TMI Tax Updates - e-Newsletter
June 19, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Expenditure on obtaining license for use of accounting software - revenue or capital expenditure - the assessee has not purchased the software but has purchased the license to use this software for its accounting purposes. That is not capital expenditure but revenue expenditure.
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Income Tax:
TDS u/s 195 - There should be a “debt claim and ‘form’ such claim income should arise to qualify as ‘interest’. Thus the word ‘debt claim “predicate the existence of debtor – creditor relationship [lender – borrower]. That relationship can arise only when there is a provision of capital. - Guarantee fee paid by the assessee to Netherlands company cannot be covered in the definition of interest as per Article 11 of The DTAA..
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Income Tax:
Addition u/s 41(1) or u/s 28 - waiver of working capital loan - In respect of principal amount, though the assessee has gained the benefit by way of one time settlement the same cannot be brought to tax u/s 41(1) because the OCC loan represents the principal which was never claimed as expenditure. AO also did not make out a case that the principal amount was debited to the Profit & Loss account in the earlier years. Therefore there is no case for making addition u/s 41(1) in respect of the principal amount.
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Income Tax:
Levy of penalty u/s 271(1)(c) - Defective notice - the A.O. merely mentioned at the bottom of the assessment order after computing the income that “penalty proceedings under section 271(1)(c) of the I.T. Act have been initiated separately.” Thus there is a violation of the Law in the matter.
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Customs:
Import of Gold Jewellery - Baggage Rules - On perusal of the Rules pertaining to importation of jewellery, as baggage by an arriving passenger, it is seen that the quantity in the present dispute is far in excess of that allowed free of duty on import into India. - Though goods liable for confiscation, reexport allowed.
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IBC:
Rejection of Resolution Plan - Since, liquidation proceedings as a going concern is already on from July 2019 and there is always scope for Resolution Applicants to opt for Arrangements under Section 230-232 of the Companies Act, 2013, if they are eligible in accordance with provisions of Insolvency and Bankruptcy Code, 2016 along with relevant Rules.
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IBC:
CIRP proceedings - Whether the income tax department is a Secured Creditor. - It is upto the Liquidator to decide in terms of the I&B Code-V - Income Tax Department allowed to make claim before the Liquidator as a Secured Creditor. If the Form is incomplete, it will file separate Form with evidence in support of the claim.
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VAT:
Stay of collection of the disputed tax - Since it is not disputed by the learned Special Counsel for Commercial Tax that petitioner had already deposited 2/3rds of the disputed tax, and since admittedly appeal filed by petitioner before the Telangana VAT Tribunal is still pending and if the balance tax is also permitted to be receoved, the very appeal would become infructuous.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (6) TMI 415
Release of detained goods alongwith truck - section 130 of GST Act - HELD THAT:- We should not interfere at the stage of adjudication of the confiscation proceedings under Section 130 of the Act. The adjudication proceedings shall proceed in accordance with law. However, we are inclined to grant some relief to the writ applicant so as to protect the goods getting damaged, but at the same time keeping in mind the interest of the State also. We direct the writ applicant to deposit an amount of ₹ 4,20,000/- towards tax and penalty with the authority concerned and also furnish a bank guarantee to the tune of ₹ 22,00,000/- of any Nationalized bank. We are asking the writ applicant to furnish the bank guarantee keeping in mind the value of the goods. On deposit of ₹ 4,20,000/- towards tax and penalty along with the bank guarantee of ₹ 22,00,000/- of any Nationalized bank, the authority concerned shall release the goods and the vehicle at the earliest. The deposit of bank guarantee shall abide by the final outcome after adjudication - Application disposed off.
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2020 (6) TMI 414
Grant of Anticipatory Bail - evasion of GST - bogus invoices of sales and purchases - HELD THAT:- The allegations are that the petitioner forged and fabricated the documents to avoid the tax liability. All the documents are already in possession of the police. Whether the petitioner had any role to play in the entire gamut or he has been made scapegoat, as alleged, can be ascertained once the petitioner joins the investigation vis a vis the documentary evidence already seized. The petitioner is ordered to be released on anticipatory bail on his furnishing bail bonds and surety bonds of local and sound surety, to the satisfaction of Chief Judicial Magistrate/ Duty Magistrate, Chandigarh, subject to his complying with provisions contained in Section 438(2) Cr.P.C. - Petition allowed.
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Income Tax
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2020 (6) TMI 413
Allowable revenue expenditure - expenditure on conversion of interest payable to financial institutions, banks into 10% redeemable preference shares - HELD THAT:- Substantial question of law No.1 is covered by decisions of this court as well as Delhi High Court in case of KIRLOSKAR ELECTRIC CO. LTD VS. CIT [ 1997 (7) TMI 109 - KARNATAKA HIGH COURT] , COMMISSIONER OF INCOME TAX V. RATHI GRAPHICS TECHNOLOGIES LTD. [ 2015 (8) TMI 376 - DELHI HIGH COURT] and answered against the revenue. Allowable as expenditure when the interest had been written off - HELD THAT:- Question framed in this appeal is squarely covered by a decision in JINDAL VIJAYANAGAR STEEL LIMITED. [ 2011 (8) TMI 1334 - SC ORDER] which is answered against the revenue. The aforesaid statement could not be disputed by learned counsel for the revenue.
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2020 (6) TMI 412
Application for stay - HELD THAT:- Petitioner was not advised properly in seeking stay of the demand by submitting an application Ext.P3 dated 18th of March 2020 as it is post the issuance of garnishee notice dated 6th of March 2020. In fact, an application for stay or simple prayer for stay along with the pending appeal ought to have been preferred before the 2nd respondent. Be that as it may, the petitioner has undertaken to file the application for stay and as there is lock down owing to the COVID 19, pandemic, grant three weeks time to the petitioner to file the application for stay before the 2nd respondent. In case such application is filed, the 2nd respondent would decide the application for stay within one month thereafter, after affording an opportunity of hearing to the parties and in accordance with law. Till such time, notice Ext.P5 dated 6th of March 2020 is ordered to be kept in abeyance. It is made clear that the interim stay is till the disposal of the interim application and not beyond.
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2020 (6) TMI 411
Notice u/s 143(2) issued electronically to the petitioner firm - petitioner did not respond to the notices issued u/s 142(1) of the IT Act - contention of petitioner that the Partner of the petitioner, who has filed the writ petition, is an illiterate person not having computer knowledge and at the time of filing the first income tax return of the firm, he had given mobile number and mail address of the son of another partner for primary communication and has given auditor s mobile number and mail address for secondary communication - earlier notices which were received by the son of the other partner had not been forwarded by the said individual to the petitioner because of which, there was a delay in responding to the notices issued - whether 3rd respondent completed the assessment for the assessment year 2017-18 in a hurried manner depriving the petitioner of opportunity to file objections though there was ample time till 31.12.2019 for him to complete the assessment? - HELD THAT:- Prima facie, we are of the opinion that the action of the 3rd respondent is arbitrary as he ought to have granted time till 20.12.2019 to the petitioner to file objections and documents. Accordingly, the impugned assessment order dated 15.12.2019 issued by the 3rd respondent is set aside and the matter is remitted back to the 3rd respondent to pass a fresh order in accordance with law; and the petitioner is granted two weeks time from the date of receipt of a copy of this order to file objections and documentary evidence in support of his contentions before the 3rd respondent, which shall be considered by the 3rd respondent before he passes a fresh order. WP allowed.
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2020 (6) TMI 410
Assessment u/s 153 OR 147 - unexplained cash credits u/s 68 - HELD THAT:- On the strength of the information received from the ADIT, INV, the Assessing Officer assumed jurisdiction u/s 148 of the Act and accordingly, statutory notices were issued and served upon the assessee. Since the documents were found at the premises of the searched person, they did not belong to the assessee and the transactions recorded in the seized documents were in the books of the searched person and, therefore, information received from the Investigation Wing was a tangible material evidence which prompted the Assessing Officer to initiate proceedings u/s 148 of the Act. P rovisions of section 153C of the Act do not apply on the facts of the case in hand, and therefore, jurisdictional issue challenged by the assessee does not hold any water. Addition u/s 68 - Direct and clinching evidences cannot be brushed aside lightly. The entire additions have been made on surmises and assumptions revolving around the statement of one Shri Devi Das Tikamdas Chattani ignoring the fact that the director of M/s Index Securities and Research Pvt Ltd alongwith major share holder Shri Sant Lal Aggarwal appeared before the Assessing Officer. Financials were available with the Assessing Officer. AO/CIT(A) should not have discarded the evidences. In our considered opinion, the assessee has successfully discharged the onus cast upon it u/s 68. Addition u/s 69C - Addition is directly related to the loan amount as the same is interest paid by the assessee to the company and the same is also directed to be deleted. Before closing, it can be seen from the confirmation exhibited elsewhere that the loan was taken on 11.09.2009 and within three months, the loan was repaid. All the transactions have been done through banking channel. Cash loans given to the assessee - Foundation of the impugned addition is the statement of Shri Devi Das Tikamdas Chattani. Except for that, there is no direct evidence brought on record to show that any cash transactions took place between the assessee and the said person. Assessing Officer never confronted Shri Devi Das Tikamdas Chattani to Shri Sant Lal Aggarwal. If the statement of Shri Devi Das Tikamdas Chattani is to be believed, then on the same facts, statement of Shri Sant Lal Aggarwal cannot be ignored or brushed aside lightly. Merely because the statement of Shri Sant Lal goes in favour of the assessee, cannot be a reason to disbelieve the same. As mentioned elsewhere, there is no direct evidence brought on record which could suggest that some cash transactions took place between the assessee and the searched person. The observations made by the Assessing Officer at page 25 of the assessment order clearly show that the entire addition has been made on surmises and conjectures. Considering the facts of the case in hand, in the light of statement of Shri Sant Lal Aggarwal, we do not find any merit in the impugned addition and the same is directed to be deleted.- Assessee appeal allowed partly
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2020 (6) TMI 409
Disallowance of ESOP expenses - HELD THAT:- As decided in own case [ 2016 (7) TMI 1486 - DELHI HIGH COURT] and [2017 (2) TMI 1399 - DELHI HIGH COURT] deciding the issue in favour of the assessee in the said case where the addition made by the Assessing Officer by way of disallowance of the expenses debited as cost of ESOP in profit and loss account was deleted by the Income-tax Appellate Tribunal. Disallowance of software expenses - Revenue or capital expenditure - HELD THAT:- The assessee has been allowed the identical claim in earlier years by the CIT(A) and based on that decision the ld DRP was also of the view that the above expenditure incurred by the assessee is revenue in nature. The ld DR could not controvert that why the order of the ld DRP is erroneous. In view of this we do not find any infirmity in the direction issued by the ld DRP. In the result we confirm the direction of the DRP. TDS u/s 194H - Disallowance of commission expenditure under section 40 (a) (ia) - sale of advertisement time on its various channels, this advertisement time is sold generally through advertisement agencies - HELD THAT:- As decided in assessee's own case for assessment year 2009 10 [ 2017 (7) TMI 867 - ITAT DELHI] referring to issue is of treatment of commission paid to the advertising agencies AO is directed to not to make this addition in the assessment order. Expenditure on obtaining license for use of accounting software - revenue or capital expenditure - HELD THAT:- This issue has already been decided while deciding the appeal of the revenue wherein following the order of the coordinate bench for assessment year 2009 10 [ 2017 (7) TMI 867 - ITAT DELHI] the software expenditure disallowed by the learned assessing officer deleted. Therefore this ground of appeal of the assessee deserves to be allowed. Even otherwise the assessee has not purchased the software but has purchased the license to use this software for its accounting purposes. That is not capital expenditure but revenue expenditure. In view of this ground of the assessee is allowed. TPA - ALP of the corporate Guarantee - non making reference to the TPO - HELD THAT:- In view of the M/S. S.G. ASIA HOLDINGS (INDIA) PVT. LTD. [ 2019 (8) TMI 661 - SUPREME COURT] guidelines issued by the CBDT in Instruction No.3/2003 the Tribunal was right in observing that by not making reference to the TPO, the Assessing Officer had breached the mandatory instructions issued by the CBDT. Thus restore the matter back to the file of the learned assessing officer so that appropriate reference could be made to the TPO. Disallowance u/s 14A - HELD THAT:- As there is no exempt income is received or receivable during the relevant previous year in the case of the assessee for this year, the disallowance under section 14 A cannot be made. Disallowance being the transmission and uplinking charges paid by invoking the provisions of section 40 (a (ia) - HELD THAT:- As in own case for AY 2009 10 [ 2017 (7) TMI 867 - ITAT DELHI] we direct learned assessing officer to delete the disallowance on account of non-deduction of tax at source on Transmission and uplinking charges. Re characterizing of income - the income declared by the appellant as capital gain pursuant to sale of 212500 shares of M/s Astrao Awani Networks Limited as income from other sources and making an addition - HELD THAT:- The CBDT circular dated 2/5/2006 speaks about the characterisation of income from transaction in listed securities as well as unlisted securities. In the present case before us the learned assessing officer could not prove that any of the three conditions mentioned in that circular applies. In fact the sale price of the shares is supported by the valuation report and also conform with provisions of FEMA. The learned assessing officer as well as the learned CIT A merely proceeded on the basis of an allegation that assessee wanted to show the higher profit in its books of account. It is not denied that the assessee was the owner of the shares, it held it for 13 months, there is no allegation that the price paid by the buyer was unfounded. In fact it was supported by the valuation report which was not controverted , except the conjectures and surmises. In view of this circular, we hold that the excess of consideration realised by the assessee on sale of the above shares is chargeable to tax as capital gain and not as income from other sources. In view of this ground number nine of the appeal of the assessee is allowed.
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2020 (6) TMI 408
Addition of difference in total sales made during the year and total cash deposits u/s 68 - assessee has failed to explain the source of cash deposits in the bank account - plea taken by the appellant that purchases in the individual capacity were also routed through the HUF and accepted by CIT(A) - HELD THAT:- A.O. in the assessment order has also mentioned the same details of the purchases as per the Trading A/c of the assessee and again compared with the bank statement and ultimately on the difference with regard to purchases, applied the G.P. rate of 0.80% for making the addition. Thus, the crux of the matter had been that the A.O. accepted the sales and purchases disclosed by the assessee in the Trading A/c. A.O. has also accepted profit declared by the assessee. A.O. with regard to the unexplained purchases applied the G.P. rate for the purpose of making the addition, but, with regard to sales without comparing with the bank statement made the addition of the entire amount in question. Thus, there is a difference in the opinion of the A.O. with regard to the same matter in issue as regards sales and purchases. CIT(A) on examination of the record, accepted the explanation of assessee that purchases and sales made by assessee of other connected parties since routed through the bank account of the assessee, therefore, could not be treated as sales and purchases of the assessee. Even if there was some excess sales declared by the assessee, the entire sales could not have been treated as unaccounted income of the assessee. As against the undisclosed or unaccounted sales, only profit rate should have been applied to make the addition. We are fortified in our view by Judgment of Hon ble Gujarat High Court in the case of CIT vs., President Industries [ 1999 (4) TMI 8 - GUJARAT HIGH COURT] and in the case of CIT vs., Bal Chand Ajit Kumar [ 2003 (4) TMI 76 - MADHYA PRADESH HIGH COURT] . No material is produced before us to rebut the finding of fact recorded by the Ld. CIT(A) that the transaction in the individual capacity were also routed through assessee HUF and are recorded in the books of account and sales and purchases have not been disputed by the A.O. Therefore, no interference is called for in the matter. Addition on account of applying G.P. Rate - difference in the purchases as the assessee has failed to explain the source of cash deposits in his bank account during the assessment proceedings and no such proof was filed - HELD THAT:- Since the purchases recorded in the books of account have not been disputed by the A.O, therefore, there is no question of making such addition against the assessee. The explanation of assessee that other purchases were also routed through the account of the assessee, have not been disputed by the Revenue. Therefore, no interference is called for in the matter. Accordingly, Ground No.2 of the appeal of the Revenue is dismissed. Ad-hoc disallowance of expenses - assessee has claimed shop expenses, labour charges, printing and stationary, and travelling expenses - assessee did not produce complete vouchers - HELD THAT:- A.O. has not pointed out as to which of the vouchers of the expenditure have not been produced by the assessee. No details of the amount has also been mentioned. Therefore, disallowing 1/5th of the expenditure claimed of the assessee would amounts to adhoc addition which cannot be sustained in law.
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2020 (6) TMI 407
Reopening of assessment u/s 147 - undisclosed income from bank accounts addition(s) - Assessee was one of the beneficiaries of M/s Ambrunova Trust and made investment in LGT Bank - proportionate share of benefit - HELD THAT:- There is no material evidence coming from the departmental side that the corresponding twin trusts deeds have formed part of records which could even remotely indicate that these assessees are beneficial owners of the trusts assets to the extent of 1/5th share each as on 31.12.2001 we quote Mukesh Kumar Gupta vs. Commissioner of Income Tax [ 2013 (4) TMI 444 - ALLAHABAD HIGH COURT ] that such a re-opening initiated beyond a period of four years from the end of the relevant assessment year is not sustainable in absence of the specified amount of taxable income having escaped assessment being recorded in reopening reasons There is further no quarrel that sec. 5(1)(a-c) defines total taxable income in case of a resident that the income which is received or deem to be received in India, accrued or arise or is deem to accrue or arise in India and accrues or arises to him outside India during such year. We reiterate that learned lower authorities have assessed these two assessees qua the overseas trust s balance amount to the extent of 1/5th share each u/s 5(1)(c) only. The clinching aspect of the trust deeds nowhere forming part of records that there is no cogent material indicating the assessees as having 1/5th share each in the trusts assets. And also as to whether the trust deeds herein pin-point the trusts as discretionary or specific ones and whether the balance amount therein was to devolve upon them in a vested or contingent manner. We note that once the Assessing Officer has himself not suggested that the impugned sums have been in fact accrued or arisen to them, thus that the department s impugned action adding the trust s balance in these two taxpayers hands does not deserve to be concurred with. The Assessing Officer s re-opening reasons nowhere allege that these assessees had any right to receive the alleged 1/5th shares as well. We wish to make it clear that our foregoing detailed discussion sufficiently proves in absence any material on record, these two assessees did not have right to receive the alleged 1/5th share each in the trust s balance. We observe in view of the foregoing detailed discussion that both the lower authorities have erred in law and on facts in initiating sec. 148 /147 proceedings against these two assessee - Decided in favour of assessee.
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2020 (6) TMI 406
TDS u/s 195 - non-deduction of tax at source on guarantee commission paid to lease plan Corporation NV Netherland - addition u/s 40 (a)(i) - Fees For Technical Services as well as Interest as per the article 11 and 12 of The Double Taxation Avoidance Agreement [ DTAA] between India and Netherland - HELD THAT:- In the present case apparently, AE has not provided any capital to the appellant on which income is earned. It is a corporate guarantee , being a surety to the lender bank of the appellant that, if in a case, in future, the appellant fails to pay the due amount owed to those lenders, the Netherland Company will pay to those lenders. Thus, there was promise to reimburse the amount to those lenders on happening of an event i.e. failure of payments by the appellant of the dues owed to the lenders and lenders invoking the guarantee issued by the Netherlands company in favour of those lenders. Therefore it needs to examine whether there is any provision of capital by the Netherland Company to Indian Company appellant, answer is in negative. There should be a debt claim and form such claim income should arise to qualify as interest . Thus the word debt claim predicate the existence of debtor creditor relationship [lender borrower]. That relationship can arise only when there is a provision of capital. In view of this, we hold that guarantee fee paid by the assessee to Netherlands company, in the above facts, cannot be covered in the definition of interest as per Article 11 of The DTAA.. Whether such guarantee fee can be Fees for technical services within compass of Article 12 (5) of the DTAA ? - The ld CIT (A) has held it to be a Consultancy services . In fact we are of the view that Provision of Guarantee is a service provided by the Netherlands Company to the assessee. US Court decision relied up on by the ld AR also says that provision of Guarantee is a service . But is it a consultancy service or not needs to be examined. Looking to the nature of Service provided by the Netherlands company in providing guarantee, it is a financial service and can by no stretch of imagination is called a Consultancy services. Even otherwise, it does not cross the threshold of make available in 12 (5) (b) of the DTAA. Therefore we also hold that, provision of Guarantee fees service is not fees for Technical services under article 12 of The DTAA. AR has also said that guarantee Fees is not chargeable to tax under Article 7 in absence of any permanent establishment of the Netherlands company. We fully agree with that as the revenue has not at all invoked article 7 in this case.In view of this, we hold that assessee is not require, Orders of lower authorities are reversed and ld AO is directed to delete the disallowance for both the years. - Decided in favour of assessee.
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2020 (6) TMI 405
Deduction u/s 80P disallowed - AO has disallowed the claim for deduction u/s 80P of the Act holding that the assessee would be hit by sec.80P(4) - it is the contention of the assessee that the assessee is carrying on money lending activity mainly with its Members and hence it cannot be categorized as Bank as held by the Assessing Officer - HELD THAT:- A.R submitted that there are decided cases on this issue in favour of the assessee. Further, the quantum of interest income to be taxed under other sources has also been decided by the Hon'ble Karnataka High Court in the case of Totgar Co-operative Sale Society Ltd. [ 2008 (9) TMI 493 - KARNATAKA HIGH COURT] In view of above said legal developments, we feel it appropriate to restore all the issues to the file of the Assessing Officer for examining them afresh in the light of various decisions rendered by Hon'ble High Court and Hon'ble Supreme Court. Accordingly, we set aside the orders passed by the CIT (Appeals) in all the three years under consideration and restore them to the file of Assessing Officer for examining them afresh. Appeals filed by the assessee allowed for statistical purposes
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2020 (6) TMI 404
Disallowance of Provision for Non-performing assets (NPA) u/s 36(1)(viia) - AO denied the assessee s claim as assessee makes the provision under surmise and assumption that the debt will be bad in future and when it is actually lost, it claims it as bad debts written off and that is allowed, but no provision on unascertained liability can be allowed as a legitimate deduction from Income under the Act - HELD THAT:- As decided in SREI Infrastructure Finance Ltd. [ 2020 (1) TMI 490 - ITAT KOLKATA ] the issue is squarely covered against the assessee by the decision of Apex Court in Southern Technologies Ltd. [ 2010 (1) TMI 5 - SUPREME COURT] . Respectfully, following the decision of Apex Court in Southern Technologies Ltd. (Supra), we dismiss the ground raised by the assessee.
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2020 (6) TMI 403
Long term capital gain - year of assessment - double taxation - HELD THAT:- Assessee had already paid the taxes on long term capital gain(LTCG) in preceding years viz:2004-05, 2005-06, and 2006-07, and therefore the assessee need not to pay the taxes on the same income again in assessment year 2012-13. The taxes should not be imposed except by authority of law, that is the Department does not have power to impose tax twice on the same income and therefore, based on the factual position narrated above, the addition made by the assessing officer under the head business income needs to be deleted, accordingly we delete the addition - Decided in favour of assessee.
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2020 (6) TMI 402
Penalty u/s 271(1)(c) - Disallowance of claim for long-term capital gain arising from the sale of shares of Jackson Investment Limited by treating the same as bogus - as per assessee no specific mention in the show-cause notice issued under section 274 for the year under consideration by the authorities below as to whether the assessee is guilty of having furnished inaccurate particulars of income or of having concealed particulars of such income - HELD THAT:- Notice issued under section 271(1)(c) without specifying which of the two contraventions, the assessee is guilty of was defective and the penalty imposed in pursuance of such defective notice was not sustainable. See BIJOY KUMAR AGARWAL [ 2019 (6) TMI 721 - CALCUTTA HIGH COURT] and M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2020 (6) TMI 401
Addition u/s 41(1) or u/s 28 - waiver of working capital loan - assessee had received the benefit as a result of one time settlement of loan by the Indian Overseas bank. The assessee was due to Indian Overseas Bank, Visakhapatnam in respect of term loan OCC which included the interest subsidy as well as the working capital loan - Addition deleted by the Ld.CIT(A) - HELD THAT:- In the instant case, the trading liability or the expenditure or deduction was claimed by the assessee in respect of interest paid on the OCC loan. In respect of principal amount, though the assessee has gained the benefit by way of one time settlement the same cannot be brought to tax u/s 41(1) because the OCC loan represents the principal which was never claimed as expenditure. AO also did not make out a case that the principal amount was debited to the Profit Loss account in the earlier years. Therefore there is no case for making addition u/s 41(1) in respect of the principal amount. In MAHINDRA AND MAHINDRA LTD. THRG. M.D. [ 2018 (5) TMI 358 - SUPREME COURT] considered the issue with regard to taxing the remission of liability u/s 28(iv) and decided the issue against the revenue and in favour of the assessee, since, the receipt was in the nature of cash or money. The Hon ble Supreme Court held that section 28(iv) has no application since the receipt was in the nature of cash or money. In the instant case what the assessee has received was remission of liability which was in the form of cash or money and the difference amount of principal which was settled by onetime payment was never debited to Profit Loss account. Therefore, the decision of Hon ble Supreme Court is squarely applicable in the instant case.The appeal of the revenue is dismissed.
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2020 (6) TMI 400
Reopening of assessment u/s 148 - interest paid on the service tax by considering the revised return of income - HELD THAT:- After 1st April, 1989, the AO has power to re-open, provided there is tangible material to come to the conclusion that there is an escapement of income from assessment. Reasons must have a live link with the formation of the belief. In the present case, the assessee has claimed interest on service tax paid as allowable deduction relates to the present A.Y. 2011-13, for that purpose he filed revised return, the same is examined by the AO and completed the assessment u/sec. 143(3), therefore the AO has already firmed opinion that the deduction claimed by the assessee is allowable deduction and accordingly allowed. Subsequently, on the basis of very same revised return and on the very same claim the Assessing Officer came to a conclusion that the expenses claimed by the assessee relates to the earlier year i.e. A.Y. 2011-12 and not relating to the assessment year under consideration, in our opinion is merely a change of opinion and is not permissible in the case of M/s.Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] . We, are of the opinion that reopening of assessment is not valid, therefore notice issued by the Assessing Officer has to be quashed. No infirmity in the order passed by the ld. CIT(A). So far as merits of the case is concerned, CIT(A) gave a finding by following the judgment of Andhra Sugars Ltd. [ 2015 (2) TMI 810 - ANDHRA PRADESH HIGH COURT] that whether service tax paid has to be allowed in the year of payment or irrespective of the year allowablility incurred. CIT(A) by following the decision of the Hon'ble Jurisdictional High Court in the case of Andhra Sugars Ltd. (supra) deleted the addition made by the Assessing Officer. We find no reason to interfere with the order passed by the ld. CIT(A). Thus, this appeal filed by the Revenue is dismissed.
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2020 (6) TMI 399
Validity of assessment u/s 147 - no addition is made in regards to reason for which assessment is reopened - Addition u/s 68 - HELD THAT:- We find that original return was processed u/s 143(1) and the only requirement under law to initiate reassessment proceeding against the assessee was that Ld.AO had reasons to believe that certain income had escaped assessment. AO was clinched with specific information while forming such reasons which suggested possible escapement of income in the hands of the assessee. Nothing more, in our opinion, was required at that stage to reopen the assessee s case and formation of a prima-facie opinion was sufficient to trigger the reassessment proceedings. Not convinced with legal grounds / submissions made by Ld. AR, we dismiss the same and hold that reassessment proceedings were validly initiated against the assessee. Ground Nos. 1 to 2 as well as additional ground stands dismissed. So far as the merit of the case are concerned, we find that the onus to demonstrate the fulfilment of primary ingredients of Sec.68 was on assessee. This onus was to prove the identity of the investor entities, their respective creditworthiness and genuineness of the transactions. This onus was more in the factual matrix which led to trigger reassessment proceedings against the assessee. Upon perusal of documents on record, we find that the assessee had furnished Income Tax Acknowledgements of the investor entities, Board Resolutions passed by those entities to make investment in the assessee entity, copies of Share Application form, audited annual accounts and the bank statements of investor entities. There are no immediate cash deposits in the bank accounts of these entities before making investment in the assessee entity. The allotment was authorized by Board Resolution of the assessee and Return of Allotment in Form No.2 was filed with appropriate authorities. Upon perusal of these documents, it could be said that the assessee had discharged the primary onus of Sec.68 and it was incumbent on the part of Ld.AO to rebut assessee s claim. However, we find that no material has been brought on record to suggest that any cash got exchanged between the assessee and the investor entities and the assessee s unaccounted money was channelized in the books in the garb of share application. Mere non-appearance of directors alone could not support the impugned additions in the hands of the assessee. We delete the impugned additions u/s 68 - Decided in favour of assessee.
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2020 (6) TMI 398
Levy of penalty u/s 271(1)(c) - Defective notice - HELD THAT:- Assessment order did not record any satisfaction as to for which limb of Section 271 (1)(c) of the I.T. Act the penalty proceedings have been initiated. The A.O. merely mentioned at the bottom of the assessment order after computing the income that penalty proceedings under section 271(1)(c) of the I.T. Act have been initiated separately. Thus there is a violation of the Law in the matter. We, therefore, do not find any justification to levy the penalty under section 271(1)(c) of the I.T. Act against the assessee. In view of the above discussion, we set aside the Orders of the authorities below and cancel the penalty. Appeal of the Assessee is allowed accordingly.
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Customs
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2020 (6) TMI 397
Rejection of renewal of CHA licence - misdeclaration of imported goods - Smuggling - white fine powdery chemical, containing a whitish colored coarse chemical, concealed in between the bags of Sodium Sulphate - HELD THAT:- The appellant is not required to fulfil under Regulation 5 of CBLR, 2013, inasmuch [as] the appellant is not new applicant . We further find that the Regulations 4, 5 and 7 is applicable to an applicant, who applies and undertakes examination conducted by Directorate General of Inspection of Customs Central Excise, by inviting application by publication of notice in two leading national daily newspapers in English and Hindi and, subsequently grants licence to successful applicant(s). Further, the said affidavit has been filed in haste, as is evident from the fact that when Regulation 5 is not applicable to the appellant, there was no requirement to file any affidavit by the appellant. This gets further supported from the first letter dated 1-1-2017 filed by the appellant, to the department, wherein they have prayed to extend the validity of licence for five years i.e. for the period which was lost from the date of suspension i.e. 15-12-2010 till the date of original validity i.e. 15-12-2015. The license stands restored for the period of 10 years w.e.f. the date of this order - appeal allowed - decided in favor of appellant.
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2020 (6) TMI 396
Smuggling - Import of Gold Jewellery - bona fide baggage - Baggage Rules - case of Revenue is that the jurisdiction in a dispute relating to baggage vested with the Government of India, in its revisionary authority, and was not under the appellate jurisdiction of the Tribunal - Confiscation - penalty - HELD THAT:- On perusal of the Rules pertaining to importation of jewellery, as baggage by an arriving passenger, it is seen that the quantity in the present dispute is far in excess of that allowed free of duty on import into India. Therefore, the passenger has failed to comply with declaration requirements and confiscation under section 111(1) of Customs Act, 1962 is not misplaced. Confiscation - HELD THAT:- The appellant is a citizen of Malaysia and intends to return to her country of domicile. She was unable to carry into, and wear the gold jewellery in, India and it is her request that she should be allowed to carry it back with her on the return trip to Malaysia. In view of these circumstances and this plea, while holding that the goods are liable for confiscation under section 111(1) of Customs Act, 1962, we desist from endorsing the conformation - Confiscation set aside. Imposition of penalty u/s 112(a) of the Customs Act, 1962 - HELD THAT:- As the goods were liable for confiscation, the liability to penalty under section 112(a) of the Customs Act, 1962 is not unwarranted - the imposition of penalty of would suffice to meet the ends of justice. Appeal disposed off.
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Corporate Laws
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2020 (6) TMI 394
Maintainability of petition - oppression and mismanagement - Stay of the Extra Ordinary General Meeting - whether the Petitioners were successful in making out a case for interference by this Tribunal by invoking Section 241 and 242 of the Companies Act, 2013? - HELD THAT:- The reading of Sections 397 and 398 provides a right to members of a company who comply with the conditions of Section 399 (Section 244 of the New Act) to apply to the court for relief under section 402 of the Old Act (Section 242 of the New Act) or such other reliefs as may be suitable in the circumstances of the case, if the affairs of a company are being conducted in a manner oppressive to any member or members including any one or more of those applying. Therefore, we have to understand Section 399 of Old Act (Corresponding to Section 249 of New Act) to arrive at a decision on maintainability of the instant petition. Whether the Petitioners have the requisite qualifications as prescribed under section 399 to file this petition? - HELD THAT:- The object of prescribing a qualifying percentage of shares to file petitions under sections 397 and 398 is clearly to ensure that frivolous litigation is not indulged in by persons who have no real stake in the company. What is required in these matters is a broad common-sense approach. If the court is satisfied that the Petitioners represent a body of shareholders holding the requisite percentage, it can assume that the involvement of the company in litigation is not lightly done and that it should pass orders to bring to an end the matters complained of and not reject it on a technical requirement. However, the Respondents have raised their objections regarding the eligibility of the Trusts which are holding 13.8% and have questioned the eligibility of Secretary/General Secretary who are repressing the Petitioners No. 3 and 4. Whether the Trust represented before the NCLT have sufficient authorization to fulfil the eligibility criteria? - HELD THAT:- In the present case it is seen that Petitioner Nos. 3 and 4 are Trusts namely, Matha Jeevan Trust and Jeeva Trust, which were represented through their Secretary and General Secretary respectively. The answer to this question would depend on whether the trustees of the trust could authorize one of them to initiate proceedings for and on behalf of the Trust. The Secretary of the Petitioner No. 3 and General Secretary of the Petitioner No. 4 was authorised to appear before any Court of law or in any legal proceedings by the respective Trust Deeds, and they have duly filed this petition. The trustee can come before the court through the representation of Secretary/General Secretary, as the Trustees of the Trusts are the members of the Company and their names appears in the Register of Members of the Company. If the name of the Trustee/Chairman is in the Register of Members or if the share certificates have been issued in the name of the Trustee/Chairman, in respect of the shares, irrespective of whether such admission of a Trustee/Chairman as a member is valid or not, the Trustee/Chairman can maintain the petition as it has been admitted as the member, especially when no proceedings has been initiated to rectify the Register of Members for deleting the name of the Trustee/Chairman on the ground that they cannot be admitted as a shareholder/member - In the present case, the Trustee of 3rd Petitioner, i.e., Matha Jeevan Trust holds 14425 equity shares constituting 4.8% of the paid-up capital of the company whereas, the Chairman of the 4th Petitioner, i.e, Jeeva Trust holds 26980 equity shares constituting 9% of the paid-up share capital of the company. The 3rd and 4th Petitioners hold share certificates issued in their names and they are in a position to establish that the name of the Trustee/Chairman is in the Register of Members, then the Respondents cannot question the capacity of the member/Trustee/Chairman who hold more than 10% to file this petition. The consent made by the 31 shareholders are an intelligent consent, in the sense, a consent given for the purpose of making allegations in the petition and for the purpose of claiming reliefs therein and therefore it cannot be considered as a blanket consent, but a valid one as contemplated under section 399(3) of the Old Act. Even assuming that the consent given by these 31 shareholders is not valid, even then, the petition satisfies the conditions under section 399 as the percentage of shareholding has already crossed the 10% threshold laid down in the Section - in the light of Sections 397, 398 and 399 of the Companies Act, 1956 (Corresponding to Sections 241, 242 and 244 of the Companies Act, 2013), prima facie , we are of the view that the petition is maintainable. In the instant petition, the Respondents had conducted the EoGM at Thiruvananthapuram. Even assuming that the EoGM was validly conducted by a proper requisition, if the resolutions passed in the said EoGM are oppressive in the eyes of law to the minority shareholders, then we are of the considered view that the Tribunal can exercise the inherent power to take appropriate action against the wrong doers. If the acts are done legally but not with a good faith in the interest of the company or was done with a mala fide intention to gain control over the company, the acts are said to be illegal and non-est in the eyes of law. It is explicit that, when a meeting is requisitioned by some shareholders for the purpose of removing directors, the requisitionists' letter must be circulated prior to the meeting and it must disclose the grounds on which they want to proceed against the director - the notice of the meeting must be accompanied by a copy of the resolution and an explanatory statement. In the instant petition, we have not come across any explanatory note from the requisitionsts as well as the company, attached to the letter sent to Petitioners. The Respondents have indulged in oppression of minority shareholders and effected change in the control and management of Respondent Company, by their financial clout, muscle power and by adopting dubious methods to achieve their ends. Whether the Respondents in their Capacity as Directors of the Company had failed in complying with the fiduciary duty towards the shareholders? - HELD THAT:- It has neither a mind nor a body of its own. This makes it necessary that the company's business should be entrusted to some human agents. Hence the necessity of Directors. The law, therefore, continues to struggle against their wiles and imposes upon them certain duties which, when properly enforced, will without driving away from the field competent men, materially reduces the chances of abuse. Prior to the enactment of the Indian Companies Act 2013, the codified law with regard to the fiduciary duties of directors was largely silent on the said aspect, except for Section 291 which contained the provision dealing with general powers of the board of directors. Duties of directors, hitherto, were largely laid down by courts by looking at common law principles - A close reading of the present section lead us to conclude that it is motley of easily identifiable elements like shareholders and employees along with vague groups like the community. Thus, it would provide a cause of action to any person from the society giving rise to a problematic and absurd scenario. Whether the director is expected to act in 'good faith' for the promotion of the objects of the company or should it also encompass other groups in the sub-section? - HELD THAT:- While acting in the best interest, a director must carefully weigh commercial interests of the company on one hand while also taking into account the safeguarding of the interests of the stakeholders, on the other. While doing so, the director must ensure that his actions conform to the standards of those of a reasonably prudent person. The duty of good faith sets a higher standard than the best interest criterion. Harmony must be sought to be struck between commercial considerations of the company and the interests of stakeholders. Whether allotment of shares was done bonafide in the interest of the company or the said allotment was made mala fide with the object of gaining the control of the company? - HELD THAT:- The allotment of shares was done to achieve different purposes, i.e., to increase the number of members of their group in the company and conversion of loan amount as share application money, is to increase their shareholding and to maintain the control over the company - the directors are not entitled to use their powers of issuing shares merely for the purpose of maintaining their control or the control of themselves and their friends over the affairs of the company or merely for the purpose of defeating the wishes of the promoter Directors and to capture the company. It is well settled that if the Directors exercise their powers for the purposes other than those for which they were conferred, it may be said that they have exceeded their authority. It is evident that the mala fide intention of the Respondents 2 to 4 at the behest of Respondents 5 to 8 to remove the Petitioners from the Company has been done with undue haste for the purpose of grabbing power in the Respondent No. 1 Company. This clearly depicts that the Respondent 2 to 4 were hand-in-glove and supporting the actions of the Respondent No. 5 and gives credence to the allegations of the Petitioners - the Respondents group led by Respondent No. 5 are acting against the interest of Respondent Company and minority shareholders, for making material changes in the management of the Respondent company. The applicability of the provisions contained in Sections 397and 398 of the old Act. Section 397 gives a right to members of the Company who comply with the conditions of Section 399 to apply to the court for relief under section 402 of the act or such other relief as may be suitable in the facts and circumstances of the case. In the instant case, it cannot be disputed that the conditions of Section 399 are complied with. There is no substance in the contention that the Petitioners are not entitled to make the application, as the Petitioners do not constitute 10% shareholding in total. However, the tribunal can exercise its powers, the tribunal must be satisfied that the requirements of the Section 397 are fulfilled and the said requirements are that on an application under section 397 of a member who has right to apply in virtue of Section 399. This Tribunal is of the considered view that the Company's affairs in relation to the Petitioners have been conducted in an oppressive manner by the Respondents and the facts would render that it is just and equitable to wind up the Company - Petition allowed.
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Insolvency & Bankruptcy
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2020 (6) TMI 395
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Dishonor of cheque - pre-existing dispute or not - time Limitation - HELD THAT:- The preliminary issue raised by the Corporate Debtor that filing of Section 138 of the Negotiable Instruments Act, 1881 by the Operational Creditor before the Magistrate Court, Bombay, would amount to preexisting dispute is no longer res integra since the said issue was put to quietus by the Hon'ble NCLAT in the matter of Sudi Sachdev -Vs- APPL Industries Ltd. [ 2018 (11) TMI 1671 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] , wherein at para 6, it was held that the pendency of the case under Section 138 of the Negotiable Instruments Act, 1881, even if accepted as recovery proceedings, it cannot be held to be a dispute pending before a court of law. It is evident that the claim as raised by the Operational Creditor is within the prescribed period of limitation of 3 years. The registered office of the Corporate Debtoris situated within the State of Tamilnadu, amenable to its territorial jurisdiction and this Authority has no hesitation in admitting this Petition and initiating the Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor. Application admitted - moratorium declared.
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2020 (6) TMI 393
Rejection of Resolution Plan - the reason for the dismissal of the Resolution Plan by the Committee of creditors were on account of Expression of Interest (EOI) deviation, and non-fulfillment of other eligibility criteria - HELD THAT:- The Appellant has strictly not complied with the terms and conditions of Expression of Interest (EOI) dated 14.08.2018 and non-submission of EMD along with submission of Resolution plan dated 4.10.2018 as required by the Bid Process Memorandum. They have also deviated on other parameters. And hence CoC after deliberation has rejected the plan and accordingly the Resolution Professional has communicated to the Resolution Applicant. Since, liquidation proceedings as a going concern is already on from July 2019 and there is always scope for Resolution Applicants to opt for Arrangements under Section 230-232 of the Companies Act, 2013, if they are eligible in accordance with provisions of Insolvency and Bankruptcy Code, 2016 along with relevant Rules. There is no merit in the case to consider the relief of setting aside the impugned order of NCLT, Hyderabad Bench - the order of NCLT Hyderabad Bench upheld.
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2020 (6) TMI 392
CIRP proceedings - Whether the income tax department is a Secured Creditor. - Attachment of Refund - time limitation in terms of sub-section (2) of Section 281B of the Income-tax Act, 1961 - the Adjudicating Authority directed the Income-tax Department to release the refund amount HELD THAT:- We have brought it to the notice of learned counsel for the Appellant that in Form B of Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) Regulation there is no provision made for Operational Creditors to claim that Corporate Debtor has created security interest. On the other hand, in Form C, which is meant for Financial Creditors, there is specific provision for Financial Creditor to state as to whether the security interest is created by Corporate Debtor or not. In view of the aforesaid lacuna, even the Income-tax Department if Secured Creditor, cannot claim to be a Secured Creditor when Form B is filed. How the matter is sorted out is upto the Liquidator to decide in terms of the I B Code - V Appeal disposed off.
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2020 (6) TMI 391
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 noted that the supplies have been made by the operational creditor to the corporate debtor who has used such supplies to make the final products for consumption of its client i.e. the railway. It is also noted that such supplies were made by the operational creditor after inspection and approval by RITES Ltd., which is the competent authority, hence, there cannot be a dispute regarding the quality of material supplied by the operational creditor. It is further noteworthy that the operational creditor filed a civil suit for recovery of its amount before the Hon'ble High Court, Calcutta which passed a decree in favour of the operational creditor which remained non-complied by the corporate debtor. Even, application for recalling of said decree filed by the corporate debtor has been dismissed by the Hon'ble High Court. There is no case of suppression of any material fact. Further, no material of whatsoever nature has been brought on record to show that there exists some dispute except making oral allegations within the meaning of Sec.5(6) of the Insolvency Bankruptcy Code, 2016 prior to initiation of this proceedings. Thus, there is an operational debt which is due and a default has occurred, hence, on merits the case of operational creditor succeeds. The petition is otherwise complete in all respects and complies with the requirements of provisions of Insolvency Bankruptcy Code, 2016 read with regulations thereto. Application admitted - moratorium declared.
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CST, VAT & Sales Tax
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2020 (6) TMI 390
Taxability - sale of loose liquor - case of petitioner is that though the petitioner is also selling alcohol (in loose form), petitioner is not liable to pay VAT as the liability was already discharged at the time of the first sale by the Telangana Beverages Corporation Limited and the sale of loose liquor is not taxable as per Explanation III to Section 2 (38) of the Act - opportunity of hearing not provided - principles of natural justice - Lockdown due to COVID pandemic situation - HELD THAT:- The petitioner had made a request in his letter dt.26.03.2020 which was acknowledged by the 1st respondent on 27.03.2020 that the petitioner was disabled from furnishing readily all the documents in support of the petitioner s contentions in view of the lockdown situation prevailing in the State and in the country on account of outbreak of COVID-19 and if the 1st respondent were to grant time till the lockdown restrictions for movement were relaxed, the petitioner would furnish the same. The petitioner also requested in the said letter dt.26.03.2020 for an opportunity of personal hearing - The existence of the lockdown prohibiting movement of people on roads on account of outbreak of COVID-19 is an admitted fact. In these circumstances, the 1st respondent cannot reasonably expect the petitioner to furnish all the requisite documents for the petitioner to defend itself, that too for a period of (5) years within the (1) week time granted by the 1st respondent. There has been a gross violation of principles of natural justice and fair opportunity was denied to the petitioner by the 1st respondent to defend itself - notwithstanding the existence of an effective alternative remedy by way of an Appeal under Section 31 of the Act, these Writ Petitions is entertained on the ground that there has been a violation of principles of natural justice vitiating the impugned assessment orders. Matters remitted to the 1st respondent to pass fresh Assessment Orders for each of the Assessment Years in question, after affording reasonable time to the petitioner to submit all the documents and also after affording a personal hearing to the petitioner to put forth its objections before the 1st respondent - petition allowed by way of remand.
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2020 (6) TMI 389
Maintainability of petition - existence of alternative remedy - Levy of CST on entire turnover - taxable, export as well as exempted sales - petitioner contends that the 1st respondent adopted the gross turnover as ₹ 9475,63,11,243/- and proposed to levy tax at 14.5% on the entire turnover without considering the exemptions claimed towards direct exports, branch transfer and CST collections under the CST Act - Personal hearing not attended - HELD THAT:- The petitioner s Representative could not be blamed for not attending the personal hearing given by the 1st respondent due to such lockdown, more particularly when the online response also could not be submitted due to technical glitches on the portal of the 1st respondent - However, since the time fixed for making the assessment was to expire on 31.03.2020, without providing a personal hearing as sought by the petitioner on the phone on 31.03.2020, the impugned order was passed. It appears that on account of lack of time in view of the impending lapsing of limitation for making the assessment, not only was the petitioner denied proper opportunity to personally represent its case before the 1st respondent but also errors might have crept into the order of the 1st respondent passed on 31.03.2020 - a proper opportunity was denied to the petitioner to represent its case and there has been violation of principles of natural justice inasmuch as personal hearings were fixed on 16.03.2020 for the first time during lockdown period disabling the petitioner and causing serious prejudice to the petitioner. The existence of alternative remedy of appeal available to the petitioner to challenge the impugned order of Assessment dt.31.03.2020 cannot be a bar for the petitioner to avail the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India - the matter is remitted back to the 1st respondent to consider the matter afresh after giving personal hearing to the petitioner and to decide within a period of two (2) months from the date of receipt of a copy of this order - Petition allowed by way of remand.
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2020 (6) TMI 388
Stay of collection of the disputed tax - Section 31(3)(c) of the A.P. VAT Act, 2005 - It is contended that pending disposal of the appeal by the Tribunal, the respondents are insisting the petitioner on paying the balance disputed tax dues and that is why the petitioner has approached this Court by filing the present Writ Petition - HELD THAT:- Since it is not disputed by the learned Special Counsel for Commercial Tax that petitioner had already deposited 2/3rds of the disputed tax, and since admittedly appeal filed by petitioner before the Telangana VAT Tribunal is still pending and if the balance tax is also permitted to be receoved, the very appeal would become infructuous, we deem it appropriate to dispose of this Writ Petition by directing stay of recovery of balance of the disputed tax pending disposal of T.A.No.98 of 2019 by the Telangana VAT Appellate Tribunal, Hyderabad. Petition disposed off.
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Indian Laws
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2020 (6) TMI 387
Compensation on account of death caused by accident - HELD THAT:- On a perusal of the documentary evidence on record i.e. the ITRs for the assessment years 2005-06 and 2006-07, filed prior to the death of the deceased, which reflect the income of approximately ₹ 1,00,000 p.a. (as assessed by the MACT in its Award dated 22.12.2009), we make this the basis for computing the compensation payable to the Claimants - We award future prospects @40% of the income of the deceased. Given the fact that the deceased left behind five dependents, the deduction towards his personal expenses would be 1/4th. Even though the Claimants/Appellants herein did not file an Appeal against the Award dated 22.12.2009 passed by the MACT before the High Court, we deem it appropriate to enhance the compensation by exercising our jurisdiction under Article 142 of the Constitution of India in order to do complete justice between the parties - The Respondent Insurance Company is directed to pay the compensation awarded to the Appellants within a period of twelve weeks from the date of this judgment, after adjusting any amount which may have been paid. The amount payable to the Appellants shall carry Interest @ 7.5% p.a. from the date of filing the claim petition till the date of realization. Appeal disposed off.
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