TMI Tax Updates - e-Newsletter
September 17, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Indian Laws
Highlights / Catch Notes
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GST:
Classification of goods - Maize Bran (cattle feed) - For the above manufacturer, who purchases Maize Bran, maize bran is just an input/ingredient which is used in the manufacture of their final product i.e.cattle feed. - But is not a cattle feed by itself. - The rate of GST chargeable is 5% - AAR
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GST:
Classification of Supply - services or not - rate of GST - mining lease for extracting “Stone along with associated minor minerals” - Thus, the activity undertaken by the applicant is classifiable under Heading 9973 (Leasing or rental services, with or without operator), as mentioned in the annexure at Serial No. 257 (Licensing services for the right to use minerals including its exploration and evaluation) sub-heading 997337 - The activity attracts 18% GST - AAR
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GST:
Classification of goods - bio agricultural products i.e. RhizoMyx and Rhizomyco - biofertilisers are not covered under the Sub-heading 3101 - the biofertilizers namely Rhyxomyx and Rhyxomyco manufactured and supplied by the applicant are classifiable under Tariff item No.30029030 - Liable to GST @12% - AAR
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GST:
Valuation - inclusion of reimbursement (at actual) of expenses - Pure agent - Rental services of aircraft including passenger aircrafts, freight aircrafts and the like with or without operator - Applicant failed to prove that conditions of "Pure agent" are satisfied - amount recovered as reimbursement (at actual) from the customer, for the fuel procured on behalf of the Customer is required to be included in the value of services - AAR
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GST:
Release of attached Bank Account of petitioner - The effect of Section 83 of the Act shall come to an end as soon as the proceedings pending in any of the aforesaid Sections i.e. 63 or 64 or 67 or 73 or 74 are over because pendency of the proceedings is the sine qua non - HC
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Income Tax:
Interest u/s 244A on delayed refund - the interest on the delayed refund becomes part of the principle amount and the delayed interest includes the interest for not refunding the principle amount. Accordingly, it also includes the interest on the delayed refund. - HC
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Income Tax:
Disallowance of interest paid on late deposit of TDS - the interest paid by the assessee for delayed payment of TDS in respect of statutory liabilities and thus this interest amount cannot be treated as business expenditure u/s 37(1) - AT
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Income Tax:
Revision u/s 263 - Assessee is entitled for deduction u/s 54 since there is transfer of residential house property as observed hereinabove and for this part of the appeal, the assessee succeeds. Regarding the deduction claimed u/s 54EC assessee has not made the investment within stipulated time and this fact was also not examined by the AO - Revision order sustained on this issue. - AT
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Income Tax:
Request for recalling an order wherein the appeal was dismissed on the ground of delay in filing an appeal - assessee cannot expect the Tribunal to become a party to its plan to be eligible for such settlement scheme by allowing its prayer to firstly recall the order and then, subsequently on such recall, allow the withdraw of the appeal, being a condition precedent for settlement of dispute. - AT
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Income Tax:
Penalty u/s 271A - When the turnover has to be computed only by taking the positive and negative outcome of the transactions and not the entire volume of the transactions, the turnover of the assessee is wrongly considered by the AO while levying the penalty u/s 271A. - AT
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Income Tax:
Penalty u/s 271A - non maintenance of books of account and not auditing of the same - when the issue of turnover in case of derivative transactions is a debatable issue, then the assessee cannot be penalized for not maintaining the books of account as the case would definitely fall under the provisions of section 273B- AT
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Income Tax:
Exemption u/s 11 - Registration u/s 12AA(1)(b) and u/s 80G(5)(vi) - As per amended rule 17A of the Income Tax Rules, which are applicable in the case of the assessee, the assessee was not required to furnish the original copy of the documents rather self attested or self certified copy of each and every documents/ instruments was sufficient for the purpose of verification by the ld. CIT (E). - AT
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Income Tax:
Addition u/s 56(2)(vii)(b)(ii) - difference between the stamp duty value and purchase value of agricultural land (immovable property) - the agricultural land purchased in the name of the assessee is not a ‘’capital asset’’ as per provisions of Section 2(14) of the Act and it is not covered by the definition of ‘’property’’ given in Explanation to Section 56(2)(vii)(b) - Additions deleted - AT
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Income Tax:
Penalty u/s 271(1)(c) - assessment proceeding u/s 153A - Nothing on record which suggests that any document/ material/ information was found during the course of search which remotely indicate that the assessee is recipient of short term capital gain on sale of immovable property. - None of the conditions specified in Explanation 5A to Section 271(1)( c) of the Act are attracted - No penalty - AT
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Income Tax:
FMV determination - sale of office with common area - AO/DVO is directed to determine the fair market value by considering these common are as a positives factor while determining the fair market value of the offices but the common area cannot be considered as the area sold by the assessee when only offices are sold. - AT
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Customs:
Defreezing of Bank Accounts of petitioner (third party) - freezing of account on the ground of illegally availed IGST refund of an exporter was deposited in the bank account of the petitioner - even if as per the proviso such period was extended by the Principal Commissioner of Customs or Commissioner of Customs for a further period not exceeding six months, that extended period has also elapsed - Respondents are directed to forthwith unfreeze the seized bank account of the petitioner - HC
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Customs:
Import of two golf carts with accessories - Benefit of exemption from customs duty - golf carts do not come under the restricted category of vehicles - the licensing authority, i.e. DGFT, has not taken any action against the appellant for wrongly availing the benefit under the SFIS nor did they take any steps against the appellant. Hence, the Customs authorities cannot refuse exemption to the appellant. - AT
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IBC:
CIRP process - employee- employer dispute - the employees who resigned after the Resolution Plan is approved are also an integral part of the stakeholders of the Corporate Debtor. - Tri
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IBC:
Maintainability of CIRP application - NCLAT set aside the order of NCLT on the ground that applicant failed to prove that there was an outstanding amount - The NCLAT, when it dealt with the NCLT order, wrongly recorded that documents which were already rejected by the adjudicating authority could not have been the basis of the order of admission. - The NCLAT is wrong on all the counts - SC
Articles
Notifications
Customs-
87/2020 - dated
15-9-2020
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver
GST - States-
F. No. 21/3/GST(A)/2020/LAS-VII/Leg./272 - dated
14-9-2020
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Delhi SGST
Delhi Goods and Services Tax (Amendment) Act, 2020.
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38/1/2017-Fin(R&C)(169)/495 - dated
14-9-2020
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Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(100)/ /2805, dated 8th May, 2019
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G.O. Ms. No. 48 - dated
8-9-2020
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Puducherry SGST
Amendment in Notification G.O. Ms. No. 44, dated the 7th September, 2020
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G.O. Ms. No. 47 - dated
8-9-2020
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Puducherry SGST
Amendment in Notification G.O. Ms. No. 44, dated the 7th September, 2020,
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G.O. Ms. No. 46 - dated
8-9-2020
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Puducherry SGST
Amendment in Notification G.O. Ms. No. 44, dated the 7th September, 2020
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G.O. Ms. No. 44 - dated
7-9-2020
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Puducherry SGST
Seeks to extend due date of compliance which falls during the period from "20.03.2020 to 29.06.2020" till 30.06.2020 and to extend validity of e-way bills
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738-F.T. - dated
14-9-2020
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West Bengal SGST
West Bengal Goods and Services Tax (Tenth Amendment) Rules, 2020.
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (9) TMI 590
Classification of goods - Maize Bran (cattle feed) - classifiable under Heading 23021010 of Central Excise Tariff Act, 1985 or otherwise - whether chargeable to CGST @2.5% under Sr.No.103A of Notification No.1/2017 or chargeable to NIL rate as per Sr.No.102 of Notification No.2/2017? - HELD THAT:- The products which were left out from Sr.No.103A of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 have found mention in Sr.No.102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017. The applicant has supplied 19.520 tonnes of Maize Bran Dry to Shri Ramdev Oil Industries, Patan, a manufacturer who is engaged in the manufacture of cattle feed ( as per the data available online). Thus for the above manufacturer, maize bran is just an input/ingredient which is used in the manufacture of their final product i.e.cattle feed. It can therefore be concluded that the maize bran sold by the applicant is used by the above company as in input in the manufacture of cattle feed but is not a cattle feed by itself. It is also seen that Maize Bran is specifically mentioned in Sub-heading No.23021010 of the First Schedule to the Custom Tariff Act, 1975 (51 of 1975) and the word Bran is specifically mentioned in Sr.No.103A of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017 - thus, the product maize bran does not warrant classification under Sr.No.102 of Notification No.2/2017-Central Tax (Rate) as the product does not classify as cattle feed and is correctly classifiable as Bran under Sr.No.103A of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. The product Maize Bran manufactured and supplied by M/s. Gujarat Ambuja Exports ltd. is covered under Entry Sr.No.103A of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 of the CGST Act, 2017 on which rate of GST chargeable is 5%.
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2020 (9) TMI 589
Classification of Supply - services or not - rate of GST - mining lease for extracting Stone along with associated minor minerals - services provided by State of Gujarat to M/s Giriraj Quarry Works for which Royalty is being paid - N/N. 11/2017-CT (Rate) dated 28.06.2017 read with annexure attached to it - HELD THAT:- The applicant has obtained Government land on lease for quarrying BLACK TRAP Material and in turn applicant is required to pay Annual Rent deed or Royalty, whichever is higher, to the Government of Gujarat. The leasing of the Government land to the applicant is considered as supply of service, as per sub-section (1) of Section 7 of the CGST Act, 2017 - the activities mentioned in the Entry No. 2 of the Schedule II relate to the activities to be treated as supply of goods or supply of services with regard to the Land and Building - thus, leasing of the Government land to the applicant to carry out the activity of the quarrying, is a supply of service to the applicant. Classification of service received by the applicant Annexure to the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The nature of service received by the application is covered under the Service Accounting Code 9973 37 - Licensing services for the right to use minerals including its exploration and evaluation. The Government has been providing the service of licensing services for the right to use minerals after its exploration and evaluation to the applicant and applicant has to pay a consideration in the form of rent/ royalty to the Government for the same. The Sectoral FAQ published by the C.B.E. C. in reply of Q. No. 30 of Government Services it is categorically state that royalty payment made towards Licensing services for exploration of natural resources is treated as supply of services. Therefore, payment of rent/royalty is for license given to extract minerals and the amount of rent/royalty paid is based on the quantum of mineral extracted. Hence it is covered under Service Accounting Code 997337 - Licensing services for the right to use minerals including its exploration and evaluation, as it is a license to extract mineral ore and also the right to use such minerals extracted. In the present case, the mining rights so granted are covered under the sub-heading 9973 37 that specifies - Licensing services for the right to use minerals including its exploration and evaluation . Whether the license to extract mineral and also the right to use such minerals extracted is a leasing or rental service? - HELD THAT:- It is clear that what is supplied by the Government is the lease of the right to extract and use mineral and that is not covered by any specific entries in the Serial No. 17 of the Notification and hence falls under the residual entry. We find that the applicant in its application has relied upon the notified rate against Sl. No. 17 of item (vi), as it stood prior to its amendment, for the entire period 1-7-2017 to 31-12-2018. Since, the service received by the applicant is not at all leasing of goods but rather Licensing services for the right to use minerals including its exploration and evaluation , the transaction is appropriately covered under the residual entry of Sl. No. 17 of the aforesaid notification. The rate of GST applicable on lease of goods may have been prescribed as the rate of GST applicable to supply of like goods involving transfer of title over the goods but the rate of GST prescribed for lease of goods can t be made applicable for leasing of mining area conferring the right to extract and appropriate the minerals. The lease by Government not being a lease of any goods, the conditional rate of tax applicable to sale of like goods cannot be imported for prescribing the rate of GST applicable to leasing of mining area - the amendments have been carried out vide the aforesaid notification No. 27/2018- CT (Rate) Dated 31.12.2018 to clarify the legislative intent as well as to resolve the unintended interpretations. It is well settled that the legislative intent cannot be defeated by adopting interpretations which is clearly against such interpretations. Thus, the activity undertaken by the applicant is classifiable under Heading 9973 (Leasing or rental services, with or without operator), as mentioned in the annexure at Serial No. 257 (Licensing services for the right to use minerals including its exploration and evaluation) sub-heading 997337 of Notification Number 11/2017-C.T. (Rate), dated 28-6-2017 - the activity undertaken by the applicant attracts 18% GST.
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2020 (9) TMI 588
Classification of goods - HSN goods - rate of GST - Sprayer pumps (manually operated) and stoves - case of applicant is that the said items are used manually for only agriculture purpose so the rate of tax should be NIL. What sprayer pumps and stoves are? - HELD THAT:- On going through the sample invoices submitted by the applicant, it is found that they are (i) classifying Sprayer pumps (manually operated) under Sub-heading 8424 (sample invoice No.440 dated 15.03.2018) and (ii) classifying stoves under Sub-heading 7321 (sample invoice No.T/082/18-19 dated 11.06.2018) and paying GST of 12% (6% SGST + 6% CGST) during their supply. Further, when the representative of the applicant was asked during the course of personal hearing about the fuel used for operating the stoves manufactured by the applicant, he stated that wood was used as fuel in the said stoves. Whether the products manufactured by the applicant have been correctly classified and whether the tax paid by them is correct or otherwise? - Notification No.01/2017-Central Tax (Rate) dated 28.06.2017? - HELD THAT:- It is observed that there is no specific entry for Sprayer pumps . However, looking at the definition of sprayer pumps as well as to the uses of the product mentioned in the pamphlets as well as in the submission of the applicant, wherein it is mentioned that it is used as a sprayer on the agricultural field crops, it would fall under Sub-heading 8424 - It is found that the Sprayer pumps are specifically covered under Tariff item no.84248100 (agricultural or horticultural) based on their use. It is observed that vide Notification No: 06/2018-Central Tax (Rate) dated 24.01.2018, the word mechanical sprayers has been inserted vide Entry No.195B in Schedule-II of Notification No:01/2017-Central Tax(Rate) dated 28.06.2017, whereas Entry No.325 in Schedule-III of the said notification has been amended to the effect that the words (other than sprinklers; drip irrigation systems including laterals; mechanical sprayer; nozzles for drip irrigation equipment or nozzles for sprinklers] have replaced the earlier entry [other than Nozzles for drip irrigation equipment or nozzles for sprinklers] . It can therefore be concluded that the product sprayer pumps falling under Tariff item No.84248100 would be classified under Entry No.325 of Schedule-III of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 up to 24.01.2018 and the GST applicable during this period would be 18%. However, with effect from 25.01.2018, the said product would be classified under Entry No.195B of Schedule-II of the said notification and the GST applicable would be 12%. Stoves - HELD THAT:- The stoves manufactured and supplied by the applicant would be classified under Tariff item No.73218990 - The product stoves falling under Tariff item No.73218990 would be classified under Entry at 183 of Schedule-II of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and the GST applicable would be 12%.
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2020 (9) TMI 587
Classification of goods - bio agricultural products i.e. RhizoMyx and Rhizomyco - classifiable under Chapter 3101 or under Chapter 3002 of CETA Act, 1985 - N/N. 01/2017-Central Tax (Rate) dated 28.06.2017 - Whether the products manufactured by the applicant fall under the Sub-heading 3101 or otherwise? - HELD THAT:- As per Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, the sub-heading 3101 covers animal fertilisers or vegetable fertilisers or organic fertilisers. For the purpose of clarity, we will have to refer to the definitions of animal fertilisers, organic fertilisers and organic fertilisers - Since the definition of vegetable fertilisers is not available anywhere, hence it would have to be construed in generic terms. In generic terms, vegetable fertilisers would be the fertilizers derived from vegetable matter like compost and crop residues. On comparing the definition as well as the uses of Biofertilizers vis-a-vis Animal fertilier/organic fertilizer/vegetable fertilizer, it can be seen that Biofertilsers are completely distinct in nature and use to these fertilisers. In view of these facts, we come to the conclusion that biofertilisers are not covered under the Sub-heading 3101 of the First Schedule to the Customs Tariff Act, 1975. Since biofertilizers are not covered under Sub-heading 3101, whether the same is covered under sub-heading 3002 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) ? - HELD THAT:- On going through the column (3) of sub-heading 3002, the entire portion of the description of goods except cultures of micro-organisms (excluding yeasts) pertains to the medical field. On going through the said Sub-heading 3002, it is seen that cultures of micro-organisms (excluding yeasts) appears at Tariff entry No.30029030 of the First Schedule of the Customs Tariff Act, 1975 (51 of 1975). Further as per Vikaspedia, bio fertilizers are produced by culturing of microorganisms and that such cultured micro organisms packed in some carrier material for easy application in the field are called bio fertilisers. Thus, it can be seen that bio-fertilizers are produced by culturing of micro-organisms which is covered by the entry cultures of micro-organisms(excluding yeast) which falls under Sub-heading No.30029030. Thus, it can be concluded that the biofertilizers namely Rhyxomyx and Rhyxomyco manufactured and supplied by the applicant are classifiable under Tariff item No.30029030 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975).
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2020 (9) TMI 586
Classification of goods - rate of tax - Micro-manipulator system which is Itracytoplasmic Sperm Injection (ICSI) with ejaculated, epidymal or testicular spermatozoa used in Assisted Reproductive Technology Procedures - HELD THAT:- In the instant case, as submitted by the applicant, the micromanipulators are used to carry out the procedure of invitro fertilization (IVF) under a microscope. From a plain reading of the procedure of IVF described by the applicant in his submission (please refer para-4), it appears that the entire procedure needs precision and perfection for which a microscope with extremely powerful objective lenses and high magnification would be required. As per the explanatory notes mentioned above, the Compound Optical Microscope consists of an objective designed to produce a magnified image, an eyepiece which further magnifies the observed image, has a provision to illuminate the object from below (by means of a mirror illuminated by a light source) and a set of condenser lenses which directed the beam of light onto the object. Thus, the micromanipulator would be rightly classified under the head Compound Optical Microscope falling under Sub-heading 9011. The said product would be rightly classifiable as Surgical microscope (Tariff item No.90118000) under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) covered under the Sub-heading Compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection. Whether the product micromanipulator finds mention under sub-heading 9018 for which we would be required to go through the sub-heading 9018 as appearing in the First Schedule to the Customs Tariff Act, 1975? - HELD THAT:- We have gone through the above explanatory notes to the Harmonized Commodity Description and Coding System with respect to Sub-heading 9018 (which covers all the products falling under the sub-heading No.9018). We have also gone through the entire list of all the instruments/apparatus/appliances listed therein covered under the Sub-heading No.9018. The product micromanipulator does not find mention in the said list. Now, since micromanipulator does not appear in the list of instruments/apparatus/appliances listed above, it can be safely concluded that the said product is not classified/ classifiable under Sub-heading No.9018 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Thus it cannot be inferred on the basis of a general entry in the Sub-heading Instruments and appliances used in medical science that a product which the applicant construes as an instrument/ appliance used in the field of medical science should find a specific entry within that sub-heading - thus, the product micromanipulator is rightly classified under the Sub-heading 9011 - Compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection. Thus, micromanipulator system falls under the Tariff item No.9011 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). The same is covered under Entry No.184 of Schedule-IV of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 upto 14.11.2017 and covered under Entry No.411F of Schedule-III of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 (as amended) from 15.11.2017 onwards. The rate of GST applicable would be 28% upto 14.11.2017 and 18% GST with effect from 15.11.2017.
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2020 (9) TMI 585
Valuation - inclusion of reimbursement (at actual) of fuel expenses - Pure agent - Rental services of aircraft including passenger aircrafts, freight aircrafts and the like with or without operator - Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT:- Payment made or to be made by the recipient to the applicant would not only include the payment for the supply of services i.e. Rental services of aircraft including passenger aircrafts, freight aircraft and the like with or without operator but would also include the amount for the fuel filled in the aircraft by the applicant. Therefore, the amount of ATF fuel, which is received as reimbursement by the applicant will undoubtedly form a part of the consideration i.e. the value of the services provided by the applicant and GST is liable on the same. Therefore, in terms of Section 15(1) of the CGST Act, 2017, the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply - In the instant case, where the applicant and the customer are unrelated parties, the price actually paid or payable for the supply of services includes the value of services i.e. Rental services of aircraft including passenger aircrafts, freight aircraft and the like with or without operator as well as the amount for the fuel filled in the aircraft by the applicant, which would be the sole consideration for the supply as per the said section. Whether the applicant satisfies all the conditions and satisfies the conditions of a pure agent? - HELD THAT:- The conditions to satisfy the term Pure Agent fails in the present case. In terms of the valuation provisions under GST legislation, amount recovered as reimbursement (at actual) by the applicant M/s. Global Vectra Helicorp ltd. from the customer, for the fuel procured on behalf of the Customer is required to be included in the value of services provided by the Applicant.
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2020 (9) TMI 584
Permission to file Form TRAN-1 - transitional credit - transition of GST regime - CGST Act - validity of Rule 117 of the CGST Rules - HELD THAT:- The controversy involved in the present writ petitions is similar to the controversy involved in OBELISK COMPOSITE TECHNOLOGY LLP, VERSUS UNION OF INDIA, THE SECRETARY TO THE GOVT. OF INDIA, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE [ 2019 (12) TMI 1162 - RAJASTHAN HIGH COURT] where it was held that The challenge to the constitutional validity of Rule 117 no more being res integra, this Court cannot entertain such prayer and accordingly reject the same, however, considering the fact that the Union of India and the Finance Department have extended the period contemplated under Rule 1A of Rule 117 till 31st December, 2019, we grant liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars. Thus, liberty granted to the petitioners to make an application before GST Council through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioners assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioners to get the benefit of CENVAT credit within the stipulated time as stipulated by the Union of India. Petition disposed off.
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2020 (9) TMI 583
Release of attached Bank Account of petitioner - Section 83 of CGST Act - Rule 159 (5) of the Central Goods and Services Tax Rules, 2017 - The respondents (GST authority) passed the order of partly releasing the Bank Account for payments under the Amnesty Scheme but rejected the prayer to release the provisional attachment holding that the petitioner does not have any property other than the Bank Account from where the Government revenue can be protected. HELD THAT:- The effect of Section 83 of the Act shall come to an end as soon as the proceedings pending in any of the aforesaid Sections i.e. 63 or 64 or 67 or 73 or 74 are over because pendency of the proceedings is the sine qua non and in case the Commissioner still feel or is of the opinion that it is necessary so to do in the interest of protecting the Government revenue, it still can pass an order in writing to attach any property or even the bank account of the taxable person if the proceedings are initiated in any of the aforesaid provisions and are pending but for the provisions in which the proceedings have earlier been initiated and are over. The impugned orders passed by the respondents are patently illegal specially when the proceedings initiated under Section 67 of the Act has already been over - impugned orders are hereby set aside with a direction to the respondents to release the aforesaid bank account of the petitioners forthwith which has been provisionally attached vide order dated 29.07.2020.
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Income Tax
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2020 (9) TMI 581
Rejection of books of account - AO adopted G.P. Rate @15% instead of 14.52% as disclosed - enhanced the addition by estimating the G.P. @23.01%, after considering the past history by ITAT - HELD THAT:- No merit in the review petition and the same stands dismissed.
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2020 (9) TMI 580
Interest u/s 244A on delayed refund - ITAT was right in law in directing the department to pay compensation in the shape of simple interest on the amount due at the rate - HELD THAT:- In view of the ratio laid down in M/S. HEG. LIMITED [2009 (12) TMI 35 - SUPREME COURT] the interest on the delayed refund becomes part of the principle amount and the delayed interest includes the interest for not refunding the principle amount. Accordingly, it also includes the interest on the delayed refund. Mainability of appeal - Revenue Authorities have been directed vide Notification dated 08.08.2019 to file appeals in income tax cases before the High Court where the monetary limit is less than ₹ 1.00 crore and where it is above the said amount, that shall not be a subject matter of appeal before the High Court. But in the Notification dated 11th July, 2018, there is an exception to the effect that in certain circumstances, an appeal should be contested on merits notwithstanding the fact that the tax effect entailed is less than ₹ 1.00 crore. Monetary limit to prefer an appeal before High Court is less than ₹ 1.00 crore, but if there is a valid question, where an Order, Notification, Instruction or Circular is to be challenged as illegal or ultra vires, an appeal could be filed before the High Court. In the present case, no such exception is available to the appellant.
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2020 (9) TMI 579
Addition u/s 14A - exempt income earned during the assessment year - HELD THAT:- Tribunal held that the Assessing Officer is not justified in making excessive disallowance and that the CIT(A) rightly restricted the disallowance to the extent the dividend income declared by the assessee. In fact the tribunal records that the revenue could not controvert the findings rendered in the case of Joint Investments Private Limited Vs. CIT [ 2015 (3) TMI 155 - DELHI HIGH COURT] As held in GODREJ AND BOYCE MFG. CO. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [ 2010 (8) TMI 77 - BOMBAY HIGH COURT] Sub-s. (2) does not ipso facto enable the AO to apply the method prescribed by the rules straightaway without considering whether the claim made by the assessee in respect of the expenditure incurred in relation to income which does not form part of the total income is correct. The AO must, in the first instance, determine whether the claim of the assessee in that regard is correct and the determination must be made having regard to the accounts of the assessee. The satisfaction of the AO must be arrived at on an objective basis. It is only when the AO is not satisfied with the claim of the assessee, that the legislature directs him to follow the method that may be prescribed. Sub-s. (3) of s. 14A provides for the application of sub-s. (2) also to a situation where the assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under the Act. The above legal position has been rightly followed by the tribunal while deciding the assessee's case and therefore, rightly dismissed the appeal filed by the revenue.
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2020 (9) TMI 578
Disallowance u/s 14A read with Rule 8D - exclude the interest on term loan and cash credit accounts for calculation - HELD THAT:- As decided in own case [ 2020 (9) TMI 91 - MADRAS HIGH COURT] remand the matter for a fresh consideration to the Assessing Officer to enable him/her to consider the entire matter afresh without, in any manner, curtailing exercise of his/her power as an Assessing Officer. Tribunal did not give independent reasons as to why, in its opinion, the direction issued in the case of Beach Miners Co. Pvt. Ltd. [ 2015 (8) TMI 1031 - ITAT CHENNAI] should also apply to the case of the assessee. Tax case appeal is allowed, the findings/observations made by the Tribunal in paragraph 11 of the impugned order are set aside and the order of remand is confirmed.
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2020 (9) TMI 577
Unaccounted cash found at the time of search - HELD THAT:- As relying on M/s. Jai Amarnath Associates vs DCIT [ 2019 (9) TMI 1396 - ITAT JAIPUR] we are of the view that since the whole cash amounting was not found from the possession of the assessee and the premises at G-8, Ratna Sagar, MSB Ka Rasta, Johri Bazar, Jaipur is not the premises belonging to the assessee and the assessee had duly reconciled the cash found from the assessee's books of accounts. Therefore, the addition made by the AO on this ground is not sustainable in the eye of law. Thus Ground No. 1 of the assessee is allowed. Disallowance of interest paid on late deposit of TDS - HELD THAT:- Referring to discussions as well as the decision of ITAT Kolkata Bench in the case of DNV GL As vs ADIT (International Taxation) [ 2017 (5) TMI 1675 - ITAT MUMBAI] we are of the view that the interest paid by the assessee for delayed payment of TDS in respect of statutory liabilities and thus this interest amount cannot be treated as business expenditure u/s 37(1) - no infirmity in the order of the ld. CIT(A) which is confirmed. Thus Ground No. 2 of the assessee is dismissed.
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2020 (9) TMI 576
Validity of reopening of assessment - computation of deduction u/s 80M - As per tribunal grounds does not arise out of the reasons recorded by the learned assessing Officer - AR has not controverted the findings of the learned Commissioner of Income Tax (A) that this ground does not arise out of the order of reassessment of the learned Assessing Officer - HELD THAT:- Tribunal has not given any independent reasons as to why the grounds canvassed by the assessee before the Tribunal does not merit consideration. The Tribunal is required to record reasons as to why there is disagreement with the finding of the Lower Appellate Authority and why the grounds raised by the assessee cannot be entertained. Since the order is devoid of reasons, we are constrained to interfere with the impugned order to the extent indicated and remand the matter back to the Tribunal for fresh consideration - above two issues are set aside and remanded to the Tribunal for fresh consideration.
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2020 (9) TMI 575
TP Adjustment - Comparable selection - HELD THAT:- Companies functionally with that of assessee need to be deselected from final list. R System International was rejected on the ground that it has different accounting year - If the audit results are available, then the TPO can extrapolate qua the figure to fit into financial year ending in March. Since R Systems is functionally similar to the assessee, we direct the TPO to adjust the audited quarterly figures by extrapolating them in the FY of the assessee and include this company in the final set of compatibles. CG VAK - As assessee stated that this company passes turnover figure as the entity wide turnover of ₹ 594 crores and segments are reported to comply with requirements of AS-17. The learned counsel further pointed out that this company was accepted by the TPO in A.Y 2009 10. We are of the considered view that the TPO should look into the financials of this company once again and decide whether it passes the turnover filter and decide afresh the inclusion or otherwise of this company in the final set of compatibles. Grounds relating to TP adjustments are decided accordingly. Denial of deduction u/s 10A on additional receipts claimed by filing the revised return of income - HELD THAT:- Since the assessee has been allowed deduction under section 10A of the Act by the first appellate authority [against which revenue is in appeal] the assessee is entitled for claim of deduction under section 10A of the Act on additional receipts claimed by filing revised Return of income. We, accordingly, direct the Assessing Officer to allow deduction under section 10A of the Act on additional receipts. Interest income on fixed deposits and miscellaneous income - denied for deduction under section on the ground that such income does not constitute business income as envisaged under section 10A - As decided in M/S. HEWLETT PACKARD GLOBAL SOFT LTD. [ 2017 (11) TMI 205 - KARNATAKA HIGH COURT] we direct the Assessing Officer to allow claim of deduction under section 10A of the Act on interest income. No details of miscellaneous income has been given and, therefore, we are not in a position to examine the nexus with the business income of the assessee. Exclusion of Accentia Technology Pvt Ltd and Infosys BPO Ltd by the ld. CIT(A) - Accentia Technology is concerned, we find that there is an extraordinary event of merger with Accentia Info Serve Pvt. Ltd. Pursuant to this event, effect on overall profit from profitability and turnover cannot be ruled out. This single factor alone is sufficient for exclusion of this company from the final set of comparables and no interference is called for. Infosys BPO we are of the opinion that this company is a giant company in the area of development of software and it assumes all risks leading to higher profit. This company also has substantial intangibles. Claim of deduction under section 10A - TPO completed the TP proceedings treating the assessee under the ITES segment. The Assessing Officer himself has assessed the assessee under the ITES segment and when it came to the claim of deduction under section 10A of the Act the Assessing Officer says that the assessee is merely running a call centre. In Notification No. SO 890E dated 26.09.2000, it has been mentioned that ITES include call centres and, therefore, we do not find any reason why the assessee was denied deduction under section 10A of the Act by the Assessing Officer. However the ld CIT(A) has rightly considered the facts of the case in true perspective and allowed the claim and, therefore, we do not any reason to interfere with the findings of the ld. CIT(A). This ground is accordingly dismissed. Deduction of cess on the ground that the same is not covered under section 40(a)(ii) - HELD THAT:- As relying on SESA GOA LIMITED [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] we direct for allowing deduction for cess. Accordingly, additional ground is allowed.
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2020 (9) TMI 574
Revision u/s 263 - exemption u/s 54 - HELD THAT:- Development Agreement is crystal clear that the land has been transferred along with the house property and that it is also the responsibility of the developer to demolish the house property standing on the said property. These facts have been analyzed by the AO through notice u/s 142(1) and questionnaire and even the replies submitted by the assessee were placed on record. Only reasons for which CIT decided that the assessee is entitled to exemption u/s 54F and not u/s 54 because as per the Development Agreement, the term owner appears therein referring to the assessee. Clauses of the Development Agreement where the entire transfer of house property along with the land given to the developer, these facts were not refuted by the DR. DR also could not place on record any evidence categorically showing that there was transfer of development rights only by the assessee. Exemption u/s 54 of the Act is correctly claimed by the assessee. Claim of exemption u/s 54EC - There is categorical finding of the Ld. CIT that for ₹ 50 lakhs, NHAI bonds invested were made in time, then why the assessee could not comply the law for other ₹ 17 lakhs which were invested also in NHAI bonds. Assessee could not explain anything in front of us at the time of hearing. We further find that the AO in his entire order has not discussed anything on this issue of investment of ₹ 17 lakhs in NHAI bonds by the assessee and whether they were according to the prescribed time limits as per section 54EC. AO has not given any reasoning or view in this matter. He has simply accepted the claim of the assessee granting exemption under the said provision. Assessee fairly conceded that there was a delay with regard to time limits prescribed in the statute for the said investment. When this issue has not been verified by the AO nor any independent enquiry conducted, nor any questions raised and when these facts are clear that in this issue the provisions of section 54EC has not been complied with by the assessee, the action of AO therefore, is erroneous and prejudicial to the interest of Revenue. CIT in his order passed u/s 263 is correct in holding that the assessee is not entitled for the claim of exemption u/s 54EC. Assessee is entitled for deduction u/s 54 since there is transfer of residential house property as observed hereinabove and for this part of the appeal, the assessee succeeds. Regarding the deduction claimed u/s 54EC assessee has not made the investment within stipulated time and this fact was also not examined by the Assessing Officer and the provisions of section 54EC were not satisfied by the assessee on this ground. The findings of Ld. CIT as per 263 order is sustained on this issue. Appeal of the assessee is partly allowed.
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2020 (9) TMI 573
Rectification u/s 254 - Request for recalling an order wherein the appeal was dismissed on the ground of delay in filing an appeal - seeking restoration of appeal to become eligible for Vivad Se Vishwas Scheme - HELD THAT:- One of the conditions for being eligible for such settlement scheme is that the appeal of the assessee should be pending on the specified date before the Tribunal and once, the assessee s application is accepted by the Appropriate Authority under the said scheme, the assessee is required to withdraw his appeal before the Tribunal. By filing the present misc. applications, we therefore find that the assessee is trying to revive his appeal which is already decided against him and thus trying to become eligible for such settlement scheme. Assessee has all the rights to apply for the aforesaid settlement scheme, however, once the appeal of the assessee has been dismissed and decided against it, unless the matter falls under the limited scope of section 254(2) which is not the case here, the act of the assessee to file misc. application to revive such appeals therefore cannot be entertained and encouraged merely for assessee to become eligible for such scheme. Where the assessee is aggrieved with the order of the Tribunal, the assessee is at liberty to approach the right appellate forum as so advised but cannot expect the Tribunal to become a party to its plan to be eligible for such settlement scheme by allowing its prayer to firstly recall the order and then, subsequently on such recall, allow the withdraw of the appeal, being a condition precedent for settlement of dispute. Miscellaneous petitions so filed by the assessee are hereby dismissed
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2020 (9) TMI 572
Transfer pricing addition being interest on receivables - HELD THAT:- As identical issue had come up before the Tribunal in assessee s own case [ 2017 (12) TMI 1052 - ITAT DELHI] . The Tribunal, relying on various decisions including the decision of the Hon ble Delhi High Court in the case of Kusum Healthcare Pvt. Ltd. [ 2017 (4) TMI 1254 - DELHI HIGH COURT] has deleted the addition on account of interest on receivables - no adjustment on account of interest due on receivables from its AE can be made. Accordingly, the grounds raised by the assessee are allowed. Denial of benefit of foreign tax credit while computing tax liability of the assessee - HELD THAT:- We deem it proper to restore this issue to the file of the AO with a direction to verify and allow the foreign tax credit of ₹ 14,08,409/- in accordance with the law. Needless to say, the AO shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. This ground raised by the assessee is allowed for statistical purposes.
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2020 (9) TMI 571
Penalty u/s 271A - determination of turnover of derivative transactions - non maintenance of books of account and not auditing of the same - HELD THAT:- When the turnover has to be computed only by taking the positive and negative outcome of the transactions and not the entire volume of the transactions, the turnover of the assessee is wrongly considered by the AO while levying the penalty under section 271A. Even otherwise, when the issue of turnover in case of derivative transactions is a debatable issue, then the assessee cannot be penalized for not maintaining the books of account as the case would definitely fall under the provisions of section 273B which contemplates that no penalty shall be imposable on a person or the assessee for any failure inter alia attracting the provisions of section 271A if he proves that there was a reasonable cause for the said failure. The showing of the turnover by the assessee from a derivative transaction is a bonafide explanation. Accordingly, the penalty levied under section 271A is deleted. - Decided in favour of assessee.
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2020 (9) TMI 570
Exemption u/s 11 - application of the assessee trust/ society for seeking registration u/s 12AA - Application for registration of charitable or religious trusts, etc u/r 17A - HELD THAT:- Assessee had filed an application before the ld. CIT (Exemption) for seeking registration u/s 12AA of the Act. The assessee had also furnished the copy of MOA notorized by the Notary Officer, Bhilwara. CIT (Exemption) rejected the application filed by the assessee on the ground that as per Rule 17A read with section 12AA(1)(b) of the Act , the certified copy of the instrument establishing the trust needs to be verified with originals. CIT (Exemption) also held that he is empowered to call for such documents/ information from the trust to satisfy himself about the genuineness of the activities of the trust or to make necessary enquiries as he may deem fit in this behalf. CIT (Exemption) further observed the since under rule 17A of Income Tax Rules, 1962, the assessee society/trust is required to produce original/ certified instrument regarding establishing the trust/society for verification but the assessee society/ trust has failed to comply with the said mandatory requirements under Rule 17A of Income Tax Rules. Therefore, the assessee society was not entitled for registration u/s 12AA. As per amended rule 17A of the Income Tax Rules, which are applicable in the case of the assessee, the assessee was not required to furnish the original copy of the documents rather self attested or self certified copy of each and every documents/ instruments was sufficient for the purpose of verification by the ld. CIT (E). This appeal of the assessee society is restored to the file of the ld. CIT(E) for afresh examination of the issue in question and act accordingly. Appeal of the assessee as to grant of approval u/s 80G is interconnected with the appeal of the assessee relating to registration u/s 12AA of the Act. Therefore, this appeal of the assessee is also restored to the file of the ld. CIT(E) for afresh consideration and act accordingly. Appeal allowed for Statistical purposes.
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2020 (9) TMI 569
Exemption u/s 11 - Registration u/s 12AA(1)(b) and u/s 80G(5)(vi) - Application for registration of charitable or religious trusts, etc u/r 17A - HELD THAT:- Assessee had filed an application before the ld. CIT (Exemption) for seeking registration u/s 12AA of the Act. The assessee had also furnished the copy of MOA notorized by the Notary Officer, Bhilwara. CIT (Exemption) rejected the application filed by the assessee on the ground that as per Rule 17A read with section 12AA(1)(b) of the Act , the certified copy of the instrument establishing the trust needs to be verified with originals. CIT (Exemption) also held that he is empowered to call for such documents/ information from the trust to satisfy himself about the genuineness of the activities of the trust or to make necessary enquiries as he may deem fit in this behalf. CIT (Exemption) further observed the since under rule 17A of Income Tax Rules, 1962, the assessee society/trust is required to produce original/ certified instrument regarding establishing the trust/society for verification but the assessee society/ trust has failed to comply with the said mandatory requirements under Rule 17A of Income Tax Rules. Therefore, the assessee society was not entitled for registration u/s 12AA. As per amended rule 17A of the Income Tax Rules, which are applicable in the case of the assessee, the assessee was not required to furnish the original copy of the documents rather self attested or self certified copy of each and every documents/ instruments was sufficient for the purpose of verification by the ld. CIT (E). This appeal of the assessee society is restored to the file of the ld. CIT(E) for afresh examination of the issue in question and act accordingly. Appeal of the assessee as to grant of approval u/s 80G is interconnected with the appeal of the assessee relating to registration u/s 12AA of the Act. Therefore, this appeal of the assessee is also restored to the file of the ld. CIT(E) for afresh consideration and act accordingly. Appeal allowed for Statistical purposes.
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2020 (9) TMI 568
Addition u/s 56(2)(vii)(b)(ii) - difference between the stamp duty value and purchase value of agricultural land - purchase of immovable property being a capital asset - agricultural land is very well covered under the term immovable property and thus falls within the purview of Section 56(2)(vii)(b)(ii) - HELD THAT:- Any property which is not a capital asset is not covered within the meaning of movable or immovable properties u/s 56(2)(vii) of the Act. In the present case, the agricultural land purchased by the assessee is situated at village Mandana, Kota which situated at a distance of 28 KM from Municipal Limits of Kota. Therefore, the agricultural land purchased in the name of the assessee is not a capital asset as per provisions of Section 2(14) of the Act and it is not covered by the definition of property given in Explanation to Section 56(2)(vii)(b) of the Act. Thus, we direct the AO to delete the addition. Addition by treating the source of investment in agricultural land to this extent as unexplained - HELD THAT:- Average income from sale of Lehsun per bigha comes to ₹ 30,000/- to 35,000/- i.e. ₹ 9.00 lacs to ₹ 10.00 lacs per annum and similarly the realization from sale of vegetables is ₹ 30,000/- to ₹ 40,000/- per bigha i.e. ₹ 9.00 lacs to ₹ 10.00 lacs per annum. After considering the agriculture expenses and the house hold expenses, the net savings from Lehsun and Vegetables by the assessee is approximately ₹ 10.00 lacs per annum i.e. around ₹ 25,000/- to ₹ 30,000/- per bigha which is quite reasonable. Thus if we consider the income / savings of the assessee for the last 04 years as has been mentioned in the chart w.e.f. for A.Y. 2010-11 to Assessment Year 2013-14 then it comes to approximately ₹ 40.00 lacs and in this way by considering the income from agriculture as has been calculated in the preceding para, the bifurcation of which is ₹ 12,93,243/- from sale of agriculture crop and approximately ₹ 40.00 lacs from the sale of Lehsun and Vegetables for the last 04 years which is quite sufficient and fully explain the source of investment in the purchase of agricultural land. Assessee has fully proved on record the source of investment in the purchase of agricultural land - we direct the AO to delete the addition. - Decided in favour of assessee.
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2020 (9) TMI 567
Denial of deduction u/s 80P - assessee is a co-operative society registered under Karnataka co-operative societies act 1959 and is engaged in the business of providing credit facilities to its members and distribution of ration card - HELD THAT:- First part of Sec.80P(2)(a)(i) allows deduction in respect of income derived by a co-operative society from business of banking. Even claim of the assessee for deduction requires to be examined under first part of Sec.80P(2)(a)(i) - Hon'ble Supreme Court in case of Citizen Co- operative Society Ltd. [ 2017 (8) TMI 536 - SUPREME COURT ] has held that, it is also important to ascertain as to what is the nature of income which is claimed as exempt, and as to how principle of mutuality is not violated in respect of such income. An examination of (i) memorandum of association, articles of association, (ii) byelaws and other documents explaining rules and regulations of the society is necessary, so as to clearly understand the purpose and the nature of business done by it. An examination of different categories of members of a society and what are the conditions attached to their being admitted as members and their rights as contributors of funds to the society and participants in surplus and the byelaws of the society is necessary. Deduction u/s.80P2(a)(i) is allowed only in respect of income arising out of transactions with members. The relevant law governing co-operative Society of State providing status of different categories of members, in so far as affairs of co- operative Society are concerned, is also required to be examined. It is only income which arises from dealing with members and which is either in the nature of banking or providing credit facilities to members that would be allowed as deduction. All these aspects requires examination. Ld.AO will allow opportunity of being heard to the Assessee and filing appropriate evidence, if desired, by the Assessee to substantiate its case, before deciding the issue. - Assessee appeal stands allowed for statistical purposes.
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2020 (9) TMI 566
Penalty u/s 271(1)(c) - assessment proceeding u/s 153A - short term capital gain on sale of immovable property was found during the course of search OR not? - HELD THAT:- In the instant case, the assessee has not been found to have earned short term capital gain on sale of immovable property during the course of search . The assessee is an individual and derived income from salary and income from other sources i.e. interest income and he was not required to maintain the books of account. Nothing on record which suggests that any document/ material/ information was found during the course of search which remotely indicate that the assessee is recipient of short term capital gain on sale of immovable property. It is only during the course of proceedings u/s 153A that the AO noticed that the assessee is in receipt of salary income which has not been disclosed by the assessee in his return and the same was brought to tax. The dispute is not that short term capital gain earned by the assessee on sale of immovable property was not offered to tax by the assessee in his return of income which is an admitted position but question is whether such short term capital gain on sale of immovable property was found during the course of search and obviously the answer to that is not in affirmative. None of the conditions specified in Explanation 5A to Section 271(1)( c) of the Act are attracted and therefore, levy of penalty is hereby directed to be deleted. Thus the appeal of the assessee is allowed.
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2020 (9) TMI 565
Revision u/s 263 - AO without making inquiries or verification with respect to the claim of deduction towards gratuity which is not debited to the P L Account of the assessee and the amount debited towards provision for warranty while arriving at the book profit of the assessee company under the provisions of section 115JB - HELD THAT:- In the case of the assessee the assessee itself has recaste its P L Account and Balance sheet in accordance with the provisions of the Companies Act. All the material facts have to be taken into account in order to arrive at the correct profit earned by the entity during the relevant financial year. Hence, in the case of the assessee it had rightly redrawn the P L Account disclosing the actual loss accrued to it during the relevant AY by way of making provision towards gratuity, bad debts and warranty which is in accordance with the provisions of the Companies Act. It is not a method adopted by the assessee to understate the book profit of the company in order to avoid tax as per the MAT provisions of the Act. In fact, it epics the correct state of affairs of the assessee company based on the qualified audit report of the Statutory Auditors of the assessee company. Since these facts were brought to the notice of the Ld. AO subsequent to the filing of the return of income it appears that the Ld. AO had accepted the same while passing orders U/s. 143(3) this action of the Ld. AO has not resulted in any error in so far as it is prejudicial to the interest of the Revenue - quash the orders passed by the Ld. CIT invoking his powers u/s.263 - Decided in favour of assessee.
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2020 (9) TMI 564
Rectification of mistake u/s 254 - FMV determination - AO has determined the fair market value on the basis of incorrect total area of two office bearing No. 202 203 of the building which were sold by the assessee - HELD THAT:- We find that the AO/DVO has considered the total area of these two offices at 283.80 sq. mt. as against area of 247.49 sq. mt. sold by the assessee as per sale deed. The AO/DVO added the common area of 36.31 sq. mt. in the area of these two office. We note that what is sold by the assessee is the offices no. 202 203 and the area as per sale deed shall be considered as the actual area sold by the assessee. The common area in the building which is clearly described in the sale deed and available for the purpose of ingress, aggress as well as common use cannot be added to the area of these offices but certainly these facilities available to the offices sold by the assessee would increase fair market prices of the offices in question. Accordingly, AO/DVO is directed to determine the fair market value by considering these common are as a positives factor while determining the fair market value of the offices but the common area cannot be considered as the area sold by the assessee when only offices are sold. Hence, the impugned order is modified accordingly.
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Customs
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2020 (9) TMI 563
Smuggling - Gold - allegation is that along with the other accused namely Shahbaz and Abdul Lais, the petitioner/3rd accused used ladies as carriers for smuggling gold through various Airports in India - retraction of statements - offence punishable under Section 135 of the Customs Act, 1962 - HELD THAT:- The Customs Officials are not Police Officers. The confession, though retracted, is an admission and binds on the petitioner. Statement given under Section 108 of the Customs Act, which is inculpatory, is not hit by the provisions under Sections 25 and 26 of the Evidence Act. Whether the statements of the co-accused could be used against the petitioner is a question to be determined by the trial court. It is, therefore, premature for this Court to discard the materials against the petitioner in the form of statements under Section 108 of the Customs Act given by the other accused. This is not a fit case for invoking the jurisdiction of this Court under Section 482 Cr.P.C to quash the proceedings. Petition dismissed.
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2020 (9) TMI 562
Defreezing of Bank Accounts of petitioner (third party) - freezing of account on the ground of illegally availed Integrated Goods and Services Tax (IGST) refund of an exporter was deposited in the bank account of the petitioner - section 110(5) of the Customs Act, 1962 - HELD THAT:- Section 110(5) of the Customs Act, 1962 was inserted in the Customs Act by the Finance (No.2) Act, 2019 with effect from 01.08.2019 - Evidently, the action of freezing the bank account i.e., on 07.12.2018 was undertaken prior to insertion of the aforesaid provision w.e.f. 01.08.2019. Prima-facie this provision may not be applicable to the case of the petitioner. Additionally, as per the condition mentioned in sub-section (5) of section 110, the initial period of freezing the bank account i.e., not exceeding six months has expired long back. That apart, even if as per the proviso such period was extended by the Principal Commissioner of Customs or Commissioner of Customs for a further period not exceeding six months, that extended period has also elapsed. In such circumstances, continuing with the freezing of the bank account of the petitioner would be oppressive and without any sanction of law. The respondents, more particularly respondent Nos.2 and 3, are directed to forthwith unfreeze the seized bank account of the petitioner - petition allowed.
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2020 (9) TMI 561
Refund of Customs Duty - Liquefied Petroleum Gases for supply to household domestic consumers - Effect of Notification, prospective or retrospective? - N/N. 37/05-Cus dated 2.5.2005 was issued exempting Liquefied Petroleum Gases for supply to household domestic consumers at subsidized prices from whole of customs duty - period September, 2004 to April, 2005. HELD THAT:- The undisputed facts are that the appellants had imported commercial butane (Liquefied Petroleum Gases) classifying it under Chapter heading 2711.1300 of Customs Tariff Act, 1975 on payment of applicable Basic Customs Duty (BCD) of 10%. Two amended notifications of the basic notification No. 21/02-Cus dated 1.3.2002 were in force during the period namely, Notification No. 82/04-Cus dated 18.8.2004 and 11/05- Cus dated 1.3.2005. Under Notification No. 82/04-Cus dated 18.8.2004, Liquefied Petroleum Gases (LPG) falling under Chapter subheading 2711 1900 attracted concessional duty @ 5%, whereas the amending notification No. 11/05-Cus prescribed exemption to Liquefied Petroleum Gases for supply to household domestic customs falling under the same chapter heading 2711.1900. It is the contention of the appellant that after the issuance of first amending notification No. 82/04-Cus dated 18.8.2004, they have represented to the Government that oil marketing company did not import Liquefied Petroleum Gases as such, but commercial butane or propane of mixture of commercial butane and propane. In the present case, in both amending exemption notifications No. 82/04-Cus and 11/05-Cus, concessional rate of duty + Nil rate of duty as the case may be the prescribed to be applicable only to Liquefied Petroleum Gases falling under Chapter 2811.1900. There was no mention of Chapter heading 2711.1300 as declared by the appellant while importing commercial butane (Liquefied Petroleum Gas). Applying the principles of strict interpretation, the exemption notification cannot be made applicable to the clearances of commercial butane (Liquefied Petroleum Gas) during the said period. In the present case, we are concerned with the period prior to 2.5.2005 where under the notifications did not contain all the three chapter sub-headings like Entry No. 75E of Notification 37/2005Cus. dated 02.5.2005, both notifications 82/2004 Cus and 11/2005 Cus. mentioned the Chapter sub-heading 27111900 only and the description of goods as Liquefied Petroleum Gas only. Besides, the principle of interpretation of an exemption notification is now well settled by the Hon ble Supreme Court in COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT] - it needs to be construed strictly. Appeal dismissed - decided against appellant.
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2020 (9) TMI 560
Served Form India Scheme (SFIS) - Exemption of Customs duty under N/N. 92/2004-Cus. dated 10.09.2004 - Import of two golf carts with accessories - restricted goods or not - HELD THAT:- The department did not file any appeal against the order dated 26.12.2008 passed by the Commissioner (Appeals) in the first round of litigation. Since the department had not challenged the said order, the original authority as well as the appellate authority cannot go beyond the direction issued by the Commissioner (Appeals). In the present case, DGFT has clarified by issuing various clarifications to the effect that golf carts do not come under the restricted category of vehicles, which is stated in para 3.6.4.5 of the Foreign Trade Policy - Further, the licensing authority, i.e. DGFT, has not taken any action against the appellant for wrongly availing the benefit under the SFIS nor did they take any steps against the appellant. Hence, the Customs authorities cannot refuse exemption to the appellant. Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2020 (9) TMI 559
Restoration of the name of the struck off company - Section 252(3) of the Companies Act, 2013 - HELD THAT:- It is noted that company has failed to file returns since 2011-12 which prompted ROC, Ahmedabad to strike off the name of such company from its Register of Companies. No plausible explanation has been given for such failure. Although, it has been claimed that notice u/s 248(1) was not served but it is noted that notice in Form STK-5 containing name of this company was published. The Company is no doubt having liabilities as well as assets in its balance sheet. Its also owing land which has got substantial value and disposal of the same cannot be done unless the company is revived. Thus, the name of the company can be restored in the Register of Companies maintained by ROC, Ahmedabad from the date of its striking off. However, for noncompliance of provisions of Companies Act, 2013 relating to non-filing of statutory returns without plausible explanation, suitable cost needs to be imposed - the name of the Company is restored on payment of costs.
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2020 (9) TMI 558
Sanction of Composite Scheme of Merger and Amalgamation - section 230-232 of the Companies Act, 2013 - HELD THAT:- This Tribunal directs that, in view of the fact that there are no Secured Creditors in the Transferor Company No. 1 and 2 and the certificate of the CA in respect of the same there is no need of convening a meeting of the secured creditors in the Transferor Company No. 1 and 2. In compliance of sub-section (5) of Section 230 and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the Applicant Companies shall send a notice in Form No. CAA.3 along with disclosures mentioned under Rule 6, to, (i) the Central Government through the Regional Director, North-western Region, (ii) the Registrar of Companies, Gujarat, (iii) the Income Tax Authorities concerned and (iv) the Official Liquidator, stating that representations, if any, to be made by them shall be made within a period of 30 days from the date of receipt of such notice, failing which it shall be presumed that they have no objection to make on the proposed scheme. The said notices shall be sent forthwith by registered post or by speed post or by courier or by had delivery or by an e-mail at the office of the authority as required by sub-rule (2) of Rule 8 of the Companies (CAA) Rules, 2016. The aforesaid authorities, who desire to make any representations under sub-section (5) of Section 230, shall send the same to the Tribunal within a period of 30 days from the date of receipt of such notice, failing which, it will be deemed that they have no representation to make on the proposed arrangement. Application allowed.
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Insolvency & Bankruptcy
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2020 (9) TMI 582
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of dues - time limitation - Appellant submits that the application filed by the 1st Respondent / Bank (Financial Creditor) is time barred - the said application was filed on 01.04.2019 but the date of default mentioned in Section 7 application before the Adjudicating Authority was on 01.01.2016 - it is the stand of the Appellant that the application filed by the 1st Respondent / Bank after the expiry of three years is hit by the plea of Limitation . HELD THAT:- The requirement of Section 18 and 19 of the Limitation Act are independent and not cumulative. Further, the actual payment of money is not an essential one under Section 18 of the Limitation Act, 1963, but it is an essential one under Section 19 of the Act. An acknowledgment of debt interrupts the running of prescription. An acknowledgement only extends the period of limitation as per decision P. SREEDEVI VERSUS P. APPU [ 1990 (8) TMI 412 - KERALA HIGH COURT] . It is to be remembered that a mere denial will not take sheen off the document and the claim of creditor remains alive within the meaning of Section 18 of the Limitation Act. Besides this, an acknowledgement is to be an acknowledgement of debt and must involve an admission of subsisting relationship of debtor and creditor; and an intention to continue it and till it is lawfully determined must also be evident as per decision MEKA VENKATADRI APPA ROW BAHADUR ZEMINDAR GARU AND ORS. VERSUS RAJA PARTHASARATHY APPA ROW BAHADUR ZEMINDAR GARU AND VICE-VERSA [ 1921 (3) TMI 4 - PRIVY COUNCIL] . An acknowledgement does not create a new right. This Tribunal, had perused the various confirmation letters as stated supra which are legally valid and binding documents between the inter se parties and the same cannot be repudiated on one pretext or other. Therefore, this Tribunal comes to an inevitable, inescapable and irresistible conclusion that the date of default i.e 01.01.2016 gets extended by the debit confirmation letters secured by the 1st Respondent/Bank from the Corporate Debtor (for making a new period run from the date of debit confirmation letters) towards the outstanding debt in Loan Account . Indeed, the application under Section 7 of the I B Code, 2016 was filed by the 1st Respondent/Bank on 01.04.2019 before the Adjudicating Authority within the period of Limitation. Furthermore, in view of the fact, that ingredients of Section 18 of the Limitation Act, 1963 are quite applicable both for Suit and Application and the debit confirmation letters in the instant case were duly acknowledged in accordance with Law laid down on the subject, the instant Appeal deserves to be dismissed - Appeal dismissed.
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2020 (9) TMI 557
CIRP process - employee- employer dispute - employees who resigned after the Resolution Plan is approved - stakeholders of the Corporate Debtor or not - Jurisdiction of Tribunal - HELD THAT:- The primary object of the I B Code is to balance the interests of all the stakeholders including the workers, who need to be paid. Any Resolution Plan not adhering to the I B Code, 2016 is against the interest of all the stakeholders and would defeat the spirit of the I B Code. Thus, taking into consideration the primary objectives of the I B Code, 2016, we are not inclined to accept the contention of the new management of the Corporate Debtor that the issue pertains employee-employer dispute and that this Tribunal does not have jurisdiction. The applicants, who resigned on 28.02.2019 from the Corporate Debtor-company with one month notice were the employees of the Corporate Debtor when new management was inducted in the Board of the Directors of the Corporate Debtor. Therefore, the successful Resolution Applicant cannot escape the responsibility by hiding behind the wheel of the employee-employer dispute. Thus these employees who resigned after the Resolution Plan is approved are also an integral part of the stakeholders of the Corporate Debtor.
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2020 (9) TMI 556
Maintainability of CIRP application - Corporate Debtor failed to make repayment of dues - NCLT allowed the application - NCLAT set aside the order of NCLT on the ground that applicant failed to prove that there was an outstanding amount - HELD THAT:- A bare reading of the NCLT order shows that it is only after a perusal of the documents, pleadings, and the supplementary affidavit of 03.08.2018, including the counter affidavit in the earlier section 7 application, that the NCLT came to the conclusion that a loan amount remained outstanding. The NCLAT, when it dealt with the NCLT order, wrongly recorded that documents which were already rejected by the adjudicating authority could not have been the basis of the order of admission. The NCLAT also wrongly recorded that there was no further evidence in support of the fact that any amount was outstanding. Further, the NCLAT also held that a document filed in the earlier petition that was dismissed as withdrawn could not have been relied upon by the adjudicating authority. The NCLAT is wrong on all these counts. The NCLAT order is set aside and that of the NCLT is restored. The resolution proceedings will continue from the stage at which they were interrupted.
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2020 (9) TMI 555
Validity of order passed by NCLT - by the order it was mandated that no new petition would be entertained in the National Company Law Tribunal without record of default under Section 7 of IBC, 2016 - respondents submit that order dated 12.05.2020 was modified by a notification dated 13.08.2020 - HELD THAT:- The notification of 12.05.2020 has been struck down by the Calcutta High Court - The notification dated 13.08.2020 reiterated the notification of 12.05.2020 issued by NCLT, however modified it to the limited extent that the default record would be filed wherever available with the Information Utility. 9. Learned counsel for the respondent informed that by a subsequent Notification dated 07.09.2020, Notification dated 13.08.2020 modifying the earlier Notification dated 12.05.2020, which had been struck down by the Kolkata High Court, has been withdrawn - Since the Notification dated 12.05.2020 has been struck down by the Kolkata High Court and Notification dated 13.08.2020 has been withdrawn by the respondent vide Notification dated 07.09.2020, learned counsel for the petitioner further submits that nothing further survives in this petition and accordingly he seeks leave to withdraw the petition. Petition dismissed as withdrawn.
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2020 (9) TMI 554
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 settled position of law that once debt and default is proved to the satisfaction of the Adjudicating Authority, the case has to be admitted to initiate CIRP, and appoint IRP, etc. - We are satisfied with the reasons cited by the Petitioner to initiate CIRP. The instant Company Petition is filed in accordance with law. Petition admitted - moratorium declared.
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2020 (9) TMI 553
Approval for replacement of the present IRP - appointment of RP in the place of IRP and CIRP proceedings - HELD THAT:- It is evident that if a class of creditors represented by Authorized Representative voted for more than 50% on a resolution, such voting is to be considered as 100% by the respective class of creditors in the resolution passed by the CoC. In this case, for the class of creditors were present in the meeting voted for more than 50% for replacement of IRP with the RP, such approval with more than 50% shall be treated as 100% on behalf of the Homebuyers to the resolution passed by the CoC as contemplated under Section 25A(3A) of the Code. No further enquiry is required, therefore we arrive to a conclusion that the resolution passed by the CoC is with more than 66% for approval of the replacement of IRP with RP, hence this application is hereby allowed for replacement of Mr. Dilip Kumar Niranjan (IRP) with Mr. Ganga Ram Agarwal as RP. Accordingly, this application is hereby allowed by appointing Mr. Ganga Ram Agarwal as RP. Appointment of RP - Insolvency professional approved as resolution professional by the CoC to replace IRP - HELD THAT:- There is no application by the IRP stating that the AR has given incorrect information to the CoC as to voting of home-buyers for approval of the RP - Since these home buyers who are said to have made their claims after the CoC meeting for approval of resolution for appointment of the RP, subsequent claimants making an allegation against past action cannot invalidate the decisions taken by the CoC. Moreover, it appears all these advocates file vakalatnamas on behalf of associations without having any vakalatnama directly from the respective home buyers. The IRP who is supposed to remain neutral, has come against the CoC as if he has personal interest in the affairs of the CD. It is evident on record that if any allegation is there against the proposed RP, if at all they have any strength for change of the RP, they can place their proposal before the CoC with 33 per cent to pass a resolution for replacement of the RP but not by making bald allegation and not allowing this bench to pass orders for more than 6 months. By this litigation, for the last six months there is no progress in CIRP, in view thereof this application is hereby dismissed as misconceived.
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2020 (9) TMI 552
Extension of time period of Corporate Insolvency Resolution Process (CIRP) - Section 40(2) of Corporate Insolvency Regulation Process and as per Section 12 of IBC 2016 - HELD THAT:- The Hon'ble Supreme Court of India, Suo Motu Writ Petition [ 2020 (5) TMI 418 - SC ORDER ] has held that a period of limitation in such proceedings, irrespective of limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order(s) to be passed by this Court in present proceedings. Also, Notification published by Insolvency and Bankruptcy Board of India dated 29.03.2020, (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2020 stated that the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process. Thus, this Tribunal extend the time limit for CIRP till 29.03.2020. After 29.03.2020 the special provision relating to the time line issued vide notification dated 29.03.2020 will apply till the lockdown lifting notification is issued by the Government of India. Application allowed.
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2020 (9) TMI 551
Reversal of disbursements of funds of the Corporate Debtor distributed to the creditors - grant of interim order restraining the liquidator from deductions of salary payable to the employees. Whether the distribution of funds from the working capital and profits derived out of the operation of the CD includes proceeds fall under Regulation 42(2) read with section 53 of the Code, is available for distribution before liquidating the assets? If not whether the act of distribution amounts to violation of the Regulations and directions to the liquidator dated 14.01.2020 as alleged? - HELD THAT:- Under Regulation 42 of the IBBI [Liquidation Process] Regulations, 2016, the Liquidator can commence distribution once the list of stakeholders and asset memorandum, was finalised, subject to Section 53 of the I B Code. This process according to us can only be done after the realization of the assets [sale of liquidation assets]. Section 36 provides for creation of a liquidation estate that shall include the assets under sub-section 3 of section 36. Section 53 provides for distribution of the proceeds from the sale of the liquidation assets. As per Regulation 42 (2) of the IBBI (Liquidation Process) Regulations, 2016 the liquidator shall distribute the proceeds from realization within ninety days from the receipt of the amount to the stakeholders. The wording of Section 53 and Regulation 42(2) indicates that the stakeholders may be paid out of the proceeds from the sale of assets. The proceeds from the sale of assets'' can only be realized after the sale concludes, which means distribution can also be done only after the conclusion of sale and more so after the liquidator realizes the liquidation value, therefore, in our opinion, the liquidator cannot distribute the funds from working capital and profit to the stakeholders until assets have been liquidated and the liquidator realizes the complete liquidation value - the distribution of working capital and profit to the financial creditors before liquidating the assets is contrary to regulations under Chapter VII of the IBBI (Liquidation Process) Regulations, 2016. Thus, the justification offered for distributing the fund by the liquidator is not just and proper and not in conformity with any of the provisions of the Code and Regulations. Whether the pay cut from the salaries of the employees is arbitrary and without their consent? - HELD THAT:- The unilateral decisions of SCC to deduct 20 to 40% from the salary of the employees for the month of April, wherein the factory of the CD is running on profit and gained 9 crore a minimum profit. The submissions that Representatives of executive heads of each department were present at the time of taking decision doesn't indicate that the decision for deduction was with the consent of the majority of the employees. It is also significant to note here that the committee has decided to reverse the amount deducted, to the employees concerned provided they are able to recover dues from the government - The Pandemic has disrupted the entire working of the country be it the government sector, private sector, businesses, educational institutions including judicial work. It is in the said circumstance, here in this matter a steel manufacturing company, is in operation and running on profit. In appreciating their effort to see that the factory was not allowed to shut down for more than one month, they deserve the entire salary for the month of April. The decision for pay cut of the salary of the employees for the month of April is arbitrary and in violation of Ministry of Home Affairs Circular and therefore, not binding on them and they are entitled to get back the same with applicable bank interest till the date of payment. Reliefs and cost - HELD THAT:- The disbursement by the liquidator from the working capital and profit kept in the account of the liquidator/CD before liquidating the assets is not in accordance with the provisions of the Code and Regulations - in the case in hand since the CD being in operation and there is enough working capital as submitted by the liquidator (About 40 crores) there is no need to return. However, in the peculiar nature and circumstances brought out in the instant case, it appears that the amounts received by the respective financial creditors shall be kept by them in an Interest bearing account of the CD. The application is allowed.
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2020 (9) TMI 550
Exclusion of period of complete lockdown from the due date of first trench of payments allow Applicant to make first trench of payments within 30 (thirty) days from the date of order excluding the period of lockdown - excluison of time period of complete lock down from the due date of making final payments under Approved Resolution Plan allow applicant to make final payment within 90 (Ninety) days from the date of order excluding period of lockdown - HELD THAT:- In the circumstances and since the facts are not disputed by the respondents and in view of the orders of the Hon'ble Supreme Court of India and the National Company Law Appellate Tribunal and the new Regulations issued by the Insolvency and Bankruptcy Board of India, the entire lockdown period i.e. from the date of imposition of lockdown by the Government of India till the reopening of National Company Law Tribunal, Chandigarh Bench, on regular basis, after removal of the lockdown, be excluded, from the compliances required to be made under order dated 13.03.2020 in CA No. 893/2019, passed by this Tribunal and in relation to the Corporate Insolvency Resolution Process. Application disposed off.
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Indian Laws
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2020 (9) TMI 549
Smuggling - Charas - acquittal of accused - accused was acquitted by recording a finding that the case of prosecution was not free from doubt and there were many infirmities in the case of the prosecution to hold that the accused was found to be in possession of charas, as alleged by the prosecution - Section 20 of Narcotic Drugs and Psychotropic Substances Act, 1985 - HELD THAT:- There are no substance in any of the contentions advanced by the learned counsel for the appellant, except the submission on the quantum of sentence. It is mainly contended by learned counsel for the appellant that the High Court / appellate Court was not justified in interfering with the judgment of acquittal passed by the trial court merely because another view is possible. As noted earlier, in support of his argument that merely because another view is possible, same is no ground to interfere with the judgment of acquittal by the appellate court. It is clear from the evidence on record that the appellant was on the counter of the dhaba which was constructed on the land owned by his wife near the temple and the charas was found in the counter of the dhaba in a gunny bag. The facts of the case show that accused not only had direct physical control over charas, he had the knowledge of its presence and character. As rightly contended by Sri Aman Lekhi, learned Additional Solicitor General in the case of Mohan Lal (2015) 6 SCC 222 this Court had held that a functional and flexible approach in defining and understanding possession as a concept has to be adopted and the word has to be understood keeping in mind the purpose and object of the enactment. In the statement recorded under Section 313 of Code of Criminal Procedure, though the appellant has referred to Brij Lal and Mantu in support of a version, contrary to that presented by prosecution but he has not chosen to examine either Brij Lal or Mantu. No defence witness has deposed to the chain of events, as has been stated by the appellant in the statement under Section 313, Cr.PC. It is also fairly well settled that where accused offers false answers in examination under Section 313 Cr.PC, same also can be used against him. Further onus was on the appellant to explain the possession and in absence of the same being discharged, presumption under Section 54 of the NDPS Act also will kick in. The judgment of the High Court does not suffer from any infirmity so as to interfere with the judgment of conviction - there are force in the submission of the learned counsel for the appellant in sentencing the appellant for 15 years rigorous imprisonment with a fine of ₹ 2,00,000/-. In view of the fact that the incident occurred in the year 2001 and as the appellant claimed to be a priest in the temple, who is now aged about 65 years, we deem it appropriate that it is a fit case to modify the sentence imposed on the appellant - the sentence awarded on the appellant is reduced to a period of 10 (ten) years, while maintaining the conviction and the penalty as imposed by the High Court. The order of sentence dated 31.12.2012 passed by the High Court stands modified. Appeal allowed in part.
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2020 (9) TMI 548
Direction to the respondents to make the payment of interest for the closed Fixed Deposits account - HELD THAT:- Admittedly, when orders were passed by this Court seeking a writ of Mandamus directing the second respondent Bank to transfer the funds to the loan account with the third respondent Bank, the petitioner had not sought for payment of interest for the overdue deposit. It is also pertinent to mention that the same set of counsels appeared for both, the petitioner and the Bank in the earlier round of litigation. In fact, the earlier order was silent about even the payment of 4% interest from the date of maturity till the date of payment. The said interest is paid by the second respondent Bank only as per the Circular of the RBI binding on them. The maturity value of the deposit as on 29-1-2013 was ₹ 1,06,65,755/-. According to the petitioner, the interest payable for 773 days from 29-1-2013 to 13-3-2015 was ₹ 18,29,630/-, but what was given was only ₹ 8,13,168 and thus after deducting TDS, they suffered loss of interest to the tune of ₹ 10,16,462/-. This Court is of the view that the petitioner is not entitled to the said amount claimed from the second respondent Bank for various reasons : (i) as per the Circular No. 415, dated 18-9-2012 referred to above, for the overdue deposits, the depositor is entitled only for interest at the rate applicable for a Savings Bank Account. In this case, admittedly, the petitioner had not made any request for renewal of FDs, though it had requested the Bank to transfer the amount to the loan account with the third respondent Bank ; (ii) the second respondent Bank had to withhold the account, as there were disputes among the trustees, after the death of the founder Trustee, who made the deposit; and (iii) Even in the earlier writ petition, the petitioner ought to have asked for payment of interest, which should have been decided there itself, but did not do so. The petitioner is not entitled to any relief in this writ petition and the writ petition fails and the same is dismissed.
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