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Total Sports & Entertainment India Pvt. Ltd., Versus Premier Brands Private Limited

Winding up petition - respondent is unable to pay its debts - Held that:- It is held that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding up procedure. The Company Court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding up petition as a means of forcing the company to pay a bo .....

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under section 439 in reliance of the presumption under section 434(1)(a) that the company is unable to pay it debts, the law should take its own course and the company of course will have an opportunity on the liquidation application to rebut that presumption. - In view thereof, in this case the defence of the respondent is totally spurious, speculative, illusory or misconceived and moonshine and not bonafide dispute on specific ground. The respondent is not able to avoid statutory demand by .....

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til for the Respondent. JUDGMENT :- 1. By this petition filed under sections 433(e) and (f) and 434 of the Companies Act, 1956, the petitioner seeks winding up of the respondent on the ground that the respondent is unable to pay its debts and also on the ground that it is just and equitable that the company should be wound up. Some of the relevant facts for the purpose of deciding this petition are as under : 2. It is the case of the petitioner that the respondent as well as M/s. Compact Discs I .....

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respondent appointed the petitioner as its representative to negotiate on its behalf with the potential licensing and merchandising partners in India in relation to the Commonwealth Games Delhi 2010. Clauses 2.1, 2.2 and 2.3 of the said agreement are extracted as under :- 2.1 If PBPL enters into an agreement with a Partner/s following an introduction effected by TSEIPL during the Representation Period, executed either directly or until the Common Wealth Games 2010, PBPL will pay to TSEIPL a comm .....

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IPL shall bear its own corporate taxes on the commission received from PBPL. 3. It is the case of the petitioner that vide letter dated 26th May, 2010, the Organizing Committee, Commonwealth Games (for short the said OC, CWG) also confirmed the appointment of the respondent for the merchandising programme for Commonwealth Games 2010 through its email sent by the Managing Director dated 26th May, 2010. 4. It is the case of the petitioner that pursuant to the said agreement entered into between th .....

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enter into an agreement with Nestle Limited introduced by the petitioner where the amount of contract was to be at ₹ 35,00,000/-. It is the case of the petitioner that since the respondent did not execute the said agreement with the said Nestle Limited for which the respondent was solely responsible, the petitioner became entitled to the commission of ₹ 7,00,000/- in respect of the said transaction also. According to the petitioner, the petitioner is entitled to the said commission o .....

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s payment stopped by the drawer , inspite of the assurance made by the respondent to honour the said cheque. 6. The petitioner issued a legal notice of demand dated 29th December, 2010, upon the respondent by registered A.D., U.P.C. as well as by email calling upon the respondent to pay to the petitioner an amount of ₹ 2,96,50,000/- along with interest thereon at the rate of 18% p.a. The said notice was duly served upon the respondent by U.P.C. and email and registered post. The said statu .....

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ioner is concerned, it was alleged in the said reply that the said cheque was issued by the respondent in the form of guarantee and in anticipation, finalization or formalization of the contracts with the sub-licencees / partners. The respondent denied that any of the partners or sub-licencees made payment as alleged by the petitioner in the statutory notice. 8. On 17th February, 2012, the petitioner filed this petition inter-alia praying for winding up of the respondent. It is the case of the p .....

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t to the said order dated 17th January, 2013. The petitioner filed affidavits of publication. The notice under Rule 28 of the Companies (Code) Rules, 1959 which was sought to be served by the petitioner on the respondent was returned with remark left . The matter appeared for hearing and final disposal before this Court on 14th November, 2014. None appeared for the respondent, though served. By an order dated 14th November, 2014 passed by this Court, the aforesaid company petition was allowed in .....

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e with law. 10. The respondent thereafter filed two Company Applications bearing Nos.661 of 2015 and 693 of 2015 in the aforesaid company petition. The Company Application No.693 of 2015 was filed inter-alia praying for leave under clause 446(1) of the Companies Act, 1956 to implead the Official Liquidator as a party to the suit filed by the respondent before Delhi High Court. Insofar as the Company Application No.661 of 2015 is concerned, the same was filed for recall and setting aside of the o .....

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Sankaran Vidhyan Balan, (1999) Supp.(3) SCR 271 and held that just as notice at the correct address of the addressee refused by the addressee is presumed to be served on him, a notice returned as unclaimed also similarly raises a presumption under section 27 of the General Clauses Act that the notice is duly served on the addressee. 12. This Court however, considered the peculiar facts of the present case that there was already a pending suit, which is being contested between the parties, there .....

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al Liquidator who was already appointed in the matter and who was incharge at the liquidation proceedings, shall continue to operate for the time being as the Provisional Liquidator. 13. It was clarified that the arbitration reference pending before Shri Justice D.P. Wadhwa, a retired Judge of the Supreme Court between the respondent herein and the Commonwealth Games Committee shall be prosecuted by the directors of the respondent in presence of the Official Liquidator as Provisional Liquidator .....

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mber, 2016, the respondent filed a writ petition under section 482 of the Criminal Procedure Code against the petitioner before the Punjab & Haryana High Court in the proceedings filed under section 138 of the Negotiable Instruments Act by the petitioner for dishonour of part payment of ₹ 19,99,600/-. In the said writ petition, there was a reference made by the respondent to the pendency of this company petition. 16. Some time in the year 2014, the respondent filed a Civil Suit bearing .....

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by the respondent, the petitioner herein filed an application under Order 7 Rule 11 of the Code of Civil Procedure, 1908. The said application filed by the petitioner is rejected. The Delhi High Court has closed the right of the petitioner to file a written statement in the said suit. The petitioner has filed an application for recall of the said order passed by the Delhi High Court. The suit filed by the petitioner and the suit filed by the respondent are pending before the Delhi High Court. 17 .....

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t with Nestle Limited which contract was to be for ₹ 35,00,000/-. The petitioner is entitled to 20% commission on that amount also. 18. It is submitted by the learned counsel for the petitioner that under clause 2.3 of the said Deal Memo, the respondent had agreed to enter into an agreement with the partners introduced by the petitioner directly. It was agreed by the parties that in all cases, the respondent shall invoice the partners directly and collect the payment due from the partners. .....

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on or renewal thereof. 19. It is submitted by the learned counsel that the role of the petitioner was to introduce a party. He submits that the petitioner was only required to bring the partners / sub-licencees and once an agreement was executed between the respondent and such partners / sub-licencees, the petitioner became entitled to receive 20% of the consideration amount as its commission. The petitioner was not required to do anything else. He submits that the claim for commission of the pe .....

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. Learned counsel for the petitioner invited my attention to the averments made in paragraph 8 of the affidavit in reply filed by the respondent setting out the names of seven clients introduced by the petitioner with whom the respondent has admittedly executed the agreements for various amounts. He submits that it is the case of the respondent itself that the respondent had received a sum of ₹ 4,75,32,060/- from those partners / sub-licencees introduced by the petitioner. He submits that .....

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commission to the petitioner was contingent upon the award of licence by Commonwealth Games and consequently formal contracts being finalized between the respondent and the other sublicencees. It was alleged in the said reply that the sub-licencees mentioned by the petitioner had either not made such payments or payments made by few others were not for complete amount as stipulated in contract. It was further alleged that the sub-licencee, who had made partial payment were raising disputes and w .....

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tioner under the said Deal Memo. 22. Learned counsel for the petitioner invited my attention to some of the defences raised in the affidavit in reply and would submit that such defences are extraneous to the claim of the petitioner and are totally frivolous and moonshine. He submits that the petitioner is not concerned with the case of the respondent that the said O.C., C.W.G. had filed an arbitration proceedings against the respondent or that the respondent has filed a counter claim in the said .....

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and is filed as the counter-blast to the suit and the company petition filed by the petitioner against the respondent. He submits that the respondent never terminated the Deal Memo dated 21st May, 2010 and on the contrary has acted upon the said Deal Memo and accepted the moneys to the tune of ₹ 5,27,00,000/- from various partners / sub-licencees introduced by the petitioner under the said Deal Memo. 24. Learned counsel for the petitioner invited my attention to the balance sheet of the r .....

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ed office on ownership basis now but there is a leave and licence agreement by the owner in some one else's name in respect of the registered office premises claimed by the respondent. 25. Learned counsel invited my attention to the balance sheet of the respondent as at 31st March, 2014 showing extremely poor financial position and nil revenue between 2013-2014. The only transaction entered into by the respondent appears to be between 2009 and 2014. The balance sheet of the respondent also i .....

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able. 26. Mr.Gandhi, learned counsel for the respondent on the other hand submits that under clause 2.3 of the Deal Memo, unless the respondent would have received the claim and cleared the amounts from the partners / sub-licencees introduced by the petitioner, the respondent was not liable to pay any commission to the petitioner. He invited my attention to some of the notices issued by some of the partners / sub-licencees introduced by the petitioner and would submit that such partners/sub-lice .....

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ondent. He submits that another entity incorporated in Singapore has claimed rights vide an agreement dated 25th July, 2007. He submits that the said O.C., C.W.G. had committee fraud upon the respondent. He submits that the said O.C., C.W.G. has also filed the arbitration proceedings against the respondent which are pending before the learned arbitrator, a former Judge of the Supreme Court. He submits that the respondent has made a substantial counter claim of about 75,00,00,000/- against the sa .....

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ncy of several proceedings in respect of the same transaction pending before different Courts, including criminal proceedings, the petitioner cannot pursue this winding up petition against the respondent. He submits that if the petitioner obtains no objection from those partners / sub-licencees, that they would not make any claim against the respondent arising out of those agreements which are entered into between the respondent and those partners / sublicencees, the respondent can make some pay .....

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eady closed. He submits that the agreement with those partners / sublicencees introduced by the petitioner are not fructified and thus no order of winding up can be passed by this Court in this petition. 31. It is submitted by the learned counsel for the respondent that the petitioner has suppressed the fact of filing a suit before this Court while obtaining an order of admission of the company petition and also an order of winding up against the respondent. He submits that if the petitioner wou .....

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e judgment of the Supreme Court in case of Manohar Lal vs. Ugrasen & Ors. (2010) 11 SCC 557 and in particular paragraphs 48 to 52, the judgment of the Supreme Court in case of S.P. Chengal Varaya Naidu vs. Jagannath & Ors. (1994) 1 SCC 1 and in case of State of U.P. & Ors. vs. Ravindra Kumar Sharma & Ors. AIR 2016 SC 690. 32. Learned counsel for the respondent states that since the license which was to be granted by the O.C., C.W.G. did not fructify, the respondent suffered very .....

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upreme Court in case of Har Prasad Choubey vs. Union of India & Anr. (1973) 2 SCC 746 and in particular paragraph 9, in case of Smt.Sushila Devi & Anr. vs. Hari Singh & Ors. AIR 1971 SC 1756 and in particular paragraphs 5, 7, 11 and 12, and in case of Rozan Mian vs. Tahera Begum & Ors. AIR 2007 SC 2883 and in particular paragraphs 9 to 11. 33. It is submitted by the learned counsel for the respondent that no contract between the Organizing Committee, Commonwealth Games and the re .....

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praying for winding up cannot be entertained. He submits that the suit of the respondent having been filed first in point of time, both the suits are already tagged and are pending before the Delhi High Court. The next date of hearing in those suits is 4th July, 2017. 35. Mr. Shiralkar, learned counsel appearing for the petitioner in rejoinder submits that the Deal Memo entered into between the parties is not frustrated but is acted upon. The respondent has already made part payment to the peti .....

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the contract entered into by and between the respondent and the partners / sub-licencees or that the said O.C., C.W.G. were frustrated or successfully performed or not. The liability of the respondent to pay to the petitioner was on the basis of the amount due under the said agreements entered into between the respondent and the partners / sub-licencees introduced by the petitioner. 36. It is submitted that in clause 2.3 of the Deal Memo, the parties had provided the mode and manner of the paym .....

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said O.C., C.W.G. has terminated the contract awarded, if any, to the respondent or even if those partners / sublicencees have called upon the respondent to return the amounts paid by them, the same would not have any bearing on the obligation of the respondent to pay the commission charges to the petitioner under the said Deal Memo. He submits that even if the contracts entered into between the respondent and those partners / sublicencees or between the respondent and the O.C., C.W.G. are frus .....

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tioner are demanding refund of the amount paid by them, from the respondent is concerned, it is submitted that the petitioner is not concerned with any such legal notices alleged to have been sent by those parties. He submits that in any event the respondent has not produced any proceedings, if any, filed by those parties against the respondent for seeking refund of the said amounts. He submits that the claims, if any, of those parties, are already barred by limitation. He submits that the respo .....

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ly different than the facts of this case. 40. Learned counsel for the petitioner invited my attention to the balance sheet of the respondent for the year ending 31st March, 2014, which would indicate that the respondent had received various advances from those partners / sub-licencees introduced by the petitioner. He submits that the bank balance as at 31st March, 2014 of the respondent is shown at ₹ 6,900/- and the cash amount is shown at ₹ 1,12,070/-. The respondent has been suffer .....

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ing up petition but did not appear in these proceedings deliberately. The respondent had suppressed about those proceedings and affidavits filed by the respondent before this Court in the company application filed by the respondent for recall of the order passed by this Court. He also invited my attention to the papers and proceedings in Criminal Miscellaneous Application No.13870 of 2014 filed by the respondent in which the respondent itself has made an averment that the respondent was proposin .....

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e suit when the company petition was initially admitted and was allowed subsequently, filing of the suit by the petitioner would have no bearing on the said order. He submits that even today the registered office of the respondent is at the same address at which the petitioner had sent the papers and proceedings and the said addressed continued on the records of the Registrar of Companies. Even in the plaint filed by the respondent against the petitioner, the respondent has shown the same regist .....

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EASONS AND CONCLUSIONS: 44. There is no dispute that the parties had executed Deal Memo dated 21st May, 2010, by which the respondent had appointed the petitioner as its representative on non-exclusive basis to negotiate on behalf of the respondent with potential licensing and merchandising partners in India in relation to the Commonwealth Games Delhi 2010 on the terms and conditions recorded in the said agreement. It is the case of the respondent that the said O.C., C.W.G. had granted licensing .....

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avour of the respondent. It is not in dispute that the respondent did not terminate the said Deal Memo executed with the petitioner at any stage till today. 45. A perusal of the affidavit in reply filed by the respondent clearly indicates that even according to the respondent, pursuant to the said Deal Memo executed between the petitioner and the respondent, the respondent has executed the agreements at least with seven partners / sub-licencees who were introduced by the petitioner having the co .....

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a sum of ₹ 19,99,600/- to the petitioner under the said Deal Memo executed by and between the parties. The respondent has now given up the plea that the said amount was not paid by the respondent to the petitioner under the said Deal Memo. The respondent has refused to pay the balance amount on the ground that the agreements entered into between those partners / sub-licencees introduced by the petitioner with the respondent and between the respondent and the said O.C., C.W.G. did not fruct .....

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se parties has also filed a suit for recovery of the said amount from the respondent. 47. A perusal of the Deal Memo entered into between the petitioner and the respondent clearly indicates that the respondent had represented and had given the guarantee in the said Deal Memo that they had exclusive rights to be the sole concessionaire including brand licensing and merchandising rights holder of the Commonwealth Games 2010 and all rights and benefits were granted by the licensor to the licencee i .....

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over and will pay to the petitioner commission @ 20% of the gross revenue due from each partner to the respondent under each agreement executed between the respondent and the Partners for the entire duration of the L & M Agreement or any extension and renewal thereof. Clause 2.2 provides that all deals will be signed directly by the respondent and and the potential licencee. Clause 2.3 provides that in all cases, the respondent shall invoice the Partners directly and collect the payment due .....

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reement executed by the respondent and partners. It is clear that the said commission @ 20% payable to the petitioner by the respondent was of the gross revenues due to the respondent from each partner introduced by the petitioner and was not dependent upon the full amount to be received by the respondent. 50. In my view, the entitlement of the petitioner of the commission was under clause 2.1 of the said agreement, whereas the mode and manner of payment was agreed under clauses 2.2 and 2.3 of t .....

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recovered substantial amount from those partners / sub-licencees under those seven agreements. The liability of the respondent to pay the commission @ 20% of the gross revenues from each partner to the respondent was thus crystallized under clause 2.1 when the petitioner had introduced those parties to the respondent and the agreements were executed between the respondent and those partners / sublicencees introduced by the petitioner. 51. In my view, merely because the respondent did not recove .....

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dent would not frustrate under the said Deal Memo entered into between the petitioner and the respondent. 52. In my view, the petitioner is not concerned with the out come of the arbitration proceedings filed by the said O.C., C.W.G. or any counter claim filed by the respondent against the said O.C., C.W.G. before the learned arbitrator. In my view, even if the partners / sub-licencees introduced by the petitioner do not pay the balance amount to the respondent, the said event also will not frus .....

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ion 56 of the Indian Contract Act, 1872 by the respondent to dispute the claim of the petitioner is totally misplaced and is not attracted to the facts of this case. 53. It is matter of record that the respondent had already paid a sum of ₹ 19,99,600/- to the petitioner under the said Deal Memo and refused to pay the balance amount. It is thus clear that the parties have acted upon the said Deal Memo and thus there is no question of any frustration of the said Deal Memo as canvassed by the .....

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the actual partition of India took place, because of the serious communal troubles, it was not possible for the respondents to go to that Tehsil either to cultivate the lands or even to collect the rent from those who were cultivating the lands, the Supreme Court held that it was impossible for the plaintiff to even get into Pakistan in view of the prevailing circumstances, to either take possession of the properties intended to be leased or even to collect rent from the cultivators and for tha .....

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on the petitioner introducing those partners / sub-licencees to the respondent and on the respondent having executed the agreements with them. The amount of 20% of commission was payable on the basis of the amount due to the respondent by those partners / sub-licencees introduced by the petitioner. A perusal of the record indicates that the respondent has already recovered substantial amount from those parties introduced by the petitioner but did not pay any amount to the petitioner towards com .....

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me Court in case of Har Prasad Choubey (supra) relied upon by the learned counsel for the respondent is concerned, the said judgment of the Supreme Court would assist the case of the petitioner and not the respondent. 57. Merely because the other parties have filed some proceedings against the respondent or the respondent having filed the counter claim against those parties, cannot exempt the respondent from complying with its obligation to pay the commission to the petitioner. This Court cannot .....

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nce the said obligation to pay the commission charges was crystallized upon the petitioner introducing those partners / sub-licencees and upon the respondent executing the agreement with them. In my view, this defence of the respondent is totally frivolous and is moonshine. 59. Insofar as the submission of the learned counsel for the respondent that the suits filed by the petitioner against the respondent for recovery of amount and the suit filed by the respondent against the petitioner for a de .....

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the commission amount with interest payable by the respondent to the petitioner. Both the proceedings can be simultaneously proceeded with. 60. Insofar as the submission of the learned counsel for the respondent that the petitioner has lost its right to file a written statement in the said suit filed by the respondent for a declaration and for refund of the amount paid by the respondent to the petitioner is concerned, it is not in dispute that the application for recall of the said order passed .....

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for the respondent. This Court cannot decide the merits of the said application for recalling of the order passed by the Delhi High Court. 61. In my view, there is no merit in the submission made by the respondent that the petitioner had suppressed any facts from this Court and more particularly about filing of the civil suit filed by the petitioner against the respondent when the aforesaid company petition was heard at the stage of admission and also at the stage of final hearing. When the com .....

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tion. The petitioner is entitled to pursue a civil suit for recovery of money as well as winding up petition. Both the proceedings are for different reliefs and are maintainable at the same time. 62. On the contrary, a perusal of the record indicates that the respondent had suppressed the facts before this Court that the respondent was fully aware of the pendency of this petition for winding up when the respondent applied for setting aside ex-parte orders passed by this Court. A perusal of the p .....

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had alleged to have suppressed about filing of the civil suit for recovery of money against the respondent and thus no relief of any nature whatsoever shall be granted by this Court in favour of the petitioner is concerned, there is no dispute about the proposition of law laid down by the Supreme Court in the aforesaid judgments holding that a party who approaches the Court has not only to approach with clean hands but also clean mind, clean heart and clean objection. 64. It is held by the Supre .....

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dent did not appear though was served and had knowledge of pendency of the proceedings, the judgment of the Supreme Cort in case of S.P. Chengal Varaya Naidu (supra) would not assist the respondent. The registered office address of the respondent continued to be the same all through out,even till today at which the petitioner had sent papers and proceedings and the notices to the respondent. The same registered office address was disclosed by the respondent even in the proceedings filed by it ag .....

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those partners / sub-licencees introduced by the petitioner, the cash and the bank account of the respondent as on 31st March, 2014 showed as ₹ 1,18,970/-. There is no revenue from the operations as on 31st March, 2013 and also 31st March, 2014. There is no other income as on 31st March, 2014. There is a loss of ₹ 23,52,697/- as on 31st March, 2014 and ₹ 3,68,587/- as on 31st March, 2013. The balance sheet of the respondent further indicates that as on 31st March, 2014, there i .....

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ould be specific and genuine if it is bonafide and not spurious, speculative, illusory or misconceived. It is held that the grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. 67. It is held that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there i .....

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Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Forum: import purchase

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Forum: 3B mistake

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.



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