TMI Blog2022 (6) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021, and therefore, in view of overriding effect of the IBC proceedings, tax demand shall stand extinguished. As position of law in this regard is that, the proceeding under provisions of Insolvency and Bankruptcy Code, 2016 overrides the proceedings under the Income Tax Act, 1961. In other words, all the proceedings initiated or pending before different authorities shall stand abated in terms of approval of resolution plan by the NCLT. The present appeal pertains to Asst.Year 2014-15 and the demand had arisen on 9.12.2016 pursuant to framing of assessment i.e. prior to the order dated 13.12.2021 passed by the NCLT. Further, as per the Resolution Plan, there is no claim made by the Income Tax Department before the Insolvency Profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law,on the facts and circumstances of the case, in assessing the income of the appellant at Rs (-) 1,66,71,312/-instead o Rs(-)l,76,02,459/- returned. As such aggregate additions of Rs 9,31,1477- may pleas be deleted. 3. The Ld. CIT (A) has upholded the AO's views that ROC expenses of Rs 7,5477- are directly related to expansion of capital base and hence treated it as capital in nature However, the Ld CIT (A) had failed to take into account that such expenses were Legal Professional Fees paid by the assessee in the normal course of business and hence to be treated as revenue in nature.. The addition made by Ld. ITO / CIT (A stands bad in law and is required to be deleted. SN Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) a sum of Rs.7,547/- towards ROC expenses considering them to be capital expenditure, (ii) disallowance of additional depreciation claim on DG set of Rs.99,473/-, (iii) addition of Rs.6,73,600/- under section 56(2)(viib) r.w.r. 11U/UA being difference in share valuation, and (iv) disallowance of interest free loans and advances under section 36(1(iii) of Rs.2,50,000/-. Thus, the ld.AO determined a loss of Rs.1,65,781,839/-. The AO also determined book profit under section 115JB of the Act at Rs.27,31,249/-. 4. Aggrieved against the assessment order, the assessee filed appeal before the ld.CIT(A). The ld.CIT(A) vide order dated 18.9.2017 partly allowed the appeal. Against the same, the assessee is now before us raising the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perational Creditors being statutory creditors (i.e. Income Tax, Excise Duty, VAT, GST and Service Tax Liabilities) on a pro-rata basis after the demand of the respective department/ authority is crystallized. As per IM and list of creditors provided in Data Room other than GST and Assistant Commissioner of Sales Tax there no other statutory authorities have filed claim. 6. Thus, as against government dues, an exgratia amount of Rs.10 lakhs has been provided to the operational creditors to settle the statutory creditors viz. income-tax, excise duty, VAT, GST etc. on pro-rata basis after the demand of the respective department was crystalised. This Resolution Plan thereafter has been approved by the NCLT by its order dated 13.12.2021 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed after the approval of the resolution plan. We further hold that other claims including claims of Government/Statutory Authorities, whether lodged during CIRP or not, shall stand extinguished after the approval of the resolution plan. We further hold that contingent/ unconfirmed dues shall also stand extinguished .. 9. The provisions of the Resolution Plan shall be binding on the Company, its creditors, guarantors members, employees, statutory authority and other stake holders in accordance with section31 of the Code with effect from the appointed date. 9. Further, the position of law in this regard is that, the proceeding under provisions of Insolvency and Bankruptcy Code, 2016 overrides the proceedings under the Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; (ii) 2019 amendment to Section 31 of the I B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I B Code has come into effect; (iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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