TMI Tax Updates - e-Newsletter
May 19, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
Income Tax
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Admissibility of application for Advance ruling u/s 245R - Pending case - The pendency has to be considered on the date of filing of the application and there was no pendency on that date. Merely because the applicant had raised the issue of excess dividend distribution tax in his subsequent letter dated November 30, 2018, it does not create any pendency of the date of application filed earlier. Thus, the questions raised in the present application is not found pending before the Income-tax authority on the date of filing of the application. - AAR
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Maintainability of writ petition - bypassing the option to file statutory appeal as provided u/s 264A - We decline to entertain this writ application as no case is made out to interfere with the impugned order, with a liberty to the writ applicant to file an appeal before the competent authority. If the appeal is filed, the appellate authority shall not raise the technical issue of limitation and decide the same on merits, in accordance with law. - HC
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Gift received from relatives - unexplained cash credit u/s 69 - Tribunal found that the assessee had not made out grounds to permit to bring in such additional evidence on record. To bring additional evidence on record at the stage before the Tribunal, the concerned party would have to demonstrate the reasons why the same could not be done earlier. The Tribunal found no justification in this respect. Entire issue is thus based on facts - HC
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Addition u/s 68 - share capital and share premium - any addition which deserved to be made should have been made in the hands of the share applicants who have shown their source of source as sale of shares of these companies or alleged accommodation entries. Whether the assessee has discharged the burden cast upon it by the provisions of section 68 of the Act or not is purely a question of fact and has to be decided on the facts of each case and, therefore, no judicial decision has been considered on the peculiar facts of the case in hand. - Additions deleted - AT
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Addition made towards profit in money market operations - in this case the physical delivery has not taken place and therefore the transactions of sale and purchase of securities are speculative transactions and so is the profit resulting from those transactions. The speculative transactions are defined under section 43(5) of the Act and are eligible to be set off against the loss of share transactions. Accordingly, we hold that the speculative loss from share market transactions is eligible to be set off against the profit from trading in money market securities. - AT
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Enhancement u/s 92CA - “MAP” margin - the Revenue fails to dispute that even the Transfer Pricing Officer has not drawn any distinction qua the “ALP” in all the substantive grounds raised herein. We thus hold that the “MAP” margin of 15.49%, 15.34% and 15.76% deserves to be applied qua the remaining portion of non-USA based international transactions as well. - AT
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Bogus purchases u/s 69C - Search action u/s 132 at the premises of assessee and certain incriminating material indicating the bogus purchases shown by the assessee was recovered - The seized material is only for the purpose of calculating rebate and there is no such evidence regarding fake purchases for the purpose of Income Tax. - CIT(A) rightly deleted the additions - AT
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Computation of capital gain - adoption of value of the property as per registered sale deed for the purpose of Section 50C - Where the stamp duty authorities have accepted the original value of the property as per the sale deed, there is no basis left with the AO to continue to apply the enhanced value - AT
Corporate Law
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Allegation of oppression and mismanagement - The decision of the majority would prevail in the interest of the Company and its shareholders per se. Therefore, he cannot question such acquisition at this stage and he has questioned the conveyance deed by filing a suit in City Civil Court of Bombay. Further, the only act of oppression of removal of Petitioner as Director is untenable as the post of director remained vacant due to the absence of the Petitioner in several meetings. - Tri
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Recall of order - doctrine of merger - Appeal against the order passed by the NCLT was dismissed by the higher appellate forum - the order of the original court ceases to exist and is merged in the order of the Appellate Court - this Adjudicating Authority is not vested with the power to review/recall of its own order either under section 60(5) of the IB Code or Rule 11 of the NCLT Rules 2016. - Tri
Indian Laws
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Dishonor of Cheque - legally enforceable debt or not - In view of the provision of Section 139 of the Act, it is not available to the petitioner to argue that in the absence of specific mention in the complaint that the cheque was received by the respondent in the discharge of any debt or other liability, the complaint is not maintainable - the defect of not supplying the list of prosecution witnesses before issuance of process is curable, as Section 465 Cr.P.C. would come to the rescue of the respondent. The Court can very well permit the respondent to submit the list of prosecution witnesses before proceeding further in the complaint. - HC
IBC
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Approval of resolution plan - during the CIRP of ACIL, no valuer was appointed to determine the fair value of the shares held by the the Corporate Debtor. Therefore, the assets of the Corporate Debtor (Respondent) cannot be included in the resolution plan - Thus, the SEZ Business of the Corporate Debtor is not included in the resolution plan submitted by the Appellant. - AT
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Initiation of CIRP - claim of interest on delayed payment - It cannot be concluded that based on the copy of invoice that applicant is entitled for the interest at the rate of 24% per annum since it is the subject matter of the City Civil Court to adduce evidence and detailed trial is required to conclude whether any interest is due and payable by the Corporate Debtor to the Operational Creditor, under invoice. - Tri
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Initiation of CIRP - The nature of goods being perishable commodity, slightest delay shall cause huge loss. - The 'debt' as claimed by Operational Creditor is towards carton boxes and other packing material supplied by Operational Creditor along with purchase orders of the year 2016-2017. The packing materials are also perishable. Further, the onus of, who has to take back the unused materials, whether the same is adjusted towards payment are not clear. - The applicant has failed to quantify the alleged 'debt' and the 'date of default'. Neither "debt" nor "default" is proved - Tri
Service Tax
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Levy of Service Tax - When the order suffers from a patent illegality, it is certainly open to the aggrieved party to invoke the writ jurisdiction of this Court - petitioner is a public sector undertaking. It is funded entirely by the Government. Even for the construction activities in question, the allocation was made only by the Government of Tamil Nadu. Such construction activities have been explicatively exempted by the Mega Exemption Notification issued on 20.06.2012. Of course, for a short duration, exemption was not available - HC
VAT
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Violation of principles of natural justice - validity of revision of assessment orders - change of opinion - The impugned orders would indicate that the revision is an outcome of the verification of the assessment records. It is also a fact that the assessing officer proceeded based on the web report which indicates mismatch. Therefore, the impugned proceedings cannot be characterized as being grounded only on change of opinion. - HC
Articles
Notifications
GST - States-
38/1/2017-Fin(R&C)(193) - dated
12-5-2021
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Goa SGST
Seeks to amend Notification No. 38/1/2017 Fin(R&C) (186), dated the 15th December, 2020
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G.O. Ms. No. 9 - dated
10-5-2021
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Puducherry SGST
Amendment in Notification G.O. Ms. No. 6, dated the 14th January, 2019
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G.O. Ms. No. 8 - dated
10-5-2021
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Puducherry SGST
Provide relief by lowering of interest rate for the month of March and April, 2021
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G.O. Ms. No. 7 - dated
10-5-2021
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Puducherry SGST
Puducherry Goods and Services Tax (Second Amendment) Rules, 2021.
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G.O. Ms. No. 10 - dated
10-5-2021
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Puducherry SGST
Amendment in Notification G.O. Ms. No. 34, dated the 5th August, 2019
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F.1-11 (91)-Tax/GST/2020(Part) - dated
12-5-2021
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Tripura SGST
Tripura State Goods and Services Tax (Second Amendment) Rules, 2021
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F.1-11(91)-TAX/GST/2021 - dated
28-4-2021
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Tripura SGST
Notification to waive penalty payable for non-compliance of provisions of Notification No. F.1-11(91)-TAX/GST/2020(Part-II), dated the 20th May 2020
Income Tax-
67/2021 - dated
17-5-2021
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IT
Central Government specifies the pension fund, namely, the Indo-Infra Inc.
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (5) TMI 557
Vires of Rule 96(10) of the CGST Rules as amended by Notification No.54/2018-Central Tax dated 9.10.2018 - retrospective operation to N/N. 4/2018-Central Tax dated 9.10.2018 - HELD THAT:- The Coordinate Bench in COSMO FILMS LIMITED VERSUS UNION OF INDIA 3 ORS. [ 2020 (10) TMI 1099 - GUJARAT HIGH COURT ] took the view that the notification No. 54 of 2018 should be made applicable with effect from 23.10.2017 and not prior thereto i.e. from the inception of Rule 97(10) of the CGST Act. It is the Notification No. 54 of 2018 dated 09.10.2018. According to Mr. Sheth, the Notification itself makes it clear that the same shall come into force from the date of its publication in the official gazette. According to Mr. Sheth, what has been observed in the case mentioned, it needs to be relooked, as the Department has started issuing notices indiscriminately on the premise that the Notification would apply with effect from 23.10.2017. Let Notice be issued to the respondents returnable on 22.03.2020 . Till the next date of hearing, the proceedings pursuant to the notice dated 04.02.2021 Annexure B shall remain stayed.
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Income Tax
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2021 (5) TMI 566
Admissibility of application for Advance ruling under section 245R - only objection of the Department is that the proceeding was pending on the date of filing of present application, therefore, the application was not admissible under clause (i) of the proviso to section 245R(2) - HELD THAT:- The question No. 21 was in respect of dividend income earned by the applicant and had no relevance to the dividend declared by the applicant. Further, question No. 23 regarding difference in tax credit in form 26AS and return, large outward remittance to non-resident, the gross total income being less than value of foreign remittances and high ratio of refund to TDS are also not found connected with the dividend declared by the applicant and dividend distribution tax made thereon. As already mentioned earlier the applicant had not only deducted and paid dividend distribution tax under section 115-O of the Act on the dividend declared at the prescribed rate but no refund of dividend distribution tax was claimed in the return. Therefore, there could have been no basis to raise this issue in the questionnaire. From the copy of questionnaire sent with notices under section 142(1) of the Act brought on record, we do not find the issue of dividend distribution tax appearing in any of the questions. The claim for the refund of excess dividend distribution tax was made vide applicant's letter dated November 30, 2018 which was after the filing of the present application. The pendency has to be considered on the date of filing of the application and there was no pendency on that date. Merely because the applicant had raised the issue of excess dividend distribution tax in his subsequent letter dated November 30, 2018, it does not create any pendency of the date of application filed earlier. Thus, the questions raised in the present application is not found pending before the Income-tax authority on the date of filing of the application. As held in the case of Hyosung Corporation v. AAR [ 2016 (2) TMI 575 - DELHI HIGH COURT ] that a notice under section 143(2) merely asking for certain information from the assessee issued prior to filing of application before Authority for Advance Rulings will not constitute bar in terms of clause (i) of the proviso to section 245R(2), on Authority for Advance Rulings entertaining and allowing the application. Consequently, the mere fact that such a notice was issued prior to the filing of the application by the petitioner before the Authority for Advance Rulings will not constitute a bar, in terms of clause (i) of the proviso to section 245R(2) of the Act, on the Authority for Advance Rulings entertaining and allowing the applications . The same principle applies in respect of other notices issued under section 142(1) of the Act. As already discussed earlier the specific questions of dividend distribution tax being a tax on dividend or otherwise and lower rate of 10 per cent. in respect of dividend distribution tax payable to non-resident shareholder under article 10 of the India-Japan DTAA did not form part of any of the questionnaires or notices. Therefore, such notices issued prior to filing of the application cannot be a bar in terms of clause (i) of the proviso to section 245R(2) of the Act, for admitting the application. As found that the issue involved in the questions raised in the application filed before us was not pending before the Income-tax authority and the bar in terms of clause (i) of the proviso to section 245R(2) is not found attracted. Therefore, the application is admitted under section 245R(2) of the Act.
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2021 (5) TMI 565
Admissibility of application for Advance ruling under section 245R - Revenue has submitted that the applications may not be admitted for the reason that the questions raised in the applications were already pending before the Income-tax authority and that the transaction was also prima facie designed for avoidance of tax - whether proceeding was pending on the date of filing of present application? - HELD THAT:- As mentioned the applicant had claimed credit for TDS on offshore services in its return but the corresponding receipt was not disclosed in the Income-tax return. When the case was selected for verification of corresponding receipts vis-a-vis TDS certificates, it is evident that the receipt for offshore services which were not disclosed in the return was subject matter of verification. The applicant had nowhere mentioned in the return that the receipt for offshore services was not offered for tax or claimed as exempt income. In the absence of any such declaration by the applicant a specific question in respect of offshore service receipts could never have been raised. Nevertheless, the basis for CASS selection and the specific questions raised in the questionnaire dated October 23, 2017 vividly show that the issue as involved in the present applications were already pending before the Income-tax authority. Thus is found that the issue involved in the questions raised in the two applications filed before us was already pending before the Income-tax authority and the bar in terms of clause (i) of the proviso to section 245R(2) is found attracted in these cases. Therefore, both the applications are not admitted and consequently rejected.
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2021 (5) TMI 556
Maintainability of writ petition - bypassing the option to file statutory appeal as provided u/s 246A - Penalty u/s 271 (1)(c) on addition u/s 68 - Writ applicant instead of filing a statutory appeal as provided under Section 264A of the Act, has directly approached this Court by invoking the writ jurisdiction under Article 226 of the Constitution of India - HELD THAT:- The writ applicant has also challenged the final assessment order dated 05.12.2018 by way of the Special Civil Application wherein, after considering the law laid down in the case of Commissioner of Income Tax Ors. Vs. Chhabil Dass Agrawal [ 2013 (8) TMI 458 - SUPREME COURT] and facts and circumstances of the case, this Court has taken a view that the writ application ought not to be entertained when there is an efficacious statutory remedy available to the writ applicant and accordingly, the writ applicant is relegated to avail the remedy of appeal before the appellate authority under the provisions of the Income Tax Act. Here in this case also, the penalty proceedings on the basis of the assessment order being made final and it is being challenged directly before this Court without availing the alternative efficacious remedy as provided under the Income Tax Act, 1961. We decline to entertain this writ application as no case is made out to interfere with the impugned order, with a liberty to the writ applicant to file an appeal before the competent authority. If the appeal is filed, the appellate authority shall not raise the technical issue of limitation and decide the same on merits, in accordance with law. It is made clear that, we have not expressed any opinion on merits on the case including the issue of principles of natural justice as raised by the writ applicant. The writ application is disposed of in the aforesaid terms. Interim relief, if any, stands vacated.
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2021 (5) TMI 555
Deduction u/s 80P(2)(a)(i) denied - appellant claims to be a society established and registered under the provisions of the Kerala Co-operative Societies Act, 1969 - The case of the appellant is that the income of a co-operative society does the business of banking by providing credit facilities only to its members, and the income derived therefrom is exempt from the payment of Income-tax under section 80P(2)(a)(i) - HELD THAT:- The counsel appearing for the appellant as well as the respondent would state that the issues considered by the orders impugned in the appeal are no more res integra and are covered in favour of the assessee by the judgment of the apex court in Mavilayi Service Co-operative Bank Ltd. v. CIT [ 2021 (1) TMI 488 - SUPREME COURT] . The statement is placed on record and accepted. - Decided against revenue.
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2021 (5) TMI 554
Deduction u/s 80IB - as per revenue project was approved with a sanctioned built-up area and the assessee has eventually constructed the area far in excess of what was approved? - Whether assessee is eligible to claim deduction under section 80IB that the assessee has violated the plan approved and that the assessee did not get any further approval for Floor Area Ratio (FAR) by the authorities? - tribunal allowed deduction - whether the Tribunal is erred in allowing deduction under Section 80IB(10) of the Act when the project was approved with a sanctioned built up area and the assessee has eventually constructed the area far in excess of what was approved and prayed for allowing of this appeal? - HELD THAT:- On close scrutiny of the judgment rendered by this court in Brigade Enterprises Ltd. [ 2020 (10) TMI 1168 - KARNATAKA HIGH COURT] , wherein held has held that accounting Standard 7 was not applicable to the real estate developers. Therefore, he submitted that percentage of completion method cannot be thrashed upon assessee and assessee was right in following the project completion method as per accounting standard 9 and the facts involved in the said case, we are of the considered opinion that the substantial question of law involved in this appeal is squarely answered in the said case. Following the dictum in Brigade Enterprises, the substantial questions of law raised in this appeal are answered against the Revenue and in favour of the assessee.
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2021 (5) TMI 552
Gift received from relatives - unexplained cash credit u/s 69- admission of additional facts - HELD THAT:- No substantial question of law arisen. The two revenue authorities and the Tribunal have concurrently come to the conclusion that the Assessee failed to substantiate the claim of having received by way of a gift from relatives. Neither before the Assessing Officer nor before the CIT(Appeals) the assessee produced any evidence whatsoever in support of his claim. Before the Tribunal an attempt was made to bring on record the so called gift deeds by way of an additional evidence. Tribunal found that the assessee had not made out grounds to permit to bring in such additional evidence on record. To bring additional evidence on record at the stage before the Tribunal, the concerned party would have to demonstrate the reasons why the same could not be done earlier. The Tribunal found no justification in this respect. Entire issue is thus based on facts. Decided against assessee.
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2021 (5) TMI 549
Nature of expenditure - non compete fee paid - Revenue or capital expenditure - HELD THAT:- Assessee entering into strategic alliance was able to control the marketing activities in a manner clearly beneficial to the assessee and hence, according to us the expenses incurred are in the nature of Revenue. We allow the claim of the assessee and this appeal of the assessee is allowed.
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2021 (5) TMI 547
Assessment u/s 153C - Revenue pleaded to reverse the CIT(A)'s action quashing Section 153C proceedings on the ground that the Assessing Officer; common for both the searched as well as the instant assessee, failed to record the twin satisfaction(s) as per the CBDT Circular No. 24/2015, dt. 31-12-2015 - HELD THAT:- We find that the hon'ble apex court's latest decision in M/s. Super Malls Pvt. Ltd. [ 2020 (3) TMI 361 - SUPREME COURT] has settled the law on the issue of the Assessing Officer being common in the searched as well as third party that the twin round(s) of satisfaction is nowhere mandatory after considering CBDT's circular. As the instant issue of twin satisfactions in case of the common Assessing Officer assessing both the searched as well as the third party; stands settled against the assessee and in favour of the department. The CIT(A)'s order quashing the impugned assessment on identical lines stands reversed therefore. We further keep in mind the fact that the CIT(A) has not dealt with the assessee's grievance(s) on merits and direct him to decide the same afresh within three effective opportunities of hearing. The assessee or its authorised representative shall appear before the CIT(A) on or before 30-09-2021 with all the relevant details and evidences to be followed by three effective opportunities of hearing; at its own risk and responsibility. Revenue's appeals allowed for statistical purposes.
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2021 (5) TMI 546
Depreciation on fixed assets i.e., golf course - HELD THAT:- As the issue of golf course being ready to use and operation thereof having been commenced in AY.2007-08 [ 2012 (6) TMI 904 - ITAT HYDERABAD] stands decided in Revenue s favour in the tribunal order and the tax appeal against the same is pending before the hon'ble jurisdictional high court. That being the case, we adopt judicial consistency and confirm the impugned depreciation disallowance. More so, in view of the fact that learned co-ordinate bench has already applied its mind and no evidence to the contrary has come from the taxpayer s side. Coming to the assessee s case that it had derived receipts in FY.2007-08, Mr.Raghuram made a valiant attempt to refer to the paper book on record. It, however, transpired during the course of hearing that the said receipts pertain to the period from 01-04-2008 onwards relevant to AY.2009-10 only than covering the period from 01-04-2007 to 31-02-2008. We thus affirm both the learned lower authorities action disallowing assessee s depreciation claim in the given facts and circumstances. - Decided against assessee.
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2021 (5) TMI 540
Addition u/s 68 - assessee company received share capital and share premium as unexplained - assessee unable to prove the identity, genuineness and credit worthiness of the subscribers - HELD THAT:- We find that the entire share capital and premium has been received through account payee cheques drawn on the account of shareholders who are all independent assessees and have confirmed the transaction of having made investments in the assessee company and have also filed their respective bank accounts and have explained the nature and source of funds in their bank account out of which share subscription including premium has been paid to the assessee company. These evidences cannot be brushed aside lightly and preponderance of human probability cannot get precedence over these evidences galore. AO has not doubted the share premium of ₹ 490/- per share as the same is supported by the valuation report as per the I.T. Rules. By disbelieving the source of source being long term capital gain from the sale consideration of shares of Shital Leasing and Finance Ltd and Shilpi Cable Technologies, the AO cannot justify the addition in the hands of the assessee company. As mentioned elsewhere, any addition which deserved to be made should have been made in the hands of the share applicants who have shown their source of source as sale of shares of these companies or alleged accommodation entries. Whether the assessee has discharged the burden cast upon it by the provisions of section 68 of the Act or not is purely a question of fact and has to be decided on the facts of each case and, therefore, no judicial decision has been considered on the peculiar facts of the case in hand. Additions made by the AO on the basis of general observations and without drawing any adverse inference in the hands of the individual taxpayers [share applicants] such additions based on surmises and conjectures cannot be sustained. - Decided in favour of assessee.
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2021 (5) TMI 538
Speculative transactions - Addition made towards profit in money market operations - addition as profit from trading in money market securities on the basis of contract notes from seven money market transactions - speculative loss from share market transactions eligible to be set off against the profit from trading in money market securities - whether profit from money market transactions is a speculative profit and eligible to be set off against the losses incurred on the share transactions of speculative nature? - HELD THAT:- As examined and analysed facts and opine that profit from money market transactions is a speculative profit and eligible to be set off against the losses incurred on the share transactions of speculative nature. CIT(A) has given a finding that transaction of money market are always backed by bank receipts or actual bonds and thus profit or loss arising from money market transactions are non speculative in nature, however, after examining the records before us we find that in this case the physical delivery has not taken place and therefore the transactions of sale and purchase of securities are speculative transactions and so is the profit resulting from those transactions. The speculative transactions are defined under section 43(5) of the Act and are eligible to be set off against the loss of share transactions. Accordingly, we hold that the speculative loss from share market transactions is eligible to be set off against the profit from trading in money market securities. We direct the AO to assess the net income which is the difference between the profit from trading in money market securities of nd losses from share market transactions as both being of speculative nature. Addition made on the basis of notings in the papers/ daily position sheets - addition towards speculative profit on trading in shares and towards speculative profit arising on shares held by the assessee on 24.01.1992 which were presumed to be carried forward and squared up on or before 31.03.1992 - HELD THAT:- Despite seized material containing transactions carried out by share brokerage firm M/s. J.H. Mehta, no statement was recorded of any employee or official of M/s. J.H. Mehta at the time of search or during the course of assessment proceedings and therefore the AO has not taken any steps to bring on record any material to corroborate the rough bottings on these sheets and merely proceeded on the basis of surmises and conjuncture. The case of the assessee is also squarely covered by the decision of M/s. Pallavi Holdings Pvt. Ltd. [ 2005 (8) TMI 589 - ITAT MUMBAI] wherein the coordinate bench of the Tribunal had held that income can not be determined by presuming the sale of shares without no evidences have been found to establish that shares were sold by the appellant. The DR could not bring any decision to the contrary. In view of the above facts and circumstances and the ratio laid down in the two decisions of the co-ordinate bench of the Tribunal, we are not in agreement with the conclusion drawn by the Ld. CIT(A) on this issue. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to delete the addition on the basis of notings in the papers/ daily position sheet. Proportionate share pertaining to the assessee out of disclosure made by Shri Harshad S. Mehta for the entire Harshad Mehta Group - In the first round of litigation, the Ld. CIT(A) confirmed the addition on the ground that books of accounts were not produced before the AO but CIT(A) noted that now the books of accounts have been allowed as additional evidence by the Tribunal - HELD THAT:- As the coordinate bench of the Tribunal in the first round of litigation has admitted the books of accounts as an additional evidence and restored the matter back to the file of the Ld. CIT(A) to decide the issues on the basis of books of accounts. We find merit in the contentions and arguments of the Ld. A.R. that the disclosure was made at a stage when the complete books of accounts were not available and it was not possible for the group to determine its correct income from share trading profit, dividend and capital gain etc. and the disclosure was purely on estimation basis. But now since the books of accounts are before the Revenue Authorities and contains all the information qua the income of the assessee by way of profit on share trading, dividend and capital gain etc and the actual income of the assessee has been assessed by the Revenue Authorities based on the bank statements and other accounting records, therefore the income as offered by way of composite disclosure by Shri Harshad Mehta can not be added to the income of the assessee. The case of the assessee also is squarely covered by the decision of the coordinate bench of the Tribunal in the related concern case of M/s. Orion Travels Pvt. Ltd. vs. ACIT [ 2017 (1) TMI 1643 - ITAT MUMBAI] wherein identical issue has been decided in favour of the assessee. We, therefore set aside the finding of the Ld. CIT(A) and direct the AO to delete the addition. Disallowance made towards the various expenses provided by the assessee in respect of services not rendered till the year end - CIT(A) in the second round again dismissed the appeal of the assessee - HELD THAT:- As the expenses of audit fees, professional fees, staff welfare have to be allowed on the basis of services availed by the assessee during the year whereas the admissibility of bonus and ex-gratia payment depends on the date of payment by the assessee before the due date of filing the return. Therefore, we are not in agreement with the conclusion drawn by the Ld. CIT(A) that disallowance is not allowable. The expenses incurred by the assessee on account of staff welfare expenses, audit fee, professional fee and preliminary expenses as claimed by the assessee are allowable expenses and AO is directed to allow the same. The remaining expenses in respect of bonus and ex-gratia need verification at the level of the AO and accordingly restored to the file of the AO with the direction verify the date of payment of bonus and exgratia payment and in case they are paid before due date of filing the return, needless to say that same are to be allowed. Short term capital loss on sale of 9% of IRFC bonds by invoking section 94(4) - In the second round CIT(A) affirmed the order of AO by dismissing the ground raised by the assessee by holding that the short term capital loss can not be allowed - HELD THAT:- Referring to rimary contentions of assessee is that the provisions of section 94(4) of the Act can not be invoked unless and until the relevant income is brought to tax in the hands of the counter party under section 94(4) of the Act meaning thereby that unless the interest arising and accruing from the security is deemed to be the income of the owner who is Shri Harshad S. Mehta in the present case who transferred the securities to the assessee in terms of section 94(1) of the Act, the loss can not be disallowed in the hands of the assessee the issue is squarely covered by the decision of co-ordinate bench of the Tribunal in the case of related entities M/s. Growmore Leasing Investment Ltd. [ 2017 (11) TMI 1310 - ITAT MUMBAI] direct the AO to allow the set off of loss to the assessee as suffered by it from 9% of IRFC bonds against the profit on sale of shares. Levy of interest under section 234A, 234B 234C - HELD THAT:- Interest charged under section 234A, 234B 234C is inevitable and is leviable in any case but same needs to be recomputed by the AO in terms of the decision of the co-ordinate bench of the Tribunal in the case of related entities M/s. Growmore Research and Assets Management Ltd. [ 2017 (2) TMI 1483 - ITAT MUMBAI] - we accordingly, direct the AO to recompute the interest in terms of the above decision after taking into account the amount of tax deductible at source on the assessed income. Ground is allowed for statistical purposes. Rejection of claim of depreciation on various assets acquired and used for the purpose of business of the assessee during the year - HELD THAT:- Since the carrying on of business by the assessee and use of these assets for the purpose of business of the assessee are undisputed, therefore the assessee is entitled to claim depreciation on these assets in terms of the explanation 5 to section 32 of the Act. As brought to our notice that this issue has not been examined by the AO, therefore, we are restoring this issue for the limited purpose to the file of the AO to examine and verify the same and allow accordingly. The ground is allowed for statistical purposes.
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2021 (5) TMI 537
Enhancement u/s 92CA - MAP margin - as per assessee mutual agreement procedure MAP resolution has already attained finality qua its international transactions with its overseas associated enterprises AEs in USA - HELD THAT:- The assessee s international transactions in these three assessment years 2005-06, 2006-07 and 2007-08 covered under the above MAP are to the extent of 94.7%, to 96% and 93% forming subject matter of the ALP in these assessment years. Coming to the remaining international transactions with associated enterprises in other jurisdictions i.e. Singapore etc., the Revenue fails to dispute that even the Transfer Pricing Officer has not drawn any distinction qua the ALP in all the substantive grounds raised herein. We thus hold that the MAP margin of 15.49%, 15.34% and 15.76% deserves to be applied qua the remaining portion of non-USA based international transactions as well. Disallowance u/s 37 - Expenditure on improvements to leasehold premises - revenue or capital expenditure - HELD THAT:- We find no merit in Revenue s stand disallowing assessee s claim in view of (i) CIT vs. Citi Financial Consumer Fin Ltd. [ 2011 (3) TMI 622 - DELHI HIGH COURT] ; (ii) Amway India Enterprises vs. DCIT [ 2008 (11) TMI 432 - ITAT DELHI] and (iiii) CIT vs. Amway India Enterprises [ 2011 (11) TMI 4 - DELHI HIGH COURT] holding that such improvements are in the nature of revenue expenditure only. The impugned disallowance is directed to be deleted therefore. Penalty u/s 271(1)(c) - Addition on enhancement in its income on the ground that it had failed to disclose the correct figures - HELD THAT:- From a perusal of CIT(A) s lower appellate order in quantum proceedings that the corresponding mistake in omitting to adopt correct figures in assessee s form 3 CEB had been made at the TPO s end which stood admitted in his letter dated 7.2.2011 than involving any concealment of particulars or furnishing of inaccurate particulars of income at taxpayer s behest. This clinching fact has gone unrebutted from revenue side during the course of hearing. We thus accept assessee s instant penalty appeal and direct the Assessing Officer to delete the impugned penalty.
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2021 (5) TMI 536
TP Adjustment - ALP Adjustment - AMP expenses - HELD THAT:- Carefully considered the decision of the Hon'ble High Court and the Tribunal. We find force in the contention of the ld. counsel for the assessee. Similar quarrel was there before the Tribunal and HC [ 2019 (3) TMI 326 - ITAT DELHI] , [ 2019 (11) TMI 341 - DELHI HIGH COURT] , [ 2017 (4) TMI 1259 - DELHI HIGH COURT] we direct the Assessing Officer /TPO to delete the additions made on account of AMP expenditure, substantive and protective. Disallowance u/s 14A - HELD THAT:- We find that during the year under consideration, the assessee has earned no exempt income. Therefore, in the light of the ratio laid down by the Hon'ble Jurisdictional High Court decision of the Special Bench of the Tribunal in the case of M/s Cheminvest Ltd [ 2009 (8) TMI 126 - ITAT DELHI-B] which was affirmed by the Hon'ble High Court of Delhi [ 2015 (9) TMI 238 - DELHI HIGH COURT] . Same view is taken by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P) Ltd [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] . We are of the considered opinion that no disallowance should have been made u/s 14A of the Act. We accordingly direct the Assessing Officer to delete the addition.
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2021 (5) TMI 535
Bogus purchases u/s 69C - Search action u/s 132 at the premises of assessee and certain incriminating material indicating the bogus purchases shown by the assessee was recovered - AO solely relied upon the alleged incriminating material i.e. order of Excise Department Authority withdrawing the Excise Duty Rebate availed by the assessee - HELD THAT:- The books of accounts of assessee was not rejected. AO is not identified the ratio of alleged bogus purchases qua the overall purchases of grey material consumed in the production of new material. The previous or subsequent years Gross Profit was not compared by AO. No adverse material was brought by the AO on record except relying upon the orders of Excise Department. We have noted that the ld. CIT(A) on the submission of assessee called the remand report of the AO. AO furnished the remand report - CIT(A) after considering the remand report held that the Excise Department not allowed the rebate, because there was some alert circular issued by Excise Department. The circular issued by Excise Department is not binding on Income Tax Department. The seized material is only for the purpose of calculating rebate and there is no such evidence regarding fake purchases for the purpose of Income Tax. CIT(A) has passed a detailed and reasoned order after considering the entire facts of the case. No contrary facts or law is brought to our notice to take other view. Thus, we affirm the order passed by Ld. CIT(A). Ground No.1 raised by the Revenue is dismissed. Disallowance u/s 80HHC - assessee submits that the addition under section 80HHC of the Act is not based on incriminating material found during the search carried out under section 132 - HELD THAT:- Perusal of the report of AO, it is clear that addition under 80HHC of the Act has no relevance with the seized material. CIT(A) while deleting the addition also held that AO exceeded his jurisdiction while sitting over the finding of the Tribunal. No addition can be made in the completed assessment in absence of incrementing material found during the search, hence, we uphold the order of ld. CIT(A). No contrary facts or law is brought to our notice to take other view. Accordingly, the Ground No.2 of the Revenue is also dismissed.
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2021 (5) TMI 534
Computation of capital gain - adoption of value of the property as per registered sale deed for the purpose of Section 50C - enhanced value of the property was challenged before the Rajasthan Tax Board and the Rajasthan Tax Board has since passed an order dated 14.08.2012 wherein the order dated 20.08.2010 of the Collector Stamp enhancing value of the property @ ₹ 77,03,999/- has been set aside - HELD THAT:- Once the Rajasthan Tax Board has given its verdict and set-aside the order of the collector stamps wherein the latter has enhanced the value of the property, there is no basis left with the taxing authorities not to accept the same. We further fail to understand why even the ld CIT(A), being the appellate authority failed to appreciate the same and insisted on passing of the appeal effect order. In any case, we find that the assessee has since filed a copy of the order dated 24.06.2020 passed by the stamp duty authorities wherein the stamp duty on the enhanced value deposited by the buyer was directed to be refunded pursuant to and giving effect to the order of Rajasthan Tax Board dated 14.08.2012. Where the stamp duty authorities have accepted the original value of the property as per the sale deed, there is no basis left with the AO to continue to apply the enhanced value and we hereby direct the Assessing Officer to consider the original value of the property as per registered sale deed @ ₹ 23,00,000/- for the purpose of Section 50C of the Act and compute capital gains accordingly. In the result, the sole ground taken by the assessee is allowed.
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2021 (5) TMI 533
Deduction u/s 80P - HELD THAT:- We noted that in assessee s own case the Hon'ble Bombay High Court [ 2017 (3) TMI 1799 - BOMBAY HIGH COURT] relying upon the judgment of co-ordinate bench in the case of Quepem Urban Co-operative Credit Society Ltd V/s ACIT, [ 2015 (6) TMI 573 - BOMBAY HIGH COURT] has held that the assessee-society is not a co-operative bank and hence entitled for deduction under Section 80P of the Act. Once the Hon'ble Bombay High Court has considered the issue and nothing new was argued before us, we are of the view that the CIT(A) has rightly allowed the claim of deduction under Section 80P of the Act. Accordingly, we confirm the order of CIT(A) and the appeal of Revenue is dismissed.
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2021 (5) TMI 532
Estimation of income - bogus purchases - Rejection of books of accounts - HELD THAT:- As abundantly clear that the Assessing Officer, having once rejected the books of accounts, could not have made further additions on account of bogus sundry creditors under section 68 by relying upon the same books of accounts. Therefore, respectfully following the judgment of PCIT Vs. TAYAB YUNUS BARUDGAR [ 2019 (6) TMI 1226 - GUJARAT HIGH COURT] and AMITABH CONSTRUCTION (P) LTD [ 2011 (5) TMI 821 - JHARKHAND HIGH COURT] we deleted the addition on account of bogus sundry creditors. As per assessee has disclosed net profit @1.79% of turnover (which was enhanced by ld CIT(A) to 2%), therefore, after rejection of books of accounts the profit may be estimated @1.79% of turnover instead of @ 2% of turnover - We note that ld Counsel has himself accepted the estimate NP @ 2% of total URD purchases by relying on the above judgment of the Coodicate Bench in the case of Shri Tayab Yunus Barudgar [ 2016 (5) TMI 1288 - ITAT AHMEDABAD] We note that Hon'ble High Court of Gujarat, Ahmedabad in PCIT Vs. TAYAB YUNUS BARUDGAR [ 2019 (6) TMI 1226 - GUJARAT HIGH COURT] has confirmed the estimate NP @ 2% of total URD purchases Thus as relying on cases above held that to estimate net profit @ 2% of total URD purchases is proper and fair, hence we dismiss ground No. 2 raised by the assessee, and we confirm the order of ld. CIT(A) so far ground no.2 is to estimate the net profit @ 2% on the turnover of the assessee. Appeal of the assessee is partly allowed.
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Customs
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2021 (5) TMI 553
Permission for withdrawal of petition - job-work - request made for export of the goods from the job worker premise is rejected - HELD THAT:- The writ petition is dismissed as withdrawn with the liberty to the petitioner to avail the statutory remedy of appeal. It is directed that if the appeal is filed by the petitioner within a period of three weeks, the same shall be decided on merits after giving an opportunity of hearing to the petitioner.
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Corporate Laws
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2021 (5) TMI 548
Allegation of oppression and mismanagement - Removal from the post of director - Acquisition of Reversionary property - Waiver application under Section 244 of the Companies Act 2014 by minority shareholders - acquisition of Reversionary rights in the leased property by the Respondent Company - removal of director of the company without notice - HELD THAT:- The Respondent No. 1 Company evidently states that 33 shareholders have been attending the meeting and thereby it resolved to acquire the revisionary rights in the leased property of the Company. The Petitioner and his late father were also part of the said acquisition process. No other objector/shareholder has come forward to object the acquisition of the said property post acquisition in the Year-2014. The shareholders and the board of directors in their collective wisdom have sort to acquire the leased property as there was an apprehension that the leased property will be taken over by unscrupulous builders. The Company and its Shareholders has passed a resolution to acquire such revisionary rights in the leased property of the Company. The Petitioner and his late father were actively involved in such acquisition. The minority cannot question the decision of the majority on frivolous grounds and it is necessary for corporate governance that Corporate Democracy of the shareholders to be protected and safeguarded qua the rights of one individual minority shareholder. The decision of the majority would prevail in the interest of the Company and its shareholders per se. Therefore, he cannot question such acquisition at this stage and he has questioned the conveyance deed by filing a suit in City Civil Court of Bombay. Further, the only act of oppression of removal of Petitioner as Director is untenable as the post of director remained vacant due to the absence of the Petitioner in several meetings. The Petitioner has sought to file several complaints, suits before ROC and filed criminal complaints with regard to the same allegations. The Petition is dismissed for want of any justified ground of oppression and mismanagement of the Company under Section 241 of Companies Act, 2013 and therefore, it is concluded that the Petitioner has failed to make out a case for grant of waiver under Section 244 of the Companies Act, 2013.
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2021 (5) TMI 543
Restoration of name of the Company in the Register of Companies - Section 252(1) of the Companies Act, 2013 - HELD THAT:- It has been brought to the notice of this Tribunal that the applicant has not complied with filing of balance sheets and other statutory returns before the RoC. However, based on the documents and pleadings, the petition is allowed. Application admitted - Registrar of companies, Chennai, the respondent herein, is ordered to restore the original status of the Applicant Company - petition allowed.
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2021 (5) TMI 542
Recall of order - doctrine of merger - Appeal against the order passed by the NCLT was dismissed by the higher appellate forum - Non-filing of accounts - oppression and mismanagement - HELD THAT:- It is to be mentioned that, the doctrine of merger is a common law doctrine that is adopted with an aim for the maintenance of the decorum of hierarchy of the courts and tribunals, the simple reason behind this is that there cannot be, at the same time, more than one operative order governing the same subject matter. The application so filed by the Applicant, is bad in the eye of law and is not maintainable. Further, the order of this Adjudicating Authority is assailed before the Hon'ble NCLAT and the same was again assailed before the Hon'ble Supreme Court, whereby, Hon'ble Supreme Court decline to interfere with the impugned order so passed by the Hon'ble NCLAT. Thus, the order of the original court ceases to exist and is merged in the order of the Appellate Court - this Adjudicating Authority is not vested with the power to review/recall of its own order either under section 60(5) of the IB Code or Rule 11 of the NCLT Rules 2016. The application so filed by the Applicant for recalling of the order dated 23.11.2017, along with other prayers, are not only beyond the jurisdiction of this Tribunal but also bad in the eye of law and is not maintainable - Application dismissed.
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Insolvency & Bankruptcy
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2021 (5) TMI 551
Approval of Resolution Plan - grievance of the Appellant is that the Adjudicating Authority had committed an error by placing an additional paragraph 22 of the Impugned Order , as a result thereof, the financial viability of the plan has been seriously affected by opening of the plan towards undecided claims - HELD THAT:- It comes to be known that the final Resolution Plan was put up for due consideration by the Committee of Creditors in the meeting that took place through Video Conferencing on 15.09.2020. In reality, the said Resolution Plan was approved by 80.64% of the voting share of the Committee of Creditors . Besides this, the Resolution Applicant had confirmed that Resolution Plan duly complied with the requirements of the I B Code and Regulations made thereunder. Based on the approval of Resolution Plan by the Committee of Creditors under Section 30(4) of the Code, as the successful Resolution Plan , the Applicant projected an application under Section 30(6) of the Code, before the Adjudicating Authority praying for its approval as per ingredients of Section 31(1) of the Code and Regulation 39(4) of the CIRP Regulations. This Adjudicating Authority is of the considered view that if any waiver is sought in the Resolution Plan, the same shall be subject to approval by the concerned Authorities. The same view has also been held by Hon ble Principal Bench, NCLT in the case of [ 2018 (9) TMI 55 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI] and therefore, the same is to be setaside, this Tribunal comes to a resultant conclusion that the said Observations are not in the form of imposition of an additional condition thereby opening up the plan in regard to the undecided claims , because of the reason that the Adjudicating Authority is within its limits to express its views/opinion(s). Appeal dismissed.
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2021 (5) TMI 550
Maintainability of application - initiation of CIRP - Approval of resolution plan - Corporate Debtor failed to make repayment of its dues - Financial Creditors - time limitation - maintainability of second application against the Corporate Debtor as for the same debt and default, CIRP has already been taken place against the Corporate Guarantor and the Financial Creditor has accepted the amount in full and final settlement of all its dues. Time Limitation - HELD THAT:- In the present case, admittedly the date of default is 15.04.2012. Within three years, i.e on 24.03.2015, the Debt Repayment and Settlement Agreement was entered into by the parties (Diary no. 24049, Page 214-245, Appeal Paper Book). The Corporate Debtor failed to repay the debt as per Debt Repayment and Settlement Agreement. Therefore, Financial Creditor cancelled the said agreement (Diary no. 24049, Page 246-256, Appeal Paper Book) on 29.05.2017. In this agreement, the Corporate Debtor has specifically acknowledged the debt - Thereafter, within three years i.e on 10.02.2020, the Financial Creditor filed the Application under Section 7 of the IBC. It is apparent that the Application is filed within extended period and the Application is within limitation. There are no force in the arguments advanced by the Ld. Counsel for the appellant - the finding of Ld. Adjudicating Authority that the Application is within limitation is affirmed. Whether the second Application under Section 7 of IBC is not maintainable against the Corporate Debtor as for the same debt and default, CIRP has already been taken place against the Corporate Guarantor and the Financial Creditor has accepted the amount in full and final settlement of all its dues? - HELD THAT:- Application under Section 7 of the IBC against the Corporate Debtor for the same debt and default is maintainable in the light of judgment of Athena Energy Ventures [ 2020 (11) TMI 800 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI ]. The argument made by the Ld. Counsel of the appellant that CIRP has already taken place against the Corporate Guarantor therefore, the second application against the Corporate Debtor is not maintainable, is not convincing. It cannot be held that the Financial Creditor accepted the amount in full and final settlement of all its dues. We are therefore of the considered view that the Application under Section 7 of the IBC is maintainable against the Corporate Debtor for the same debt and default and the Financial Creditor can recover the remaining dues from the Corporate Debtor. Whether the Resolution Applicant is entitled to exercise its right over the subsidiaries company of ACIL (Corporate Guarantor)? - HELD THAT:- No forensic audit report place on record to prove that the ACIL fraudulently made investments in its subsidiaries i.e. Corporate Debtor. Therefore, the assets of the subsidiaries cannot be included in the resolution plan in relation to ACIL submitted by Resolution Applicant (Appellant). Whether the approved resolution plan has included the SEZ business of the Corporate Debtor? - HELD THAT:- In the case of Facor Alloys Ltd. [ 2020 (11) TMI 848 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] the shares of Facor Power Ltd. i.e. 86% shares were held by the Corporate Debtor. The RP in accordance with regulation 27 of the IBBI (Insolvency Resolution Process of Corporate Persons) Regulations 2016 appointed two registered valuers to determine the fair value and liquidation value of the assets of the Corporate Debtor (Including the shares held by the Corporate Debtor in FPL). However, in the present case, during the CIRP of ACIL, no valuer was appointed to determine the fair value of the shares held by the the Corporate Debtor. Therefore, the assets of the Corporate Debtor (Respondent) cannot be included in the resolution plan - Thus, the facts of the case of Facor Alloys Ltd. are quite different from those of the present case. Thus, this citation is not helpful to the Appellant. Thus, the SEZ Business of the Corporate Debtor is not included in the resolution plan submitted by the Appellant. Appeal disposed off.
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2021 (5) TMI 545
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - interest on delayed payment - existence of debt and dispute or not - suppression of material facts - HELD THAT:- It is clearly brought to our notice that the amount claimed by the applicant is based on the delayed payment of the invoice and interest thereon at the rate of 24% per annum. The applicant relies only on the document at page No. 11 filed along with the application in which there is no seal of the Corporate Debtor. Whether the Applicant is entitled to claim interest at the rate of 24% per annum based on the invoice during business transaction between the parties is the subject matter of the trial and cannot be decided in summary suit. This Adjudicating Authority cannot isolate one invoice and conclude that amount is due and payable - whether the applicant is entitled to the interest at the rate of 24% per annum cannot be decided, without trial based on the invoice which is not signed by the Corporate Debtor in token of acceptance. There are several other transactions and business dealings but the applicant has filed only one invoice. Hence, there is clearly suppression of material facts. Whether Operational Creditor is entitled to claim interest on the delayed payment ? - what is the rate of interest the applicant is entitled to and from which period is the amount, if any, is due and payable? - HELD THAT:- It cannot be concluded that based on the copy of invoice that applicant is entitled for the interest at the rate of 24% per annum since it is the subject matter of the City Civil Court to adduce evidence and detailed trial is required to conclude whether any interest is due and payable by the Corporate Debtor to the Operational Creditor, under invoice. Application dismissed.
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2021 (5) TMI 544
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational creditors - existence of debt and dispute or not - HELD THAT:- It is seen that there was business dealing between both the parties. The nature of goods being perishable commodity, slightest delay shall cause huge loss. Further, there were lots of discussions and reconcilement of the accounts between both the parties, as evident from the exchange of mails. There is also counter claim raised by the respondent, and the same is evident by auditor statement for the relevant years. The 'debt' as claimed by Operational Creditor is towards carton boxes and other packing material supplied by Operational Creditor along with purchase orders of the year 2016-2017. The packing materials are also perishable. Further, the onus of, who has to take back the unused materials, whether the same is adjusted towards payment are not clear. The applicant has failed to quantify the alleged 'debt' and the 'date of default'. Neither debt nor default is proved - Petition dismissed.
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2021 (5) TMI 541
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Respondent has not produced sufficient documentary evidence supporting its claim that the NOC was communicated to the Petitioner and the communication regarding cancellation of agreement on account of non-payment of requisite amounts by the Petitioner to the Respondent. In absence of documentary evidence of communications in relation to disputes, the Respondent's plea appears to be bald and an attempt to avoid payment of dues. Further, the Respondent has failed to produce latest balance sheets showing that the company is an ongoing concern generating revenue and solvent. No evidence has been produced to show communication of NOC. It is clear from the material on record that there is an operational debt which has fallen due on 23.07.2018 and has not been paid. Further, the Respondent has failed to point out any substantial dispute. Despite providing sufficient opportunity, the Respondent also failed to produce its audited financial statements or any other proof of its solvency. Application admitted - moratorium declared.
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2021 (5) TMI 539
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- Though the provision of Sec. 19 of Limitation Act, 1963 is met here, the Bench takes note of the fact that in the present age of digital payments very few payments would be accompanied by a handwritten and signed note. It is mostly accomplished by the transfer of an amount from one bank account to the other through a digital format. All the banks in this regard require a borrower to have the saving/current account in the bank before a loan is disbursed and the transfer of funds might be repayment of the loan from saving/current bank account to the loan account on a periodic basis as per the terms of the loan regarding disbursement. In the present instance the provision of Section 19 of the Limitation Act, 1963 is squarely met as an acknowledgment of payment has been signed by the Director of the Respondent Company. Therefore, from 31.03.2017 a fresh period of limitation of 3 years commences which would end on 30.03.2019. Since the present Petition was filed on 09.03.2020 it is within the period of limitation as prescribed under Section 19 of the Limitation Act. The Petitioner has not received the outstanding Debt from the Respondent and that the formalities as prescribed under the Code have been completed by the Petitioner, we are of the conscientious view that this Petition deserves 'Admission'. Petition admitted - moratorium declared.
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Service Tax
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2021 (5) TMI 559
Levy of Service Tax - works contract service - construction of additional godowns as accorded by the Government of Tamil Nadu vide G.O.(Ms).No.119, Cooperation, Food and Consumer Protection Department, dated 05.11.2014 - HELD THAT:- Though clause No.12(a) was withdrawn from the Mega Exemption Notification, it was reintroduced vide notification No.6/2015, dated 01.03.2015 issued by the department of Revenue and Finance Ministry, Government of India. The withdrawal notice was issued on 01.03.2015 but it came into effect on 01.04.2015. Since there was still some ambiguity as regards the treatment of the subject matter for the period from 01.04.2015 to 01.03.2016, to deal with the same, Section 102 of the Finance Act, 2016 was brought in. The second respondent clearly erred in proceeding on the premise that the exemption on which, the appellate order was predicated no longer held good. On this sole ground, the order impugned in the writ petition has to go. When the order suffers from a patent illegality, it is certainly open to the aggrieved party to invoke the writ jurisdiction of this Court - petitioner is a public sector undertaking. It is funded entirely by the Government. Even for the construction activities in question, the allocation was made only by the Government of Tamil Nadu. Such construction activities have been explicatively exempted by the Mega Exemption Notification issued on 20.06.2012. Of course, for a short duration, exemption was not available. Petition allowed.
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Central Excise
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2021 (5) TMI 558
Maintainability of appeal - monetary amount involved in the appeal - validity of circular dated 22.08.2019 and earlier circular dated 17.08.2011 - HELD THAT:- The petition preferred by the Department was dismissed in the light of the monetary limit fixed by the circular under reference in the aforesaid case. Against the judgment of the Division Bench, a special leave to appeal was preferred before the Hon ble Supreme Court in COMMISSIONER VERSUS PARTH PHARMACHEM INDUSTRIES [ 2017 (4) TMI 84 - SC ORDER] and the Hon ble Supreme Court has dismissed the special leave to appeal by an order dated 17.10.2016. Therefore, taking into account the aforesaid judgment, the circular dated 22.08.2019, read with circular dated 17.08.2011, as the case does not fall under the exceptional case i.e., Rule 8(3A) of the Central Excise Rules, 2002. Appeal dismissed.
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CST, VAT & Sales Tax
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2021 (5) TMI 561
Violation of principles of natural justice - validity of revision of assessment orders - change of opinion - alleged purchase suppression - HELD THAT:- Admittedly, in all these cases, penalty has been imposed vide separate orders. It has been held that when imposing penalty under Section 27 of the Act, the same will have to form part of the assessment order and they cannot be levied though a separate order. Therefore, imposition of penalty in these cases is bad in law. Likewise, the petitioners being works contractors engaged in civil construction, cannot be levied with purchase tax. Therefore, levying purchase tax also will have to go. But then, this Court accepts the submission of the petitioner's counsel that the impugned proceedings will have to be questioned on the ground of change of opinion. The impugned orders would indicate that the revision is an outcome of the verification of the assessment records. It is also a fact that the assessing officer proceeded based on the web report which indicates mismatch. Therefore, the impugned proceedings cannot be characterized as being grounded only on change of opinion. The matter is remitted to the file of the second respondent to pass orders afresh in accordance with law - Petition allowed by way of remand.
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2021 (5) TMI 560
Rectification of mistake - levy of tax - cash discount received and commission received - HELD THAT:- Considering the fact that skeleton and sketchy order came to be passed by the respondent, the petitioner filed an application for rectification of the impugned order dated 28.03.2016 before the respondent on 15.04.2016 by way of abundant caution by invoking the power to rectify the order under Section 84 of the VAT Act and thereafter filed the present writ petition. There are no purpose in keeping the writ petition pending. Considering the fact that the petitioner has filed a rectification application under Section 84 of the TNVAT Act, 2006, it is directed that the respondent to dispose the same on merits in accordance with law - petition disposed off.
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Indian Laws
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2021 (5) TMI 564
Time limitation - extension of period of limitation in filing petitions/ applications/ suits/ appeals/ all other proceedings - HELD THAT:- The steep rise in COVID-19 Virus cases is not limited to Delhi alone but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders. List the Miscellaneous Application on 19th July, 2021.
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2021 (5) TMI 563
Dishonor of Cheque - legally enforceable debt or not - rebuttal of presumption - section 138 of NI Act - HELD THAT:- The impugned order of issuance of process to the petitioner does not suffer from any illegality or infirmity as would call for any interference by this Court in exercise of its inherent jurisdiction under Section 482 Cr.P.C. - It true that in the complaint the respondent has not disclosed the legally enforceable debt or liability in discharge whereof he has received the cheque from the petitioner. That, however, cannot vitiate the complaint for the simple reason that under Section 139 of the Act, there is presumption that holder of the cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability unless of course the contrary is proved. In view of the provision of Section 139 of the Act, it is not available to the petitioner to argue that in the absence of specific mention in the complaint that the cheque was received by the respondent in the discharge of any debt or other liability, the complaint is not maintainable - It is true that under Section 204 of the Code of Criminal Procedure, the Court shall not issue summon or warrant against the accused unless list of prosecution witnesses is filed. However, the defect of not supplying the list of prosecution witnesses is only an irregularity and the same would not vitiate the proceedings unless failure of justice has in fact been occasioned thereby. In the instant case, the petitioner is yet to cause appearance in the case and before the respondent embarks upon recording of his evidence he can very well file the list of witnesses and cure the defect - the defect of not supplying the list of prosecution witnesses before issuance of process is curable, as Section 465 Cr.P.C. would come to the rescue of the respondent. The Court can very well permit the respondent to submit the list of prosecution witnesses before proceeding further in the complaint. Petition dismissed.
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2021 (5) TMI 562
Bail Application - misappropriation of funds - allegation found against the present applicant is that he induced the complainant to invest himself and others in his scheme to get higher benefit but he neither fulfilled his promise nor returned their money - HELD THAT:- As per the statements of complainants and bank statement, prima facie, ₹ 17,00,000/- were found deposited in the account of present applicant by the complainants. The co-accused has already been released on bail by the trial Court. Investigation is completed, charge-sheet has been filed and on account of COVID-19 pandemic, there is every possibility of consuming time in conclusion of trial. The applicant has no criminal past, therefore, there is no possibility of his absconding or tampering with the evidence of prosecution witnesses. The offences alleged have not maximum punishment of more than 7 years imprisonment - The trial Court is also directed to keep the said amount in FDR Scheme at any nationalized Bank of locality. This order will remain operative subject to compliance of the conditions of depositing the amount as well as enumerated under section 437(3) Cr.P.C. by the applicants. Bail granted subject to conditions imposed - Jail Authority shall ensure the medical examination of the applicant by the jail doctor before his release.
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