TMI Tax Updates - e-Newsletter
October 6, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Indian Laws
Highlights / Catch Notes
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GST:
Classification of goods - preparation of Whole Wheat parota and Malabar parota - to be classified under Chapter heading 1905, attracting GST at the rate of 5% or otherwise? - The Appellant is indeed guilty of having not revealed the fact of an investigation pending against them by the DGGI on the issue of classification of Parota at the time of applying for an advance ruling - the provisions of Section 104 of the CGST Act is invoked, and it is declared that the advance ruling as void ab initio. - AAAR
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Income Tax:
Application for a certificate u/s 197 - legality and validity of order issued by the first respondent u/s 119 - Application was rejected since the reply against the SCN could not be filed due to lockdown - Period of limitation - Extension of limitation period as provided by the Ordinance would have an overriding effect over the limitation provision contained in the Income Tax Act for the financial year relevant to the assessment year 2020-21. - Application restored for re-consideration - HC
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Income Tax:
Special audit u/s 142(2A) - extension of 60 days for conduct of special audit - no extension has been given by AO but by the Commissioner and the AO has only conveyed the approval, therefore, we hold that the grant of extension by the Commissioner is beyond the powers enshrined under the statute. Accordingly, the assessment completed after the due date is held to be void-ab-initio - AT
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Income Tax:
Appeal ex-parte decided by CIT-A - AO objected to admission of the additional evidence - Audited financial statements and audited report could not be filed during the course of assessment proceedings due to factors entirely beyond the control of the assessee, in the interest of substantial justice, the AO should de-novo make the assessment after duly considering the audited financial statements and the audit report of the assessee - AT
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Income Tax:
Disallowance of Forex Loss - although there was import of capital assets in those years when ECB loans were borrowed but there was substantial exports also and the assertion of the assessee is this that such export proceeds were used for import of capital assets and ECB loan was not used for that purpose and the learned DR of the revenue could not bring any evidence on record to show that ECB loans were used for import of capital goods, claim of the assessee allowed - AT
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Income Tax:
Penalty u/s 271 - Defective notice - the allegation should be specific and clear in the penalty notice also because the assessee has to submit reply in the course of penalty proceedings on the basis of allegation in the penalty notice only and not on the basis of allegation in the Assessment Order and therefore, even if specific allegation is made by the AO in the Assessment Order, the defect in the penalty notice does not get rectified even u/s 292B - AT
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Income Tax:
Replacement of Primary Adaptive Display and Tail Rotor Blade are essential to keep the aircraft in a running usable condition and the replacements do not enhance the useful life of the aircraft. Thus, the impugned repairs would fall under ‘current repairs’ which were essential to keep the aircraft in a running condition. - AT
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Income Tax:
Relief u/s 220(7) - Assessee in default for amount non received in India - From the perusal of the records it can be seen that the compensation is not coming under the purview of the business income as there was no business during the period. - Thus, compensation received in lieu of the losses of the contract which was supposed to be executed in the year 1991 will not form the receipt of revenue in nature, but capital in nature. - Since the amount is not taxable, the question of relief u/s 220(7) becomes redundant - AT
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Income Tax:
Subsidy received under TUFS - Income chargeable to tax - The receipt does not become taxable, merely because it was erroneously offered to tax by the assessee in the return of income. The department is entitled to collect only legitimate tax that are due from the assessee. - assessed income could go below the returned income. - AT
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Income Tax:
Short deduction of TDS - TDS u/s 194C or 194J - provisions of Section 40(a)(ia) will not be applicable in the case of the assessee as there was nothing in the section to treat the assessee as defaulter where there is shortfall in deduction of TDS. - AT
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Corporate Law:
Oppression and mismanagement - illegal transfer of shares - this Tribunal is exercising its ample powers to waive the requisite shareholding percentage in order to maintain this petition even without filing a waiver application. - In spite of rescuing the Respondent Company in critical times, the petitioners were made to run from pillar to post to get their rightful share transfers as agreed to by the Respondent Nos. 2 to 8 which was clearly documented in various meetings and letters from joint Managing Director of the Company. Therefore, this Petition is hereby allowed. - Tri
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Corporate Law:
Restoration of name - The name of the Company was struck off for continuous non-filing of Statutory Returns. Hence, considering the public interest, and to protect the legitimate interest of revenue, the name of the Respondent Company requires to be restored in the Register of Companies maintained by the ROC, Ahmedabad so as to enable the Appellant (Income Tax Department) to proceed further as per rules and in accordance with law - Tri
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Indian Laws:
Dishonor of Cheque - section 138 of NI Act - benefit of presumption - The Trial Court as well as first Appellate Court have committed no error in rejecting plea raised by the respondent accused that blank cheque was received by the complainant to obtain the loan from the bank - HC
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IBC:
Initiation of CIRP - The petitioner is the dominus litis and the onus probandi lies on the petitioner to establish the crucial ingredient of time value of money, as required under section 5(8) of the Code and the judicial pronouncements discussed in the transaction under consideration. But the petitioner failed on this count. Hence, the amount claimed is not a financial debt. - Tri
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (10) TMI 149
Classification of goods - preparation of Whole Wheat parota and Malabar parota - to be classified under Chapter heading 1905, attracting GST at the rate of 5% or otherwise? - challenge to AAR decision - seeking advance ruling when the matter was pending and under investigation - HELD THAT:- It has been brought to our notice by the Department that the impugned advance ruling has been obtained by the Appellant by suppressing the fact of an investigation by the DGGI against them on the very same issue of classification of Whole Wheat Parota and Malabar Parota. It has been urged by the Department that the ruling of the lower Authority is to be held as void ab initio since the same has been obtained by suppression of the material fact of the ongoing investigation against them and is therefore in violation of the provisions of Section 98(2) of the CGST Act - the objection raised by the Department points to the very maintainability of the advance ruling in question. The Department has submitted that certain crucial facts have been brought to their notice by the DGGI, Chennai Zonal Unit which implies that the lower Authority had been misled into admitting the application in as much as the applicant (now Appellant) had withheld information regarding the commencement of investigations against them on the issue of classification of the impugned products. The process of investigation in tax administration is such a step towards the action of issuing a show cause notice which culminates in a decision. Investigation is activated when there is enough predication to show that there is an alleged tax evasion. The essence of investigation is to carry out an in-depth review of the taxpayer s records and activities to ensure that the tax due to the government is not lost in evasion. Therefore, commencement of investigation in terms of Section 67 of the CGST Act, can be said to be the start of a proceeding to safeguard the government revenue - the usage of the words any proceeding in the proviso to Section 98(2) of the CGST Act will encompass within its fold the investigation launched by the agencies. Appellant has also argued that the issue of classification of the disputed products was not raised specifically by DGGI in the summons - HELD THAT:- It is found from the records that the DGGI, Chennai Zonal Unit had issued a summons dated 21St June 2019 under Section 70 of the CGST Act, to the Appellant calling for certain details/documents in connection with the enquiry undertaken by them. One such area on which documents were called for was Major input details with gist of manufacturing activity . Shri. Yugandhar J, appeared before the DGGI on 2nd July 2019 in response to the above summons and tendered a preliminary statement on the activities of the Appellant Company. Thereafter another summons dated 9th July 2019 was issued directing the Appellant to produce a write-up of the activities involved in manufacturing various types of parotas - the DGGI were conducting their investigation on the issue of classification of parotas and the eligibility of concessional rate of 5% as per entry SI.No. 99A - the argument of the Appellant that the classification of the disputed products was not raised specifically by the DGGI, cannot be accepted. The Appellant has also argued that the issue of jurisdiction cannot be raised at a belated stage before the Appellate Authority - HELD THAT:- The view of the Appellant that the issue of jurisdiction could only have been raised before the lower Authority and not having been raised before it, the Department had waived its rights to raise the same is not entirely correct. We find that the proceedings before the lower Authority had been conducted without any participation of the jurisdictional officer. The jurisdictional officer was not asked to furnish comments nor was the jurisdictional officer present at the time of the personal hearing - it is well settled that reason to believe that the question on which an advance ruling was sought was not pending in any proceedings in the case of the applicant under the Act is a jurisdictional fact and only on its satisfaction, the lower Authority acquires jurisdiction to give a ruling on the question. An objection to it can be raised at any time even in appeal proceedings. The mere fact that no objection was taken before the lower Authority would not by itself bestow jurisdiction to the said Authority. Another argument of the Appellant is that any point raised by the Department in the absence of an appeal of their own cannot be entertained by the Appellate authorities - HELD THAT:- Section 100 of the CGST Act provides for an appeal to be filed by any party who is aggrieved by the advance ruling given by the lower Authority. In this case, the Department is not aggrieved by the ruling given by the lower Authority. It is also observed that there is no provision in the statute for a cross appeal/cross objection to be filed before the Appellate Authority in the appeal against the advance ruling. While Section 112(5) of the CGST Act explicitly provides that the party against whom an appeal has been filed before the GST Appellate Tribunal may file a cross objection/cross appeal notwithstanding that they may not have appealed against that order, there is no such similar provision for filing a cross appeal in the case of an appeal against an advance ruling. The Department has brought to our notice the fact that the advance ruling has been obtained by suppression of material facts and we are inclined to take cognisance of this information placed before us. It is trite law that when one comes for justice one should come with clean hands. This is not the case here. The Appellant is indeed guilty of having not revealed the fact of an investigation pending against them by the DGGI, Chennai Zonal Unit on the issue of classification of Parota at the time of applying for an advance ruling - the provisions of Section 104 of the CGST Act is invoked, and it is declared that the advance ruling order dated 22 May 2020 as void ab initio. Having held that the order of the lower Authority is void ab initio, the question of addressing Whether the preparation of Whole Wheat parota and Malabar parota be classified under Chapter heading 1905, attracting GST at the rate of 5%? does not arise. Appeal dismissed.
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2020 (10) TMI 148
Release of provisionally attached bank account and the property of the petitioner - Section 83 of Punjab Goods and Service Tax Act and Central Goods and Service Tax 2017 - HELD THAT:- The petition is disposed of with the direction that all the accounts of the petitioner be defrozen and the petitioner would maintain the amount which was present in the accounts on the date of provisional attachment.
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Income Tax
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2020 (10) TMI 147
Disallowance u/s 14A read with Rule 8D - whether it be restricted to the extent of exempted income especially when neither Section 14A nor Rule 8D provides for any such restriction? - Respondent assessee is in the process of being liquidated - HELD THAT:- Tribunal recorded that it had heard the rival submissions, which would mean that both parties were heard - preamble portion of the impugned order shows that none represented the assessee. Since the first respondent assessee is under liquidation and the Hon'ble Administrator has been appointed and he is also represented through a counsel, we are of the considered view that the Tribunal can decide the matter afresh on merits after giving an opportunity to the Hon'ble Administrator represented by his counsel to put forth their submissions. For such a reason alone, we are inclined to interfere with the impugned order. Above tax case appeal is allowed, the impugned order is set aside and the matter is remanded to the Tribunal.
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2020 (10) TMI 146
Application for a certificate u/s 197 - legality and validity of order issued by the first respondent u/s 119 - Application was rejected since the reply against the SCN could not be filed due to lockdown - Period of limitation - application of the petitioner for non-deduction of TDS and grant of certificate u/s 197 - HELD THAT:- Sub-section (2) says that where any due date has been specified or prescribed or notified for payment of any amount towards tax or levy falling within the period from 20.03.2020 to 29.06.2020 or such other date after 29.06.2020 as may be notified by the central government and such amount having not been paid within such date but paid subsequently on or before 30.06.2020 or such other date after 30.06.2020 as may be notified by the central government, then it would carry a lower rate of interest with no penalty and prosecution. In our view, the said provision cannot be invoked to justify rejection of the application of the petitioner for issuance of a certificate under sub- section (1) of section 197 on the ground of being barred by limitation. On the contrary, as we have already noted earlier sub-section (1) of section 3 also provides for extension of limitation to 30.06.2020 or even beyond in case of furnishing of any reply, application, report, document, return, statement or such other record under the provisions of the Act which would cover the case of the petitioner. To make it more explicit, in that portion of sub-section (1) of section 3 preceding the first proviso, it is clarified that such extension of limitation upto 30.06.2020 or even beyond would be notwithstanding anything contained in the Specified Acts, in this case the Income Tax Act. Extension of limitation period as provided by the Ordinance would have an overriding effect over the limitation provision contained in the Income Tax Act for the financial year relevant to the assessment year 2020-21. Considering the above and having regard to the extra-ordinary situation faced by the country in view of the pandemic and the lockdown for which the Ordinance had to be promulgated, simplicitor rejection of the application of the petitioner as having been rendered infructuous either on 31.03.2020 or on 27.04.2020 cannot be justified and is wholly unsustainable in law as well as on facts. We set aside the decision of respondent No.2 dated 08.06.2020 to reject the application of the petitioner and remand the matter back to respondent No.2 for taking a fresh decision on the application of the petitioner for issuance of a certificate under sub- section (1) of section 197 of the Act for the assessment year 2020-21 on merit and in accordance with law within a period of six weeks from the date of receipt of a copy of this order. Writ petition is accordingly allowed.
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2020 (10) TMI 145
Maintainability of appeal - low tax effect - Depreciation on Intangible assets - Tribunal allowing depreciation at 60% in respect of design and assembly drawings of hydraulics cylinders, Bill of materials and other components in CD as computer software - As submitted Monetary limit for filing or pursuing an appeal before the High Court has been increased to ₹ 1 Crore - HELD THAT:- The above tax case appeal is dismissed on account of the low tax effect. The substantial question of law framed is left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits.
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2020 (10) TMI 144
Deduction u/s.80IA(iv)(a) - Initial Assessment Year - first year opted for by the assessee for claiming deduction u/s.80IA OR year in which the eligible business has commenced - HELD THAT:- Pune Bench of the Tribunal in assessee own case for immediately preceding assessment year i.e. A.Y.2011-12 [ 2017 (8) TMI 474 - ITAT PUNE] has allowed the deduction to the assessee by observing that the initial assessment year is the year in which the assessee has claimed first time the deduction u/s.80IA of the Act. CBDT Circular itself, gives preference to the assessee to choose a particular year as initial assessment year and in this case the assessee has chosen Assessment year 2010-11. Therefore, the case of the assessee is fortified by the CBDT CircularNo.1/2016 dated 15.02.2016 wherein the CBDT has clarified that the term Initial Assessment Year in Section 80IA (5) of the Act would mean the first year opted for by the assessee for claiming deduction u/s.80IA and not the year in which the eligible business has commenced - decision relied on by the Ld. DR of Special Bench of Tribunal in the case of Goldmine Shares and Finance Pvt. Ltd. [ 2008 (4) TMI 405 - ITAT AHMEDABAD] was much prior to the CBDT Circular. - Decided against revenue. Prior period depreciation on investment in premises disallowed - CIT-A allowed deduction - HELD THAT:- Before the Ld. CIT(Appeals) itself, it had been demonstrated by the assessee that in the entire book depreciation it included depreciation on investment in premises for prior period and entire books of account, tax audit report were submitted and were analyzed by the First Appellate Authority - assessee at the time of hearing drew our attention to the Balance Sheet and P L account for the relevant assessment year wherein the entire depreciation and amortization expenses has been claimed And it included prior period deprecation on investment in premises. DR could not refute these facts on record nor could bring any material or evidences to show that the said amount was not included in the said total depreciation taken by the assessee company for taxation purpose. - Decided against revenue.
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2020 (10) TMI 143
Reassessment proceedings - no objection was raised by the assessee in the course of reassessment proceedings - Decision of ld. CIT(A) that the reopening was based on mere change of opinion and hence, the order was bad in law - HELD THAT:- CIT(A) has held the reassessment as bad in law on the basis of the factual and legal position obtaining in the case. Merely because the assessee did not raise any objection against the reassessment proceedings before the AO, does not mean that question of validity of reassessment has attained finality and hence cannot be challenged before the appellate forums. The quintessence of the matter is to examine as to whether or not the reassessment is valid and not whether or not any objection was taken by the assessee before the AO. It will be seen hereinafter that the ld. CIT(A) rightly quashed the reassessment as having been initiated on the basis of change of opinion only. This ground is, therefore, dismissed. Reassessment on the basis of change of opinion - case was taken up under scrutiny under Computer Aided Scrutiny Selection (CASS) to examine the claim of deduction under Chapter VI-A of the Act - claim of deduction u/s.80IB(10) - HELD THAT:- It is evident from the reasons recorded by the AO that the initiation of reassessment proceedings was premised on the fact that the commencement took place at a date in variance with the one stated by the assessee in the original assessment proceedings. CIT(A) has aptly recorded that the AO in the original assessment proceedings thoroughly examined the issue of date of commencement of the project, as supported by the reproduction from the assessment order. Reassessment came to be initiated by the AO on the basis of no fresh material coming to his possession after the completion of the original assessment, which was, in fact, made only for the verification of claim of the deduction under the CASS. Rather it is a case of change of incumbent who reviewed the material existing on record and took a contrary view. Such change of opinion is strictly impermissible in the light of judgment in Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] . No reason to disturb the finding recorded by the ld. CIT(A) in coming to the conclusion that the reassessment proceedings were bad in law. The impugned order is countenanced to this extent. - Decided against revenue.
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2020 (10) TMI 142
Special audit u/s 142(2A) - extension of 60 days for conduct of special audit - CIT, Central-II for granting extension for the further period is legally valid are not? - HELD THAT:- This issue stands covered by the order of the Tribunal in the case of sister concern i.e. M/s. Soul Space Projects Ltd. [ 2020 (6) TMI 696 - ITAT DELHI ] wherein as held Punchnama for the search was issued in the name of various entities as per Annexure-1 which included names of the assessee and M/s Soul Space Projects Ltd. Commissioner has issued common letter for both the entities under which the so-called extension of 60 days was given for conduct of special audit. In the entirety of above facts and circumstances, where under proviso to section 142(2C) jurisdiction was upon the AO to examine the circumstances and after due application of mind pass an order granting extension for conduct of special audit under section 142(2A) and as no extension has been given by AO but by the Commissioner and the AO has only conveyed the approval, therefore, we hold that the grant of extension by the Commissioner is beyond the powers enshrined under the statute. Accordingly, the assessment completed after the due date is held to be void-ab-initio. - Decided in favour of assessee.
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2020 (10) TMI 141
Appeal ex-parte decided by CIT-A - AO objected to admission of the additional evidence - As argued Audited financial statements and audited report could not be filed during the course of assessment proceedings due to factors entirely beyond the control of the assessee - HELD THAT:- Assessee did not file audited financial statements along with audit report either at the time of filing of return or during the course of assessment proceedings. It is the assessee s contention that the same could not be done because of the some changes in the management. The bona fide of the assessee is lent credence by the fact that the assessee had also moved an application before the Company Law Board for compounding of offences requesting compounding for not filing the audited annual accounts. We also note that the correct income of the assessee can be determined only on the basis of the audited financial results and, therefore, it would be incorrect to shut out an assessee in the process of administration of justice from leading evidence to prove its case. The earlier inability to lead evidence should not be held against the assessee unless it is known to be incorrect or suggested to be incorrect or there was evidence to suspect that the evidence was fabricated. In the present case no such adverse inference has been drawn by the Ld. CIT (A). No prohibition for admitting the additional evidence at the appellate stage, though, the same may pertain to a period after completion of the assessment proceedings and the only condition is that the Revenue should not be prejudiced and that the AO should be given a reasonable opportunity to rebut the additional evidence. Audited financial statements and audited report could not be filed during the course of assessment proceedings due to factors entirely beyond the control of the assessee, in the interest of substantial justice, the AO should de-novo make the assessment after duly considering the audited financial statements and the audit report of the assessee - Appeal of the assessee stands allowed for statistical purposes.
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2020 (10) TMI 140
Validity of the assessment - No notice u/s 143(2) issued - HELD THAT:- AO has not issued any notice u/s 143(2) of the Act to the assessee within the time stipulated under the Income Tax Act, 1961 and, therefore, the impugned assessment order is invalid, void ab initio and against the provisions of the law and is not sustainable in the eyes of law. See CHETAN GUPTA [ 2015 (9) TMI 756 - DELHI HIGH COURT] - and M/S HOTLINE INTERNATIONAL PVT. LTD. [ 2007 (4) TMI 44 - DELHI HIGH COURT] - The appeal of assessee is allowed .
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2020 (10) TMI 139
Ex-parte order by CIT-A - CIT-A dismissing the appeal for non-prosecution - HELD THAT:- It is well settled principles of law that a person, who filed appeal shall go to the authorities and justify its case along with necessary evidence. In case, the assessee does not choose to appear before the authorities, then the authorities are left with no other option but to proceed to pass an order in accordance with law on the basis of materials available on record, but, at the same time, the authorities are bound to dispose of the appeal filed by the assessee on merits on the basis of materials available on record. In this case, on a perusal of the order passed by the learned CIT(A), we find that the CIT(A) has dismissed the appeals filed by the assessee ex-parte in limine without discussing the issues on merits. Thus appeals need to go back to the file of CIT(A) to give one more opportunity of hearing to the assessee to file necessary evidences and to decide the issues involved in the appeals on merits. Appeals filed by the assessee allowed for statistical purposes.
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2020 (10) TMI 138
Belated payment of Employee s contribution to PF - HELD THAT:- This issue is squarely covered in favour of the assessee by the judgment rendered in the case of CIT vs. Sabari Enterprises [ 2007 (7) TMI 169 - KARNATAKA HIGH COURT] and respectfully following the same, we decline to interfere in the order of CIT (A) on this issue. Disallowance of project expenses capitalised by the AO - HELD THAT:- Issue decided in favour of assessee in own case [ 2020 (3) TMI 113 - ITAT BANGALORE] as held disallowance made in the assessment order was not warranted, as the expenditure on setting up of new outlets being an expansion of the existing business, is an allowable expense. Interest incurred on borrowed funds on account of Capital Work in Progress - HELD THAT:- As decided in own case as decided in own case [ 2020 (3) TMI 113 - ITAT BANGALORE] proviso to section 36(1)(iii) inserted by the Finance Act, 2003 w.e.f. 01.04.2004 is very relevant for this issue. As per the same, till the asset for which the loan is borrowed is put to use, interest is not allowable. The judgments cited by the learned AR are for the period before insertion of this proviso and hence, not relevant. Hence, there is no merit in these grounds of the assessee and therefore, rejected. Disallowance of Forex Loss - HELD THAT:- Tribunal [ 2020 (3) TMI 113 - ITAT BANGALORE] decided similar issue in favour of the assessee by following the judgment of Hon ble Apex Court rendered in the case of Woodward Governor India Pvt. Ltd. [ 2009 (4) TMI 4 - SUPREME COURT] - revenue could not point out any difference in facts in the present year as compared to these two years for which the tribunal order is available. Regarding the applicability of section 43A, we find that this is stated by the AO in the assessment order itself that this section is not applicable - being final fact finding authority, we made efforts to examine the facts and found that although there was import of capital assets in those years when ECB loans were borrowed but there was substantial exports also and the assertion of the assessee is this that such export proceeds were used for import of capital assets and ECB loan was not used for that purpose and the learned DR of the revenue could not bring any evidence on record to show that ECB loans were used for import of capital goods. - Decided in favour of the assessee
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2020 (10) TMI 137
Penalty u/s 271 - Defective notice - whether the assessee is guilty of concealment of income or of furnishing inaccurate particulars of income? - HELD THAT:- Once the notice issued by the AO under section 274 r.w.s. 271 of the Act is found to be defective because there is no specific allegation made by the AO regarding this aspect as to whether the assessee is guilty of concealment of income or guilty of furnishing inaccurate particulars of income, the said notice cannot be accepted as valid even if such specific allegation is made by the AO in the Assessment Order. In our considered opinion, the AO has to make a specific allegation in the Assessment Order also and that will satisfy this requirement that the AO was satisfied about reason of initiating penalty proceedings but even after that, the allegation should be specific and clear in the penalty notice also because the assessee has to submit reply in the course of penalty proceedings on the basis of allegation in the penalty notice only and not on the basis of allegation in the Assessment Order and therefore, even if specific allegation is made by the AO in the Assessment Order, the defect in the penalty notice does not get rectified even under section 292B Rectification of mistake - HELD THAT:- In the present case, this is not the case of the Revenue that any judgment of Hon ble jurisdictional High Court was not considered by the Tribunal in the present case. In fact, this is admitted position that the Tribunal order is following the binding judgment of Hon ble Karnataka High Court rendered in the case of CIT Vs. Manjunatha Cotton and Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT ] and therefore, in the facts of the present case, this judgment of Hon ble Gujarat High Court is also not rendering any help to the Revenue. We find that there is no apparent mistake in the impugned Tribunal order. - Decided in favour of assessee.
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2020 (10) TMI 136
Deduction for deferred revenue expenditure incurred in respect of maintenance and overall check-up (in compliance with DGCA guidelines) of helicopter EC145 taken on lease - disallowance of deduction as copy of lease agreement and invoices were not furnished by the appellant - As argued maintenance and overall check-up expenses under consideration were incurred in a preceding assessment year and suo motu amortized by the appellant over the lease period of the helicopter - HELD THAT:- In the year under consideration, the issue does not seem to have been examined by the Assessing Officer in the proper perspective i.e. with reference to the lease agreement. We also note that even the Ld. CIT (A) did not examine the relevant documents. Issue be restored to the file of the AO for duly considering the claim of the assessee after going through contents of the lease deed as well as the relevant bills and vouchers. It is so directed accordingly. While the Assessing Officer is re-examining the issue, he should also consider the factum of similar expenditure having been allowed in 143(3) proceedings in Assessment Years 2010-11 and 2011-12. Disallowance of regular repairs and maintenance of Aircraft after capitalizing the same and allowing depreciating thereon - As per AO this replacement was in the nature of major repairs which added to the life of the asset - CIT (A), while dismissing the assessee s appeal, also held that these were repairs of a nature which enhanced the efficiency of the Aircraft and were not part of the regular maintenance expenses - HELD THAT:- We agree with the contention of AR that the quantum of expenditure cannot determine whether a particular expenditure is capital or revenue in nature. In our opinion, replacement of Primary Adaptive Display and Tail Rotor Blade are essential to keep the aircraft in a running usable condition and the replacements do not enhance the useful life of the aircraft. Thus, the impugned repairs would fall under current repairs which were essential to keep the aircraft in a running condition. Therefore, we set aside the order of the Ld. CIT (A) on the issue and direct the Assessing Officer to delete the disallowance. Interest of Income Tax Refund - assessee s contention that the assessee has not received any such interest - AR has submitted that the issue may be restored to the file of the Assessing Officer for passing appropriate order after due verification in this regard and the Ld. SR. DR also does not have any objection to the same - HELD THAT:- In view of the agreement of both the parties, this issue is also restored to the file of the Assessing officer for the purpose of being adjudicated afresh after due verification of the assessee s claim .
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2020 (10) TMI 135
Deduction u/s 80HHB - amount credited to the profit and loss account of the year ending 31.03.1995 under the head Compensation from Government of India/ECGC - issuance of bond on assignment of assessee s due from Government of India as settlement in lieu of foreign exchange loans extended to assessee through Exim Bank and SBI by Government of India to enable assessee to make off with contracts in Iraq following the deferment of its contract under Deferred Payment Agreement (DPA) - whether settlement-cum-compensation can be termed as profit of business activity? - HELD THAT:- Income accrues when it becomes due but it must also be accompanied by a corresponding liability of the other party to pay the amount. Only then can it be said that for the purposes of taxability that the income is not hypothetical and it has really accrued to the assessee. In the present case, the income has not accrued to the assessee, therefore, it cannot be termed as the business income. From the perusal of these case laws and from the submissions of the assessee, it is clear that the settlement received from the Government of India is not coming under the purview of the business income as there was no business during the period. Besides, the contracts between the assessee and the Government of Iraq was not completed due to war situation and UN Sanctions. There was no hope for the assessee to conduct any business, but foreign exchange loans extended to assessee through Exim Bank and SBI by Government of India was a liability to the assessee. Thus, the settlement received in lieu of this will not form the revenue receipt. Thus, the contentions of the assessee that the receipt are not revenue in nature is sustained and Ground Nos. 1 to 4 of assessee s appeal are allowed. Disallowance of prior period expenses - CIT(A) held that the assessee has not given any evidence as to expenditure was booked in present assessment year? - HELD THAT:- There is no evidence that expenses have been crystallized during the year, even though they pertained to earlier years. Thus, in absence of evidence, the CIT(A) confirmed this addition correctly. Before us as well the assessee could not demonstrate the same as to how the expenditure was booked in present assessment year. Therefore, Ground No. 5 of the assessee s appeal is dismissed. Interest on fixed deposits with the bank - Income from other sources OR Business income - HELD THAT:- After hearing both the parties, it can be seen that the interest was received on the fixed deposits with the bank and thus it cannot be termed as business income. Ground No. 6 and 7 of the assessee s appeal is allowed. Expenses on transit accommodation and mess located in remote areas where the benefit of hotel was unavailable - CIT(A) followed the Apex Court decision in case of Britannia India Ltd. [ 2005 (10) TMI 30 - SUPREME COURT] and upheld the addition - HELD THAT:- CIT(A) was rightly confirmed this addition as there was no evidence shown by the assessee at the time of the assessment proceedings as well as at the time of the Appellate proceedings. - Decided against assessee. Relief u/s 220(7) - Assessee in default for amount non received in India - Compensation received by the assessee company from United Nations Compensation Commission (UNCC) for loss of assets suffered by it due to UN led war against Iraq after the Iraq s invasion occupation of Kuwait in the year 1990, by virtue of which assessee company was forced to abandon its assets and leave Iraq to save its human assets - A.Y. 2001-02 - HELD THAT:- The compensation is in respect of the loss incurred by the assessee in respect of the contracts which were unable to be completed since the invasion of Iraq in Kuwait in year 1990. The assessee company treated the said sum as capital receipt, accounted on receipt basis, not exigible to tax, being in the nature of compensation of capital nature and against forced abandoned capital assets due to war. The returned total income included a sum on account of interest accrued on sums receivables from Iraq in terms of deferred payment agreement between Govt. of Iraq Govt. of India. Thus, the treatment given by the assessee company is just and proper. From the point of view of the commercial aspect of the receipt it can be seen that the assessee received the amount from the United Nations Compensation Commission and not from the Government of Iraq. From the perusal of the records it can be seen that the compensation is not coming under the purview of the business income as there was no business during the period. Thus, compensation received in lieu of the losses of the contract which was supposed to be executed in the year 1991 will not form the receipt of revenue in nature, but capital in nature. Therefore, Ground No. 1 to 3 of the assessee s appeal are allowed. Employee s contribution to P.F. - assessee company has deposited sums received from employees towards contribution to provident fund after the due date including grace period of 5 days - HELD THAT:-Assessee company has deposited employer s contribution to the P.F. after the due date mentioned in schedule but deposited before the due date of filing of return of income. Thus AO was not right in disallowing these expenses claimed by the assessee company for the employer s contribution to the P.F. as per the provisions of Sec 43B if the same is deposited prior to the due date mentioned in the respective statute as held by the Hon ble Apex Court in case of CIT v. Vinay Cement Ltd.[ 2007 (3) TMI 346 - SC ORDER] and CIT v. Alom Extrusions Ltd.[ 2009 (11) TMI 27 - SUPREME COURT] - Ground No. 7 of the Assessee s appeal is allowed.
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2020 (10) TMI 134
Disallowance u/s 14A - assessee earned exempt income but did not make any disallowance u/s 14A - assessee submitted that the majority of its investments were made in the earlier years and further the loans taken during the year under consideration were used for general business purposes - HELD THAT:- If the interest free funds available with the assessee is more than the value of investments, then the presumption is that the assessee has used interest free funds for making investments. This view is supported by the decision rendered in the case of Reliance Industries Ltd.[ 2019 (1) TMI 757 - SUPREME COURT] . There should not be any dispute that, if the assessee is able to demonstrate that the interest free funds available with the assessee is more than the value of investments and further the loan funds have not been used to make the investments, then no disallowance out of interest expenditure is called for under rule 8D(2)(ii). Since the factual details relating to the issue require examination, we are of the view that the assessee, in the interest of natural justice, should be provided with an opportunity to present its case to the A.O. With regard to the disallowance of administrative expenses made under rule 8(D)(iii), it is the submission of the assessee that the majority of expenses debited to Profit loss account are not related to the exempt income and further the expenses relatable to the exempt income could be identified and the same is lower than the amount computed by the A.O. u/r 8D(2)(iii). This contention of the assessee also require examination at the end of the A.O. This issue requires fresh examination at the end of the A.O. Assessee appeal allowed for statistical purposes.
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2020 (10) TMI 133
Late filing fee u/s 234E - intimation u/s 200A - Late filing of TDS returns / statement - HELD THAT:- As held in SRI. FATHERAJ SINGHVI [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT] that when the statute confers no express power under section 200A before 01.06.2015 on the authority either to compute and collect any fee under section 234E, the demand for the period before 01.06.2015 could not be sustained. The present appeals of the Assessee relate to TDS returns filed prior to 1.6.2015. The decision of the Hon ble Karnataka High Court in the case of Fateeraj Singhvi (supra) was rendered on 26.8.2016. It has been held in the case of MSV IT Solutions Ltd. [ 2018 (10) TMI 1774 - ITAT HYDERABAD] wherein on identical facts noticing that there was no legal remedy prior to 1.6.2015 against an intimation u/s.200A of the Act, the Hyderabad Bench condoned delay in filing appeal before CIT(A). Interest of justice would be met if the delay in filing appeals by the Assessee before CIT(A) is condoned and the issue with regard to levy of interest u/s.234-E of the Act be remanded to the CIT(A) for fresh consideration - Appeals of assessee allowed for statistical purpose.
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2020 (10) TMI 132
Assessment u/s 153A - whether there was incriminating material found in the course of search for section 153A to be invoked? - HELD THAT:- If search has taken place, section 153A is triggered, and finding of incriminating material in search is not relevant. There is no categorical observation by CIT(A) regarding any incriminating material that was unearthed and seized leading to undisclosed income that was not considered. Even Ld.CIT.DR could not point out any categorical observation by authorities below wherein this issue has been addressed. Unless there is a factual observation regarding availability of incriminating material seized during course of search leading to undisclosed income in the hands of assessee for year under consideration, issue cannot be answered in accordance with law. Remand this issue back to Ld.CIT(A) to discern from assessment records of their being any incriminating material seized during course of search. Appeal of assessee allowed for statistical purposes.
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2020 (10) TMI 131
Subsidy received under TUFS - Income chargeable to tax - CIT(A) had adjudicated the non-taxability of the receipt of subsidy after due examination of the relevant scheme which are available in the public domain - HELD THAT:- The entire scheme of taxation after determining the total income is governed by the provisions of the Income Tax Act which is to be read with Article 265 of the Constitution of India which stipulates that no tax could be collected except by authority of law . Hence, it is a legal mandate and pre-requisite that a particular receipt need to be taxed within the ambit of the provisions of the Income Tax Act. The receipt does not become taxable, merely because it was erroneously offered to tax by the assessee in the return of income. The department is entitled to collect only legitimate tax that are due from the assessee. Hon‟ble Gujarat High Court in the case of CIT vs. Milton Laminates Ltd. [ 2013 (3) TMI 192 - GUJARAT HIGH COURT] after considering the decision of the Hon‟ble Supreme Court in the case of CIT vs. Shelly Products [ 2003 (5) TMI 4 - SUPREME COURT] had held that assessed income could be below the returned income. We hold that CIT(A) was justified in holding that assessed income could go below the returned income. Our aforesaid observations on merits and on technicalities and in view of the decision of the Hon‟ble Supreme Court in the case of Ponni Sugars [ 2008 (9) TMI 14 - SUPREME COURT] we do not find any infirmity in the entire order of the ld. CIT(A) granting relief to the assessee both on technicalities and on merits. Accordingly, the grounds raised by the revenue are dismissed.
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2020 (10) TMI 130
TDS u/s 194H - disallowing expenditure of commission u/s 40(a)(ia) for non-deduction of tax - HELD THAT:- As relying on order of Tribunal for AYs 2011-12 2012-13 [ 2017 (10) TMI 539 - ITAT MUMBAI] The TDS provisions are applicable under section 194H in case it is held that the nature of the transaction entered into between the assessee and the distributor is that of commission but in case if it is decided that the nature of transaction is not commission but discount given on sales it cannot be regarded to be commission which is hit by the provisions of Section 194H - in the interest of justice and fair play to both the parties set aside this issue and restore it to the file of the AO with the direction that the AO shall redecide this issue afresh in accordance with law after going though the agreement which the assessee has entered into with the distributor as well as the sample subscription application form, whether the amount represents the expenditure incurred by the assessee towards commission or whether the said amount represents cash discount given by the assessee to the distributor for sale of talk time card - Decided in favour of assessee for statistical purposes. Short deduction of TDS - TDS u/s 194C or 194J - customer support charges - HELD THAT:- This issue is squarely covered in assessee s favor by the order of the Tribunal for AYs 2011-12 2012-13 [ 2017 (10) TMI 539 - ITAT MUMBAI] wherein found no infirmity or illegality in the order of the CIT(A) in holding that provisions of Section 40(a)(ia) will not be applicable in the case of the assessee as there was nothing in the section to treat the assessee as defaulter where there is shortfall in deduction of TDS. In fact, this decision has subsequently been followed by the co-ordinate bench of this Tribunal in assessee s own case for AY 2010-11 [ 2018 (6) TMI 547 - ITAT MUMBAI] - Decided against revenue.
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2020 (10) TMI 129
Maintainability of appeal - low tax effect - HELD THAT:- Department ought not have filed the appeals before the ITAT where the tax effect is ₹ 50 Lacs or less. See Dinesh Madhavlal Patel [ 2019 (8) TMI 752 - ITAT AHMEDABAD ]
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Customs
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2020 (10) TMI 128
Violation of import conditions - benefit of Concessional rate of duty denied - stand of the respondents is that the imported goods should have been put only for own use consumption and should not have been sold - SI.No.292(A) of General Exemption N/N. 50/2017-Customs, dated 30.06.2017 - HELD THAT:- Since the petitioner has now obtained End Use certificate from the jurisdictional authority, in the interest of justice, he deserves to be granted one more opportunity. In this view of the matter, the order impugned in this writ petition is quashed - The matter is remitted to the file of the first respondent. The first respondent will issue a fresh hearing notice to the petitioner. On the said date, the petitioner should place all the materials such as End Use certificates before the first respondent for his consideration. Petition allowed by way of remand.
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Corporate Laws
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2020 (10) TMI 127
Restoration of name of the Company in the Register of Companies, maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT:- Having satisfied with the reasons as mentioned in the appeal and in the light of various provisions of Companies Act, 2013, the Tribunal is of the opinion that it would be just and equitable to order restoration of the name of the Company in the Register of Companies and that the shareholder of the Company is competent to file this appeal - The Registrar of Companies, the respondent herein, is ordered to restore the original status of the Appellant Company as if the name of the company has not been struck off from the Register of Companies and take all consequential actions like change of company s status from Strike off to Active (for e-filing), to restore and activate the DINs if applicable, to intimate the bankers about restoration of the name of the company so as to defreeze its accounts. Application allowed.
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2020 (10) TMI 126
Restoration of name of the company in the Register of Companies maintained by the Registrar of Companies - failure to file Financial Statements and Annual Returns for more than two continuous financial years - not carrying on any business or operation for a period of immediately preceding two years - no application made for obtaining the status of Dormant Company under section 455 of the Companies Act, 2013 - section 252(3) of the Companies Act, 2013 - HELD THAT:- On perusal of the records, it appears that the name of the company was struck off for the failure on the part of the company to file the statutory documents for a continuous period of more than two years, as mandatorily required under the statute and also for not carrying on the business. On hearing the submissions of the Learned Counsel appearing on behalf of Petitioner and on perusal of the Audited Accounts submitted by the Petitioner Company and the documents provided on record, the Bench has observed that the company has assets liabilities in its Books of Accounts during the immediately preceding two years from the date of striking off of its name by the Registrar of Companies - Therefore, it would be just and equitable to provide an opportunity to the company to rectify its defaults and continue the business. The prayer sought by the Petitioner company deserves to be allowed - Respondent is directed to restore the name of the Petitioner company to the Register of Companies subject to payment of a sum of ₹ 50,000/- - Petition allowed.
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2020 (10) TMI 125
Grant of Leave to continue the suit filed against Gaon Wonderland Properties Pvt. Ltd. - section 279 of Companies Act, 2013 - HELD THAT:- Appellant says that he has filed a Suit against the M/s Gaon Wonderland properties Private Limited and its Director before the Court of Civil Judge, Senior Division at Panji in Special Civil Suit No.44 of 2008 for specific purpose of contract dated 28.11.2006. However, no contract dated 28.11.2006 was placed before this Bench. Instead, what was placed before this Bench is an unregistered Agreement dated 28.11.2011 (though notarized) where the Company has agreed to compensate the Petitioner towards his services. Therefore, this Bench is not on a firm footing to decide as to how a Civil Suit was filed in 2008 though the unregistered Agreement which is signed between the parties is dated 28.11.2011. The interpretation of the Bench is that in the Company Petition No. 24/2012 an Order was passed by the Hon'ble High Court of Bombay, Bench at Goa appointing a Liquidator and initiating the process of Liquidation. This Bench understands that the process of Liquidation, interalia, involves the Official Liquidator making public announcement, submitting report on the fixed assets and liability and carrying out the liquidation process. The job of the Official Liquidator essentially relates to squaring up the Assets and Liability side and completely liquidating the assets of the Company and, thereafter filing a report before the Hon'ble High Court of Mumbai, Goa Bench for dissolving the Company - this Bench is of the view that the final outcome of CP No.24/2012 is by way of dissolution of the Company and, therefore, the appointment of the OL vide its Order dated 19.06.2018 is just an intermediate stage and the final outcome in CP 24/2012 is still pending. The Petitioner s is directed to take appropriate steps to file leave application before the Hon ble High Court, Bombay bench at Goa. This Bench is of the view that NCLT has no jurisdiction to grant leave in the matter which is pending before the Hon ble High Court, Bombay Bench at Goa - Matter disposed off.
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2020 (10) TMI 124
Restoration of the name of the company to the Register of Companies maintained by the Registrar of Companies - failure on the part of the company to file the statutory documents for Financial Year since incorporation, and also for not carrying on the business - section 252(3) of the Companies Act, 2013 - HELD THAT:- The Petitioner Company holds tangible assets in the form of land admeasuring an extent of 3610 sq ft in Mira Road, Thane, which was acquired at a value of ₹ 3,87,320/- on 31.08.2007. The Company has placed on record a copy of the 7/12 register extract in support of its contention, at Annexure-3 to the Petition - Possession of an asset such as land will fall within the meaning of the expression just used in section 252(3) of the Companies Act, 2013. The land in question is located in Mira Road, within the Mumbai Metropolitan Region. The property of the Petitioner Company would be rendered bona vacantia in case the present application is not allowed, and this is not a very desirable result from the point of view of the Petitioner Company. Thus, the name of the Petitioner Company should be restored to the register and that it should be given a chance to redeem itself by filing all the pending statutory returns with the RoC - The Respondent Registrar of Companies, Maharashtra, Mumbai, is directed to restore the name of the Petitioner Company - petition allowed.
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2020 (10) TMI 123
Prayer to NCLT to decided the matter at an earliest - Appellant claims that there is an urgency that the matter should be taken up to inter-alia consider if the Respondent No. 1 2 who have procured the Impugned Order performed their obligations or not - HELD THAT:- It appears to us that there is urgency in the matter and in order to protect the interest of the Company it would be appropriate that the Learned NCLT urgently deals with the M.A. 21/KB/2020. The Parties had fairly entered into a settlement and timely action by the Learned NCLT can help save the settlement. Appeal disposed off with a direction to the Learned NCLT Kolkata Bench (Kolkata) to urgently decide Misc. App. No. 21/KB/2020 in CP No. 49/2016 preferably within a month.
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2020 (10) TMI 122
Restoration of name of the Company in the Register of Companies, maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT:- The ROC submitted that the action of striking off of the name of the Company was triggered due to negligence and lack of due diligence on the part of the directors of the Company for not discharging their statutory duties in filing the statutory returns within the due date stipulated under the Companies Act and also for not responding to the several periodical notices within the notice periods. Therefore, the action of strike off of the name of company is fully substantiated within the authority under the provisions of Section 248 of the Act and deserves the protection of this Tribunal. The Company is directed to file all the statutory document(s) along with prescribed fees/additional fee/fine as decided by Registrar of Companies within 30 days from the date on which its name is restored on the Register of Companies by the Registrar of Companies. The appellant is directed to submit a declaration from the Directors regarding the deposits made during the demonetization period with the Registrar of Companies - Application disposed off.
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2020 (10) TMI 121
Restoration of company website in such a manner that client enquiries are directed to the petitioner company - direction to handover control and access of the web site to the petitioner company - direction to abstain from obstructing smooth operations of the petitioner Company in any manner - HELD THAT:- It is seen that the applicants 2, 3 and 4 are not parties to TCP/ 116 /KOB/2019 in which the present IA is filed. Hence on that count itself, the I.A is not maintainable. Moreover, the contentions of the respondent in paragraph 4 of the counter is that the IA is not maintainable for the reason that the petitioner in TCP/116/KOB/2019 is not made party to the present I.A. The Respondent, however, stated in paragraph 9 of the counter that he is very much willing to provide the access of the website to the Company. But, as the Respondent herein was the Managing Director of the company, he had developed the website in order to publicize the Company and promote its business and the applicants herein have provided no assistance to the respondent and he had developed the website of the Company out of his own costs and effort, for which he was not even been paid till date. The respondent is directed to handover the control and access of the website to the applicants company, provided the applicants pay the remuneration and costs the respondent had incurred in web designing, developing, twice re-designing and rebuilding it from scratch at the insistence of the other directors/shareholders, and maintaining it for four years from 2013 to 2017. Application disposed off.
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2020 (10) TMI 120
Sanction of Scheme for Merger by Absorption - section 230-232 of the Companies Act, 2013 - HELD THAT:- The applicant company to serve various notices - The Applicant Companies shall host the notices along with a copy of the Scheme on their respective websites, if any. The Applicant Companies shall file a compliance report with the Registry in regard to the directions given in this Order in lieu of the customary affidavit of service, due to the lockdown situation prevailing now.
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2020 (10) TMI 119
Approval of the scheme of arrangement - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme and the affidavits filed by the Regional Director, Northern region, Ministry of Corporate Affairs. The objection which was raised by Regional Director whereby, the resulting Company is required to increase its Authorized Share Capital to enable it to issue shares in terms of the Scheme of Arrangement. Learned Counsel of the Petitioner Companies confirmed that the Resulting Company has already increased its Authorized Share Capital by paying the requisite fee to the ROC. The Petitioners have also filed Affidavits confirming the same on 4th June, 2019. Hence, there appears no impediment to grant sanction to the Scheme. However, the Companies shall remain bound by the undertaking filed by either of them. Consequently, sanction is hereby granted under Sections 230-232 of the Companies Act, 2013. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law. Scheme is approved - petition allowed.
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2020 (10) TMI 118
Oppression and mismanagement - illegal transfer of shares - purported breach of trust on the part of Respondents 2 to 8, who are the shareholders of the 1st Respondent Company, pertaining to transfer of 108075 shares to Petitioner No. 1 and 92634 to petitioner No. 2 from their respective shareholdings as the Petitioners have repaid the loan on behalf of the Respondent Nos. 2 to 8, consideration being transfer of the above shares to the petitioners. HELD THAT:- The Respondents cannot benefit from their own wrong, and having taken the share certificates and duly filled forms, cannot now outrageously claim that the share transfer forms were not lodged with the Company by the Petitioners. As, share transfer was ratified during the Conciliatory Meeting, later the Settlement Agreement was taken on record and specifically mentioned in the minutes of the Board meeting, the Company can no longer contend that the issue pertaining to rectification of share register had not crossed the first stage of lodging of share transfer requests. The other contention that it was a private inter-party dispute or was merely amounts to an agreement to sell, is also too far-fetched and totally untenable. - Even in the absence of any proof, the petitioner cannot be shut out under Section 244 of the Companies Act, 2013 on mere statements of the respondents without any shred of evidence being produced to deny an opportunity to the petitioners to prosecute the company petition. In the light of the recorded facts and circumstances of this case, we, are of the view that this Tribunal is exercising its ample powers to waive the requisite shareholding percentage in order to maintain this petition even without filing a waiver application. The petitioners are considered as beneficial owners and has every right to protect their beneficial interest in such shares even before their name is entered in the share register. We have further gone through the list of citations submitted by the Respondents during the course of the hearing dated 10.03.2020. However, we consider none of the case sought to be relied on by the respondents are relevant in the present case. Therefore, we are of the view that the defences sought to be taken by the Respondents herein are untenable. This Bench is of the view that this is a fit case for considering the allegations of oppression and mismanagement as alleged by the Petitioners - Petition allowed.
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2020 (10) TMI 117
Restoration of name of Respondent in the Register of Companies maintained by the office of ROC - Section 252(3) of the Companies Act, 2013 - maintainability of application - HELD THAT:- On further perusal of the record, it is found that the appeal is filed under section 252(3) of the Companies Act, 2013. While, going through the section 252(3) of the Companies Act, it is found that the instant provision is made when the company is struck of voluntarily on the behest of the Promoter(s)/Director(s), whereas, section 252(1) of the Companies Act, provides that, when the company is struck of by the Registrar of Companies on the failure in filing of statutory returns by the Company - the instant application would not lie under section 252(3) of the Companies Act, 2013; rather, it would lie under section 252(1) of the Companies Act,. 2013. The name of the Company was struck off for continuous non-filing of Statutory Returns. Hence, considering the public interest, and to protect the legitimate interest of revenue, the name of the Respondent Company requires to be restored in the Register of Companies maintained by the ROC, Ahmedabad so as to enable the Appellant (Income Tax Department) to proceed further as per rules and in accordance with law - it would be just and equitable to restore the name of the Company M/s. Airticket Online (India) Pvt. Ltd. in the register maintained by ROC, Ahmedabad, Gujarat as the same is not barred by any law - petition allowed.
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2020 (10) TMI 116
Oppression and Mismanagement - illegal transfer of shares - grievance of the Appellant is that the Respondent have fictitiously used the transfer agreement dated 08.04.2010 to claim 50% stake in the company - HELD THAT:- 2nd Appellant is resorting to various acts of Oppression and Mismanagement in the affairs of the company so as to prejudice the interest of the Respondent and his group. The agreement dated 08.04.2010 is declared to be legal and the same is binding on all the parties concerned. The contentions raised by the second Appellant against the said agreement of transfer of shares are liable to be rejected. As mentioned supra both the parties got shares of Mr. Nayar, as per the said agreement. Both the parties got 50% share holding of the company as given in the said agreement. The subsequent transactions alleged to have been made by the Appellant, as explained, are declared to be illegal and liable to be set aside - Moreover, the Respondent is stated to have been removed from the post of director. Appellant has failed to follow the process of law in the removal of the Respondent from the post of director of the Company. The affairs of the company are being conducted in a manner prejudicial to Respondents herein. The Appellant has raised several frivolous litigations by misusing process of law and has committed several acts of Oppression and Mismanagement. The Appellant has acted contrary to the interim orders passed by the CLB - the judgement of NCLT upheld - petition dismissed.
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Insolvency & Bankruptcy
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2020 (10) TMI 115
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - debt due and payable or not - legally enforceable debt in between the Financial Creditor and the Corporate Debtor or not - HELD THAT:- It is very clearly stated in the Power of Attorney that the Power of Attorney Holder therein can ''.appear before any judicial or quasi-judicial body including any Court of Law, Forum, Tribunal, Arbitrator and Banking Ombudsman, represent the Bank and act as Presenting Officers before Debt Recovery Tribunals/Debt Recovery Appellate Tribunals/Company Law Board and other such judicial/quasi-judicial bodies/offices, institutes suit or appeals.. Therefore, this IBA has seen filed by the Assistant Vice President of the Financial Creditor who is the Power of Attorney Holder of the Financial Creditor. This Tribunal is of the opinion that no specific authorization is required to file the instant IB case - Dated the 24th day of September, 2020.
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2020 (10) TMI 114
Maintainability of petition - initiation of CIRP - Corporate Debtor committed default in making payment of financial debt - Existence of debt and dispute or not - HELD THAT:- The ledger account produced by the Petitioner clearly shows that the Petitioner used to purchase goods from the Corporate Debtor and payments were made by the Petitioner. It is not even the case of the Petitioner that the amount paid to the Corporate Debtor is separately accounted by him as a loan and the same is shown in his balance sheet as an unsecured loan. The payment of money by the Petitioner to the Corporate Debtor, without executing any loan document by the Corporate Debtor, more particularly when there is a customer-supplier relationship between the parties, will not fall under the purview of Section 5 (8) of the code, to bring this debt under the umbrella of financial debt as defined in the Code. To decide whether the debt is a financial debt or not, we have to see the intent of the parties. Further we have to look at the surrounding circumstances of the advancement of money and have to ascertain whether the money is advanced for financial return or for supply of goods and services. There are transactions where the Petitioner is the purchaser of goods from the Corporate Debtor. There are no documents to show the money is advanced purely as a financial transaction notwithstanding the fact that the Corporate Debtor is a supplier of goods to the petitioner. The petitioner is the dominus litis and the onus probandi lies on the petitioner to establish the crucial ingredient of time value of money, as required under section 5(8) of the Code and the judicial pronouncements discussed in the transaction under consideration. But the petitioner failed on this count. Hence, the amount claimed is not a financial debt. Petition dismissed.
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Service Tax
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2020 (10) TMI 113
Validity of N/N. 1/2006-ST dated 01.03.2006 - Works Contract - levy of service tax - HELD THAT:- Since the writ petition itself emanates from a show cause notice and also since the petitioner has touched upon certain factual aspects of the case, it would be appropriate to grant liberty to the petitioner to raise all his objections, including placing reliance on the decision of the Hon'ble Supreme Court in the case of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [ 2018 (2) TMI 1325 - SUPREME COURT] . The petitioner is granted liberty to raise his objections by way of a reply to the show cause notice dated 02.03.2009, atleast within a period of 15 days from the date of receipt of a copy of this order - the matter is remanded back to the appropriate adjudicating authority.
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Indian Laws
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2020 (10) TMI 112
Dishonor of Cheque - Section 138 of Negotiable Instruments Act, 1881 - the respondent/complainant issued statutory notice to the petitioner and since he has not paid the amount within the stipulated time, he filed the complaint - HELD THAT:- It is no doubt that the subject cheque was issued by the petitioner himself as an authorized signatory of M/s.Sri Constructions in favour of the petitioner himself, of course to his S.B. Account No.40280101000996 and the cheque was not directly issued in favour of the respondent/bank. However, the claim of the respondent/bank is that the subject cheque was tendered by the petitioner along with a covering letter requesting the bank to credit the cheque amount in his S.B. Account No.40280101000996 and appropriate the said amount towards part payment of loan amount. Neither party produced the said covering letter before this Court. Therefore, whether the petitioner tendered the subject cheque dated 11.04.2012 for ₹ 5000/- along with a covering letter to the respondent/bank with a request as stated supra or not and if so whether by virtue of the said letter the respondent/bank can treat itself as holder in due course of the said cheque and file criminal complaint against the petitioner for dishonour of the cheque are the crucial issues which can be resolved only after a full fledged trial, not at this stage. This Criminal Petition is disposed of directing the learned Judicial First Class Magistrate, Guntakal to proceed with the trial by giving liberty to both parties to adduce evidence to project their respective versions and after hearing arguments of both parties pronounce the judgment expeditiously but not later than four (4) months from the date of receipt of a copy of this order.
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2020 (10) TMI 111
Dishonor of Cheque - section 138 of NI Act - benefit of presumption - blank cheque issued for obtaining loan or not - whether a revisional court can, in exercise of its discretionary jurisdiction, interfere with an order of conviction in absence of any jurisdictional error or error of law? - Whether the payee of a cheque is dis entitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, of a cheque duly drawn, having been issued in discharge of a debtor or other liability? HELD THAT:- From the evidence of the witness examined by the respondent accused, case of the prosecution is supported that money transaction was carried out between the parties. An agreement to sell of the land in question was executed before the Notary on 5th December 2012 and it appears that photographs of the parties as well as their signatures are never disputed except in the cross examination of the complainant - It is well settled that in exercise of revisional jurisdiction, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re analyse and re interpret the evidence on record. Here it is not the case of the respondent accused that she either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. In the absence of any finding that the cheque in question was not signed by the respondent accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant complainant, it may reasonably be presumed that the cheque was filled in by the appellant complainant being the payee in the presence of the respondent accused being the drawer, at her request and/or with her acquiescence. The Trial Court as well as first Appellate Court have committed no error in rejecting plea raised by the respondent accused that blank cheque was received by the complainant to obtain the loan from the bank - Application dismissed.
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