-up the same subject matter without the second Ld. Pr.CIT in the second revisional order spells out where the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be permitted to again ask the AO to start the investigation in the way he thinks it proper on the very same subject on which merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the assessment proceedings meaning no finality to assessment proceedings and that is exactly why the Parliament in its wisdom has brought in safe-guards, restrictions conditions precedent to be satisfied strictly before assumption of revisional jurisdiction. We find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio void. Pr. CIT has made a bald statement that the AO s assessment order attracts Explanation 2(c) u/s. 263 of the Act. However, he failed to spell out in his impugned order how the action of AO while framing the assessment order is not in accordance to any order, direction or instruction issued by the Board under section 119 of the Act. So, the deeming fiction as envisaged in Explanation (2) u/s. 263 of the Act cannot be used to interfere with the order of AO. This action of Ld. Pr. CIT is bad for non-application of mind. - Decided in favour of assessee.
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2021 (12) TMI 1285
Penalty levied u/s 271(1)(c) - Defective notice - non specification of charge - HELD THAT:- AO has neither mentioned in the assessment order nor in his Penalty notice as to whether the penalty is initiated for concealment of income or for furnishing inaccurate particulars of income. He has also not mentioned in the order that the penalty is initiated under explanation 5 of section 271(1)(c) of the Act. We find that the only words used in the Assessment order are, It is found that the assessee has shown additional income of ₹ 24,00,000/- in the computation of income filed with the return, hence proceedings for penalty under section 271(1)(c) of the Act are to be initiated . Further, the Final Show-cause notice issued on 29/12/2016 alongwith the Assessment order clearly mentions the words Whereas in the course of proceedings before me for A.Y.2014-15, it appears that you have concealed the particulars of your income or furnished inaccurate particulars of such income , and the AO has not stricken off the not applicable words We find that the AO has sent one printed form, wherein the specific finding of the AO as to whether he is initiating penalty for concealment of income or for furnishing inaccurate particulars of income is not mentioned. Further, the AO has also not mentioned that he intends to levy penalty under explanation 5 of Section 271(1)(c) and hence the said penalty U/s. 271(1)(c) is not justified and is directed to be deleted. Therefore, we direct to the delete the same. - Decided in favour of assessee. Penalty levied u/s 271AAB - Undisclosed income - HELD THAT:- Assessee has been able to explain the source of the alleged undisclosed income may be relevant for final imposition of the penalty, however, for initiation of the penalty proceedings, the provisions of section 271AAB are self contained and are not dependent upon commencement or finalization of the assessment proceedings. It is further pertinent to note here it is not mandatory for the AO to invoke provisions of section 271AAB of the Act in each every case of levy of penalty pursuant to search action. Assessee has neither made any surrender of any undisclosed income during the search action nor the penalty has been initiated on the basis of undisclosed income found during such search action. In view of the above factual position, the impugned order of the AO imposing the penalty on the assessee under section 271AAB of the Act does not pass the mandate of the provisions of section 271AAB of the Act, therefore, the same being bad in law is hereby quashed and we direct to delete the penalty levied U/s. 271AAB - Decided in favour of assessee.
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2021 (12) TMI 1284
Addition u/s 56(2)(viib) - difference between the fair market value (FMV) of the shares and the value actually received - HELD THAT:- FMV of the shares as on 15/07/2013 should have been determined on the basis of balance sheet drawn up on 31/03/2012 instead of 31/03/2013 cannot be accepted not being either fair or proper. Moreover, the definition of 'balance sheet' given in Clause (b) of Rule 11U for the purpose of sub-rule (2) of Rule 11UA contemplates the balance sheet of the company as drawn up on the valuation date which has been audited by the auditor of the company clearly suggests or indicates that the balance sheet referred to therein need not be available on the date of valuation simply because the balance sheet as drawn up on the valuation date and audited by the auditor of the company cannot be practically available as on the date of valuation itself. We are, therefore, of the considered view that the balance sheet drawn up as on 31/03/2013 was rightly taken by the Assessing Officer as well as the ld. CIT(A) for the determination of the FMV of the shares sold by the assessee on 15/07/2013 as per Clause (b) of Rule 11U for the purpose of sub-rule (2) of Rule 11UA being the balance sheet drawn up immediately preceding the valuation date. In that view of the matter, we uphold the impugned order of the ld. CIT(A) on this issue and dismiss this appeal of the assessee.
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2021 (12) TMI 1283
Penalty u/s. 271AAB - commodity profit as falling in the ken of the 'undisclosed income' - HELD THAT:- We note that when the search took place on 13.12.2012 in the assessee's premises, the commodity trading which is itself is speculative transaction has been found to be recorded in the 'other document' (seized marked as SA/1) even though not in the books of account of the assessee, which has been retrieved from the assessee's premises and the assessee during search declared u/s. 132(4) ₹ 45.50 lakhs (₹ 45,100/- from commodity trading profit and miscellaneous income of ₹ 4,40,000/-) and filed return of income pursuant to notice u/s. 153A of the Act which includes the total amount of ₹ 63,50,320/- has been declared and the same has been accepted in toto by the AO. We note that since the penalty u/s. 271AAB of the Act is levied on the amount of ₹ 45,50,000/- and since the same has been found at the time of search and which has been found recorded in the 'other document' marked by the search team as SA/1, we are of the considered opinion that for the purpose of 271AAB of the Act, this amount from SA/1 cannot be termed as 'undisclosed income' as per the definition given under Section 271AAB of the Act (supra) and therefore penalty u/s. 271AAB of the Act cannot be levied in this case. - Decided in favour of assessee.
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2021 (12) TMI 1282
Disallowance of employees' contribution made to the respective funds of the Government under PF ESI Act - assessee has not remitted the employees' contribution on the due date as prescribed by the PF ESI Act, thus the contribution made belatedly cannot be allowed - Scope of amendment - HELD THAT:- Respectfully following the decision of M/s. Lumino Industries [ 2021 (11) TMI 926 - ITAT KOLKATA] we are inclined to allow the appeals of the assessee and direct the A.O to delete the addition and hold that the Amendment brought in Finance Act 2021 w.e.f. 01.04.2021 by inserting an Explanation to section 36(1)(va) and section 43B of the Act is prospective in nature in nature and would apply from AY 2021-22 onwards and therefore, the amendment is not applicable to these assessment years (AYs 2014-15, 2017-18 2019-20) under consideration.- Decided in favour of assessee.
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2021 (12) TMI 1281
Correct head of income - rental income from letting out building space along with inbuilt infrastructure and other amenities - income from other sources or income from house property - HELD THAT:- On careful analysis of the facts and circumstances, we find that the issue is squarely covered in favour of the assessee by the decision of the coordinate bench in assessee s own case for Assessment Year 2011-12, [ 2021 (6) TMI 538 - ITAT DELHI] wherein, on identical facts and circumstances, issue has been decided by coordinate bench and it held that income earned by the assessee form letting out of the building space and other amenities is chargeable to tax under the head income from other sources . Thus we decide ground in favour of the assessee holding that such composite rental income is chargeable to tax in the hands of the assessee under the head Income from other sources . - Decided against revenue.
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2021 (12) TMI 1267
Depreciation on demerger - AO has disallowed depreciation on the ground that the assessee had received assets free of cost from the Government of UP - AO noticed that the assessee took over the assets on transferred from UPJVNL but for the liability side did not take over the loans transferred in full form UPJVNL - AO had concluded that the assessee had only taken over the assets for which the liabilities were not ascertained till date - HELD THAT:- We have gone through the entire contents and the history of the assessee. In this case, the assets have been transferred from Uttar Pradesh Government (UPJVNL) to Uttaranchal Government (UJVNL). There is no claim of the depreciation twice by both the Governments. The demerger led to division of assets in a fixed ratio and the same was duly accounted for both the entities as per the written down value (WDV) as on that date. The depreciation on de-merger cannot be a forgone benefit owing to de-merger, which is the result of state reorganization. Hence, we decline to interfere with the reasoned order of the Ld. CIT (A). - Decided against revenue.
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Customs
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2021 (12) TMI 1280
Extended period of limitation - Certificate of Origin furnished by the petitioner was valid or not - actual Regional Value Content (RVC) of Tin Ingots - mis-statement or misdeclaration by the petitioner at the time of import or not - HELD THAT:- The facts as to whether a case was made out for suppression of facts or wilful mistatement with an intent to evade of payment of duty or not is a question of fact which has to be decided by the hierarchy of the authorities under Customs Act, 1962. The petitioner has to establish the case for interference only before the Appellate Commissioner under Section 128 of the aforesaid Act. Even if the Appellate Commissioner does not accept the contention of the petitioner, the petitioner is not remedyless. The petitioner can recover the same from the 2nd respondent in accordance with the provisions of the Sale of Goods Act, 1930. The writ petition is liable to be dismissed and it is dismissed.
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Corporate Laws
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2021 (12) TMI 1279
Seeking rectification of register of members of the Company - Seeking to declare that all the resolutions passed by the superseded Director Board enlisting R2 to R20 as new members of the Company are ultra vires of AOA of the Company - seeking to declare that the enrolment of Respondent No. 2 to 20 as members of the 1st Respondent Company violates the Articles of Association of the Company hence illegal - seeking to rectify the register of members of the Company - HELD THAT:- It appears from the Articles of Association that the number of members can be increased only up to 500 if the general meeting is of the opinion that it is necessary to add more members for the activities of the Company. From the minutes of the meeting of all general meetings held from 01.01.2013 to 05.11.2018 that any of the general meetings of these periods found it necessary to enlist more members for the activities of the Company or authorized the Director Board to enlist new members. We are also agreeable to the contention of the Administrator appointed to carry out the functions of the Company, that the Director Board has no authority or power to enroll new members without the sanction of the General Meeting. The resolutions passed to enroll Respondent Nos.2 to 20 as members, it is not stated that the General Meeting had been held and authorized the Director Board to enlist new members. Even though the Respondents stated that they have inducted the new members with the approval of the Board, they have not produced any record to show that this was approved by any General Body of the Respondent Company, which is mandated under the Rules/Articles of Association of the Company. It is declared that enrolment of R2 to R20 as members of 1st Respondent Company was done in clear violation of the Articles of Association of the Company. As such they are directed to be removed from the Register of Members of the 1st Respondent Company and rectify the Register of Members accordingly and file appropriate documents before the Registrar of Companies, Kerala without delay, at any rate within a period of one month from the date of receipt of this order - The appellant has a strong case in the instant appeal - appeal allowed.
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2021 (12) TMI 1278
Sanction of Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT:- All statutory requirements of the provisions of Sections 230-232 of the Act are satisfied. The present company scheme appears to be genuine and bona fide and it appears to be in the interest of its shareholders and creditors. The scheme is approved - application allowed.
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2021 (12) TMI 1277
Seeking restoration of name of the company in the Register of Companies - Section 252(1)/252(3) of the Companies Act, 2013 - HELD THAT:- As per the records the name of the company, M/S Akansha Tea Plantation and Trading Company Private Limited got struck off from the Register of Companies and dissolved 09.06.2017 (followed by a Gazette notification published in this respect), while the present appeal has been filed on 18.11.2020. Hence it is found to be filed within limitation. As per the records, the name of the company, M/S Akansha Tea Plantation and Trading Company Private Limited is the company that has filed its statutory return up to 2011-12 and thereafter it has not filed any return - The failure on the part of the company to file the annual returns and financial statement was unintentional and not deliberate. However due to such reasons the ROC, NER, Assam, Struck off the name of the Company. The Registrar of Companies, NER, Guwahati, the respondent herein, is directed to restore the original status of the petitioner company as if the name of the Company had not been struck off from the register of Companies with the resultant and consequential actions like changing status of petitioner company from struck off to Active - Application allowed.
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2021 (12) TMI 1276
Seeking restoration of name of the company in the register of ROC - Section 252(3) of the Companies Act, 2013 - HELD THAT:- As per the record, the petitioner has preferred the present appeal under section 252(3) of the Companies Act as being the shareholder and Director of the deregistered company. He is eligible to file the present appeal for restoration of the company s name in the register of the ROC. Hence, the present appeal is found maintainable - As per the records the name of the company, M/S Elangbam Infrastructures Construction Private Limited got struck off from the Register of Companies w.e.f 30/09/2019 (followed by a Gazette notification published in this respect), while the present appeal has been filed on 23.08.2021. Hence it is found to file within limitation. It would be just and equitable to revive the name of the company M/S Elangbam Infrastructures Construction Private Limited in the statutory register as being maintained by the Registrar of Companies, Guwahati - respondent is directed to restore the original status of the petitioner company as if the name of the Company had not been struck off from the register of Companies with the resultant. Application allowed.
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Insolvency & Bankruptcy
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2021 (12) TMI 1275
Payment of Transaction Audit Fees - Section 60(5) of IBC read with Rule 11 of NCLT Rules - HELD THAT:- It is clear that the Suspended Management /Directors have neither cooperated fully nor they have provided the complete book of accounts, despite sufficient opportunities given, as required under Sec 19 of IBC for completion of the CIRP. The Transaction Auditor, the Applicant here has not submitted Complete Transaction Audit Report for want of cooperation from the Directors and availability books of accounts of the CD. The Transaction Audit Report submitted by the Applicant is not complete. Hence the Suspended Management is hereby directed to file reply affidavit to the reported irregularities undertaken by the CD as mentioned in the Report and the reasons for their non - cooperation/non supply of all books of accounts, within 10 days from today - Transaction Audit Report is not complete. Considering the work done by the Applicant and the Unit being a Coaching Institute, it is reasonable for the CoC to pay ₹ 3,00,000.00 plus applicable GST i.e. ₹ 60000.00 per year - application disposed off.
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2021 (12) TMI 1274
Seeking release of security interest from the liquidation estate - HELD THAT:- The vehicle is registered in the name of the suspended Director of the corporate Debtor. Under Part II of IBC when an Application is admitted moratorium becomes applicable, the right to reach the vehicle under such contract would be affected will be subject to provisions of IBC. Under Section 18(1)(f) of the IBC Code, 2016, as soon as CIRP is initiated, the IRP is duty-bound to take control and custody of assets over which the Corporate Debtor has ownership rights. It appears from the records that the owner s name and address in the Certificate of Registration, confirms the ownership of the car to be that of the Corporate Debtor - the vehicle is purchased in the name of the suspended Managing Director for the Corporate Debtor. Therefore, the company is the owner of the vehicle. If the respondent wants to proceed with the liquidation proceedings without relinquishing his security interest he has to follow Section 52 of the I B Code in which it is specified that the CIRP cost due from the secured creditors who realize the security interest in the manner provided in Section 52 has to deduct the proceeds from the sale of the asset and shall transfer such amounts to be included in the liquidation estate. In this case the respondent has submitted Form D to realize his claim from the asset of the Corporate Debtor through Liquidation Proceedings. Thus, we are constrained to believe that the respondent has admitted themselves as the Financial Creditor and submitted the claim before the Liquidator and that the Liquidator considered the claim of the Respondent. Therefore, the Respondent is liable to follow the procedures prescribed under the I B Code - Since we found that the asset in question is registered in the name of the Managing Director of Corporate Debtor and in the address of M/s. Adhils Builders and Developers Pvt. Ltd, it is to be taken as a Liquidation asset of the Corporate Debtor. Application disposed off.
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2021 (12) TMI 1273
Seeking to release the outstanding fee of Liquidator during which the Applicant has discharged his functions - HELD THAT:- There are force with the contention of the Applicant/erstwhile liquidator. Having considered the submissions made by the parties and the directions given by this Tribunal vide order dated 06.01.2020 while passing the liquidation order, we deem it appropriate to allow this application and direct that the Applicant is entitled to get his fees during the period he functioned as the Liquidator. It is deemed appropriate to direct the respondent no. 1 to 5, who are the Members of the Stakeholders Consultation Committee to pay a sum of ₹ 75000/- per month to the present applicant/erstwhile Liquidator for the period 06.01.2020 to 06.01.2021 during which he worked as the Liquidator of the Corporate Debtor - application allowed.
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2021 (12) TMI 1272
Seeking direction to 1st Respondent to admit the claim - Section 68 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The reason for rejection stated by the Resolution Professional in her reply statement is that as per the books of accounts of the Corporate Debtor an amount of ₹ 91,05,993.26/- equivalent to USD 1,41,847.05 is only payable to the Applicant, as this amount reflects in the Audited Financial Statement of the Corporate Debtor. The excess amount claimed by the Applicant has already been received by them from the Corporate Debtor and this amount was adjusted by the Applicant against the dues of Matheel. Hence the Resolution Professional has not accepted that amount which has already been paid. If that amount is also accepted by the Resolution Professional, that would be violation of the IBC and detrimental to the interests of other creditors of the Corporate Debtor. Moreover, the applicant has not disputed the receipt of such amount from the Corporate Debtor. There are no reason to entertain this application - application dismissed.
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2021 (12) TMI 1271
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors - existence of debt and dispute or not - HELD THAT:- In the present case in hand it is noted that the amount were advanced as per agreement on 11.01.2016 for period of 3 years being lock in period at the rate of 2% per month interest rate therefore amount becomes due on 11.01.2019. The Financial Creditor also issued default notice and recalled principal and interest through advocate, however Corporate Debtor has failed to make the payment. In the lights of the Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT ] upholding the Constitutional validity of IBC, the position is very clear that unlike Section 9, there is no scope of raising a dispute as far as Section 7 petition is concerned. As soon as a debt and default is proved, the adjudicating authority is bound to admit the petition. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Application admitted - moratorium declared.
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2021 (12) TMI 1270
Seeking dissolution of Corporate Debtor - Section 59(7) of the Insolvency and Bankruptcy Code, 2016 and other applicable provisions of the IB Code, 2013 read with Regulation 38(3) of Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT:- The Applicant Company is having no creditors, i.e. either secured creditors or unsecured creditors. The Company has duly passed necessary Special Resolution in its Extra-Ordinary General Meeting on 14.02.2019 by confirming the decision of its Board of Directors by proposing its Voluntary Liquidation. Further, in Extra-Ordinary General Meeting a Resolution was passed to appoint a Liquidator for such purposes. Thus, it appointed Mr. Om Prakash Rathi, the Insolvency Professional as Liquidator and after his demise, through Special Resolution passed in its Extra-Ordinary General Meeting on 26.07.2019, appointed Mr. Amit Pareek, the Insolvency Professional as Liquidator. This Adjudicating Authority in exercise of power conferred under Section 59 (8) of the Insolvency and Bankruptcy Code 2016, the Applicant Company i.e., M/s. Guwahati Real Estate Limited is ordered to be dissolved with effect from the date of this Order i.e. 30.11.2021 - Petition allowed.
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Service Tax
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2021 (12) TMI 1269
Maintainability of appeal - pre-deposit of the amount of certain percentage of duty demanded or penalty imposed which was mandatory to be deposited before filing the appeal - section 35F of Central Excise Act, 1944 - HELD THAT:- Perusal of section 35F of Central Excise Act, 1944 makes it apparent and clear that the requirement of this section is mandatory requirement and the failure thereof results in rejection of appeal in limine . However keeping in view the acknowledgement of the appellant for pursuing this matter to be adjudicated on merits, it is being reasonable in the interest of justice that the matter be remanded back to the Commissioner (Appeals) with the direction to the appellant to make good the absence of payment of amount of mandatory pre deposit prior for the appeal being heard by Commissioner (Appeals). In nutshell the appellant is allowed an opportunity to make the compliance of the section 35F of Central Excise Act. Appeal allowed by way of remand.
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2021 (12) TMI 1268
Work contract service - the appellant has received the amount towards the provisions of said services from their service receiver but have not paid the Service Tax on such taxable receipts - extended period of limitation - HELD THAT:- There is no dispute about the fact that the amount of Service Tax for the amount of consideration received by the appellant stand already paid with the Government exchequer, however by the main contractor M/s. Gannon Dunkerley and Co. Ltd. There is also no denial to the fact that during the period there were several pronouncements made not only by this Tribunal but even by the departmental adjudicating authority holding that the sub-contractor is not liable to pay the Service Tax when the main contractor has paid the said Service Tax. The facts of the case are sufficient to hold that there was no clarity about the individual liability of the sub contractor towards the payment of service tax. Even the Department was not clear on the interpretation of the circulars issued, judgements made and practice followed on sub contractors liability. As such in the case where the main contractor had discharged the Service Tax on entire value of service. These findings are sufficient for me to hold that there cannot be any intentional conduct of the appellant to not to pay the service tax during 2013-14. Alleging fraud mis-statement or suppression of facts upon the appellant in view of prevalent situation is opined to be definite error on part of the Adjudicating Authority below. The onus was otherwise on the Department to prove that short payment of service tax has been made with intent to evade such payment. Apparently and admittedly in the present case the service tax stands already paid with respect to the amount involved in the present appeal, i.e. the amount of consideration received by the appellant/ sub contractor for providing works contract services to main Contractor M/s. Gannon Dunkerley Co. Ltd. The question of any positive evidence proving evasion does not at all arise. The impugned show cause notice is held to be barred by limitation - Appeal allowed - decided in favor of appellant.
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