TMI Tax Updates - e-Newsletter
November 23, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
-
GST:
Validity of proceedings under Sections 78 and 79 of CGST Act, 2017 - no recovery order as appearing in Annexure P-9 was ever served upon the petitioner - as an interim measure, it is directed that effect and operation of order /notice dated 01.10.2021(Annexure P-10) shall remain stayed till the next date of hearing subject to petitioner depositing 50% of the total payable tax amount - HC
-
Income Tax:
'Inter Corporate Deposits' treated to be not an ICD and a payment made regarding high seas sales in 'Indian Currency' - this Court has no difficulty in coming to the conclusion that this is a fit case to relegate the writ petitioner to file statutory appeal under Section 246A - there is no ground warranting interference in writ jurisdiction qua impugned order. Though obvious, it is made clear that if the writ petitioner chooses to take the alternate remedy route and file a statutory appeal under Section 246A of IT Act, Appellate Authority shall consider the appeal on its own merits - HC
-
Income Tax:
Disallowance on account of depreciation and interest on vehicles - The AO may find out what is the rental income of Toyota Innova and Tata Canter in other cases to ascertain as to whether the assessee is deliberately entering into an agreement with a concern just to incur losses so as to set off the same from income from house property. The AO shall decide the issue as per fact and law and after giving due opportunity of being heard to the assessee. - AT
-
Income Tax:
Bogus LTCG - Addition u/s 68 - onus to prove genuineness of the transactions - The whole basis of making additions is third-party statement and no opportunity of cross-examination has been provided to the assessee to confront these parties. As against this, the assessee’s position that that the transactions were genuine and duly supported by various documentary evidences, could not be disturbed by the revenue. - the additions made by Ld. AO and confirmed by Ld. CIT(A), are not sustainable - AT
-
Income Tax:
Revision u/s 263 by CIT - Faulty computation of ALP - As per CIT assessment is erroneous as reference to TPO was not made - The said clause 3.3 of the Instruction specifies three situations and we find that none of the situation is applicable in the case of the assessee. - it cannot be said that the assessment is erroneous as reference to TPO was not made. - AT
-
Customs:
Classification of goods - sweet corn or maize? - Scope of Show cause notice (SCN) - The adjudicating authority has not undertaken classification of the impugned goods in accordance with the General Rules for the Interpretation of the Harmonized System but set out to deny the effective rate of duty available to specific enumerations. The classification claimed by the importer in the bill of entry, even if substitutable by a more apt tariff item, cannot be discarded owing to absence of such proposal in the show cause notice. - AT
-
Customs:
Reassessment of Bill of Entry - case of the Revenue is that respondent should have appealed before the Commissioner (Appeals) against the assessment of the Bill of Entry whereas they have filed appeal against the rejection of reassessment made by the assessing authority - now the Revenue cannot challenge the direction of reassessment given by the Ld. Commissioner. Therefore, on this score Revenue appeal does not sustain. - AT
-
Indian Laws:
Validity of award of interest by the sole arbitrator - earnest money and security deposits or not - The learned Arbitrator in the instant case has erred in awarding pendente lite and future interest on the amount due and payable to the contractor under the contract in question and the same has been erroneously confirmed by the High Court - the award passed by the learned Arbitral Tribunal awarding pendente lite and future interest on the amounts held to be due and payable to the contractor under the contract are hereby quashed and set aside. - SC
-
Indian Laws:
Dishonor of Cheque - drawer of cheque - Vicarious liability - From the bare reading of Section 138 of the N.I. Act, it transpires that the liability of the drawer of the Cheque, who has issued the Cheque from the joint account maintained by him and his wife, does not specifically bear any implication to make the wife equally liable when the Cheque was drawn by her husband, and therefore, no vicarious liability can be fastened on the holder of a joint account, by a mere fact that the dishonoured cheque was issued by the drawer of such a cheque from the same bank account. - HC
-
IBC:
Maintainability of application - initiation of CIRP - In the instant case, the challenge to the Arbitral Award was dismissed on 06.10.2018, and hence has attained finality, the part payment was made on 31.03.2016 and therefore the Application filed on 04.06.2019 is not barred by Limitation. - The Learned Adjudicating Authority shall proceed in accordance with law keeping in view the timelines under the Code - Appeal allowed - AT
-
IBC:
Maintainability of application - initiation of CIRP - In the instant case, it is clear that the right to sue accrued when the default occurred way back on 28.02.2002. The material on record does not evidence any acknowledgment of liability under Section 18 of the Limitation Act, 1963 to extend the limitation period. The dismissal of the BIFR reference, relied upon by the Learned Counsel for the Appellant, is also dated 04.05.2016 which is beyond three years form the date of default. - The Ld. Adjudicating Authority has rightly dismissed the Application filed under Section 7 of the Code, as barred by limitation - AT
-
VAT:
Rejection of turnover appearing in the books of accounts - It is already well-settled that in the absence of any definite adverse material accounts kept in regular course of business cannot be disbelieved and must be given credence and due weight - In the case in hand, no adverse material whatsoever was brought on record to disbelieve the account books maintained by the revisionist and therefore rejection of account books and enhancement of turnover is uncalled for.- HC
Articles
News
Case Laws:
-
GST
-
2021 (11) TMI 754
Validity of proceedings under Sections 78 and 79 of CGST Act, 2017 - no recovery order as appearing in Annexure P-9 was ever served upon the petitioner - HELD THAT:- Perusal of Notice (Annexure P-10) would show that in two of the notices i.e. Recovery No.34 of 2021 and 35 of 2021, order date is mentioned as 18.8.2021. Under Section 78 of the Act of 2017, the period of three months is provided for making payment of the tax assessed/ascertained by the Proper Officer but the letter/notice Annexure P-10 to third party under Section 79 (1) (c) of the Act of 2017 was issued on 1.10.2021 which is less than three months period from the date of the recovery order No.34 of 2021 and 35 of 2021. It is not disputed by learned counsel for the respondents that no specific reasons have been assigned for issuing notice under Section 79 (1) (c) of the Act of 2017 for initiating proceedings under Section 78 of the Act before lapse of three months period. Considering the entirety of the facts and circumstances of the case, submission made by learned senior counsel for the petitioner that no order was served upon the petitioner as required under Section 78 of the act of 2017, as an interim measure, it is directed that effect and operation of order /notice dated 01.10.2021(Annexure P-10) shall remain stayed till the next date of hearing subject to petitioner depositing 50% of the total payable tax amount within a period of three weeks from today. Application disposed off.
-
2021 (11) TMI 753
Cancellation of registration of petitioner - taxpayer neither attended personal hearing nor responded to the query raised by this office - Section 107 (1) of CGST Act, 2017 - appeal has been filed within the prescribed time- limit or not - whether or not the appeal filed against the order of cancellation to be decided? - HELD THAT:- In the instant case the appeal has been filed by the appellant with the delay of 17 months 10 days from the normal period prescribed under Section 107 (1) of CGST Act, 2017. Delay in filing the appeal is condonable only for a further period of one month provided only in case of sufficient cause is shown by the appellant. There is no reason given by the appellant for acceptance of appeal beyond the normal period prescribed under Section 107 (1) of CGST Act, 2017. Thus, there are no option but to reject the appeal as time barred without going into the merits of case. The appeal is rejected as time barred - appeal disposed off.
-
2021 (11) TMI 752
Revocation of cancellation of registration - rejection due to not deposit interest liability against late discharged cash payment and also appellant not replied to the show cause notice - HELD THAT:- On account of inadvertent mistake, particulars of disputed order were wrongly entered of Registration passed by the learned Superintendent, Circle-3, Jaipur Ward-I. This was a genuine clerical mistake which has caused ab-initio incorrectness in appeal memo. That the appellant has deposited of interest and be considered as the requirement has been complied. The appellant has deposited ₹ 11,062/- towards interest liability on 15.06.2021 (vide DRC-03 ARN No.AD0806210018946 Dated 15.06.2021 CGST ₹ 5,531/- and SGST ₹ 5,531/- for the period April-2020 to December-2020). Further, the appellant submitted copy of DRC-03 dated 15.06.2021 and also filed GSTR-3 B return for the period July-2020 August-2020 September 2020, October-2020, November-2020 and December-2020 respectively. The appellant has filed returns upto date of cancellation of registration hence, the appellant has substantially complied with the said provisions of the CGST Act/Rules, 2017 in the instant case. Therefore, the registration of appellant may be considered for revocation by the proper officer. The proper officer is ordered to consider the revocation application of the appellant after due verification of payment particulars of tax, late fee, interest and status of returns - appeal disposed off.
-
Income Tax
-
2021 (11) TMI 751
Characterization of receipt - revenue or capital receipt - compensation received by the appellant from Suzlon Energy Ltd. in terms of the purchase orders on account of failure of performance guarantee parameters of capital assets purchased by the appellant - HELD THAT:- It is settled legal position that there is no singular test available to determine whether a receipt is a capital receipt or a revenue receipt for which it is necessary that the Assessing Officer should examine the facts of each case. Therefore, we are of the considered view that the manner in which the Tribunal had interpreted the decision of Saurashtra Cement Ltd. [ 2010 (7) TMI 11 - SUPREME COURT] and come to a conclusion that it does not help the assessee is incorrect. The Tribunal is required to rely the legal proposition laid down in the Hon ble Supreme Court as well as the other decisions which have been referred to by the Hon ble Supreme Court. Matter requires to be remanded to the Tribunal for a fresh consideration to consider the legal issue which was decided by the Hon ble Supreme Court in Saurashtra Cement Ltd. It goes without saying that the Revenue also will be given adequate opportunity by the Tribunal to put forth their contentions on the grounds canvassed by the assessee before us in this appeal. In the result, the appeal is allowed and the order passed by the Tribunal is set aside on the subject issue alone, namely, whether the compensation received by the assessee from Suzlon Energy Ltd. in terms of the purchase orders on account of failure of performance guarantee parameters of capital assets, namely, wind turbine generators, purchased by the assessee was on revenue account made for reducing loss incurred in the course of business or a capital receipt outside the purview of taxation and the matter shall be remanded to the Tribunal for a fresh decision.
-
2021 (11) TMI 750
Addition u/s 68 - unexplained cash credit - assessee could not satisfactorily explain the genuineness of the transactions and creditworthiness of the share applicants in question - CIT-A deleted the addition - HELD THAT:- Order passed by the CIT(A) does not suffer from any error. CIT(A) is entitled to exercise the power of the Assessing Officer. Therefore, two options were available before the CIT(A), in the event he found that facts were required to be brought on record. The first of the options available was to remand the matter to the Assessing Officer for fresh consideration. The second option would be to call for the remand report from Assessing Officer by keeping the appeal pending. CIT(A) exercised the second option which undoubtedly could go to save a lot of time in the matter of completion of the assessment. Upon direction being issued by the CIT(A) calling for a remand report, the Assessing Officer before us treated the matter with more seriousness and after thorough factual exercise reported that genuineness and creditworthiness of the share applicants have been established. In absence of any material available with the revenue to discard the remand report we find the CIT(A) was fully justified in accepting the remand report in deleting the addition. Tribunal has also re-examined the facts and rightly accepted the conclusion arrived at by the CIT (A). Thus we find there is no questions of law much less substantial questions of law arising for consideration in this appeal. - Decided against revenue.
-
2021 (11) TMI 749
'Inter Corporate Deposits' treated to be not an ICD and a payment made regarding high seas sales in 'Indian Currency' - external commercial borrowing - whether excess of jurisdiction as the impugned order proceeds on the basis that there is a violation of 'Foreign Exchange Management Act, 1999' ('FEMA') without even issuing notice to the counter party;Statutory appeal under Section 246A - availability of alternate remedy - HELD THAT:- The arguments that the norms of FEMA have not been set out with specificity or required approval details have not been set out with specificity in the impugned order are all clearly arguments in the nature of an appeal qua impugned order i.e., not arguments compelling interference in writ jurisdiction. To be noted, impugned order i.e., assessment order proceeds on the basis that Xangbo is non resident owned, non resident controlled with opaque ownership (97.99% share holding being subscribed by a Cayman Island Controlled entity, which has been allowed 'Foreign Direct Investment' (FDI) in 100% wholesale sector). All these turn heavily on facts and therefore, this is also another reason to say that these are clearly matters for legal drill in the nature of an appeal and does not warrant interference in writ jurisdiction. If there is an error in holding that FEMA norms have not been followed or that the business is not approved under FEMA, these are matters which can be corrected in an appeal. All this turns heavily on facts and on merits of the matter. Excess jurisdiction as an illustration is a case/situation where an Authority exercises jurisdiction which is not vested in it. In this case, if the respondents have levied any fine or have mulcted the writ petitioner with any of the consequences for FEMA violation under FEMA that may well qualify as a case of excess jurisdiction. The consequences under FEMA do not form subject matter of impugned order. If there is no violation of FEMA, it is well open to the writ petitioner to canvass the same in a statutory appeal. Therefore, this is not a case of excess jurisdiction. This Court is unable to accept the argument that this is a case of excess jurisdiction. As rightly contended by learned Revenue counsel, in this case, writ petitioner has not raised the point that the time granted is not reasonable, adequate or ample. On the contrary, writ petitioner has responded to the notice and the same has culminated in the impugned order. Therefore, it is made clear that this Court has not expressed any opinion or view on the merits of the matter and as to whether time granted is reasonable, ample or adequate as that does not fall for consideration in the case on hand. Suffice to say that the writ petitioner has responded and the impugned order has been made. This Court is clear in its mind that none of the exceptional circumstances, which have been culled out in DUNLOP INDIA LIMITED AND OTHER [ 1984 (11) TMI 63 - SUPREME COURT] are attracted in the case on hand. To be noted, excess jurisdiction point urged has been negatived by this Court and the same has been delineated supra elsewhere in this order. In the light of the discussion and dispositive reasoning this Court has no difficulty in coming to the conclusion that this is a fit case to relegate the writ petitioner to file statutory appeal under Section 246A - there is no ground warranting interference in writ jurisdiction qua impugned order. Though obvious, it is made clear that if the writ petitioner chooses to take the alternate remedy route and file a statutory appeal under Section 246A of IT Act, Appellate Authority shall consider the appeal on its own merits and in accordance with law de hors any observation made in this order. Observations in this order which may have the trappings of some expression touching upon merits is for the limited purpose of disposal of captioned writ petition and therefore, if writ petitioner chooses to avail alternate remedy, statutory appeal shall be dealt with by Appellate Authority untrammelled by any observation made in this order. Though obvious, it is also made clear that alternate remedy if availed by the writ petitioner will be subject to pre deposit [either direct or indirect as contended] and limitation. This Court is informed that the time limit for preferring the statutory appeal is 30 days. If the writ petitioner chooses to seek exclusion of the time spent in this Court qua captioned writ petition for computing this 30 days (by resorting under Section 14 of The Limitation Act, 1963), the same can be considered by Appellate Authority on its own merits and in accordance with law. This order will neither impede nor serve as an impetus in such a legal drill.
-
2021 (11) TMI 748
Review petition on Maintainability of appeal - low tax effect - petitions seek review of order whereby interference was declined in view of the circular no. 17/2019 dated 08/08/2019 issued by the Ministry of Finance - HELD THAT:- Petitioners informed that almost similar Review Petition in Principal Commissioner of Income Tax- 1 Vs. Gurvinder Singh Bhatia [ 2021 (7) TMI 1287 - MADHYA PRADESH HIGH COURT] was also dismissed by this Court. In absence of showing as to how review jurisdiction can be invoked and further showing ingredients, on which review jurisdiction can be exercised, interference is declined.
-
2021 (11) TMI 747
Penalty u/s. 271(1)(c) - defective notice u/s 274 - whether AO failed to specify the charge and record requisite satisfaction with regard to concealment of income or furnishing of inaccurate particulars of income - HELD THAT:- As in the notice issued u/s. 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961, there was no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income. From the notice dated 30/03/2013 produced by the Ld. AR during the hearing, it can be seen that the AO was not sure under which limb of provisions of Section 271 assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee's case. Thus, there is no particular limb mentioned in the notice issued under Section 271(1)(c) r.w.s. 274 - See M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] Inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s. 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s. 271(1)(c) is not sustainable and has to be deleted. Notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. - Decided in favour of assessee.
-
2021 (11) TMI 746
Exemption u/s 11 - rejection of application seeking registration u/s. 12AA - appellant is a company incorporated under the provisions of Section 8 of the Companies Act, 2013 and promoted by IIS (Deemed to be University) Trust which is also solely engaged in imparting education having necessary approvals u/s.12AA - HELD THAT:- Assessee company had filed an application on 16.10.2020 seeking registration u/s. 12AA of the Act. Thereafter, the assessee company was issued a letter dated 30.12.2020 asking them to submit certain documents/explanation and to submit original registration certificate and Memorandum of Association for verification - only part information/documentation was submitted by the assessee company. Thereafter, a show cause notice dated 11.03.2021 was issued asking for certain specific details/information and matter was fixed for hearing on 15.03.2021. In response to the show cause, the ld PCIT stated that the assessee company furnished part details and failed to furnish clarification regarding certain objects having elements of commercial/business nature and clarification on the objects benefiting particular community or class in terms of ICG-IISU Alumnae Association and not for general public utility, ownership proof of the assessee premises. Pr. CIT therefore stated that the assessee company has failed to furnish valid explanation inspite of giving sufficient opportunity and being a limitation matter, he decided basis material available on record and application seeking registration u/s. 12AA was rejected. AR submitted that in response to the show cause dated 11.03.2021, the assessee company did submit its response vide letter dated 19th of March, 2021 and it is therefore, factually not correct that the assessee company has not submitted the requisite information and explanation as sought by the ld. Pr. CIT rather he has failed to correct appreciate the submissions so filed by the assessee company. While examining the assessee's application seeking registration u/s. 12AA, the ld. Pr. CIT has raised broadly two issues which require deeper examination. Firstly, certain objects of the assessee company have been stated to be having elements of commercial/business nature and secondly, whether the objects sought to be achieved were for the benefit of Alumnae ICG-IISU and whether the same qualify as benefiting the public at large and can therefore be classified as object of general public utility. Though the assessee claims to have submitted the requisite explanation, however, in absence of findings by the ld. Pr. CIT, we deem it appropriate that the matter is set aside to the file of ld. Pr. CIT to examine the same afresh - Appeal of the assessee is allowed for statistical purposes.
-
2021 (11) TMI 745
Addition u/s 68 on unsecured loans - HELD THAT:- Loans from directors and group entities and the assessee had filed requisite documents to substantiate these transactions during remand proceedings - AO has also accepted these transactions in the remand proceedings - assessee has discharged the primary onus as required u/s. 68. Therefore, the additions have rightly been deleted by Ld. CIT(A) and no interference is required to that extent. Remaining additions we find that the assessee has merely filed confirmations and no other documents have been filed by the assessee in support of the transactions. AR has submitted that these loans were procured from the market as per the requirement - onus to prove the genuineness of the same is on the assessee. Therefore, with respect to these 11 parties, we remit the matter back to the file of Ld. CIT(A) with a direction to the assessee to file requisite documentary evidences to establish the genuineness of the same. Advances u/s. 69 - Assessee made advances towards purchase of land to various parties which were added by Ld. AO as unexplained investments - HELD THAT:- The investments made by the assessee are part of regular books of accounts and therefore, the same could not be held to be unexplained investment u/s. 69. The ground raised by the revenue stand dismissed. Amount paid for land - HELD THAT:- The onus was on AO to supply to impounded documents to the assessee along with an opportunity to cross-examine Shri Sanjay Sonawane. In fact, no statement was recorded from Shri Sanjay Sonawane and therefore the additions were unsustainable in terms of the decision of M/s. Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] . In the absence of any corroborative evidence and without affording opportunity of cross-examination, the addition could not be made. Finally, the additions were deleted against which the revenue is in further appeal before us. We find that the issue has been clinched very correctly by Ld. CIT(A). The allegation of Ld. AO as well as consequent addition made in the hands of the assessee has no legs to stand. The additions are based on surmises and presumptions without there being any corroborative evidence on record. The adverse material has never been confronted to the assessee and the allegations of cash payment are bereft of any concrete evidence on record. Hence, the adjudication do not call for any interference on our part. The ground raised by the revenue stand dismissed.
-
2021 (11) TMI 744
Disallowing of reimbursement of expenses and allowances under the provision of the Income Tax Act claimed against salary income - submission of the ld. Counsel that identical allowances were allowed by the AO in the order passed u/s 143(3) in the subsequent years - HELD THAT:- We deem it proper to restore this issue to the file of the AO with a direction to decide the issue afresh in the light of his decisions in the subsequent years in the order passed u/s 143(3) after obtaining necessary details from the assessee on this issue. The ground raised by the assessee is accordingly allowed for statistical purposes. Disallowance on account of depreciation and interest on vehicles - AO disallowed the claim of deduction u/s 57 on the ground that the assessee did not furnish the requisite details towards claim of depreciation and interest by filing the copies of invoice in support of purchase of vehicles, copies of rent agreement in respect of letting out of the vehicles and the loan certificate for claiming interest - CIT(A) upheld the action of the AO on the ground that both the vehicles were given on rent at very low rentals and the assessee, in the process incurred huge loss which has been utilized to set off the income from house property - HELD THAT:- The matter requires a re-visit to the file of the AO to find out as to the status in the preceding and succeeding years since the two vehicles were purchased on 27th December, 2010 and 29.09.2011 respectively. The AO may find out what is the rental income of Toyota Innova and Tata Canter in other cases to ascertain as to whether the assessee is deliberately entering into an agreement with a concern just to incur losses so as to set off the same from income from house property. The AO shall decide the issue as per fact and law and after giving due opportunity of being heard to the assessee. Ground No.2 raised by the assessee is accordingly allowed for statistical purposes. Reopening of assessment u/s 147 - CIT(A) giving a direction u/s 150(1) to the AO for taking action in the hands of the assessee as per law - HELD THAT:- The assessment year involved in the instant case is 2012-13. The property was purchased on 01.07.2010 for ₹ 22 lakhs. The assessee has obtained housing loan from the bank. The bank has valued the property at higher price for sanctioning the loan. Under these circumstances and in absence of any evidence with the AO or the CIT(A) that either the recipient has received any extra money or that the assessee has paid anything over and above what is stated in the sale deed, merely on the basis of valuation report by the bank for sanctioning of the loan cannot be a ground for giving a direction to the AO to reopen the assessment for another assessment year which was not the subject matter of appeal before the CIT(A). Even otherwise also, the CIT(A), in the instant case, passed the order on 5th February, 2019. On this date, the time limit for reopening of assessment u/s 149 for the assessment year 2011-12 was not available as the period of reopening the assessment for preceding six assessment years as on the date of passing of order by the CIT(A) was available only upto assessment year 2012-13. The various decisions relied on by the ld. Counsel supports the proposition that the order passed by the CIT(A) issuing direction u/s 150(1) is barred by limitation.
-
2021 (11) TMI 743
Disallowance of provision for warranty - CIT(A) accepted the assessee s submissions and working as being correct and allowed the claim of the assessee - HELD THAT:- A perusal of the order of the CIT(A) shows that he has accepted the submissions of the assessee without actually examining the weight of the submissions of the assessee. CIT(A) has simply accepted the submissions provided by the assessee and after duly reproducing the submissions in the impugned order has noted that in view of the submissions made by the assessee and the case laws cited and in view of the facts and circumstances of the case, the impugned disallowance is deleted. While making the deletion, the Ld. CIT(A) has not given any reasoning as to why the submissions of the assessee were found to be satisfactory for the purpose of making provision of warranties. CIT(A) has not adjudicated the issue before him by examining the various details and documents submitted by the assessee and has simply accepted the contentions of the assessee without returning a finding on fact. In such a situation, we deem it appropriate to restore this issue to the file of the CIT(A) for considering the issue afresh and, thereafter, adjudicate on the issue by passing a speaking order after giving proper opportunity to the assessee. Accordingly, the Department succeeds on ground No.1 and the same stands allowed for statistical purpose. Disallowance U/s 14A r.w.r. 8D - HELD THAT:- AO has simply applied the procedure prescribed in Rule 8D of the Income Tax Rules to compute the amount disallowable u/s 14A of the Act without appreciating that in the present case, no part of interest could have been said to have been incurred in relation to exempt income. In the assessment order, the Assessing Officer has not pointed out even a single expenditure having been incurred by the assessee during the year which was having proximate nexus with the exempt dividend income earned during the year. Assessing Officer, while computing the disallowance u/s 14A, considered the entire investments whereas the disallowance u/s 14A read with Rule 8D is in relation to the income which does not form part of the total income and this can only be done by taking into consideration the investment which has given rise to the income which does not form part of the total income. CIT(A) has returned a categorical finding of fact on the issue and has computed the disallowance after excluding those investments which were not related to the earning of dividend income. Such is also the mandate in the case of ACB India Ltd. vs. ACIT [ 2015 (4) TMI 224 - DELHI HIGH COURT ] and plethora of other judgments. We also note that the assessee is not in appeal before this Tribunal against the amount of disallowance U/s 14A as confirmed by the Ld. CIT(A). Accordingly, we find no reason to interfere with the finding of the Ld. CIT(A)
-
2021 (11) TMI 742
Bogus LTCG - Addition u/s 68 - onus to prove genuineness of the transactions - HELD THAT:- As relying on MR. ANIL AGRAWAL (HUF) , MUMBAI VERSUS DCIT-CENTRAL CIRCLE-3 (4) , MUMBAI [ 2021 (4) TMI 1252 - ITAT MUMBAI] impugned additions are not sustainable in the eyes of law. The assessee had discharged the primary onus of establishing the genuineness of the transactions whereas the onus as casted upon revenue to corroborate the impugned additions by controverting the documentary evidences furnished by the assessee and by bringing on record, any cogent material to sustain those additions, could not be discharged by the revenue. The whole basis of making additions is third-party statement and no opportunity of cross-examination has been provided to the assessee to confront these parties. As against this, the assessee s position that that the transactions were genuine and duly supported by various documentary evidences, could not be disturbed by the revenue. Hence, going by the factual matrix and respectfully following the binding judicial precedents as enumerated in the order, the additions made by Ld. AO and confirmed by Ld. CIT(A), are not sustainable - Decided in favour of assessee.
-
2021 (11) TMI 741
Revision u/s 263 by CIT - Faulty computation of ALP - As per CIT assessment is erroneous as reference to TPO was not made - HELD THAT:- PCIT has failed to specify as to how and on what ground the assessment order is erroneous and/ or which part of the CBDT instructions were not adhered to by the AO. Merely not recording the satisfaction Ld AO on the records does not make the assessment order erroneous and prejudicial to the interest of revenue, as is decided in the various judicial pronouncement by various courts. We have also perused Instruction no 3/2016 and are of the opinion that it was not mandatory for the AO to make a reference to the TPO. Even as per the order and the show cause notice u/s 263 which has been issued it is evident that the selection of the case was for complete scrutiny and the issues was not on transfer pricing parameters risk factors.The Instruction No. 3 of 2016 in para 3.3 states that where cases are selected for scrutiny on non transfer pricing risk parameters but also having international transactions or specified domestic transactions, shall be referred to TPO in specified circumstances The said clause 3.3 of the Instruction specifies three situations and we find that none of the situation is applicable in the case of the assessee. The clause (a) states where there are international transactions or specified transactions or both and the taxpayer has not filed any report required to be submitted under section 92E. This is not a situation in the case of the assessee, and report was submitted and also during the assessment the same was submitted. The second situation where in previous assessments if any addition on account of transfer pricing adjustment of more than ten crores and addition being upheld in appellate proceedings is also not applicable in the case of the assessee, and this is not a case where search or seizure or survey operations had been carried out. In such a situation it cannot be said that the assessment is erroneous as reference to TPO was not made. See M/S AMIRA PURE FOODS PVT. LTD. VERSUS THE PR. C.I.T, CENTRAL GURGAON [ 2017 (12) TMI 189 - ITAT DELHI] - Decided in favour of assessee.
-
2021 (11) TMI 740
Disallowance u/s 14A r.w.Rule 8D - Amount assessee had earned a dividend income - HELD THAT:- Hon ble Delhi High Court in the case of Joint Investment P.Ltd. [ 2015 (3) TMI 155 - DELHI HIGH COURT ] held that by no stretch of imagination can Section 14A or Rule 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expenditure; incurred by the assessee in relation to the tax exempt income. This proportion or portion of the tax exempt income surely cannot swallow the entire amount as has happened in this case. Respectfully following the ratio laid down by the Hon ble Delhi High Court, we direct the Assessing Officer to restrict the disallowance to the extent of exempt income on dividend income earned by assessee as u/s 14A r.w.Rule 8D of Rules. Thus, grounds raised by the assessee in this appeal are partly allowed.
-
2021 (11) TMI 739
Capital gain computation - year of assessment - Year of transfer of asset u/s 2(47) - HELD THAT:- The joint development agreement was executed on 6.11.2013 and from the assessment order the AO has himself accepted that the transfer took place as per sec.2(47) rws 53A of the Transfer of Property Act which was taken place for the previous year ending only on 31.3.2014 relevant to AY 2014-15, therefore, the capital gain should be arising in the AY 2014-15 - Decided against revenue.
-
Customs
-
2021 (11) TMI 738
Classification of goods - sweet corn or maize? - Scope of Show cause notice (SCN) - Levy of penalty u/s 112 of CA - Recovery of differential duty - statutory intent of primacy of section 114A of Customs Act, 1962 had been overlooked in the adjudication order - HELD THAT:- There has been no controverting of the claim of the importer that the impugned goods are sweet corn which is, essentially, a vegetable but, owing to design of nature for propagation of the species through seed, finding fitment elsewhere too in the tariff. As use is not the criteria for classification, save where explicitly intended, the tariff accords recognition of these as cereals to enable national policy to be determined accordingly and within the enumerations under the relevant subheading. Nonetheless, sweet corn , though a fresh cereal thereby, is further excepted from such coverage by the general notes pertaining to chapter 10 in the Explanatory Notes to the Harmonized System of Nomenclature (HSN). Consequently, sweet corn is not cereal for the purposes of exclusion from chapter 12 of the First Schedule to Customs Tariff Act, 1975. The permission envisaged under the Policy on Seed Development, 1988, requiring appropriate clearance by the competent authority empowered by the Plant Quarantine (Regulation of Imports into India) Order, 2003, has also made it abundantly clear that the seeds are intended for sowing. While not sufficing for classification, it does establish the description of the goods impugned in this proceeding - The adjudicating authority has not undertaken classification of the impugned goods in accordance with the General Rules for the Interpretation of the Harmonized System but set out to deny the effective rate of duty available to specific enumerations. The classification claimed by the importer in the bill of entry, even if substitutable by a more apt tariff item, cannot be discarded owing to absence of such proposal in the show cause notice. Appeal allowed - decided in favor of appellant.
-
2021 (11) TMI 737
Confiscation - reduced quantum of redemption fine and penalty - want of IEC code for import of raw materials by the appellant for Railway Project, Government of India - HELD THAT:- It is only a venial breach at the most, which is also for no fault of the appellant, as the appellant had made application for IEC number in proper time. The delay in grant of IEC number is wholly attributable to the Government of India , Department of Foreign Trade, Ministry of Commerce. Accordingly, the appellant had produced the IEC code before the Addl. Commissioner of Customs/Adjudicating Authority, before passing of the adjudication order and prayed for amendment in the bill of entry as per the provisions of Section 149 of the Customs Act. The order of confiscation is bad. Accordingly, the confiscation and redemption fine are set aside. The penalty imposed under Section 112(a) is reduced to ₹ 1,000/- - Appeal allowed - decided in favor of appellant.
-
2021 (11) TMI 736
Reassessment of Bill of Entry - case of the Revenue is that respondent should have appealed before the Commissioner (Appeals) against the assessment of the Bill of Entry whereas they have filed appeal against the rejection of reassessment made by the assessing authority - HELD THAT:- The assessee filed appeal before Commissioner (Appeals) against rejection of reassessment request made by them before the assessing authority. Therefore, the assessment was very much alive before the Commissioner (Appeals). There is no other remedy available for the assessee except to file an appeal before the Commissioner (Appeals). Therefore, now the Revenue cannot challenge the direction of reassessment given by the Ld. Commissioner. Therefore, on this score Revenue appeal does not sustain. The assessing authority is directed to reassess the Bill of Entry as directed by the Ld. Commissioner (Appeals) in the impugned order - appeal dismissed - decided against Revenue.
-
Corporate Laws
-
2021 (11) TMI 735
Winding up of company - Seeking to implead the applicant as a respondent - seeking permission to applicant to file necessary pleadings and further documents - rule 11 and 34 of the National Company Law Tribunal Rules, 2016 - whether all shareholders/stakeholders of a company facing wound up proceedings filed under section 271(e) of the Companies Act, 2013 must invariable to be impleaded and heard prior to ordering wound up of a company? HELD THAT:- The applicant is bound by the decisions taken by its main company, wherein it is holding shares. As long as it has no grievances against the affairs of Devas company, the applicant has no locus standi to intervene in the main company petition. The contention of applicant that amount awarded is an asset and Antrix is debtor is not tenable and it is baseless, as long as the award has not attained its finality, through judicial process. Admittedly, the validity of Award is in question and the same is sub judice. The contention that rights of shareholders to carry on business through the instrumentality of a company is a right guaranteed under article 19(1)(g) of Constitution of India, and it cannot be taken away by this hon'ble Tribunal acting under the Companies Act, 2013 on mere conjectures and allegations without finding of a competent court of law, is mere misconception of law - rights of shareholders can be exercised through board of directors elected by them. Every shareholder cannot claim and defend the cases filed against their company, whether it is winding up petition or other cases and, it is the responsibility of company represented by its board of directors, to defend those cases, as a legal entity. It is misconception of law that every shareholders/stakeholders are to be heard in every case filed against a company. There are cases where creditors can file petition seeking to wind up of a company on the ground that company is unable to pay its debts and if debt in question is paid, petition itself can be closed. But here in, the case is different that the incorporation itself and subsequent affairs are being run in fraudulent manner and unlawful object. The instant application is nothing but to delay proceedings and to support Devas in the main company petition and it is proxy war. Since the Tribunal finds that Devas is a fit company to wind up by way of separate order dated May 25, 2021 the instant application is not maintainable and it is liable to be dismissed - Application dismissed.
-
Insolvency & Bankruptcy
-
2021 (11) TMI 734
Removal of directorship of the Petitioner - CONSISTENCY with the restriction provided under the Articles of Association or not - grant of interim stay of resolution passed in EOGM - implementation of the Resolutions passed in the board meetings - HELD THAT:- The instant Appeal is against the interim order dated 19.07.2021 passed by the National Company Law Tribunal, Mumbai Bench, Court-IV in CA-201/2021 in CP-193(MB)/2021 and the main petition is still to be heard on merit. We are restraining from expressing our views and while passing the impugned order has considered the provisions of Articles 25 and 26 of the Articles of Association and have committed no illegality. The plea raised by the Appellant in the memo of Appeal that the Article of Association of company cannot supersede the provisions of Companies Law and this Article was itself subject to the provisions of the Companies Act, 2013 is concerned, only can be decided while hearing the main petition i.e. CP-193(MB)/2021 is still pending before the Ld. National Company Law Tribunal, Mumbai Bench, Court-IV for hearing and adjudication. There is no illegality in the impugned order - Appeal dismissed.
-
2021 (11) TMI 733
Liability/Deemed liability in respect of the allotment to the Appellants - agreement with ANS (Corporate Debtor/Respondent) or paid money to ANS for allotment of flats or not - jural relationship between the Appellants and ANS - breach of contract or not - Section 3 (6) of the Insolvency and Bankruptcy Code, 2016. Whether RPD being agent of ANS collected the part sale consideration from the Appellants? - HELD THAT:- The MOU is an admitted document between the parties. There is the explicit terms and conditions of the MOU that the MOU shall not be deemed constitute a partnership between the parties hereto nor shall make one an agent of the other. Thus, we are unable to convince with the argument of Ld. Counsel for the Appellants that RPD has collected the amount from the Appellants being an agent of ANS. Actually, this is an agreement to complete the construction of five towers i.e. D, E, F, G K and after completion of construction, RPD and ANS were free to sell their saleable area directly and collect the consideration. However, they have to deposit the sale proceeds from the sale of their respective areas in the account in the name of ANS Apartments Pvt. Ltd. A/c Shri Rajneegandha Greens only. Whether there is jural relationship between the Appellants and ANS? - HELD THAT:- From the documents as per terms of MOU and Minutes of meeting, RPD was free to sell its share of saleable area directly and collect all dues in favour of ANS and the same is required to be deposited in the bank A/c of Shri Rajneegandha Greens (Dedicated Joint Signatory Account). As per the minutes of meeting dated 15.04.2313, the RPD was required to send printed agreement in triplicate pre-signed by the costumers to ANS and ANS was required to return two copies with in two working days. There is no such flat buyer agreement placed on record. In clause 3 of minutes of meeting dated 11.05.2013 the same condition was reagitated in the minutes of meeting and no document has been placed on record to show that the list of all flats allotted to Shri Rajneegandha Greens be made available to RWA - it is clear that part consideration has been collected from the Appellants but the same has not been deposited by the RPD in the A/c of Shri Rajneegandha Greens as per clause 17 and 31 of the MOU. There is nothing on record to show that in response to these letters ANS has issued credit note and allotment letters in favour of the Appellants. Thus, RPD has not deposited the amount collected from the Appellants in the A/c of Shri Rajneegandha Greens as agreed terms of the MOU and therefore, the ANS has not issued any credit note/allotment letters in favour of the Appellants. Thus, Ld. Adjudicating Authority has rightly held that there is no jural relationship between the Appellants and ANS. The RPD has not collected the part sale consideration from the Appellants as an agent of ANS. The RP as well as Ld. Adjudicating Authority has rightly rejected the claims of the Appellants - Appeal dismissed.
-
2021 (11) TMI 732
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It was only on 06.08.2016 after the receipt of the information under RTI, that the Appellant got the knowledge of recovery for the very first time and filed the Section 9 Application on 04.06.2019, well within three years - The Hon ble Supreme Court in B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [ 2018 (10) TMI 777 - SUPREME COURT] has observed that the right to sue accrued on the date of default . This decision has to be understood and interpreted keeping in view the factual matrix of each case. In the instant case the Respondent/ Corporate Debtor does not deny the main contention of the Appellant that the decision with respect to recovery and deduction of the Arbitral amount was never communicated to the Appellant. Even in their reply before the Adjudicating Authority and before this Tribunal and in the submissions filed, the Corporate Debtor is completely silent with respect to this communication having been made to the Appellant herein - the date of knowledge of happening of the default is a relevant date. The part payment made on 31.03.2016 further extends the date of default keeping in view the facts and circumstances of the attendant case on hand. The challenge to the Arbitral Award was dismissed on 06.10.2018. The recovery made in 2016 was provisional, subject to the challenge against the Arbitral Award, which got dismissed on 06.10.2018 and the same was not challenged further. The Application was filed on 04.06.2019 which is within three years of this date. The Hon ble Supreme Court in DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [ 2021 (8) TMI 315 - SUPREME COURT] has noted that once a recovery certificate is issued authorising the Creditor to realise its decretal dues, a fresh right accrues to the Creditor to recover amount of the final Judgement/Order/decree - In the instant case, the challenge to the Arbitral Award was dismissed on 06.10.2018, and hence has attained finality, the part payment was made on 31.03.2016 and therefore the Application filed on 04.06.2019 is not barred by Limitation. The Learned Adjudicating Authority shall proceed in accordance with law keeping in view the timelines under the Code - Appeal allowed - decided in favor of appellant.
-
2021 (11) TMI 731
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - applicability of time limitation - HELD THAT:- It is seen from the record that three years form the date of NPA i.e. 28.02.2005, as per Article 137 of the Limitation Act, 1963, expires on 28.02.2005. The BIFR reference was abated as the Corporate Debtor did not modify the pending reference therefore the deemed date of abatement of reference relates back to 13.08.2015. Section 22(5) of SICA, 1968 is not attracted to the present case since the period of limitation i.e. 3 years had already expired before the BIFR reference was made by the Corporate Debtor. Any reference before the BFIR is abated, if secured creditors have taken measures under Section 13(4) of the SARFAESI Act, 2002 as provided for under Section 41 of the SARFAESI Act, 2002. The period between 25.04.2006 when the Corporate Debtor was declared sick by BIFR under SICA and 04.05.2016 when the reference was dismissed cannot be excluded form computing the limitation period - The argument of the Learned Counsel that 05.05.2016 should be taken as the first accrual of the cause of action is unsustainable, as the period of limitation i.e. 3 years had already expired before the BIFR reference was made by the Corporate Debtor. The documentary evidence on record does not establish any acknowledgment of liability made in writing, signed by the party against whom the property or right is claimed and hence Section 18 of the Limitation Act, 1963 cannot be made applicable to the facts of the instant case. In the instant case, it is clear that the right to sue accrued when the default occurred way back on 28.02.2002. The material on record does not evidence any acknowledgment of liability under Section 18 of the Limitation Act, 1963 to extend the limitation period. The dismissal of the BIFR reference, relied upon by the Learned Counsel for the Appellant, is also dated 04.05.2016 which is beyond three years form the date of default. The Application under Section 7 was filed on 04.06.2019 for an amount which even according to the Appellant, fell due on 14.02.2008 and cannot revive a debt which is no longer due as it is time barred. The Ld. Adjudicating Authority has rightly dismissed the Application filed under Section 7 of the Code, as barred by limitation - the Appeal is dismissed.
-
Central Excise
-
2021 (11) TMI 730
Area Based Exemption - availment of inadmissible cenvat credit (on inputs) on improper and inadmissible documents - extended period of limitation - HELD THAT:- The disallowance under each of the annexures to the show cause, is of similar nature. Further, from the demonstration made by the counsel for the appellant, it is satisfying that this is a case of only clerical error and the appellant s Plant No.9 has received the inputs in question, making the proper entries in the records and have further made the payments through its bank accounts. It is also found that there is no other allegation as to diversion of raw materials or of any fraudulent activity on the part of the appellant. Extended period of limitation - HELD THAT:- The extended period of limitation is not available to the Revenue. Further, cenvat credit in dispute is allowable to the appellant/assessee. Appeal allowed -
-
CST, VAT & Sales Tax
-
2021 (11) TMI 729
Rejection of turnover appearing in the books of accounts - turnover shown in the account books is higher than the turnover disclosed in the return - disallowance of claim of damage which is less than 1% - HELD THAT:- Seeing the first year of business of the revisionist, the revenue cannot compel the revisionist to manage the affair of its business or to conduct its business according to whims of the assessing authority. The revisionist have all rights to manage its business affairs according to his wisdom. In absence of any material brought on record by the authorities, the revenue cannot compel the dealer to sell its products at a rate fixed by the revenue without bringing on record any exemplars. Therefore, the view taken by the Tribunal as well as the lower authorities that the goods were sold at lesser price is bad. Further the record reveals that only on the basis of surmises and conjucture, the account books of the assessee have been rejected and turnover has been enhanced which cannot be justified. It is already well-settled that in the absence of any definite adverse material accounts kept in regular course of business cannot be disbelieved and must be given credence and due weight - In the case in hand, no adverse material whatsoever was brought on record to disbelieve the account books maintained by the revisionist and therefore rejection of account books and enhancement of turnover is uncalled for. The Tribunal is directed to pass an order under Section 11(8) within a period of two months from the date of receipt of a copy of this order - revision is allowed with cost of ₹ 2000/- (two thousand), which shall be paid to the revisionist within a period of one month from today and compliance report of the same be submitted by the opposite party to the Registrar General of this Court within 45 days from today.
-
Indian Laws
-
2021 (11) TMI 728
Validity of award of interest by the sole arbitrator - earnest money and security deposits or not - in view of the specific clause 16(2) of the GCC, whether the contractor is entitled to any interest pendente lite on the amounts payable to the contractor other than upon the earnest money or the security deposit? HELD THAT:- An identical question came up for consideration before this Court in the recent decision of this Court in the case of GARG BUILDERS VERSUS BHARAT HEAVY ELECTRICALS LIMITED [ 2021 (10) TMI 250 - SUPREME COURT] where it was held that the High Court was justified in rejecting the claim of the appellant seeking pendente lite interest on the award amount. Merely because the appellant has claimed interest, does not imply that the contractor shall be entitled to interest pendente lite. Even if the appellant would have been awarded interest, the same also was not permissible and could have been a subject matter of challenge. In short, there cannot be an estoppel against law. The learned Arbitrator in the instant case has erred in awarding pendente lite and future interest on the amount due and payable to the contractor under the contract in question and the same has been erroneously confirmed by the High Court - the impugned judgment and order passed by the Division Bench of the High Court in an appeal under Section 37 of the 1996 Act and the order passed by the learned Single Judge in an application under Section 34 of the 1996 Act and the award passed by the learned Arbitral Tribunal awarding pendente lite and future interest on the amounts held to be due and payable to the contractor under the contract are hereby quashed and set aside. Appeal allowed.
-
2021 (11) TMI 727
Dishonor of Cheque - seeking acquittal of applicant from the charge under Section 138 of the Negotiable Instruments Act on the basis of the compromise entered into between the parties - invocation of extraordinary jurisdiction of this Court under Section 482 of the Cr.P.C. - HELD THAT:- This petition under Section 482 of the Cr.P.C. has been filed by the applicant to acquit the applicant from the charge under Section 138 of the Negotiable Instruments Act on the basis of the compromise entered into between the parties. It is a case of abuse of process of law. It is true that Section 482 of the Code of Criminal Procedure gives inherent powers to the High Court to make such orders as may be necessary to prevent the abuse of process of law or to secure the ends of justice. However, Section 482 does not confer unlimited jurisdiction upon the High Court and the inherent powers, being in the nature of exception and not a rule, should be used sparingly and with great care and caution. Even in the various cited judgments, Supreme Court has held that whether to exercise the inherent power or not, would depend upon the facts and circumstances of the case. In the present case, when the coordinate Bench of this Court dismissed the revision as non maintainable and also dismissed the application seeking suspension of sentence and grant of bail on the ground that the applicant is absconding and his presence is necessary to maintain the application as well as the revision, filing of this petition under Section 482 of the Cr.P.C. is not maintainable and it is an abuse of process of law - revision petition dismissed.
-
2021 (11) TMI 726
Dishonor of Cheque - statutory period prescribed under the provisions of Section 138 of the Negotiable Instruments Act, 1881 not satisfied - legally enforceable debt or not - presumptions regarding existing debt or not - whether on the date of filing of the complaint case under Section 138 of the Negotiable Instruments Act, 1881, the cause of action had crystalized or the complainant itself was pre-mature? HELD THAT:- This Court finds that admittedly, there is no evidence of service of the legal notice to the petitioner and accordingly, the learned courts below has considered deemed service of notice by referring to the General Clauses Act. This Court is of the considered view that presumption regarding service of notice sent through registered cover can be drawn only upon expiry of 30 days from the date of dispatch of notice as has been held by the Hon ble Supreme Court in SUBODH S. SALASKAR VERSUS. JAYPRAKASH M. SHAH ANR [ 2008 (8) TMI 795 - SUPREME COURT ]. In the said judgment, the notice was sent through speed post and although the actual date of service of notice was not known, the Complainant proceeded on the basis that the same was served within the reasonable period. It was held that if the presumption of notice within the reasonable period is raised, the deemed service at best can be taken to be 30 days from the date of its issuance and the accused was required to make payment in terms of the said notice within 15 days thereafter and the complaint petition therefore could have been filed after expiry of 15 days given to the accused for payment of money after receipt of notice. This Court finds that the law has been well settled by the aforesaid judgement that the cause of action for filing a Complaint case under Section 138 of the N.I. Act could not arise prior to expiry of 15 days from the date of service of the legal notice on the accused - this Court also finds that even if the best case of the Complainant is taken into consideration, then the date of dispatch of the legal notice regarding bouncing of the cheque by the complainant is 19.11.2009 (through registered cover), the date of deemed service of legal notice upon the petitioner would be 18.12.2009 (30 days from dispatch of legal notice) and 15 days from the date of service of notice would expire only on or about 02.01.2010 and present complaint case has been filed on 22.12.2009 i.e. on the 4th day from the deemed service of notice, if taken as 18.12.2009. The condition precedent for filing the case under Section 138 of the Negotiable Instruments Act, 1881, having not been satisfied, the Complaint itself was not maintainable on the day it was filed and accordingly, the petitioner could not have been convicted under the said Section. The question of any presumption regarding existing debt under Section 139 of the Negotiable Instruments Act, 1881 also could not arise as the Complaint itself was not maintainable - petitioner is acquitted from the charge thereunder and is discharged from the liability of the bail bonds. Petition allowed.
-
2021 (11) TMI 725
Dishonor of Cheque - drawer of cheque - Vicarious liability - petitioner has contended that she is not the signatory to the dishonoured Cheque and the said Cheque was issued from the Joint Account maintained by her along with her husband - Section 138 read with Section 141 of the N.I. Act - HELD THAT:- The plain reading of Section 138 makes it clear that it has to be strictly interpreted, as penal provision is made for commission of offence as prescribed under Section 138 of the N.I. Act. It is drawer of the Cheque, who has to be made liable for the payment of amount of money due to the payee or the holder of the Cheque within the statutory limits as provided, after the receipt of the legal notice demanding the cheque money. If the drawer of the Cheque fails to make payment of the said amount of money, then such person shall be deemed to have committed offence - Section 138 of the N.I. Act being a penal provision, it entails a conviction and sentence at the end of the criminal proceedings. There is a statutory presumption under Section 139 of the N.I. Act in favour of the holder of the Cheque. A prosecution under Section 138 of the N.I. Act is ultimately to bring the offender to suffer penal consequences. It appears that the present petitioner has been joined in criminal proceedings just as being the joint account holder with the husband. As per the facts of the case, the Cheque was issued by accused no.1 in his personal capacity. The wife has no business relationship, nor was having any transaction with the complainant on her personal basis, thus, she cannot be made vicariously liable for the act of the husband. It appears that the learned trial Court Judge has not considered the averments of the complaint and has not examined the status of the proposed accused prior to order for issuance of summons against the present petitioner, who was joined in the criminal proceedings merely under the status of being wife of the accused no.1 and holding a joint account with the husband - The proceedings under Section 138 of the N.I. Act cannot be misused by any of the parties. The culpability is attached with the dishonour of the Cheque and it is only the drawer of the Cheque who can be made accused in any proceedings under Section 138 of the N.I. Act. From the bare reading of Section 138 of the N.I. Act, it transpires that the liability of the drawer of the Cheque, who has issued the Cheque from the joint account maintained by him and his wife, does not specifically bear any implication to make the wife equally liable when the Cheque was drawn by her husband, and therefore, no vicarious liability can be fastened on the holder of a joint account, by a mere fact that the dishonoured cheque was issued by the drawer of such a cheque from the same bank account. Application allowed.
-
2021 (11) TMI 724
Dishonor of Cheque - insufficiency of funds - acquittal of the accused - compounding of offences - HELD THAT:- Having taken note of the fact that entire amount of compensation stands deposited with the trial Court and accused has no objection in releasing the same in favour of the complainant, this Court finds no impediment in accepting the prayer made in the application while exercising power under section 147 of the Act as well as in terms of the law laid down by the Hon'ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [ 2010 (5) TMI 380 - SUPREME COURT] , whereby it has been categorically held that Court exercising power under Section 147 of the Act can proceed to compound the offences even in those cases where accused stands convicted. The instant matter is ordered to be compounded and judgment dated 5.4.2021 passed by learned Sessions Judge, Shimla, in Criminal Appeal No. 51-S/10 of 2018 and the judgment of conviction and order of sentence dated 24.11.2018, passed by learned Judicial Magistrate, 1st Class, Court No. 5, Shimla, District Shimla, H.P., in case No. 183-3 of 2014, are quashed and set-aside. The petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act. The bail bonds of the accused are ordered to be discharged. Petition disposed off.
-
2021 (11) TMI 723
Frequency of release on furlough - matter of right or not - offences under Sections 376(2)(c), 377, 354, 344, 357, 342, 323, 504, 506(2), 120-B, 212, 153 and 114 of the Indian Penal Code 1860 - HELD THAT:- The Bombay Furlough and Parole Rules were made pursuant to Section 59 of the Prisons Act 1894 and are applicable in the State of Gujarat. Under sub-Section 5 of Section 59 of the Prisons Act 1894, the State Government may make rules for the award of marks and shortening of sentences. Sub-Section 28 of Section 59 also grants power to the State Governments to make rules for carrying out the purposes of the Act. It is evident that the Bombay Furlough and Parole Rules do not confer a legal right on a prisoner to be released on furlough. The grant of furlough is regulated by Rule 3 and Rule 4. While Rule 3 provides the eligibility criteria for grant of furlough for prisoners serving different lengths of imprisonment, Rule 4 imposes limitations. The use of the expression may be released in Rule 3 indicates the absence of an absolute right. This is further emphasised in Rule 17 which states that said Rules do not confer a legal right on a prisoner to claim release on furlough. Thus the grant of release on furlough is a discretionary remedy circumscribed by Rules 3 and 4. Turning now to Rule 4(6) of the Rules, the Jail Superintendent has given a negative opinion based on the fact that the respondent kept a mobile phone inside the jail illegally and attempted to make contacts with the outside world. Rule 4(4) of the Rules provides for denial of furlough on grounds of disturbance to public peace and tranquillity. The order dated 8 May 2021 has adduced a number of circumstances which cumulatively indicate that the release of the respondent on furlough may lead to a violation of public peace. The order refers specifically to the threat he and his followers pose to the complainant and other persons who deposed at the trial. An attempt has been made to threaten and suborn the investigating team and the witnesses - The respondent was released earlier this year to accommodate a genuine need to attend to his mother s health at the relevant time. Based on this, we are unable to agree with the line of reasoning of the High Court. The opinion of the Sanctioning Authority under the Rules does not suffer from perversity nor does it consider material extraneous to the Rules governing the grant of furlough - Appeal allowed - decided in favor of appellant.
|
