TMI Tax Updates - e-Newsletter
July 26, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Securities / SEBI
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Classification of supply - supply of services or not - pallets, crates and containers leased by CHEP India Private Limited located and registered in Karnataka to its other GST registration located across India - The activity would be considered as lease transaction if the specific goods are sent on lease as per the agreement between the two entities and accordingly taxable as supply of services in terms of the provisions of the Integrated Goods and Services Tax Act, 2017 read with Section 7 of the Central Goods and Services Tax Act, 2017. - AAR
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GST:
Cancellation of registration of petitioner - non-payment of interest - delayed filing of returns GSTR-3B - Let the petitioner approach the concerned authority more specifically the respondent No. 3 along with an application to permit the petitioner to pay the interest liability in installment as a special case keeping in view the pandemic situation arising out of Covid-19 - HC
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Income Tax:
Bogus claim of Deduction u/s 35(i)(ii) - Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 - as there are serious allegations against the petitioner herein and there are several triable issues, this Court is not inclined to quash the proceedings and the petitioner failed to make out any case to quash the said proceedings. - HC
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Income Tax:
Validity of reopening of assessment u/s 147 - admission of additional objections - the petitioner is directed to submit his further objections along with the materials, documents, etc., to the respondent within a period of two weeks from the date of receipt of a copy of this order. On receipt of any such objections from the writ petitioner, the respondent shall consider the same along with the process of assessment/re-assessment by providing an opportunity to the writ petitioner. - HC
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Income Tax:
Reopening of assessment u/s 147 - Mere production of books of account and the details by the assessee are one aspect of the matter and even with reference to such books of accounts and materials, if the Assessing Officer could able to discover some new information or materials, which provided cause for the Assessing Officer to invoke Section 147 of the Act or has reason to believe, then also such reopening proceedings are permissible. Explanation 2(c)(i) states that where an assessment has been made, but income chargeable to tax has been under-assessed, then also reopening of assessment is permissible - HC
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Income Tax:
Computation of deduction u/s 10A - belated receipt of foreign remittances on account of export sales - The only reason for not considering the alleged amount while computing deduction under section 10A of the Act was that, such amount was received belatedly beyond the period of six (6) months mentioned in the statute, and application for extension of time for receiving such foreign remittances have been filed with the authorized bankers and the applications were not been rejected. - the assessee is entitled to the benefit of deduction u/s 10A - AT
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Income Tax:
Validity of proceedings u/s 153C - related party transaction with subsidiary companies - Evidently, no draft order was passed in this case. See CBDT Circular No. 09/2013 dated 19.11.2013 wherein the Assessing Officer is required to forward a draft assessment order to the eligible assessee, if he proposes to make, on or after the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee - assessment order is bad in law - AT
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Income Tax:
Revision u/s 263 - When the ld. Commissioner issued a show cause notice under section 263 and ultimately passed impugned order; by that time the alleged domestic transaction of purchase from related party was not required to be considered as a specified domestic transaction under section 92BA of the Act. It has been omitted, and therefore, no proceedings under section 263 should have been undertaken by the ld. Commissioner - Revision order quashed - AT
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Customs:
Review petition - Rectification of error in the Judgement of the Court - Verification in respect of the Bill of Entry - Verification of country of origin - Inadvertent error rectified - This Court is persuaded to direct the Customs [the respondents No.2 and 3] to release ware-housed consignment of the petitioner as covered by the Bills of Entry on obtaining an indemnity bond to the effect that on assessment of duty, after verification, if any of the petitioner is found liable to pay more duty - HC
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SEBI:
Compounding of offence - Price rigging and insider trading - Such alleged acts of price rigging and manipulation of the prices of the shares have a vital bearing on investors’ wealth and the orderly functioning of the securities market. SEBI was, therefore, justified in opposing the request for the compounding of the offences. The matter was referred to the HPAC constituted by SEBI and presided over by a former judge of the Bombay High Court, which denied the request for compounding. This decision which has been taken by SEBI is not mala fide nor does it suffer from manifest arbitrariness. On the contrary, having due regard to the nature of the allegations, we are of the view that an order for compounding was not warranted. Judgment of the High Court of Delhi Affirmed. - SC
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Central Excise:
Jurisdiction for passing adjudication order - when there is a clear observation of the hon’ble High Court in the present case itself that will prevail over the board circular which was relied upon by the learned Commissioner (Appeals) - the observation of hon’ble High Court will prevail over the board circular and according to which the Joint Commissioner has jurisdiction not only to issue the Show Cause Notice but also to adjudicate the same. - AT
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VAT:
Validity of assessment order - exercise of jurisdiction erroneously - In the absence of exhausting such remedies, High Court is losing the benefit of deciding the matter on merits, as the High Court cannot conduct a trial or examine the original records in the writ proceedings under Article 226 of the Constitution of India. Thus, the Courts shall not provide unnecessary opportunities to the assessee to escape from the liability merely on the ground of jurisdictional error, which is rectifiable. - HC
Articles
Notifications
Customs-
62/2021 - dated
23-7-2021
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Cus (NT)
Customs Brokers Licensing (Amendment) Regulations, 2021
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61/2021 - dated
23-7-2021
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Cus (NT)
Sea Cargo Manifest and Transhipment (Fifth Amendment) Regulations, 2021.
GST - States-
ERTS(T)65/2017/Pt II/293 - dated
18-5-2021
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Meghalaya SGST
Meghalaya Goods and Services Tax (Fourth Amendment) Rules, 2021.
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ERTS(T)65/2017/Pt.II/291 - dated
1-5-2021
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Meghalaya SGST
Meghalaya Goods and Services Tax (Third Amendment) Rules, 2021
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ERTS(T)65/2017/Pt-II/287 - dated
1-5-2021
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Meghalaya SGST
Amendment in Notification No. 76/2018- State Tax, dated the 31st December, 2018
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ERTS(T)65/2017/Pt-II/286 - dated
1-5-2021
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Meghalaya SGST
Providing relief by lowering the rate of interest for the months of March and April, 2021.
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ERTS(T) 65/2017/Pt II/292 - dated
1-5-2021
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Meghalaya SGST
Seeks to extend specified compliances falling between 15.04.2021 to 30.05.2021 till 31.05.2021 in exercise of powers under section 168A of MGST Act.
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ERTS (T)- 65/2017/Pt II/290 - dated
1-5-2021
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Meghalaya SGST
Amendment in Notification No. 83/2020 - State Tax, dated the 10th November, 2020
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ERTS (T) 65/2017/Pt II/289 - dated
1-5-2021
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Meghalaya SGST
Seeks to extend the due date for furnishing of FORM ITC-04 for the period Jan-March, 2021 till 31st May, 2021.
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ERTS (T) 65/2017/Pt II/288 - dated
1-5-2021
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Meghalaya SGST
Amendment in Notification No. 21/2019- State Tax, dated the 23rd April, 2019
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (7) TMI 973
Classification of supply - supply of services or not - pallets, crates and containers leased by CHEP India Private Limited located and registered in Karnataka to its other GST registration located across India - Valuation for calculation of GST - GST charged on lease charges or the value of equipment in terms of Section 15 of the CGST Act and KGST Act read with relevant Rules - documents that should accompany the movement of goods from CUPL, Karnataka to CIPL, Kerala - movement of equipment from CIPL, Kerala to CIPL, Tamil Nadu on the instruction of CIPL, Karnataka - movement of goods or not. Whether the transfer of assets on lease to his own branches having separate registrations in other States could be termed as Lease and accordingly taxable as supply of services? - HELD THAT:- Section 9(1) of the CGST Act, 2017 mandates that the levy of tax on the intra-State transactions of supply and Section 22 and 24 requires all taxable persons who are located in a State to obtain registration in that State. Since GST is a tax within the State and registrations are State-specific, the transactions of interstate nature are brought under the IGST Act and the Centre is liable to collect the tax and apportion the same to the Centre and States based on the destination of such goods or services as GST is a consumption based tax. Therefore all stock transfers from one State to another state are treated as supplies and would be covered under the term transfer . Since the registrations are state-specific, the transactions between the two entities of the same concern would be covered under deemed supplies between two deemed distinct persons. Since the applicant states all the goods are purchased in the account of CIPL, Karnataka, as per the provisions of the CGST Act, 2017, the goods are held to be in the account of CIPL, Karnataka as owned assets and in the account of CIPL, Kerala as leased assets, for which CIPL, Kerala is liable to pay consideration for the lease transactions - Further, since the two entities are deemed to be distinct persons, and the transfer of goods are effected from CIPL, Karnataka to CIPL, Kerala without any transfer of ownership of such goods, the same amounts to supply of service as per entry no. 1(b) of the Schedule II to the CGST Act which states that any transfer of right in goods or of undivided share in goods without transfer of title thereof, is a supply of services. Valuation of supply - HELD THAT:- The transaction value which is the price actually paid cannot be treated as the value of supply as the supplies are between the related persons, i.e. the branches of the same company - the recipient, CIPL, Kerala who is the recipient of the goods is eligible for full input tax credit on the transaction between the applicant and the CIPL, Kerala and hence the value declared in the invoice would be the value of supply of goods or services or both as per the second proviso to Rule 28 and hence would be treated as the value of such supply. What documents should accompany the movement of goods from CIPL, Karnataka to CIPL, Kerala? - HELD THAT:- In the pertinent case, as the goods are moving out of the State as a consequence of a lease transaction which is a service, the applicant has the option of issuing the tax invoice either before the provision of service or after the provision of service and in case the applicant opts to issue the tax invoice after the provision of service, the time limit in terms of Rule 47 is applicable. This means to say, that there is a possibility that the invoice may not be issued at the time of provision of service. It is seen that the applicant is not supplying goods, but services which involve the movement of such goods given on lease/ rent and hence they are liable to issue a delivery note as per Rule 55 at the time of removal of such goods for the purposes of renting. Further, they shall also generate an e-way bill for movement of such goods as per Section 138(1) based on the details of such delivery note before the movement of such goods and consignment value of the goods shall be the market value of such goods and not the value of supply of services involved in such transaction. Movement of goods from CIPL, Kerala to CIPL, Tamil Nadu on the instruction of CIPL, Karnataka - HELD THAT:- CIPL, Kerala would be acting in two capacities, first as an independent entity under the CGST Act for the leased goods while the lease contract of the specific goods is in force and next as a bailee of CIPL, Karnataka. Once the lease contract is over and the goods are no more under the control of CIPL, Kerala. If the goods are to be transferred immediately after the contract of lease is over, the CIPL, Karnataka should enter into the lease transaction with the CIPL, Tamil Nadu and raise a delivery note and e-way bill with ship from address as CIPL, Kerala and Ship to address as CIPL, Tamil Nadu for those specific goods which are given on lease or rent and in effect, it would amount to CIPL, Karnataka picking the goods and sending to CIPL, Tamil Nadu. It cannot be said that the goods are moving not as a result of supply under section 7 of the CGST Act, 2017. It cannot be termed as a mere movement without any involvement of supply and the said transaction of supply of goods on rental or lease basis by CIPL, Karnataka to CIPL, Tamil Nadu and is liable to tax in the hands of CIPL, Karnataka if the transaction is between CIPL, Karnataka and CIPL, Tamil Nadu. Further the services provided by CIPL, Kerala to CIPL, Karnataka in facilitating the transportation of goods to CIPL, Tamilnadu are exigible to GST - from the applicant's point of view, his lease contract with CIPL, Kerala is continuing and the goods leased should ultimately come back to the applicant from CIPL, Kerala and CIPL, Kerala is liable to pay lease rentals to CIPL, Karnataka. Documents needed to be carried - HELD THAT:- The documents to be carried for the movement is a delivery note and e-way bill issued by CIPL, Karnataka if the movement is as a result of supply by CIPL, Karnataka or a delivery note and e-way bill issued by CIPL, Kerala is the movement is as a result of supply by CIPL, Kerala.
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2021 (7) TMI 966
Cancellation of registration of petitioner - non-payment of interest - delayed filing of returns GSTR-3B - HELD THAT:- There is no dispute that due to non payment of the interest liability for the period from October, 2018 to April, 2020 for delayed filing of returns GSTR-3B, the petitioner is required to make the payment and only thereafter, as submitted by Mr. Keyal, the registration of the petitioner shall be restored by the respondent GST. On the other hand, the submission of Ms. Bhattacharjee that due to striking out of the registration of the petitioner he could not collect the contractual dues from the various organizations against the contractual job also cannot be disbelieved. Let the petitioner approach the concerned authority more specifically the respondent No. 3 along with an application to permit the petitioner to pay the interest liability in installment as a special case keeping in view the pandemic situation arising out of Covid-19 - Petition disposed off.
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Income Tax
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2021 (7) TMI 968
Reopening of assessment u/s 147 - reopening of assessment beyond the period of four years - Sufficiency of reason to believe - HELD THAT:- This Court is of the considered opinion that intricacies of non-disclosure of certain informations, materials, fully and truly, cannot be gone into by the High Court. In other words, the High Court has to ensure whether the mandatory condition of reason to believe is satisfied or not. Sufficiency of the reasons cannot be gone into by the High Court in a writ proceedings. The provisions of the Act enumerates mainly the reason to believe and the findings provided to form such an opinion, which are the material factors to be considered. Therefore, the High Court has to scrutinise the reasons and the reasons are sufficient enough to meet out the requirements as contemplated under the Act. Other aspects, on merits, are to be adjudicated by the Assessing Officer and High Court is not expected to adjudicate the disputed facts with reference to the accounting system followed or the materials which all are to be adjudicated with reference to the documents and evidences. This being the factum and the principles to be followed, this Court has no hesitation in forming an opinion that the petitioner is bound to cooperate for the completion of reopening of assessment proceedings initiated under Section 147 of the Act, by producing all the relevant materials and documents and the authorities competent are expected to complete the process by affording opportunity to the writ petitioner, as contemplated and as expeditiously as possible. Petitioner made a submission that the reason for reopening of assessment is the assessment order passed for the Assessment Year 2009-10. However, the said assessment order was reversed by the Income Tax Appellate Tribunal in its order dated 06.01.2016. Therefore, the reasons furnished for reopening of assessment is not in existence as of now and therefore, the authorities cannot proceed further. This Court is of the considered opinion that the order of the Tribunal, its findings, as well as the applicability with reference to the materials produced and informations regarding the Return of Income for the Assessment Year 2006-07 all to be considered by the competent authorities and this Court cannot go into those merits and demerits and it is for the petitioner to establish the same before the Assessing Officer, by availing the opportunities to be provided for the purpose of completion of re-assessment proceedings.
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2021 (7) TMI 967
Correct head of income - Income derived from letting out of property to the tenants for the purpose of running a software technology park - business income or house property - HELD THAT:- As decided in M/S. TIDAL PARK LTD. [ 2021 (7) TMI 302 - MADRAS HIGH COURT] income derived from letting out of the property with all amenities and facilities would be income from business and cannot be assessed either as income from house property or as income from other sources. - Decided in favour of the assessee.
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2021 (7) TMI 965
Disallowance u/s 10B - whether the assessee has complied with the conditions prescribed under Section 10B? - HELD THAT:- The fact that the assessee has exported the goods through third party is not disputed. The substantial questions of law Nos.1 and 2 have already been answered by two division benches of this court in INTERNATIONAL STONES INDIA (P.) LTD [ 2018 (6) TMI 1478 - KARNATAKA HIGH COURT] and 'METAL CLOSURES (P.) LTD [ 2018 (6) TMI 1468 - KARNATAKA HIGH COURT] For the reasons assigned in the aforesaid decisions, the aforesaid substantial questions of law are answered in favour of the assessee and against the revenue. Whether, the Tribunal was justified in law in ignoring the decision of the Hon'ble Jurisdictional Karnataka High Court in the case of Tata Elxsi Vs. ACIT [ 2015 (10) TMI 634 - KARNATAKA HIGH COURT] and consequently passed a perverse order on the facts and circumstances of the case? - The tribunal while passing the impugned order has not taken note of decision of this court in 'TATA ELXSI VS. ACIT', [ 2015 (10) TMI 634 - KARNATAKA HIGH COURT] and therefore, the substantial question of law No.3 is answered in the affirmative.
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2021 (7) TMI 964
Validity of Reopening of assessment u/s 147 - expiry of time limit for making reopening of assessment under Section 148 - Assessee stating that the reopening is done beyond the period of six years and therefore, the impugned notice under Section 148 is without jurisdiction - HELD THAT:- The respondent in vide letter dated 14.11.2011 has stated that the reassessment proceedings were initiated for issuance of notice under Section 148 on 07.03.2011 and was served to the petitioner assessee on 16.03.2011.This was well before the expiry of time limit for making reopening of assessment under Section 148 of the Act. Accordingly, notice shall be deemed to be a valid notice. The petitioner is bound to submit their objections, if they have chosen to do so. In the event of filing any such objections, same are to be considered by the respondents and the same is to be disposed of by passing a speaking order as per the directions of the Hon'ble Supreme Court in the case of GKN Driveshafts India Ltd., vs ITO [ 2002 (11) TMI 7 - SUPREME COURT ] Even before submitting the objections on the reasons furnished for reopening of assessment, the petitioner filed the writ petition on the ground that reopening of assessment is made beyond the period of six years and therefore, the respondent has no jurisdiction. Respondents have categorically stated in their letter dated 14.11.2011 for the impugned notice under Section 148 was issued on 07.03.2011 and it was served to the assessee on 16.03.2011. The last date for reopening of assessment was 30.03.2011 and thereafter the impugned notice of reopening of assessment is well within the period of six years. In these circumstances, the petitioner has to avail the opportunities to be provided under the provisions of the Act. - Decided against assessee.
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2021 (7) TMI 962
Validity of assessment order - faceless assessment - Violation of provisions of Section 144B - initiating penalty proceedings under Section 270A and 271AAC(1) - HELD THAT:- Petitioner is correct in submitting that Section 144B of the Act has been violated and the assessment proceeding has been completed in the present case in violation of the principles of natural justice. Consequently, the impugned assessment order dated 11th June, 2021 issued u/s 143(3) read with Section 144B of the Act along with accompanying notice of demand issued u/s 156 of the Act as well as notice for initiating penalty proceedings issued under Section 270A and 271AAC(I)of the Act are set aside - the respondents/revenue is given liberty to pass a fresh assessment order in accordance with law. The petitioner is also given liberty to challenge any action of the respondents/revenue in accordance with law, in the event it is aggrieved by the same.
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2021 (7) TMI 960
Bogus claim of Deduction u/s 35(i)(ii) - Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 - offences alleged against the petitioner herein are under Sections 409, 420, 464, 465, 466, 468 and 471 read with 120-B of IPC - HELD THAT:- Prima facie, there are serious allegations against the petitioner herein. There are several triable issues. The total tax advantage derived was around ₹ 22.43 Crores which would have accrued to the Government. Thus, Government is deprived to the said extent. It is loss to public exchequer. The petitioner has not voluntarily forgone the claim of exemption claimed on the basis of false donation certificate received by him and when he was asked to prove the genuineness of the said certificate during the assessment procedure, then only the petitioner agreed to forgo such exemption. Thus, the petitioner has to prove his innocence by facing trial. The contention of the petitioner that there is no mens rea is also triable issue in view of the facts stated. It is apt to refer to the decision rendered in Kamal Shivaji Pokarnekar v. The State of Maharashtra [ 2019 (2) TMI 1894 - SUPREME COURT ] wherein the Apex Court has categorically held that quashing criminal proceedings was called for only in a case where complaint did not disclose any offence, or was frivolous, vexatious, or oppressive. If allegations set out in complaint did not constitute offence of which cognizance had been taken by Magistrate, it was open to High Court to quash same - The Court has to consider whether complaint discloses that prima facie, offences that were alleged against Respondents. Correctness or otherwise of said allegations had to be decided only in trial. At initial stage of issuance of process, it was not open to Courts to stifle proceedings by entering into merits of the contentions made on behalf of Accused. Criminal complaints could not be quashed only on ground that, allegations made therein appear to be of a civil nature. If ingredients of offence alleged against Accused were prima facie made out in complaint, criminal proceeding shall not be interdicted. In Skoda Auto Volkswagen India Private Limited Vs. The State of Uttar Pradesh and Ors [ 2020 (11) TMI 994 - SUPREME COURT] the Hon ble Apex Court referring to the various judgments rendered by it categorically held that the High Courts in exercise of its inherent powers under Section 482 of Cr.P.C has to quash the proceedings in criminal cases in rarest of rare cases with extreme caution. In view of law laid down by the Hon ble Apex Court and in view of the above said discussion, as there are serious allegations against the petitioner herein and there are several triable issues, this Court is not inclined to quash the proceedings and the petitioner failed to make out any case to quash the said proceedings. Therefore, this Criminal Petition is liable to be dismissed.
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2021 (7) TMI 959
Reopening of assessment u/s 147 - Reopening beyond period of four year - HELD THAT:- Scope of Section 147 under the Act is wider enough to cover various circumstances under which reopening of assessment shall be done by the authority competent. As rightly pointed out by the petitioner, within four years and beyond four years, there is a distinction. Within four years, the Assessing Officer, if has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, can reopen the assessment. Beyond the period of four years, certain conditions are to be fulfilled In the present case, the learned Senior Standing Counsel relied on the fact that new informations were gathered and the genuinity of business transactions are also questioned by the AO. AO has reason to believe that the assessee failed to disclose fully and truly all material facts necessary for his assessment. The very intention of the provision is to ensure that even in cases where there was an omission or commission or by mistake certain particulars or details were not given by the assessee at the time of original assessment, after reopening of the assessment, the assessee shall produce all those documents, which were omitted, left out as well as the informations. Thus, the provision do not doubt about the integrity of an assessee u/s147 unless a contrary is established by the AO. This Court is of the opinion that assessment/re-assessment is to be completed by following the procedures contemplated. The scope of judicial review under Article 226 of the Constitute of India is to scrutinise the processes through which the decision is taken by the competent authority by following the procedures as contemplated under law, but not the decision itself. In the present case, the directives issued in the case of GKN Driveshafts (India) Ltd. [ 2002 (11) TMI 7 - SUPREME COURT] have been followed and the assessee was given opportunity to submit their objections and the petitioner had rightly availed the opportunity and the said objections were also considered and disposed of by the authorities. The reasons furnished for reopening of assessment as well as the findings made in the order disposing of the objections are in the opinion of this Court is candid and convincing and therefore, there is no other reason to interfere with the order impugned in this writ petition and consequently, the writ petition fails and stands dismissed.
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2021 (7) TMI 958
Validity of reopening of assessment u/s 147 - admission of additional objections - HELD THAT:- The petitioner seeks further opportunity to submit elaborate objections. This Court is of the considered opinion that in the event of quashing the initiation proceedings and providing an opportunity to submit further objections, it would cause prejudice to the revenue. Petitioner may be permitted to submit all his further objections based on the statement of Ms.Subhadra G., Manager (Operations), Apollo Hospital, enabling the Assessment Officer to consider the same and accordingly, proceed with the assessment/reassessment, based on the reopening of assessment proceedings. Thus, instead of quashing the entire proceedings, as prayed for in the present Writ Petitions, it is suffice if an opportunity is provided to the writ petitioner to submit additional objections, if any, based on the materials relied on by the assessee to the Assessing Officer, with in a stipulated period and on receipt of the same, the AO shall be permitted to proceed with the assessment/re-assessment. This being the factum established, the petitioner is directed to submit his further objections along with the materials, documents, etc., to the respondent within a period of two weeks from the date of receipt of a copy of this order. On receipt of any such objections from the writ petitioner, the respondent shall consider the same along with the process of assessment/re-assessment by providing an opportunity to the writ petitioner.
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2021 (7) TMI 957
Validity of reopening of assessment u/s 147 - petitioner made a submission that he was not a Director of the Company, namely M/s.B.Rangaswamy Naidu Orchards Private Limited and without even hearing him and not providing any opportunity to defend his case first respondent issued notice under Section 147 - HELD THAT:- This Court of an opinion that the observations or certain considerations made in an order passed u/s 143 (3) of the Act, against the assessee M/s.B.Rangaswamy Naidu Orchards Pvt.Ltd., and no direct action was taken against the petitioner and admittedly in the present case no direct orders are passed and the AO has reason to believe for reopening of assessment under Section 147 of the Act and consequently issued a notice u/s 148 of the Act. Thus the petitioner is entitled for an opportunity to defend his case including the factual aspects submitted even before this Court. If at all, the petitioner claims that he was not a director of the said Company M/s.B.Rangaswamy Naidu Orchards Pvt.Ltd., it is for the petitioner to establish the same before the Authorities Competent Information for the purpose of invoking Section 147 of the Act and all further procedures contemplated under the Acts as well as the directions in the case of GKN Driveshafts India Ltd. [ 2002 (11) TMI 7 - SUPREME COURT] are to followed scrupulously by the Assessing Officer, while undertaking the process of completion of proceedings initiated.
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2021 (7) TMI 955
Reopening of assessment u/s 147 - Reappreciation of books of accounts and records - expiry of time limit for making reopening of assessment under Section 148 - Proceedings initiated beyond the period of four years and during the fag end of sixth year - change of opinion - HELD THAT:- Admittedly, the assessment order under Section 143(3) of the Act was passed on 27.07.2009. Reopening of assessment was initiated beyond the period of four years, but within a period of six years. The order furnishing reasons for reopening issued at the first instance by the Assessing Officer was ambiguous and the reasons were not made clear. This Court directed the second respondent therein to consider the objections raised by the petitioner, afford an opportunity of personal hearing and pass orders. Thereafter, the petitioner was provided with an opportunity and the petitioner also had admittedly availed the same. The order pursuant to the directions issued by this Court was passed by the second respondent in proceedings dated 02.03.2015 and perusal of the order would reveal that the assessee failed to disclose certain amount in the tax calculation and subsequently for the taxation. Hence, the said discrepancy was found as a failure on the part of the assessee to disclose fully and truly all material facts Assessee failed to disclose certain amount, which resulted failure on the part of the assessee to disclose fully and truly all materials. The very ground taken by the assessee that it has furnished/disclosed fully and truly all material facts deserves no merit consideration. The second respondent could able to ascertain certain material facts establishing failure on the part of the assessee to disclose the facts fully and truly. Regarding the ground of availability of fresh material for reopening of assessment proceedings, this Court is of the considered opinion that Explanation 2(c) to Section 147 would be relevant - In the present case, Explanation 1 and Explanation 2(c) to Section 147 are to be considered. Mere production of books of account and the details by the assessee are one aspect of the matter and even with reference to such books of accounts and materials, if the Assessing Officer could able to discover some new information or materials, which provided cause for the Assessing Officer to invoke Section 147 of the Act or has reason to believe, then also such reopening proceedings are permissible. Explanation 2(c)(i) states that where an assessment has been made, but income chargeable to tax has been under-assessed, then also reopening of assessment is permissible, in cases where assessment order has been already passed based on the materials available on record. In the event of identifying under-assessment based on the very same materials, then also reopening of assessment is possible. Regarding the under-assessment there need not be new materials. Even based on the available materials, if the competent authority could able to identify any under-assessment, then also power under Section 147 shall be invoked by the competent authority. Thus where it is established that the assessee failed to disclose certain amount in the tax calculation and subsequently for the taxation, there is a reason to believe that there was a failure on the part of the assessee to disclose fully and truly all material facts. This being the factum, the initiation cannot be construed as change of opinion warranting interference from the hands of this Court. - Decided against assessee.
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2021 (7) TMI 952
Disallowance by denying accumulation u/s.11(2) - assessee had not filed Form No.10 electronically on or before the due date of filing of return - HELD THAT:- The assessee has filed audit report in Form No.10B clearly reflecting the accumulations u/s.11(1)(a) and 11(2) of the Act. Merely because Form No.10 was not filed electronically by the assessee, more so when it was also not even mandated by the statute for the relevant year under consideration, the ld. AO (CPC) ought not to have disallowed the accumulation while processing the return vide intimation u/s.143(1) of the Act. Pursuant to section 154 application preferred by the assessee before the ld. AO (CPC), the regular accumulation u/s.11(1)(a) of the Act was duly allowed but the accumulation u/s. 11(2) was denied for want of Form No.10 in electronic mode. We find that both the lower authorities have grossly erred in not appreciating the facts of the case and by denying the benefit of accumulation on a mere technical inability on the part of the assessee.We find the very same issue had been the subject matter of adjudication by this Tribunal in the case of Parle Hindu Devalaya Mandir [ 2020 (3) TMI 1353 - ITAT MUMBAI] wherein this issue has been decided in favour of the assessee - We deem it fit to restore this issue to the file of the ld. AO with a direction to verify Form No.10 filed by the assessee manually and allow assessee s claim of exemption u/s.11(2) of the Act in accordance with law. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
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2021 (7) TMI 950
Computation of deduction u/s 10A - Belated receipt of foreign remittances on account of export sales to be included in the export turnover for the purposes of computing deduction - HELD THAT:- The criteria required by the statute is that the sale proceeds are to be received in convertible foreign exchange in India for being eligible to be considered for the purposes of claiming deduction under section 10 A. In the present facts of the case, we note that, there is no dispute whatsoever regarding receipt of the sale proceeds in convertible foreign exchange were received by assessee, though belatedly. The only reason for not considering the alleged amount while computing deduction under section 10A of the Act was that, such amount was received belatedly beyond the period of six (6) months mentioned in the statute, and application for extension of time for receiving such foreign remittances have been filed with the authorized bankers and the applications were not been rejected. The facts of the case in hand is similar to the aforesaid case of Wipro Ltd.[ 2015 (10) TMI 826 - KARNATAKA HIGH COURT ] - Thus following it we hold that notwithstanding the fact that there is no express order granting approval by the authorized bankers extending the time limit of six (6) months for receipt of foreign remittances on account of export sales, the assessee is entitled to the benefit of deduction under section 10A of the Act and consequently direct AO that such amounts, though realized belatedly, shall be included in the export turnover for the purposes of computing deduction under section 10A of the Act - Decided in favour of assessee.
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2021 (7) TMI 949
Disallowance of Commission expenses - allowable business expenses or not? - HELD THAT:- The commission is being paid regularly and scrutiny assessment was also made for the previous years. The assessee has enclosed assessment orders from AY 10-11 to 13-14. The details of commission paid to the agents has also been filed from the AY 10-11 to 14-15 . There is no dispute that the commission has been paid every year and no disallowance was made on this count. Facts for the impugned AY are the same to that of earlier AYs but, only there is a change in the names of the recipients. We find substance in submissions of the ld. AR that the principle of consistency should be followed. In support of our decision, we rely on the decision of co-ordinate bench of Mumbai ITAT in the case of Apne Aap Women Worldwide (India) Trust [ 2018 (10) TMI 426 - ITAT MUMBAI] - Decided in favour of assessee.
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2021 (7) TMI 948
TP adjustment - inclusion of the assessee s DEPB incentives in rule 10(B)(1)(a)(ii) of Income Tax Rules as an adjustment in the Comparable Un-controlled Price CUP method for the purpose of arriving at arm s length price ALP under the provisions of the Act - HELD THAT:- The assessee s argument seeking to include DEPB as an adjustment for ALP computation because it is in the nature of an operating income, ought not be accepted as it tends to have an overriding effect on application of chapter-X of the Act as per stricter interpretation rule. We therefore accept the Revenue s instant former substantive grievance. Corporate guarantee adjustment - HELD THAT:- As it come on record that the assessee had itself recorded comparable guarantee commission @8.75% i.e. much more than that that decided by the tribunal - We therefore adopt judicial consistency and decline Revenue s instant latter substantive ground for this precise reason alone.
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2021 (7) TMI 946
Interest u/s 244A - Whether CIT(A) is correct in allowing interest u/ s. 244A for the period of delay attributable to the assessee either wholly or in part.? - HELD THAT:- As submitted by assessee that the delay is not attributable to the assessee as the department gives credit to the TDS only when reflected in 26AS. The updation of Form 26AS is beyond the control of the assessee and hence the delay in updation should not be attributed to the assessee. Therefore, we find no infirmity in the order of the CIT(A) in directing the AO to allow interest u/s 244A as was allowed in the earlier 154 order for the full period and upholding the order of the CIT(A), the grounds raised by the revenue on this issue are dismissed. Revision u/s 263 - computation of loss or unabsorbed depreciation - HELD THAT:- We observe that the assessee has furnished details of the unabsorbed depreciation and business forward losses before the AO on two different dates, first vide letter dated 24/07/2014 and second one on 11/11/2014, which have been extracted by the AO. AO has calculated the unabsorbed depreciation and business forward losses and the CIT(A) has confirmed the order of the AO. At the time of hearing, the assessee has also produced before us a statement showing the details of unabsorbed depreciation and accumulated losses. Figures are not in consonance with each other as calculated by the AR of the assessee. Therefore, to find out the genuineness of the figures which are extracted as above, we remit this issue to the file of the AO for verification/genuineness of the figures as quoted supra in the table by the ld. AR of the assessee. If the figures are found to be correct, the AO is directed to allow the claim of the assessee u/s 115JB(2)(iii) in accordance with law after providing reasonable opportunity of being heard to the assessee. Thus, the grounds raised by the assessee on this issue in both the appeals under consideration are treated as allowed for statistical purposes.
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2021 (7) TMI 945
Validity of proceedings u/s 153C - related party transaction with subsidiary companies - satisfaction note for invoking the provisions of section 153C - assessee is a foreign company, thus in the first instance, the AO should have issued a draft assessment which is not done in the instant cases - non - adherence of the provisions of section 144C - HELD THAT:- The unchallenged observations of the Ld. CIT(A) clearly establishes that the learned Assessing Officer did not make any enquiry pertaining to the documents seized, no deadly conduct any verification as to the transactions recorded on them with related parties, but on the other hand, as observed by the Ld. CIT(A) he simply placed reliance on certain photostate copies and recorded his satisfaction note in a wholesale consolidated manner pertaining to all the Indian company s and overseas companies Thus so-called satisfaction recorded by the AO to invoke the jurisdiction is not a specific satisfaction with reference to any particular document belonging to the assessee and, therefore, it goes to the root of the matter and vitiates the assumption of jurisdiction by the learned Assessing Officer to reopen the assessment proceedings by issuance of notice under section 153C of the Act. Non-adherence of the provisions of section 144C - The assessee company incorporated in Cyprus as per laws of Cyprus and have been resident of Cyprus. The assessee has been filing the Incometax Return with Cyprus Revenue Authorities. Since the transaction between Focus Energy Ltd. with the assessee was accepted as an international transaction continuously over a period of time, it goes without saying that other party, i.e., the assessee is a foreign company. Any transaction between Indian Company and Indian company cannot be an international transaction and therefore, the international transaction of Focus Energy Ltd. which is an Indian Company, will necessarily be with the foreign company. CIT(A) concluded that it an unmistakable pointer that the assessee is a foreign company and such a fact is admitted by the Assessing Officer while dealing with the transactions of Focus Energy Ltd. with its foreign AEs continuously over a period of time. Basing on these facts, learned CIT(A) concluded that the material on record is more than enough to conclude that the assessee is a foreign company and therefore, under the provisions of section 144C, the Assessing Officer shall, in the first instance, forward a draft order of the proposed assessment to the assessee if he proposes to make any variation which is prejudicial to the interest of assessee. Evidently, no draft order was passed in this case. See CBDT Circular No. 09/2013 dated 19.11.2013 wherein the Assessing Officer is required to forward a draft assessment order to the eligible assessee, if he proposes to make, on or after the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee It is, therefore, clear that the assessment order is bad for invoking the jurisdiction u/s. 153C without proper satisfaction and also for not passing the draft assessment order as required u/s. 144C. Documents found in search as not incriminating in nature - Also as per decision of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] there is a finding of fact returned by ld. CIT(A) that documents found in search were not incriminating in nature; that the contents of the same were fully explained by the assessee and accepted by the Assessing Officer; and that the seized documents were only referred for ascertaining the residence status of the assessee company in accordance with the provisions of section of the Act and not for detecting any undisclosed income of the assessee as per the provisions of section 153C of the Act, but served the purpose as a foot board to reopen the case of the assessee company for a block period of six years. - Decided against revenue.
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2021 (7) TMI 944
Undisclosed income admitted in the statement made u/s 132(4) - CIT-A deleted the addition - HELD THAT:- From perusal of finding of Ld. CIT(A) and the facts placed before us it is clear that firstly surrender was on an estimate/tentative basis since no reference was made to specific assessment year, any undisclosed asset or unexplained expenditure or seized records. Secondly, disclosure was made before M/s Ramani Group could get the copies of seized records. Thirdly, after analyzing and examining the seized records M/s. Ramani Group has offered undisclosed income in the name of five assessees namely M/s. Ramani Ice-cream Company Ltd., Shri Girish Awatramani, Shri Vijay Hariramani, M/s. Windsor Infra M/s. Ishaan Builders and Developers. Fourthly, the impugned addition is made merely on the basis of statement given u/s 132(4) of the Act without making any reference or placing any nexus with any incriminating material found during the course of search u/s 132 of the Act. In case no incriminating material was found during the course of search whether the Assessing Officer can make addition merely on the basis of statement u/s 132(4) ? - Following the decision of this Tribunal in the case of Signature Builders [ 2021 (1) TMI 945 - ITAT INDORE ] and also respectfully following the decisions referred hereinabove find no inconsistency in the finding of Ld. CIT(A) which is based on the examination of facts, settled judicial precedence and direction given in circular issued by Central Board of Direct Taxes and thus hold that he has rightly deleted the addition made by the Ld. AO solely based on the statement given u/s 132(4) of the Act without referring or placing any nexus to the incriminating material seized during the course of search u/s 132(4) of the Act. Thus, revenue fails to succeed in the sole ground - Ground no.1 of revenue s appeal stands dismissed.
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2021 (7) TMI 943
Bogus LTCG - Addition u/s 68 - denial of claim of exemption u/s 10(38) - HELD THAT:- Tribunal in the case of Shivnarayan Sharma others [ 2021 (7) TMI 210 - ITAT INODRE ] is squarely applicable on the common issues raised in the instant appeals and thus taking consistent view and respectfully following decisions and judgments referred hereinabove, we set aside the finding of CIT(A) and direct the AO to allow claim of the exemption of u/s 10(38) of the Act for Long Term Capital Gain earned from sale of listed equity shares of Sunrise Asian Ltd. which have been effected through recognized stock exchange, after making payment of Security Transaction Tax (STT) and holding the equity shares for more than 12 months. Thus, the addition in the case of Smt. Manorama Devi Sharma and in the case of Shri Pratap Bajaj stands deleted.
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2021 (7) TMI 942
Addition u/s. 36(1)(va) read with Section 2(24)(x) - delayed deposit of employees contribution to PF and ESI - assessee contributing/depositing the same before the due date of filing of return of income u/s. 139(1) - HELD THAT:- We do not accept the Ld. CIT(A)'s stand denying the claim of assessee since assessee delayed the employees contribution of EPF ESI fund and as per the binding decision in Vijayshree Ltd.[ 2011 (4) TMI 63 - ITAT KOLKATA] u/s. 36(1)(va) of the Act since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds and we allow the appeal of the assessee.
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2021 (7) TMI 941
Difference between the department's valuation cell as against the books of accounts maintained at the taxpayer's behest - HELD THAT:- Case file prima facie suggests that neither the valuation cell nor the learned lower authorities have taken into consideration the alleged difference between the state and CPWDs rates as well as assessee's self-supervision and cost of raw material at the relevant point of time. And also it has come on record from a perusal of the municipal construction permissions as well as house tax assessment proceedings that the impugned construction had not been completed in the impugned AY. 2003-04 prima facie. Therefore deem it appropriate in these peculiar facts and circumstances that a lumpsum addition of ₹ 3.5 lakhs only than that in issue amounting to ₹ 16,09,048/- would meet the ends of justice with a rider that the same shall not be taken as a precedent. The assessee gets relief of ₹ 12,59,048/- in other terms.
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2021 (7) TMI 939
Revision u/s 263 - transactions entered with the related parties whose value at the most could be determined at arm's length, are the transactions with related parties - Whether domestic transaction of purchase from related party was not required to be considered as a specified domestic transaction under section 92BA? - whether in the absence of sub-clause (i) of section 92BA in the provision can still be transaction of the assessee regarding purchase made from the related party deserves to be referred to the TPO? - HELD THAT:- As decided in judgment of Pr. CIT Vs. Texport Overseas P. Ltd. [ 2019 (12) TMI 1312 - KARNATAKA HIGH COURT ] that there was a domestic transaction which fall within the definition of specified domestic transaction with help of section 92BA(i). A reference was made to the TPO and objections were filed before the DRP also. But ultimately when the assessment order was passed under section 144(3) of the Act, read with section 143(3) of the Act, this clause has been omitted from the Act. In other words, the assessment order was passed on 30.6.2017, and this clause, on the strength of which this reference was made to the TPO, stand omitted w.e.f. 1.4.2017. The case of the assessee was that after April, 2017 this proceeding would lapse, which was not accepted by the AO as well as TPO, but the Tribunal accepted the stand of the assessee. When the ld. Commissioner issued a show cause notice under section 263 and ultimately passed impugned order; by that time the alleged domestic transaction of purchase from related party was not required to be considered as a specified domestic transaction under section 92BA of the Act. It has been omitted, and therefore, no proceedings under section 263 should have been undertaken by the ld. Commissioner. - Decided in favour of assessee.
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2021 (7) TMI 937
Computation of capital gains - transfer of the subject property by the assessee and other co-owners - FMV determination - HELD THAT:- Section 50C nowhere confers any jurisdiction to the assessing authority to change the nature of the capital asset other than that declared in the corresponding transfer instrument u/s. 2(47)(v) of the Act. Hon'ble apex court's recent larger bench's decision in Commissioner of Customs Vs. Dilip Kumar [ 2018 (7) TMI 1826 - SUPREME COURT] settles the law that only strict interpretation is to be adopted whilst construing a taxing or an exemption provision; as the case may be. Coupled with this, the crucial statutory expression 'assessable' in Section 50C came to be inserted by way of Finance (No. 2) Act, 2009 w.e.f. 01-10-2009 whereas we are in A.Y. 2008-09 only. We thus hold in the foregoing factual backdrop that the CIT(A) has rightly reversed the impugned long term capital gain made in the assessees' hands. The same stands affirmed accordingly. Disallowance of claim towards cost of acquisition - HELD THAT:- We find no reason to express our agreement with the learned CIT(A)'s foregoing remand directions going against the amendment in Section 251(1)(a) of the Act vide Finance Act, 2001 w.e.f. 01-06-2001 omitting the clinching statutory expression 'or he may set aside'. The fact also remains that the assessees have not been able to prove as to under what circumstances they had to pay the impugned sum over and above ₹ 8 crores as per the terms of settlement. We therefore deem it appropriate that these assessees need to be afforded one more effective innings before the AO to explain the justification of ₹ 3 crores made to the twin recipients (supra) as falling u/s. 48(i) and (ii) of the Act; as the case may be. These assessees are directed to appear themselves or through their authorised representative; as the case may be on or before 31-10-2021 with all the supportive evidence; at their own risk and responsibility to be followed by three effective opportunities of hearing for the consequential verification.
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2021 (7) TMI 936
Exemption u/s. 11 12 - Charitable activity u/s 2(15) - HELD THAT:- Mere circumstances of collection of such amounts did not results in the assessee losing their essential character of being established for charitable purpose and held that since the case if similar to those for the earlier assessment year, respectfully following the decision of Hon'ble Delhi High Court [ 2016 (12) TMI 1860 - DELHI HIGH COURT] and Hon'ble ITAT (Delhi) in Appellant's own case for AY 2009-10 [ 2016 (5) TMI 38 - ITAT DELHI] Assessing Officer was directed to allow exemption with all consequential benefits. Appeal filed by the Revenue is dismissed.
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2021 (7) TMI 933
Capital gain computation - Cost of improvement for computing long term capital gain on sale of agricultural land - HELD THAT:- As decided in case of the co-owner [ 2018 (3) TMI 1340 - ITAT AHMEDABAD] wherein 50% of the cost of improvement of the agricultural land was allowed - we direct the Assessing Officer to calculate 50% cost of improvement of the agricultural land as directed in the order of the ITAT as mentioned above. Accordingly, this ground of appeal of the assessee is partly allowed.
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2021 (7) TMI 930
Denial of exemption u/s 80P(2)(d) - interest income earned from Co-operative banks - HELD THAT:- In the case of Karkala Co-op. S. Bank Ltd. Vs. ITO [ 2021 (2) TMI 854 - ITAT BANGALORE] the Bangalore bench of Tribunal has considered issue of eligibility of the assessee to claim deduction u/s 80P(2)(d) and it was held that the assessee is eligible for deduction of expenses incurred for earning the interest income. We set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to allow deduction of proportionate cost, administrative and other expenses, if the A.O. proposes to assess the interest income earned from bank deposits as income under the head -other sources. Denial of deduction u/s 80P of the Act in respect of commission income earned on sale of e-stamps - HELD THAT:- Perusal of provisions of sec.80P(2)(c) would show that there is no such restriction prescribed in it. Section 80P(2)(c) prescribes deduction in the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b). It further states that the deduction u/s 80P(2)(c) is allowable to so much of its Profits and gains attributable to such activities as does not exceed the amount prescribed. Thus the quantum of deduction is the amount of profits and gains attributable to the activities subject to the maximum amount prescribed therein. Hence, we are of the view that the assessee would be eligible for deduction u/s 80P(2)(c) of the Act in respect of commission income on sale of e-stamps, since it is not one of the activities mentioned in clause (a) or (b). We notice that it is necessary to first determine the profits and gains attributable to the activities of earning commission income on sale of e-stamps and then compute deduction u/s 80P(2)(c) subject to the limits prescribed in the said provision. Accordingly, this issue requires fresh examination at the end of AO. Appeal allowed for statistical purposes.
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Customs
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2021 (7) TMI 969
Review petition - Rectification of error in the Judgement of the Court - Verification in respect of the Bill of Entry - Verification of country of origin - respondent filed their objection against the review petition and stated that there is nothing to be reviewed except a bonafide mistake that has crept in the order dated 26.04.2021 which is merely a bonafide typographical error - Rule 6(1)(b) of the CAROTAR, 2020 - HELD THAT:- Since the errors in the judgment dated 26.04.2021 are apparent on the face of records. The line the petitioner may take release of the imported goods covered by Bill of Entry No.659,629/IMP/AGT-LCS/2020-21 dated 29.09.2020 without prejudice to his claim be deleted and substituted by the following sentence : The petitioner may take release of the imported goods covered by Bills of Entry No.959298 IMP/AGT-LC/2020-21 dated 17.12.2020. This Court is of the view that the purported verification cannot be brought under Rule 6(1)(b) of the CAROTAR, 2020 as there is no expression to the effect that there is reason to believe that the Country of Origin criteria stated in the Certificate of Origin has not been met or the claim of preferential rate of duty made by the importer, the petitioner, is invalid. Even there is no document to show that specific information has been sought from the verifying authority. It appears further to this Court, this can be at best termed as measure of due diligence to verify whether the goods meet the origin criteria as claimed and thus, the said verification shall fall within the ambit of verification on random basis covered by Rule 6(1)(c) of CAROTAR, 2020. This Court is persuaded to direct the Customs [the respondents No.2 and 3] to release ware-housed consignment of the petitioner as covered by the Bills of Entry No.959298 and INP/AGT-LC/2020-21 dated 17.12.2020 on obtaining an indemnity bond to the effect that on assessment of duty, after verification, if any of the petitioner is found liable to pay more duty, he shall pay such duty within a period of thirty days from the day when the order of assessment will be communicated to the petitioner, else the customs will be at liberty to take appropriate action in terms of law without further reference to the petitioner. Petition allowed.
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Corporate Laws
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2021 (7) TMI 935
Sanction of the Scheme of Amalgamation and Arrangement - Section 232(3) of the Companies Act, 2013 - HELD THAT:- It is ordered that even after the sanction of the scheme, the Admobile Private Limited will be liable for all liabilities as per the letter of Income Tax Department relating to Admobile Private Limited, as it is a demerged company and it is not getting dissolved. The scheme is approved with various orders issued - the scheme is approved - application allowed.
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2021 (7) TMI 934
Sanction of the Scheme of Amalgamation - Section 230 to 232 of the Companies Act, 2013 - HELD THAT:- The scheme is approved alongwith various directions with regard to sanction of scheme also issued. Application allowed.
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2021 (7) TMI 932
Approval of Scheme of Amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various notices also issued. The scheme is approved - application allowed.
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Securities / SEBI
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2021 (7) TMI 971
Compounding of offence - Price rigging and insider trading in the scrip of the Company - IPO issues - SEBI s Investigation and the criminal complaint - HELD THAT:- The nature of the allegations against the appellant are such so as to preclude a decision to compound the offences. We have adverted, in a considerable amount of detail, to the circumstances which have been narrated in the counter affidavit filed by SEBI. We find merit in the submissions which has been urged before the Court by learned Senior Counsel who appeared on behalf of SEBI that the allegations in the present case involved serious acts which impinged upon the protection of investors and the stability of the securities market. The observation in the order of adjudication of the Chairperson of the SEBI dated 22 September 2000, that no loss has been caused to the investors as a result of the proposal which was submitted by the promoters to purchase the shares at the rate of ₹ 12 per share, would not efface the element of alleged wrong doing. Such alleged acts of price rigging and manipulation of the prices of the shares have a vital bearing on investors wealth and the orderly functioning of the securities market. SEBI was, therefore, justified in opposing the request for the compounding of the offences. The matter was referred to the HPAC constituted by SEBI and presided over by a former judge of the Bombay High Court, which denied the request for compounding. This decision which has been taken by SEBI is not mala fide nor does it suffer from manifest arbitrariness. On the contrary, having due regard to the nature of the allegations, we are of the view that an order for compounding was not warranted. Judgment of the High Court of Delhi Affirmed.
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Insolvency & Bankruptcy
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2021 (7) TMI 947
Amount paid to the Interim Resolution Professional towards the CIRP Costs and the Fees - Appellant and the Corporate Debtor have already settled the dispute - Appellant and the Original Petitioner agreed that the Appellant will bear the CIRP Costs and the Fees of the IRP of the Corporate Debtor - HELD THAT:- When the Original Petitioner has admittedly already entered into settlement, it is inappropriate for the learned counsel for the Original Petitioner Operational Creditor to now turn around and create doubts with regard to the amounts paid to the Resolution Professional. The Learned Counsel for the Original Petitioner is submitting that the Application was filed in capacity of Liquidator and as it is Liquidator it is answerable to stakeholders. When willful execution of the settlement agreement dated 19th July, 2021 is not questioned and the documents itself show that the Appellant would be making necessary payments of the CIRP Costs and the Fees of Resolution Professional, the Original Applicant who is not making the payment can not now be seen as turning around to question the quantum of the CIRP expenses and Fees. It is not convincing that the Learned Counsel for the Original Applicant is making out a case to look into the question of sufficiency or otherwise of the CIRP Costs and the Fees - appeal disposed off.
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2021 (7) TMI 940
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- It is not in dispute that the demand notice was sent through speed post to the address of the respondent-corporate debtor as mentioned in its master data and when the same was offered to deliver at the said address and when the same was unclaimed, it should be treated as a valid and proper delivery of the demand notice, as per the settled principles of law. Hence, this issue is decided in favour of the petitioner. Whether the petitioner has proved the existence of an enforceable debt and the liability to pay the same by the corporate debtor? - HELD THAT:- It is not in dispute that the respondent-corporate debtor vide Annexure 5 warning notice has raised serious allegations of breach of the contract, malpractice, defective and substandard supply of machinery and threatened to revoke/cancel the contract between the parties. The petitioner failed to show the settlement of those disputes either before issuance of the demand notice or thereafter. In the absence of the same, it is to be concluded that there is a pre-existing dispute between the parties and that the CP is liable to be dismissed on this ground - there is no necessity to go into other allegations and counter allegations made in the CP. Petition dismissed.
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2021 (7) TMI 938
Seeking to consider the resolution plan - seeking to set aside the impugned Form-G dated 21.02.2021 and for issuance of a fresh Form-G again - HELD THAT:- It is not in dispute that the object of the Code is maximization of the value of the assets of the corporate debtor. Hence, no prospective resolution applicant can object if the COC in its commercial wisdom rejects a particular resolution plan and in deciding to issue a fresh Form-G. The applicant though got an opportunity to submit a fresh resolution plan, and has chosen not to submit the same but on the other hand, filed the instant application. It is to be seen that the resolution of the respondent-corporate debtor has already been delayed for substantial period due to various reasons including different long spells of lockdowns due to Pandemic Covid-19. It is not in the interest of the corporate debtor and any of its stakeholders to further delay the resolution process. The applicant having given consent to participate in the process in pursuance of the impugned Form-G dated 21.02.2021 cannot challenge the same - a short time is given to all the prospective resolution applicants including to the applicant to submit their resolution plans or revised resolution plans as the case may be within a specified time. Application is disposed of by permitting the applicant and all other prospective resolution applicants to participate in the resolution process of the corporate debtor and to submit their fresh resolution plans/revised resolution plans within 10 days from today.
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PMLA
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2021 (7) TMI 972
Seeking grant of Bail - illegal transfers of valuable foreign exchange - allegation of transmission of more than ₹ 518 Crores to the alleged exporters from Hong Kong - HELD THAT:- Without going into the question whether the rigor of Section 45 of the Act would still apply as a result of the amendment, the appellant is entitled to the benefit of bail principally for the reasons: a. The length of custody undergone by the appellant as against the maximum sentence that could be visited upon the appellant under the offences in question. b. The fact that the investigation in the matter is complete and draft charges have been circulated. c. All other three co-accused have been released on bail. Subject to the appellant furnishing cash security in the sum of ₹ 25,00,000/- with two like sureties to the satisfaction of the Trial Court, the appellant shall be released on bail, subject to other conditions as the Trial Court may deem appropriate to impose - appeal allowed.
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2021 (7) TMI 963
Protection of rights of the Union of India - attachment of property - HELD THAT:- In view of the matter being remanded to the Adjudicating Authority, who is still seized of the matter, the Undertaking given by the parties in the connected Appeals are directed to maintain the Status-quo about the property shall continue till the Adjudicating Authority decides the matter again in pursuance of the said remand directions in the order dated 13.12.2017 passed by the learned Tribunal. Appeal disposed off.
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2021 (7) TMI 961
Validity of notice of eviction - direction to vacate the property mentioned in the notice within 10 days of receipt of the said notice - HELD THAT:- Mr Tahir Majid Shamsi, the learned Assistant Solicitor General of India (ASGI), appearing on behalf of the Respondents, when asked, seeks some time to get instructions in the matter qua availability of Appellate Tribunal. That apart, the learned Assistant Solicitor General of India submitted that when the Petitioner, admittedly, has already availed the remedy of appeal as provided under the Statute, therefore, pending such appeal, there is no scope for the Petitioner to approach this Court through the medium of the instant Petition. Before proceeding further in the matter, it is thought just and proper to grant one opportunity to Mr Shamsi for reporting instructions in the matter. Accordingly, let the matter come up for consideration on Wednesday, the 7th of July, 2021 in the Daily Supplementary Cause List in order to enable Mr Shamsi to get instructions in the matter, as aforesaid.
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Service Tax
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2021 (7) TMI 931
GTA Services - service of transport operator or owner and not of any transport agency for inward transportation of raw material to their factory - adjudicating authority took the ground that there was no existence of goods transport agency - reverse charge mechanism - HELD THAT:- There is no such provision in the scheme of Acts and Rules permitting assumption of facts to be made by the Adjudicating Authority, without reference to the facts on record. In this view of the matter, the basic fact and /or the requisite for charging service tax under GTA service i.e. service being provided by goods transport agency as defined, nor existence of consignment note being there, the demand has been raised improperly as well as whimsically. The penalties imposed are also set aside - the appeal is allowed.
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Central Excise
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2021 (7) TMI 953
Refund of unutilised Cenvat Credit in cash - Credit lying in the books of accounts at the time of closure of factory being 28.6.2017 - non-submission of reliable supporting documents related to refund claim - applicability of Rule 5 of CCR, 2004 - HELD THAT:- Reliance placed in the case of UNION OF INDIA VERSUS SLOVAK INDIA TRADING CO. PVT. LTD. [ 2006 (7) TMI 9 - KARNATAKA HIGH COURT] holding that the appellant is entitled to refund of the amount of Cenvat Credit lying in their Cenvat Credit account on closure of business - further it is held that the appellant is entitled to interest as per Rules, as per section 11BB of Central Excise Act, i.e. three months after the date of application till the date of grant of refund. Appeal allowed - decided in favor of appellant.
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2021 (7) TMI 951
Jurisdiction for passing adjudication order - duty/tax involved in the present case exceeds ₹ 2 crore - Circular No. 1049/37/2016-CX dated 29-Sep-2016 - HELD THAT:- Very same issue was decided in M/S PALAK DESIGNER DIAMOND JEWLLERY VERSUS UNION OF INDIA [ 2019 (8) TMI 714 - GUJARAT HIGH COURT] - The issue involved in the said judgment was whether the Order-In-Original in respect of the Central Excise matter passed by Joint Commissioner is legal and correct or since the amount involved is more than ₹ 2 Crores the competent authority to issue the Show Cause Notice and pass the adjudication order should be Commissioner, and it was held that it cannot be said that the Joint Commissioner had no jurisdiction to issue the Show Cause Notice and adjudicate the same. Following this principle in the present case also when there is a clear observation of the hon ble High Court in the present case itself that will prevail over the board circular which was relied upon by the learned Commissioner (Appeals) - the observation of hon ble High Court will prevail over the board circular and according to which the Joint Commissioner has jurisdiction not only to issue the Show Cause Notice but also to adjudicate the same. Application disposed off.
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CST, VAT & Sales Tax
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2021 (7) TMI 970
Interest on amount claimed - entire case of the petitioner is that the amount which the respondents had claimed under the provisions of The Goa Value Added Tax Act, 2005 was already with the respondents and therefore, there was no question of claiming any interest on the said amount - HELD THAT:- The Tribunal, after having accepted the petitioner's case that there was no valid consideration of their main contention or that there was no reason assigned for rejection of his main contention, would have remanded the matter to the Assistant Commissioner of Commercial Taxes and Appellate Authority and not the Commissioner to exercise power under Section 25(4) of the said Act. The impugned order is modified and it is directed that the petitioner's appeal before the Assistant Commissioner of Commercial Taxes and Appellate Authority to restore and for the reasons the matter shall stand remanded to the Assistant Commissioner of Commercial Taxes and Appellate Authority for fresh disposal in accordance with law and by complying with the direction in the Tribunal's impugned Order dated 23/06/2020. The rule is disposed off.
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2021 (7) TMI 954
Validity of assessment order - erroneous application of the provisions of the TNVAT Act and the assessment orders passed which resulted exercise of jurisdiction erroneously - input tax credit to be considered for the purpose of passing an assessment order or not - applicability of amendment as issued in the Tamil Nadu Act, 13 of 2015 with effect from 29.01.2016 - HELD THAT:- Usurping the powers of the appellate authorities by the High Court by invoking its powers under Article 226 of the Constitution of India is certainly unwarranted. The parties must be provided an opportunity to approach the appropriate authorities for redressal of their grievances in the manner known to law. In the event of entertaining all such writ petitions, the High Court will not only be over-burdened, but usurping the powers of the appellate authority, which is certainly not desirable - Jurisdictional error should not result in exoneration of liability. Jurisdictional error, if any committed, is technical, and thus, rectifiable. In such circumstances, the Courts are expected to quash the order passed by an incompetent authority and remand the matter back for fresh adjudication. The growing practice in the High Court is to file writ petitions under Article 226 of the Constitution of India without exhausting the statutory remedies provided under the Act. The points raised in this regard are statutory violations. However, even such statutory violations can be dealt with by the Appellate authorities or the Appellate Tribunals. This apart, in a writ petition, if such orders are passed with jurisdictional errors and quashed without any remand, then an injustice would be caused to the very spirit of the statute enacted for the benefit of the public at large. Thus, Courts are expected to be cautious, while granting exoneration of liability merely on the ground of jurisdictional errors, if any committed by the authorities competent - review of such orders by the higher authorities are imminent to form an opinion that there is willful or intentional act for commission of such jurisdictional errors, enabling the assesses to get exonerated from the liability. Liability and jurisdictional errors are distinct factors, and therefore, Courts are expected to provide an opportunity to the Department to decide the liability on merits and in accordance with law with reference to the provisions of the Act and Rules and guidelines issued by the Department. In the absence of exhausting such remedies, High Court is losing the benefit of deciding the matter on merits, as the High Court cannot conduct a trial or examine the original records in the writ proceedings under Article 226 of the Constitution of India. Thus, the Courts shall not provide unnecessary opportunities to the assessee to escape from the liability merely on the ground of jurisdictional error, which is rectifiable. This Court has no hesitation in arriving a conclusion that the petitioner is bound to exhaust the statutory appellate remedy as contemplated under the provisions of the TNVAT Act - the authorities competent are bound to consider the amended provision under Section 19 of the Tamil Nadu Act and pass the assessment orders on merits and in accordance with law and by affording opportunity to the assessee concerned. Petition disposed off.
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Indian Laws
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2021 (7) TMI 956
Dishonor of Cheque - supply of information about the location of the original case records - it was submitted that while the impugned order was passed, the facts with regard to the trial of the case under Section 138 of the NI Act was not taken into consideration by the writ Court as the complaint was initially instituted before the learned Chief Judicial Magistrate, Paschim Medinipur - HELD THAT:- The order substantially has been passed in favour of the petitioner/appellant to take appropriate steps with regard to the case records pending with the learned Judicial Magistrate, Alipore as it appears that the case records is pending for inquiry and trial before the learned Judicial Magistrate, 2nd Court at Alipore. The report of the learned Chief Judicial Magistrate was communicated to the registry through District Judge, South 24 Parganas which reflects that the case record is pending for disposal before the learned Judicial Magistrate, 2nd Court at Alipore and is physically lying at the said Court. But the petitioner has not appeared before the learned Judicial Magistrate, 2nd Court at Alipore, although, substantially the order directing the petitioner/appellant herein was to take proper steps in the case before the Court concerned - a complaint case under Section 138 of the NI Act pending before the Magistrate ought to have been disposed of speedily in a summary manner in the letter and spirit of provision under Section 143 NI Act which provides for Power of Court to try cases summarily but the case could not be disposed of due to the transfer and retransfer of the case from the Court of CJM, Medinipur to the Court of CJM, Alipore due to solemn direction passed by the Hon ble Supreme Court. It is settled proposition of law regarding territorial jurisdiction of the Courts in case of dishonor of cheque which has completely been changed with the new amendments by the Negotiable Instrument (Amendment) Act, 2015 which retrospectively came into force on and from 15th July, 2015 - the learned trial Court being the Judicial Magistrate, 2nd Court at Alipore are directed to take steps for disposal of the complaint case No. C-4392 of 2016 as expeditiously as possible preferably with six months from the date of communication of this order. Appeal disposed off.
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