TMI Tax Updates - e-Newsletter
April 1, 2020
Case Laws in this Newsletter:
Income Tax
Customs
Insolvency & Bankruptcy
Central Excise
Highlights / Catch Notes
-
GST:
Clarification on refund related issues - CGST - Bunching of refund claims across Financial Years - Refund of accumulated input tax credit (ITC) on account of reduction in GST Rate - Change in manner of refund of tax paid on supplies other than zero rated supplies - Guidelines for refunds of Input Tax Credit u/s 54(3) - New Requirement to mention HSN/SAC in Annexure ‘B’
-
Income Tax:
Deduction u/s.80IB(10) - when the assessee claimed the deduction with respect to the residential units, which are having built up area less than 1500 sq.ft, the condition laid down under section 80IB(10)(c) is fulfilled. Therefore, whether such development permission includes the area for the residential units, which are more than 1500 sq.ft. would not be relevant for deciding eligibility to deducting under section 80IB(10) of the Act.
-
Income Tax:
Penalty u/s 271(1)(c) - Bogus purchases - Assessing Officer has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income - No penalty.
-
Income Tax:
Disallowance of expenditure - Most importantly, the Tribunal in assessee’s own case for AY 2012- 13 had held that it was not necessary that the business had actually commenced for claiming of expenses but the relevant fact was that the business was set up or not. It is quite evident from the financial statements, that the assessee had already set up its business and was undertaking various projects, the expenditure of which was being accumulated under the head Capital Work-in-progress. Therefore, the observation of Ld. CIT(A) that the business was not set up could not be sustained.
-
Income Tax:
Business loss or not - Payment of additional Custom Duty after the department of Customs found that goods were under-valued - the duty was paid in the names of other parties but the same related to the assessee only. - non-payment of the duty would have resulted into substantial losses for the assessee and damaged assessee’s reputation in the market. This being the case, the said loss would be allowable to the assessee as a business loss out of commercial expediency.
-
Income Tax:
Bad debts u/s 36(1) - Diversion of income by overriding title - assessee claimed that since land was mortgaged to the bank for loan to HPGPL and the bank has adjusted the sale proceeds against loan to HPGPL, there is diversion of income by overriding title. - Since in the present case holding company’s loss was adjusted upon by e-auctioned of the property for an amount of ₹ 296 crores, the assessee-company’s share out of the same as per the facilitation agreement clearly accrued to the assessee-company. If the assessee-company did not press for or forwent its claim it cannot be diversion of income by overriding title. - But it will be treated as application of income.
-
Income Tax:
Disallowance of bad debts u/s 36(1) - The non-realisation of debt can result in bad debt written off if the same is written off in the books. Since it is not the case that any bad debt has been written in the books the assessee’s plea fails. As per section 36(1)(vii) the allowance of bad debt is depending upon its being written off as irrecoverable in the accounts of the assessee in the previous year. Hence, in absence of this prerequisite the assessee’s claim of bad debt fails.
-
Income Tax:
Deemed dividend - addition u/s 2(22)(e) - Even though, assesse has repaid the deposit within the same year, it does not mean that the loan or benefit is not taken. - even though assessee claims it as inter corporate deposit, the literal meaning will remain same as the short term loan enjoyed by the assessee, hence in our considered view, the provision of section 2(22)(e) is attracted in the present case.
-
Income Tax:
Disallowance of professional fees paid by the assessee as well as interest expenditure incurred - assessee is not carrying on any business during the year - Additions confirmed - However, merely because the issue is decided against the assessee confirming the disallowance it cannot result into levy of penalty for furnishing of inaccurate particulars - Levy of penalty deleted.
-
Income Tax:
TDS default - Order passed u/s 201(1) and (1A) - Period of limitation - Effective date of amendments by Finance Act (No. 2) of 2009 - CIT(A) quashing the impugned order as barred by limitation does not call for any interference, as the Ld CIT(A) has followed the decision rendered by Hon’ble jurisdictional Karnataka High Court.
-
Income Tax:
Deduction u/s.80IAB(4)(iii) - Deduction under the said provision in respect of income derived from a SEZ project known as Millennium Towers - the grounds raised by the revenue in this regard are without any basis and does not arise out of the order of the CIT(A).
-
Income Tax:
TDS u/s 194A - interest payments where it exceeded the threshold limit - interest payments covering joint deposit holders - CIT(A) has correctly calculated the TDS liability in respect of 162 cases and the assessee failed to show that there was mistake in the order of the Ld.CIT(A).
-
Customs:
Seeks to extend the exemption from Integrated Tax and Compensation Cess upto 31.03.2021 on goods imported against AA/EPCG authorizations. - Notification
-
Customs:
Trade Facilitation - clearance of Import Cargo — possible delay in filing Bill of Entry due to precautionary measures on account of the outbreak of nCOVID-19 — waiver of the late fee under Sec 46 (3) of the Customs Act, 1962 - Trade Notice
-
Customs:
Issuance of H, G and Self category customs pass/ card under regulation 13 of the CBLR 2018 - Trade Notice
-
Customs:
Electronic Sealing - deposit in and removal of goods from Customs Bonded warehouses - Trade Notice
-
Customs:
ICES Advisory 09/2020 (Turant Customs) - Customs Compliance Verification and System OOC - Implementation on All India basis - Trade Notice
-
Customs:
Suspension of CHA License - the entire issue has now been resolved and at the level of the tribunal - The judgment and order of the tribunal, do not call for any interference. The agent will be entitled to function as such, subject to obtaining renewal or extension of its tenure in accordance with law - Application disposed off.
-
Customs:
Seeking quashing FIR - foreign made liquor and beer - since the bonded warehouse was situated within the territorial jurisdiction of the Customs Department and the Central Government, without obtaining prior permission of the Customs Department or the Central Government, the police has no authority to seal or to carry out any search & seizure procedure. If any offence is found to be committed, at the most, the police can request for the same to the Department or to the Central Government. The police has no authority to carry out any search operation which is beyond their jurisdiction.
-
DGFT:
Export of Red Sanders wood by Government of Andhra Pradesh and Directorate of Revenue Intelligence - Extension of time - Notification
-
DGFT:
Amendment in Export Policy of Animal By-Products. - Notification
-
DGFT:
Implementation of the Track and Trace system for export of Pharmaceuticals and drug consignments along with maintaining the Parent-Child relationship in the levels of packaging and their movement in supply chain — Extension of date of implementation - Public Notice
-
Corporate Law:
Modification to LLP Scheme 2020 - in order to support and enable Limited Liability Partnerships (LLPs) registered in India to focus on taking necessary measures to address the COVID-19 threat and to reduce their compliance burden - Circular
-
Corporate Law:
Companies Fresh Start Scheme, 2020 - in order to facilitate the companies registered in India to make a fresh start on a clean slate, this Ministry has decided to take certain alleviative measures for the benefit of all companies - Circular
-
IBC:
CIRP Proceedings - scope of preferential transactions - It was submitted that the "corporate debtor" paid a sum of ₹ 2,50,00,000 towards part payment of principal amount to the appellant on October 29, 2016 which is more than one year before the commencement date of initiation of the "corporate insolvency resolution process", therefore, it cannot be termed to be "preferential transactions". - The contention rejected.
-
Central Excise:
CENVAT Credit - input services - outward transportation of goods (GTA Services) - place of removal - period from 2009-10 to 2013-14 - Tribunal observed that, Appellants are eligible for the cenvat credit of service tax paid on outward freight - No question of law much less of any substantial question of law arises.
Articles
Notifications
Customs-
18/2020 - dated
30-3-2020
-
Cus
Seeks to extend the exemption from Integrated Tax and Compensation Cess upto 31.03.2021 on goods imported against AA/EPCG authorizations.
-
35/2020 - dated
30-3-2020
-
Cus (NT)
Exchange Rates Notification No.35/2020-Customs (NT) dated 30.03.2020
DGFT-
56/2015-2020 - dated
30-3-2020
-
FTP
Export of Red Sanders wood by Government of Andhra Pradesh and Directorate of Revenue Intelligence - Extension of time
-
55/2015-2020 - dated
30-3-2020
-
FTP
Amendment in Export Policy of Animal By-Products.
GST - States-
03/2020- State Tax (Rate) - dated
30-3-2020
-
Bihar SGST
Amendment in Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017
-
02/2020- State Tax (Rate) - dated
30-3-2020
-
Bihar SGST
Amendment in Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017
-
38/1/2017-Fin(R&C)(134) - dated
30-3-2020
-
Goa SGST
Supersession Notification No. 38/1/2017-Fin(R&C)(123) dated 01st January, 2020
-
38/1/2017-Fin(R&C)(133) - dated
30-3-2020
-
Goa SGST
Supersession Notification No. 38/1/2017-Fin(R&C)(121) dated 1st January, 2020
-
38/1/2017-Fin(R&C)(132) - dated
30-3-2020
-
Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(100)/2805, dated 08th May, 2019
-
38/1/2017-Fin(R&C)(131) - dated
30-3-2020
-
Goa SGST
Special procedure for certain processes
-
38/1/2017-Fin(R&C)(03/2020-Rate) - dated
30-3-2020
-
Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C) (1/2017- Rate), dated the 30th June, 2017
-
38/1/2017-Fin(R&C)(02/2020-Rate) - dated
30-3-2020
-
Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(11/2017-Rate), dated the 30th June, 2017
Circulars / Instructions / Orders
News
Case Laws:
-
Income Tax
-
2020 (3) TMI 1235
TP Adjustment - arm’s length price of the services provided to the Associated Enterprises (AE) - comparable selection - Assessee is intoproviding non–binding investment advisory services - HELD THAT:- MOTILAL OSWAL INVESTMENT ADVISORIES PVT. LTD. company is engaged in the business of investment banking, merchant banking, merger and acquisition, private equity, syndication, etc. Whereas, the assessee has only one segment of providing non–binding investment advisory services to the AE. Looking at the functional profile of this company, not only different benches of the Tribunal, but even different High Courts including Hon'ble Jurisdictional High Court have consistently held that this company cannot be a comparable to a non–binding investment advisory service provider.
ICRA ONLINE LIMITED - as relying on AGM INDIA ADVISORS PRIVATE LIMITED [2016 (5) TMI 1335 - ITAT MUMBAI] ICRA company cannot be a comparable to an investment advisory service provider. In fact, while considering the comparability of this company in assessee’s own case for the assessment year 2012–13, the Transfer Pricing Officer himself has categorically stated that none of the segments of ICRA Online Ltd. are comparable to investment advisory services rendered by the assessee and accordingly rejected it as a comparable. In our considered opinion, facts are not different in the impugned assessment year as well. That being the case, we hold that this company cannot be treated as comparable to the assessee. Hence, should be excluded.
As submitted exclusion of these two companies, arithmetic mean of the rest of the comparables would work out to 26.57% and assessee’s margin shown at 23.16% would be within the acceptable range, requiring no further adjustment. Keeping in view the aforesaid submission, we do not intend to deliberate further on any other comparable at this stage and leave the issues relating to the comparability of the other comparables open for adjudication if they arise in assessee’s case in any other assessment year in future.
-
2020 (3) TMI 1234
Penalty u/s 271(1)(c) - Bogus purchases - AO restricting the profit element in the purchases @15% - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Assessing Officer restricting the profit element in the purchases @15%. On identical situations the Coordinate Bench in the case of Shri Deepak Gogri v. Income Tax Officer [2017 (11) TMI 1857 - ITAT MUMBAI] held that no penalty is leviable as
Assessing Officer had made only adhoc estimation of profit on certain purchases treated as unexplained expenditure.Assessing Officer did not doubt the sales made by the assessee from out of such purchases - there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of adhoc estimation.
Hon'ble Delhi High Court in the case of CIT v. Aero Traders Pvt. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] wherein held that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars.- In the case on hand the Assessing Officer has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. - Decided in favour of assessee.
-
2020 (3) TMI 1233
Penalty u/s 271(1)(c) - Bogus purchases - CIT-A deleted penalty - HELD THAT:- No valid reason to disturb the findings of the Ld.CIT(A) in deleting the penalty levied u/s. 271(1)(c) of the Act on disallowance of purchases as mere disallowance will not attract penalty and when there is complete disclosure of expenses in the books by the assessee. Grounds raised by the revenue are rejected.
-
2020 (3) TMI 1232
Penalty levied u/s. 271(1)(c) - Non specification of limb on which the penalty was proposed to be levied - non-striking off relevant clause in the notice shows - HELD THAT:- We hold that the notice was issued by the Assessing Officer U/s. 274 r.w.s 271(1)(c) of the Act is without specifying the charge for which the notice was issued as was non striking off of the inappropriate limb on account of non-application of mind and therefore the penalty proceedings initiated are bad in law. Thus, we direct the Assessing Officer to delete the penalty levied U/s. 271(1)(c) of the Act. - Decided in favour of assessee.
-
2020 (3) TMI 1231
Penalty levied u/s 271(1)(c) - Bogus purchases - AO estimated the profit element from the non-genuine purchases at 12.5% - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Assessing Officer restricting the profit element in the purchases @12.5%. On identical situations the Coordinate Bench in the case of Shri Deepak Gogri v. Income Tax Officer [2017 (11) TMI 1857 - ITAT MUMBAI] held that no penalty is leviable as Assessing Officer had made only adhoc estimation of profit on certain purchases treated as unexplained expenditure. Assessing Officer did not doubt the sales made by the assessee from out of such purchases - there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of adhoc estimation.
Hon'ble Delhi High Court in the case of CIT v. Aero Traders Pvt. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT]wherein the Hon'ble High Court affirmed the order of the Tribunal in holding that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars.
In the case on hand the Assessing Officer has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. Thus, we do not observe any infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer - Decided in favour of assessee
-
2020 (3) TMI 1230
Disallowance of expenditure incurred by the assessee towards project - non commencement of business - Methods of accounting - HELD THAT:- Upon perusal of clause-19, we find that General administration costs and selling costs are generally not considered a part of contract cost unless they are contract specific. Applying the same to the fact of the case, we find that the assessee has debited expenditure of such a nature only in the Profit & Loss Account. Theses expenditure was not project specific and allowable as period cost. Nothing on record establishes that there was any change in aforesaid method of accounting by the assessee during the year under consideration.
As held that AS-7 as an approved system of accounting and regular accounting methodology adopted by the assessee could not be disregarded by the department.
On the basis of above discussion, it could be observed that the assessee was consistently following a particular method of accounting which was in accordance with Accounting Standard issued by ICAI and which is well accepted by higher courts. Therefore, there being no change in fact, the said methodology could not be rejected by the revenue.
Most importantly, the Tribunal in assessee’s own case for AY 2012- 13 had held that it was not necessary that the business had actually commenced for claiming of expenses but the relevant fact was that the business was set up or not. It is quite evident from the financial statements, that the assessee had already set up its business and was undertaking various projects, the expenditure of which was being accumulated under the head Capital Work-in-progress. Therefore, the observation of Ld. CIT(A) that the business was not set up could not be sustained.
Keeping in view the entirety of facts and circumstances, the disallowance as confirmed by Ld. CIT(A) could not be sustained in the eyes of law. By deleting the same, we allow ground no.1
Disallowance u/s 14A r.w.r. Rule 8D(2)(iii) - HELD THAT:- We find that no adjudication has been rendered by Ld. first appellate authority, in this regard since the same was termed as academic in nature. However, going by the factual matrix, we find that the assessee has already offered suo-moto disallowance of ₹ 0.75 Lacs against the exempt income and Ld. AO without considering the basis of disallowance, has proceeded to apply Rule 8D. We find that the issue of disallowance u/s 14A for AY 2012-13 has already been sent back by the Tribunal to Ld.AO for fresh adjudication. Therefore, with a view of enable the revenue to take consistent stand in the matter, the matter of disallowance u/s 14A would stand remitted back to the file of Ld. AO on similar lines.
-
2020 (3) TMI 1229
Business loss or not - Payment of additional Custom Duty after the department of Customs found that goods were under-valued - the duty was paid in the names of other parties but the same related to the assessee only. - CIT(Appeals) not allowing to the appellant the deduction of custom duty being the business loss - HELD THAT:- Assessee has paid certain duty pursuant to action carried out by DRI. The matter of duty was finalized by Hon’ble Settlement Commission and the assessee made the payment as determined. The payment so made amounted to ₹ 197.60 Lacs out of which deduction to the extent of ₹ 104.47 Lacs has already been allowed to the assessee. The basis of disallowance is the fact that the payment is not in assessee’s account. However, as rightly pointed out by Ld. AR, the said payment was made by the assessee himself out of his own funds and substantial payment challans were in the name of assessee’s proprietorship concern namely M/s M.B.Sales Corporation. The other entities denied their liability and despite legal action, the stated amount could not be recovered from them and the amount eventually became irrecoverable for the assessee.
Therefore, the said loss, in our considered opinion, was incurred in the course of business being carried out by the assessee and non-payment of the duty would have resulted into substantial losses for the assessee and damaged assessee’s reputation in the market. This being the case, the said loss would be allowable to the assessee as a business loss out of commercial expediency. The ratio laid down in the cited judicial pronouncements clearly support the case of the assessee. Therefore, we hold that the said expenditure would be an allowable expenditure.- Decided in favour of assessee.
Disallowing the set-off of carried forward of losses pertaining to AY 2005-06 - HELD THAT:- The said issue would stand remitted back to the file of Ld. AO for re-adjudication in view of our decision for AY 2006-07. The Ld. AO is directed to verify assessee’s claim and allow the set-off of losses as per law. The ground stand allowed for statistical purposes. The appeal stands partly allowed.
-
2020 (3) TMI 1228
Disallowance of bad debts u/s 36(1) - assessee had written off inventory of land - Diversion of income by overriding title - as concluded by directing the AO to restrict the addition on account of amount received through e-auction of impugned land and property by HDFC to only 5% of the receipt and recomputed income after giving benefit for amount of inventory of land written off - HELD THAT:- By no stretch of imagination it can be said that entire sum was received only against land belonging to the assessee. It is further clear from sale certificate wherein in the description of the property it has been mentioned that the same consists of immovable property being sold by way of sale of residuary right including receivable of HPGPL with step-in obligation in respect to the immovable property. Hence, it is quite evident that the receipt of e-auction by the HDFC against its finance to HPGPL did not belong to the assessee in its entirety as the same was of project as it stood as on that date. It comprised of the constructions there on as well receivable by HPGPL. Learned CIT(A) is correct in his appreciation that the assessee can be entitled to 5% which was agreed upon in the facilitation agreement between the assessee and its developer holding company i.e. HPGPL.
We come to the assessee’s claim that since it has not received any amount and its land has also been e-auctioned, the assessee’s case should be treated as business loss. That it should be treated that land being trading asset of the assessee has been lost so assessee has claimed business loss.
Further limb of the assessee’s submission is that since land was mortgaged to the bank for loan to HPGPL and the bank has adjusted the sale proceeds against loan to HPGPL, there is diversion of income by overriding title. The income has been diverted to HDFC by HPGPL and the assessee has not received any amount. So nothing can be attributed to the assessee’s income.
We find that this limb of the assessee’s submission is also not sustainable. It is undoubted that the assessee had facilitation agreement with its holding company for development of the project on its land. As per the said agreement the assessee was entitled to 5% of the sale proceeds of the constructed property. Since in the present case holding company’s loss was adjusted upon by e-auctioned of the property for an amount of ₹ 296 crores, the assessee-company’s share out of the same as per the facilitation agreement clearly accrued to the assessee-company. If the assessee-company did not press for or forwent its claim it cannot be diversion of income by overriding title.
But it will be treated as application of income. Hence, firstly assessee’s share has to be considered as income of the assessee for which necessary consequences of taxation has to follow. In this view of the matter in our considered opinion assessee’s contention that it had lost everything. That its land which was its stock-in-trade has been lost and hence assessee should be allowed loss to that extent is not acceptable as assessee’s share will be deemed to have been applied by the assessee after accrual and hence, contention of the assessee is not accepted.
Sale of land by e-auction and consequent realisation of moneys are income of the assessee, as the land was a trading asset. Hence the income, which accrues to the assessee upon sale of trading asset is to be considered debt. Even Assessing Officer has recognised that the sale proceeds of land are sale receivable in the hand of the assessee. The non-realisation of debt can result in bad debt written off if the same is written off in the books. Since it is not the case that any bad debt has been written in the books the assessee’s plea fails. As per section 36(1)(vii) the allowance of bad debt is depending upon its being written off as irrecoverable in the accounts of the assessee in the previous year. Hence, in absence of this prerequisite the assessee’s claim of bad debt fails.
-
2020 (3) TMI 1227
Deemed dividend addition u/s 2(22)(e) - assessee has beneficial share holding in 2 companies namely M/s Jasubhai Business Services Pvt Ltd and M/s. ABM Steels Pvt M/s.- as per AO ABM Steels Pvt. Ltd is not a company in which public is substantially interested and assessee is holding beneficial interest and voting right and M/s ABM Steels Pvt. Ltd. is having accumulated reserves - HELD THAT:- Any credit or advantage taken by the persons having substantial interest will attract the provision of section 2(22)(e) - Even though, assessee has repaid the deposit within the same year, it does not mean that the loan or benefit is not taken. We can call any name but ultimately assessee has taken a credit/ benefit, the assessee should have known that it is surpassing the deeming provisions particularly when it has holding beneficial interest. It is settled law that deemed dividend provisions get attracted as soon as it takes benefit and it does not matter whether it is repaid within the same year. It is similar to the case of Miss P. Sarda vrs. CIT [1997 (12) TMI 1 - SUPREME COURT] the Hon’ble Apex court held that even though the loan is repaid at the end of the year, will attract the provision of section 2(22)(e) of the act.
Even though assessee claims it as inter corporate deposit, the literal meaning will remain same as the short term loan enjoyed by the assessee, hence in our considered view, the provision of section 2(22)(e) is attracted in the present case.
With regard to payment by M/s ABM Steels Pvt. Ltd. on behalf of the assessee for the purchase of machinery, it is brought on record that M/s ABM Steels Pvt. Ltd. has purchased the similar machinery from the assessee in the subsequent assessment year and it is a back to back purchase of machinery. Therefore, in our considered view, it is a business transaction and we are inclined to agree with the findings of Ld. CIT(A).
With regard to issue of debentures, since assessee has issued redeemable debentures and M/s Jasubhai Business Services Pvt. Ltd has subscribed for the debentures and during this year, they have also exercised the options and assessee has redeemed the debentures and current outstanding amount is of ₹ 2,02,25,000/.This transaction involving issue of securities, even though it is a private placement but it cannot be considered as a loan transaction.
The provisions of section 2(22)(e) of the Act are not attracted, it attracts only when loan and advances taken in place of direct issue of dividends. In order to avoid dividend tax, some of the assessee are resorting to taking loan instead of dividend being issued to the respective shareholders. The securities are a separate scripts and having stand alone capital liability, which cannot be equated with loan, which is current liability. Therefore, we are in agreement with the findings of led CIT(A). Accordingly, grounds raised by revenue are dismissed.
-
2020 (3) TMI 1226
Exemption u/s. 54F - Whether assessee could avail benefit u/s 54F if the construction of new asset commenced before the sale of old assets? - Whether the amount paid for land used for new asset should be considered for purpose of section 54F? - HELD THAT:- The condition preceded and for claiming benefit under the provision is that capital gain realised from sale of capital asset should have been invested either in purchasing a residential house or and constructing a residential house.
In the present facts of case assessee utilised part of sale consideration earned from sale of 2 parcels of land in construction of residential house, which started on 13/01/2014 (which is within one year prior to the sale of capital asset) and, construction was completed in financial year 2016-17 (which is before expiry of 3 years from the sale of capital asset). Admittedly assessee has used sum towards construction of new asset and balance has been offered to tax.
Under these circumstances, we do not find any violation of requirement to claim exemption u/s. 54F, as per decisions relied upon by Ld.AR in case of CIT vs J.R Subramanya Bhat [1986 (6) TMI 7 - KARNATAKA HIGH COURT] and CIT Vs. Ramachandra Rao [2015 (4) TMI 620 - KARNATAKA HIGH COURT] assessee is eligible to claim exemption under section 54F. We therefore direct Ld. AO is directed to compute the capital gains considering claim in consonance to decisions of Hon’ble Karnataka High Court mentioned herein.
Whether additional deduction being construction cost incurred after filing the return of income but before expiry of 3 years from the date of sale of original assets land should be considered while computing exemption under section 54F even though assessee failed to claim it in the return of income? - HELD THAT:- It is observed that, as rightly argued by Ld. Sr. DR that, one has to verify the manner in which assessee invested in the vacant plot. Also, that this issue has not been considered by Ld.AO, and therefore in our view it is appropriate to set aside this issue back to Ld. AO. Needless to say, that assessee shall be granted proper opportunity of being represented in support of this claim. Accordingly, Additional ground raised by assessee stands allowed for statistical purposes,
-
2020 (3) TMI 1225
Disallowance of professional fees paid by the assessee as well as interest expenditure incurred - assessee not carrying on any business - HELD THAT:- The only solitary transaction is demerger of business of the assessee against which the shares have been allotted in the demerged entity. There is neither frequency nor volumes. Therefore, it does not also apply. Thus, we do not find any reason upset the finding of the lower authorities. Hence, we are also of the view that assessee is not carrying on any business during the year and therefore the learned assessing officer as well as the learned CIT – A has rightly disallowed professional fees paid by the assessee as well as interest expenditure incurred. In the result, ground number 1, 2 and 3 of the appeal are dismissed.
Revenue earned because of renting of space of ATM - Business income - HELD THAT:- Lower authorities have concurrently held that appellant is in receipt of rental income from Punjab National Bank for provision of ATM. Except for agreement with the Punjab National Bank, no other details were furnished before the lower authorities as to how the above business can be assessed as a business income. Therefore, we conquer with the findings of the lower authorities and dismiss ground number four of the appeal.
Interest income from fixed deposit receipts as income from other sources - HELD THAT:- No infirmity in the order of the lower authorities as assessee has merely placed fixed deposits with the banks and it has not been shown that how the earning of the bank‟s deposit receipt interest can be said to be interest income chargeable to tax under the head business income. Thus, ground number five of the appeal is also dismissed.
Penalty u/s 271(1)(c) - HELD THAT:- Claim of the assessee though ultimately not accepted by the concurrent authorities but it cannot be denied that issue raised is not debatable. Further, when the issue itself is debatable, it cannot result into penalty. Based on our discussion also in the quantum appellate proceedings before us covered in this order, it cannot be denied that claim of the assessee is not debatable.
Assessee has furnished all the particulars related to its claim. None of the evidences filed by the assessee was incorrect. It may be an altogether different thing that in spite of those evidences, the issue is decided against the assessee. However, merely because the issue is decided against the assessee confirming the disallowance it cannot result into levy of penalty for furnishing of inaccurate particulars - on the merits, the orders of the lower authorities with respect to the penalty levied on the assessee under section 271 (1) (C) of the act cannot be sustained.
-
2020 (3) TMI 1224
TDS default - Order passed u/s 201(1) and (1A) - Period of limitation - Effective date of amendments by Finance Act (No. 2) of 2009 - The impugned year under examination is Assessment-year 2010-11. Finance Act (No. 2) of 2009 inserted subsections (3) and (4) with effect from 1-4-2010. It provided that an order under section 201(l) for failure to deduct the whole or any part of the tax as required under the Act, if the deductee is a resident payer, shall be passed within two years from the end of the financial year in which statement of tax deducted at source is filed by the deductor. The assessee submits that the said amendment is applicable to the year under appeal.
HELD THAT:- Having heard rival contentions, we are of the view that the order passed by Ld CIT(A) quashing the impugned order as barred by limitation does not call for any interference, as the Ld CIT(A) has followed the decision rendered by Hon’ble jurisdictional Karnataka High Court in M/S BHARAT HOTELS LTD. [2015 (12) TMI 1469 - KARNATAKA HIGH COURT] wherein held period of limitation would be four years from the end of the financial year in question. Accordingly, we uphold the order passed by Ld CIT(A). - Decided against revenue.
-
2020 (3) TMI 1223
Deduction u/s.80IAB(4)(iii) - Deduction under the said provision in respect of income derived from a SEZ project known as Millennium Towers - HELD THAT:- AO considers income from Millennium project as Business income then he should allow all the expenses claimed by the Assessee and therefore the income from Millennium project arrived at by the AO at ₹ 1,17,35,191 was not proper. By reason of this conclusion, there would be only loss from the project Millennium and therefore there is no occasion to allow deduction u/s.80IAB(4)(iii).
There was also a disallowance of expenditure u/s.14A of the Act. The disallowance u/s.14A of the Act was sustained by the CIT(A) at a sum of ₹ 65,65,245/-. The CIT(A) in para 6.10 of his order observed that if the profit of the Assessee increases after the disallowance of expenses u/s.14A of the Act, the Assessee would be eligible for deduction u/s.80IAB(4)(iii)/80IA of the Act on such enhanced profit. There is no bifurcation of the sum of ₹ 65,65,245 between the Millennium Towers project eligible for deduction u/s.80IAB(4)(iii) of the Act and the other project on which the Assessee claimed deduction u/s.80IA of the Act. The CIT(A) however in paragraph-7 of his order observed that the Assessee has negative income after setting off loss of earlier years business loss and hence he did not allow any deduction u/s.80IAB(4)(iii). - Therefore the grounds raised by the revenue in this regard are without any basis and does not arise out of the order of the CIT(A). - Decided against the revenue.
Disallowance of expenses u/s.14A r.w.r. 8D - HELD THAT:- There can be no dispute on the availability of own funds more than the investments that are likely to yield tax free income. This finding of the CIT(A) has not been shown to be erroneous except a submission that own funds and borrowed funds come from a common pool of funds. The law by now is well-settled that if available interest-free funds are much more than investments in dividend yielding shares, then there can be no disallowance under rule 8D(2)(ii) of the Act. In the case of CIT Vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] it was held where assessee's own funds and other non-interest bearing funds were more than investment in tax free securities, no disallowance of part of interest payments under section 14A of the Act can be made. In light of the above factual and legal position, we are of the view that disallowance of interest under rule 8D(2)(ii) cannot be sustained and was rightly deleted by the CIT(A).
Besides the above the interest expenditure claimed by the Assessee as deduction were all in respect of borrowings which by its very nature was not capable of being used by the Assessee for the purpose other than business purpose of the Assessee and not for making investment. We find no grounds to interfere with the order of the CIT(A) and dismiss the relevant grounds of appeal of the revenue.
-
2020 (3) TMI 1222
TDS u/s 194A - interest payments where it exceeded the threshold limit - interest payments coveringjoint deposit holders - TDS liability u/s 201 and interest u/s 201(1)(1A) - HELD THAT:- As seen from the order of Ld. the CIT(A), we observe that the Ld.CIT(A) examined the details and confirmed the amount to the extent of ₹ 68,24,522/- in respect of 162 cases. During the appeal hearing, for a query from the bench, the Ld.AR neither furnished the actual tax liability nor furnished the details. The case was posted for hearing in as many as 20 occasions and the A.R continuously taken the adjournment. The appeal was filed was way back on 03.05.2017 and the Ld.A.R. could not explain the mistake in the order of the Ld.CIT(A). In the instant case, the Ld.AR could not bring any mistake of calculation of tax liability u/s 201 and 201(1A).
We are unable to accept the contention of the Ld.AR that there was mistake in the tax calculation. From the order of the Ld.CIT(A), we observe that the Ld.CIT(A) has correctly calculated the TDS liability in respect of 162 cases and the assessee failed to show that there was mistake in the order of the Ld.CIT(A). Therefore, we find no error in the order of the Ld.CIT(A) and the same is upheld. Appeal of the assessee is dismissed.
-
2020 (3) TMI 1221
Penalty u/s 271(1)(c) - non recording of satisfaction - Defective notice - HELD THAT:- On perusal of facts, we find that the Ld. AO has initiated penalty proceedings u/s 271(1)(c) for both limbs, i.e, for concealment of particulars of income and for furnishing inaccurate particulars of income. The said lapses continued in show cause notice issued u/s 274 r.w.s. 271(1)(c) where the Ld. AO has issued printed notice without striking of inapplicable part of notice.
From the above, it is very clear that the Ld. AO has not arrived at clear satisfaction, as required under law before initiation of penalty proceedings u/s 271(1)(c) of the I.T.Act, 1961,whether said penalty proceedings has been initiated for furnishing inaccurate particulars of income or for concealment of particulars of income. Therefore, we are of the considered view that the whole penalty proceedings consequent to vague or invalid notice is void ab initio and liable to be quashed and hence, we quashed penalty order passed by the Ld. AO u/s 271(1)(c) - Decided in favour of assessee.
-
2020 (3) TMI 1220
Addition of interest expenses - addition made on the basis that the assessee has filed only a written explanation but has not provided the evidences proving nexus between the expenditure incurred and the interest free fund available - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. The assessee has demonstrated that the assessee had made investment in fixed assets namely Oil Mill Machinery of ₹ 34,35,045/- and Oil Mill Building of ₹ 20,95,190/- totaling to ₹ 55,30,235/- during the year. The Assessee has submitted during the Assessment Proceedings that funds which were invested in fixed assets were out of funds available in the capital account. It is also stated that the loan which was taken by the assessee was utilized for the purpose of business. In support of this contention the assessee has drawn my contention to the inventory, sundry debtors, cash and bank, loans and advances. Hence, it is stated that the entire amount of loan of ₹ 21,21,57,670/- was utilized for the purpose of business of the assessee.
This fact is not rebutted by the revenue, therefore, assessing officer is hereby directed to delete the addition. - Decided in favour of assessee.
-
2020 (3) TMI 1237
Deduction u/s.80IB(10) - assessee was not sole owner of the land on which the housing project was constructed - AO observed that, assessee is not entitled to deduction under section 80IB(10) in view of the common commencement certificate/raja-chhiththi because it includes 55 residential units of having more than 1500 sq.ft. built up area - HELD THAT:- It is discernible that as there is no provision of obtaining commencement certificate from the local authority for development and construction of the residential unit having more than 1500 sq.ft area. In the facts of the present case, when the assessee claimed the deduction with respect to the residential units, which are having built up area less than 1500 sq.ft, the condition laid down under section 80IB(10)(c) is fulfilled. Therefore, whether such development permission includes the area for the residential units, which are more than 1500 sq.ft. would not be relevant for deciding eligibility to deducting under section 80IB(10) of the Act.
In view of concurrent findings of fact arrived at by the CIT(A) and the Tribunal, there is no legal infirmity in the impugned orders of allowing deduction under section 80IB(10) of the Act. - Decided against revenue
-
2020 (3) TMI 1236
Penalty u/s 271D - assessee accepted loan or deposit in cash - Default u/s 269SS - diary seized and inventorized as per Annexure A-1 during the course of search, which contains the sharafit transactions of the assessee with Shri Jivraj V.Desai & Group - ITAT deleted the penalty stating there is no material possessed by the Revenue showing acceptance of any loan or deposits by the assessee from Shri Jivraj V. Desai. Revenue has mis-constructed or misinterpreted the seized material as well as statement of Shri Arvindbhai A. Shah, alleged author of the diary - HELD THAT:- In view of the finding of fact given by the Tribunal that the Appellant-Revenue is not able to establish that assessee accepted any loan or deposit from Shri Jivraj V. Desai. In absence of any material showing acceptance of any loan or deposits by the respondent-assessee, we are of the opinion that the Tribunal has rightly deleted the penalty levied under Section 271D of the Act.
Revenue's this appeal fails and is hereby dismissed as no substantial question of law arises.
-
Customs
-
2020 (3) TMI 1219
Suspension of CHA License - mis-description of the goods or the erroneous classification of the goods - By the judgment and order impugned dated December 15, 2017, the writ petition was allowed since the very basis of the order of suspension had been destroyed upon the order of adjudication of September 12, 2017 being set aside qua the first respondent by the appellate order of October 26, 2017 - HELD THAT:- As of date, the prejudice caused by the original order of adjudication of September 12, 2017 has been wiped clean as against the agent. In such scenario, no reasonable authority could have suspended the licence of the agent or instituted proceedings therefor without the order dated October 26, 2017 being challenged or without first having such order annulled. At any rate, the entire issue has now been resolved and at the level of the tribunal, it has been decided that the relevant goods in this case answered the description that was applied by the agent in this case and not as suggested by the department. In such circumstances, nothing remains of the matter except the compensation that can be claimed by the agent for its licence effectively remaining suspended for more than two years while the appeal was pending.
The judgment and order impugned dated December 15, 2017 do not call for any interference. The agent will be entitled to function as such, subject to obtaining renewal or extension of its tenure in accordance with law - Application disposed off.
-
2020 (3) TMI 1218
Seeking quashing FIR - foreign made liquor and beer - Offence punishable under Sections 175, 176 and 186 of the Indian Penal Code, 1860 - it is alleged that the present applicants though were demanded to furnish the document, record, pass permit regarding foreign made liquor and beer, they did not give the same and also obstructed the investigation - HELD THAT:- since the bonded warehouse was situated within the territorial jurisdiction of the Customs Department and the Central Government, without obtaining prior permission of the Customs Department or the Central Government, the police has no authority to seal or to carry out any search & seizure procedure. If any offence is found to be committed, at the most, the police can request for the same to the Department or to the Central Government. The police has no authority to carry out any search operation which is beyond their jurisdiction.
The police was not authorized to file such complaint or proceedings against the present applicants who are high ranked officials of the Customs Department. In view of clear provisions of Section 155 of the Act also, no proceedings could be allowed against the applicants. On that count also, the complaint deserves to be quashed.
There appears no iota of evidence or material to prosecute the present applicant in connection with the impugned F. I. R. Hence, this application is allowed.
-
2020 (3) TMI 1217
Smuggling - Gold Bars - acquittal of accused - offence under Section 135 of the Customs Act, 1962 and Section 85 of the Gold Control Act, 1968 - HELD THAT:- The trial court has held that the accused no.12 is entitled to acquittal as he is arraigned only because of the confessional statement of the co-accused. The trial court in the impugned judgment has placed reliance on the aforesaid judgment and in the considered opinion of this Court, such reliance cannot be said to be misplaced, which is rendered in the case of the co-accused. The present accused no.14 has only been arraigned because of the statement of the co-accused no.12, who has been acquitted by the trial court - The confession recorded of the accused no.1 vide Exh.100 reveals that the same does not meet with the parameters of Section 26 of the Evidence Act, 1872. It is also the come on record that the identity of the accused no.14 is not established and he has only been arraigned by the name of Kasam on the statement of the co-accused.
Since the accused no.14 has only been arraigned as an accused on the confession of the co-accused, as per the judgment of the Apex Court in the case of MOHAMMED FASRIN VERSUS STATE REP. BY THE INTELLIGENCE OFFICER [2019 (9) TMI 830 - SUPREME COURT], the discharge of the accused no.14 cannot be disturbed.
The present revision application fails.
-
Insolvency & Bankruptcy
-
2020 (3) TMI 1216
Condonation of delay in filing appeal - the appeal has been filed with a delay of 15 days beyond the period as enunciated under section 61(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is to be borne in mind that section 5(20) of the "I and B" Code defined "operational creditor" means a person to whom the "operational debt" is owed and includes any person to whom such debt has been legally assigned or transferred. Section 5(21) of the "I and B" Code speaks of "operational debt", meaning a claim in respect of the provision or goods or service including employment or debt in respect of payment or dues assigning in law for the time being in force and payable to the Central Government, in State Government or in Local Authority. Sections 5, 6 of the "I and B" Code defines that dispute which includes a suit or arbitration proceedings relating to (a) the existence of amount of debt (b) the quality of goods or services or (c) the breach of a representation or warranty.
In the present case, the respondent through e-mail dated March 23, 2018 had intimated the appellant/"operational creditor" that the payments were not received and that the same could not be received from SRS in as much as the customer "was not reachable and in bad shape" and that they had not received any payment from the customer till date. When the respondent had disputed the debt and the same being not payable by it, because of the reason that the purchase order and commercial proposal was executed between the "operational creditor" being a reseller of Microsoft programme and SRS group of companies and further as a collecting agent, the respondent in the considered opinion of this Tribunal cannot be held liable for the outstanding amount.
In the present case, the claim of the appellant as an "operational creditor" does not fit within the purview of the definition of the term of "operational debt" under section 5(21) of the "I and B" Code on account of the fact that it was neither against any goods purchased by the respondent nor against any services availed by it. In the absence of any material to fasten the liability on the respondent by virtue of the terms of the purchase order, which was not addressed to the respondent the appellant/applicant cannot be characterised as an "operational creditor" as per definition of section 5(20) of the "I and B" Code.
Taking into account the vital fact that the respondent in its reply notice dated May 17, 2018 had disputed the claim of the appellant and its liability to pay, etc., by raising serious bona fide factual pre-existing disputes, which requires an in depth examination/investigation and the said disputes which cannot be gone into any summary proceedings under the "I and B" Code, it is held by this Tribunal that the application filed by the appellant as an applicant before the learned Adjudicating Authority is not maintainable in the eye of law - appeal dismissed.
-
2020 (3) TMI 1215
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- It is evident that the appellant intended to settle the matter with the respondent. Finally, on September 19, 2019 when we noticed that the matter has not been settled, it is the appellant who was ready to deposit the total amount of ₹ 2.13 crores as claimed by the respondent-"M/s. Val-Met Engineering P. Ltd.", we allowed "to give such offer to 'M/s. Val-Met Engineering P. Ltd.' (financial creditor) and may deposit with them". However, we directed the respondent to keep the same in a separate "interest bearing account". It was also made clear that if the amount is deposited within 10 days, then this Appellate Tribunal will decide whether to allow the "M/s. Val-Met Engineering P. Ltd." to withdraw the application under section 7 of the "I and B Code" - the respondent having agreed to withdraw the application filed under section 7, we are not inclined to accept such plea taken by the appellant.
The application under section 7 filed by "M/s. Val-Met Engineering P. Ltd." stands withdrawn.
-
2020 (3) TMI 1214
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt an dispute or not - HELD THAT:- It is noted that since the advance payment was effected by the corporate debtor only on February 2, 2018 the corporate debtor cannot allege the delay from the part of operational creditor in completion of the work. Apparently delay occurred from the part of the corporate debtor in releasing the advance which resulted in delayed commencement of the work assigned to the operational creditor. The rest of the averments with respect to the matches are not relevant which have been pointed out reasons for dispute are baseless and bogus, since the existence of the operational debt has been proved by applicant, it is seen from the correspondence regimes of office e-mail communication that they have not disputed existences of operational debt which has fallen due after completion of the work by the operational creditor.
The application is admitted as has been filed by the operational creditor and consequently corporate insolvency resolution process is initiated - the application stands admitted in terms of section 9(5) of the IBC, 2016 and the moratorium shall come in to effect as of this date.
-
2020 (3) TMI 1213
Maintainability of application - initiation of CIRP - section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- There is no dispute that the address of the notice was proper address of the registered office of the corporate debtor. The operational creditor did what was expected from it under the law and corporate debtor merely by putting up hands and saying that "I did not receive", would not be sufficient. The Adjudicating Authority also dealt with this aspect and found that notice was duly served. We also hold that the notice was duly served as required by the law.
What corporate debtor could do is to show that there is a pre-existing dispute or that the dues are not payable in law or in fact. It is not the case of the appellant-corporate debtor that the corporate debtor was or is ready to pay the dues claimed in default and if section 8 notice had been received, it would have paid the dues and avoided the invoking of the IBC. There is no material to show any preexisting dispute. What the corporate debtor is trying to say is that there were certain transactions between the operational creditor and corporate debtor along with Univercell and MPS and thus the Adjudicating Authority should look into all those transactions and on such basis, it is tried to be said that the dues are not payable - The attempt of the corporate debtor to push through mutual tripartite agreement (page 80) did not succeed as operational creditor did not join the same. If anything, the document would rather show acceptance of liability by the corporate debtor. Even if the parties and/or their sister concerns are indulging in various transactions and deals, when there is an independent transaction of sale giving rise to dues and there is default in payment of the same, that indeendent transaction cannot be doubted or put into shadows due to other dealings between the parties and/or their sister concerns.
Section 9 application was properly admitted - Appeal dismissed.
-
2020 (3) TMI 1212
Maintainability of application - initiation of CIRP - Financial Debt or not - whether there was a default on behalf of corporate debtor in payment of the amount claimed? - time limitation - HELD THAT:- What can be seen is that the offer made by the corporate debtor was conditional in the sense that it stated that it was willing to refund money provided the procedure prescribed by RBI is followed. Now, before us learned counsel for both the parties are trying to make submissions against each other. While learned counsel for the financial creditor states that they made a demand and learned counsel for the corporate debtor is submitting that the demand is improper and the Rules applicable under the FEMA and the RBI Act are required to be followed.
Once the Adjudicating Authority came to the conclusion that default has not been proved, the only option it had was to reject the application and the conditional offer could not have been gone into. We find that the underlined portion of the impugned order (referred to supra) where it gives directions to fulfil requirements and liberty to revive cannot be maintained.
This appeal disposed off with liberty to the respondent-financial creditor to take necessary steps (which were found wanting in paragraph 11 of the impugned order) and it may file fresh application under section 7 of the IBC, if so advised - the question of limitation is kept open for consideration when such application is moved.
-
2020 (3) TMI 1211
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - debt due and payable or not - HELD THAT:- There is no existence of dispute prior to the issuance of demand notice dated December 3, 2018 with regard to dues payable to the first respondent. The appellant/corporate debtor had availed the services of respondent No. 1-operational creditor and in pursuance of the same, the appellant issued cheques to the first respondent and in one of the letters of the appellant (annexed at page 90 of the paper book), it is clearly mentioned that they have issued cheques for ₹ 3 lakhs to be deposited on March 31, 2018. The dispute must be bona fide dispute as held by the hon'ble apex court and this Tribunal in various judgments. The payment of huge cash, which is impermissible, that too, to a third party and trying to adjust the payments due to the operational creditor, i. e., the first respondent herein cannot be recognized.
The said dispute is not a bona fide dispute and therefore the Adjudicating Authority has rightly admitted the application. Apart from above, even if ₹ 25 lakhs is held to be paid was to be accepted, admittedly corporate debtor held back ₹ 1 lakh. If the default is ₹ 1 lakh, the insolvency can be triggered against the corporate debtor as per section 4 of the IBC. The appellant in grounds of appeal has stated that the balance of ₹ 1 lakh was withheld by the appellant. Thus the default is admitted.
There are no reason to interfere with the order passed by the learned Adjudicating Authority - appeal dismissed.
-
2020 (3) TMI 1208
CIRP Proceedings - scope of preferential transactions - It was submitted that the "corporate debtor" paid a sum of ₹ 2,50,00,000 towards part payment of principal amount to the appellant on October 29, 2016 which is more than one year before the commencement date of initiation of the "corporate insolvency resolution process", therefore, it cannot be termed to be "preferential transactions". - HELD THAT:- Section 43 of the "I and B Code" deals with "preferential transactions", it is clear that if there is a transfer of property or an interest thereof of the "corporate debtor" for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the "corporate debtor" is transferred, then it comes within the meaning of "preferential transactions". The "preferential transactions" has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with section 53 - As per sub-section (3) of section 43, transfer made in the ordinary course of the business or financial affairs of the "corporate debtor" or the "transferee" be not included within the meaning of "preferential transactions".
Whether in such case, the transactions, in question, can be claimed to be a transfer made in the ordinary course of business? - HELD THAT:- It is not the case of the appellants that apart from the appellants, all other creditors were paid their dues during the ordinary course of business. It is only in the case of the appellants that the amounts were released and repaid just before a period of one year from the date of the insolvency commencement date, i. e., July 18, 2017 - This apart, as it is not in dispute that the promoters of the "corporate debtor" hold 99.4 per cent. shareholding in "Excello Fin Lea Ltd." and 50 per cent. shareholding in "Tirumala Balaji Alloys P. Ltd." and rest of the 50 per cent. shareholding of the "Tirumala Balaji Alloys P. Ltd." is with the relatives of the promoters of the "corporate debtor", i. e., "Rungta Family", we are of the view that all the transactions made during the period of two years preceding date of the insolvency commencement date, i. e., July 18, 2017 come within the meaning of "preferential transactions".
The impugned order dated August 6, 2018 passed by the Adjudicating Authority, Mumbai Bench, Mumbai is upheld - appeal dismissed.
-
2020 (3) TMI 1210
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is observed that the applicant herein was duly present in the meeting dated May 29, 2015 wherein a resolution to consider his appointment on a remuneration of ₹ 30,99,998 per annum for a period of 3 years with effect from May 7, 2015 was confirmed and the same was not denied. Further the applicant also continued to work as a whole-time director of the corporate debtor on the same salary/remuneration until he himself resigned from the post of the whole-time director on May 10, 2016 and continued as a director of the company thereafter, only claiming the sitting fees of ₹ 10,000 for each meeting. No documentary evidence has been placed on record to indicate that the petitioner had ever raised any objection to the payment of salaries at the rate of ₹ 30,99,998 per annum.
Further, the offer letter dated March 16, 2015 clearly stipulates : "To formalise your acceptance of our offer, please sign, date and return a scanned copy of the letter as soon as possible". Thus, without acceptance of the offer, no contract can be deemed between the petitioner and the corporate debtor. The petitioner has not placed any signed copy of the offer letter signifying his acceptance of the same which was submitted back to the employer/corporate debtor.
This Adjudicating Authority is not inclined to admit the instant application and the same is hereby rejected.
-
2020 (3) TMI 1209
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - time limitation - existence of debt and dispute or not - HELD THAT:- In view of section 238A of the IBC, 2016 mandating the application of the Limitation Act to the proceedings before this Tribunal and there being an acknowledgment of debt on the part of the corporate debtor in excess of ₹ 1,00,000 in its financial statement for the year ended March 31, 2018 thereby holding out to all the stakeholders as to the "true and fair" financial status of the corporate debtor as on the said date, the claim is not barred by limitation.
Also, despite proceedings pending before the Debts Recovery Tribunal, this Tribunal designated as an Adjudicating Authority in relation to corporate persons under the I and B Code, 2016 can entertain an application filed by a financial creditor in case of a "financial debt" and "default in existence" and in the circumstances we are unable to consider the said ground having any force.
The application as filed by the applicant-financial creditor is required to be admitted under section 7(5) of the I and B Code, 2016 - Petition admitted - moratorium declared.
-
Central Excise
-
2020 (3) TMI 1207
Extended period of limitation - demand of Central Excise Duty including Cess and Secondary & Higher Education Cess and also imposing interest and penalty - HELD THAT:- This Court is of the view that since it has been clearly mentioned in para-12.2 of the circular dated 16.02.2018 issued by the Department of Revenue that the extended period would not be available to raise the demand, which has also been perused by this Court, this Court is of the opinion that the availability of alternative remedy may not debar the petitioner from approaching this Court - Accordingly, till the next returnable date the impugned order dated 26.03.2018 may not be given effect to.
List the matter after 3 (three) weeks.
-
2020 (3) TMI 1206
CENVAT Credit - input services - outward transportation of goods (GTA Services) - place of removal - period from 2009-10 to 2013-14 - HELD THAT:- Tribunal relying upon the Board Circular No.1065/2018CX dated 8th June 2018 as well as the decision of the Supreme Court in the case of M/S ULTRA TECH CEMENT LTD. VERSUS CCE & ST, ROHTAK [2014 (10) TMI 679 - CESTAT NEW DELHI] and in the case of COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT], has held that the Appellants are eligible for the cenvat credit of service tax paid on outward freight.
No question of law much less of any substantial question of law arises out of the impugned order passed by the Tribunal - Appeal dismissed.
|
