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2020 (11) TMI 1076 - ITAT MUMBAI
Disallowance u/s.14A r.w.r 8D - assessee has earned tax free income from Bonds and dividend income on shares held as ‘stock-in-trade’ - HELD THAT:- Whether dividend is earned or not is immaterial. It is quirk of fate that when the investee company declared dividend, those shares are held by the assessee, though the intention of the assessee is to trade in shares to earn profits. Hon’ble Supreme Court approved the order in the case of PCIT vs. State Bank of Patiala,[2017 (2) TMI 125 - PUNJAB AND HARYANA HIGH COURT] albiet for a different reason that provisions of section 14A would not get attracted where the shares are held in ‘stock-in-trade’,
Following the judgment rendered in the case of Maxopp Investment P. Ltd. (supra), the Tribunal in the case of Asstt.CIT vs. UCO Bank [2018 (3) TMI 805 - SUPREME COURT], Punjab National Bank [2019 (1) TMI 1625 - ITAT DELHI] and IDBI Bank Ltd. [2020 (1) TMI 213 - ITAT MUMBAI] has held that disallowance under section 14A r.w.r. 8D of the Act in case of assessee engaged in Banking business and holding shares as ‘stock-in-trade’ is not warranted.
CIT(A) has restored the issue of disallowance under section 14A r.w.r. 8D of the Act to Assessing Officer to decide the issue in line with the order of Tribunal in assessee’s own case for assessment year 2010-11. We observe that the Co-ordinate Bench while adjudicating the issue of disallowance under section 14A r.w.r. 8D of the Act for assessment year 2010-11 in appeal by the assessee [2016 (1) TMI 1427 - ITAT MUMBAI] has in turn followed the order of Tribunal in assessee’s own case for assessment year 2008-09, wherein the issue was restored to Assessing Officer with a direction to examine the same afresh. The Tribunal while deciding the appeal of assessee for assessment year 2010-11 was not having the benefit of judgment rendered in the case of Maxopp Investment P. Ltd. (supra). The Tribunal passed the order on 08/01/2016 and the judgment in the case of Maxopp was delivered in February 2018. Even the judgment in the case of Pr.CIT vs. State Bank of Patiala[2018 (3) TMI 805 - SUPREME COURT] and Pr.CIT vs. Punjab and Sind Bank[2019 (11) TMI 342 - DELHI HIGH COURT] are subsequent to the order of Tribunal.
Thus, in the light of the decisions discussed above, we hold that no disallowance under section 14A r.w.r. 8D of the Act is warranted where the assessee has earned exempt income on shares/stocks held as ‘stock-in-trade’. Consequently, the sole ground raised in appeal by the assessee is allowed and corresponding ground No.1 raised in the appeal by the Revenue is dismissed.
Bad Debt Written off - assessee has claimed bad debts written off with regard to non-rural branches - AO after examining assessee’s claim concluded that as per provisions of section 36(1)(viia), the deduction is available only to the extent of 10% of aggregate average advances made by rural branches and an amount not exceeding 7.5% of the gross total income - HELD THAT:- The Tribunal in turn following the order in assessee’s own case for assessment year 2007-08 [2015 (11) TMI 1058 - ITAT MUMBAI] decided the issue in favour of assessee.
Deduction u/s.36(1)(viii) - HELD THAT:- Tribunal vide order [2016 (1) TMI 1427 - ITAT MUMBAI] has remitted the issue back to the file of AO to allow the deduction based on actual interest earned from eligible advances after deducting cost and expenses on reasonable basis. CIT(A) has restored the issue to AO to follow the directions of Tribunal. DR has not brought before the Bench any material to controvert the findings of Tribunal in immediately preceding assessment year . We see no infirmity in the findings of CIT(A), hence, the same are upheld. The ground No.3 of appeal by the revenue is dismissed.
Deduction u/s.36(1)(viia) - HELD THAT:- We find that the CIT(A) after examining the findings of Assessing Officer and the submissions of the assessee held that the issue is covered by the decision of Tribunal in the case of State Bank of Mysore [2009 (5) TMI 610 - ITAT BANGALORE]
Applicability of provisions of section 115JB - HELD THAT:- We hold that sub-section 115JB as it stood prior to its amendment by virtue of Finance Act, 2012, would not be applicable to a banking company. We answer the question No.2 in favour of the assessee and against the revenue. In view of this, question of correctness of the order of rectification passed by the AO becomes unimportant. Question No.1 is therefore not answered. All the appeals are dismissed.
MAT applicability - HELD THAT:- As provisions of section 115JB of the Act does not get attracted in the case, of Nationalised Banks, assessee being the one.
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2020 (11) TMI 1075 - ITAT DELHI
Global Trade Development expenses (GTD expenses) - Disallowance of the said expenses were not incurred in accordance with the aims and objectives of the appellant society, failing to appreciate the contemporaneous evidences filed on record substantiating the business nexus of said expenditure - HELD THAT:- The assessee has aimed through GTD, issues such as immigration policies, visa regimes, software quality standards. WTO and free trade in services data security and next generation best practices and the importance of collaboration and trade cooperation, especially during these times of economic recession. The assessee is working closely with the Indian Government to represent the true potential of Indian IT Industry for increasing the Indian market share in Information and Communication Technology (ICT) and helping to ensure that the Governments of other nations do not create impediments to free trade or barrier-free business exchanges.
GTD expenditure incurred for the above purpose primarily consisted of Consulting fees paid to various international firms in respect of their strategic and tactical planning for positioning IT industry of India vis-a-vis the foreign country's economic outlook, Expenditure on global protectionism sentiments and campaign, Expenditure in public relations/ public awareness and Travelling expenses.
We also find that the similar expenses has been allowed in [2019 (5) TMI 1158 - ITAT DELHI] wherein it was held that the disallowance of GTD expenses are not sustainable on the grounds that the purpose of such expenditure and the benefits derivable there from is aimed at benefitting L.C.T & Business Process Management (BPM) industry as a whole, which not denotes the member fraternity of the assessee, but also the industry at large in India. The monetary and in principal support to GTD activity by Government of India clearly establish the utility of such expenses for the India I.T. Industry as a whole.
Thus keeping in view the activities of the assessee and its relevance to the expenses incurred, the continuous stand of the revenue to allow such expenses in all the previous and subsequent years, we hereby hold that the disallowance confirmed by the ld. CIT (A) is liable to be quashed. Appeal of the assessee is allowed.
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2020 (11) TMI 1074 - MADRAS HIGH COURT
Revocation of leave granted to the appellant/plaintiff to sue them - infringement of patent of the appellant/plaintiff - HELD THAT:- Within the city of Madras, both the City Civil Court presided by District Judges has additional courts which is also and the High Court have jurisdiction to entertain civil suits relating to violation of Patent. Under Clause12 of the Letters Patent, a plaintiff may file a suit in the High Court before the Original Side when the cause of action has wholly or partly arisen within its territorial limits, notwithstanding the fact that the defendant may not be carrying on business within its territorial limits - Chartered High Courts governed by the Letters Patent have been given discretion to grant a leave to sue to the plaintiff/plaintiff under Clause 12 of the Letters Patent. Where either a part of cause of action arises within its jurisdiction or where the defendant(s) reside(s) outside its jurisdiction, the High Court exercises this discretion at the threshold even before the plaint is received for being numbered as a suit.
Since the dispute in the present case pertains to the alleged violation of the patents of the appellant/plaintiff, the jurisdiction of Court under Clause 12 of the Letters Patent has to be read in conjunction with Section 104 of the Patents Act, 1970 and not in conjunction with Section 104A of the Patent Act, 1970. Section 104 of the Patent Act - Section 104A of the Patent Act, 1970 is not concerned with Jurisdiction of the Court. It is concerned with burden of proof in case of a process patent as is evident from a reading of Section 104A of the Patent Act, 1970.
For granting leave, the Court should consider the grant of leave from the angle of Forum non conveniens/Forum conveniens. They are the relevant factor for the Court while either granting or revoking leave under Clause 12 of the Letters Patent. What exactly is the purport of Forum non conveniens/Forum conveniens and how it has been decided and considered have not been clearly spelled out by the domestic Courts in India - The object of the doctrine of Forum Non Conveniens is “to find that forum which is the more suitable for trying the suit to meet the ends of justice, and is preferable because pursuit of the litigation in that forum is more likely to secure those ends. The onus lies on the defendant to show that there exists another forum which is more appropriate to try the action.
This appeal filed by the appellant/plaintiff is allowed.
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2020 (11) TMI 1073 - NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD
Effect of moratorium on passing of Liquidation order - HELD THAT:- It is not in dispute that impugned order has been passed subsequent to the order of liquidation being passed by this Adjudicating Authority in the case of Corporate Debtor. The legal position is that on passing of the order of liquidation, the moratorium placed under Section 14 of IBC, 2016 comes to an end. Further, as per provision of Section 33(5) of IBC, 2016, the legal proceedings can be continued against the Corporate Debtor during the course of liquidation.
There are no merit in this application. The same is, therefore, dismissed.
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2020 (11) TMI 1072 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Seeking reconsideration of Scheme of Compromise and Arrangement under Section 230 of the Companies Act, 2013 - HELD THAT:- The Corporate Debtor is under liquidation since 11th January, 2018. The Scheme of Compromise and Arrangement for revival of the Corporate Debtor (Company) has been rejected by the secured creditors.
Admittedly, 90 days’ limit from the date of the order of liquidation has elapsed. Now after lapse of more than two years, the Adjudicating Authority has declined to reconsider the Scheme on the same grounds as were taken earlier for approval of the Scheme. The revised Scheme placed by Shareholders before the Creditors has been rejected. It is noticed from the impugned order that the creditors have objected to the addition of ‘TEV Study’. It goes without saying that the Scheme of Compromise sought to be reconsidered on the basis of ‘TEV Study’ could not be forced upon the stakeholders who were unwilling to consider the same even after addition of ‘TEV Study’ - no change in circumstances warranting reconsideration at the hands of the Adjudicating Authority was made out and the Adjudicating Authority was right in dismissing the application.
Appeal dismissed.
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2020 (11) TMI 1071 - ITAT DELHI
Vivad Se Vishwas Scheme - Permission seeking withdrawal of the appeals - HELD THAT:- Assessee has requested for withdrawal of the appeals filed by the assessee and stated that the assessee has opted to settle the dispute relating to the tax arrears for the assessment years under consideration under the Vivad Se Vishwas Scheme, 2020. Certificates to this effect under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020 have also been filed.
DR has no objection. In view of the above, we accept the request of the assessee for withdrawal of the appeals.
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2020 (11) TMI 1070 - PUNJAB AND HARYANA HIGH COURT
Seeking grant of regular bail - adoption of fraudulent means to usurp the scholarship amount - HELD THAT:- In Sanjay Chandra's case [2011 (11) TMI 537 - SUPREME COURT], the Hon'ble Apex Court has held that it is not in the interest of justice that accused should be in jail for an indefinite period. No doubt, the offence alleged against the accused is a serious one in terms of alleged huge loss to the State exchequer, that, by itself, should not deter the Court from enlarging the accused on bail when there is no serious contention of the State that the accused, if released on bail, would interfere with the trial or tamper with evidence.
It is deemed appropriate to negate the contention of learned State counsel for dismissal of the bail in view of serious allegations and pending investigation of the case. Petitioner is in judicial custody since 07.09.2020 and is not required for any further investigation of the case. The offences are triable by the Magistrate.
It is deemed appropriate to enlarge the petitioner on regular bail - petition allowed.
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2020 (11) TMI 1069 - APPELLATE AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND
Rejection of application for Advance Ruling by the AAR as sub-judice - Input Tax Credit - Authority for Advance Ruling observed that on the issue of admissibility of ITC in respect of goods/ services received while constructing Hotel including restaurant & banquet hall, on which applicant has sought advance ruling, is pending
HELD THAT:- The appellant's contentions about the interpretation of the term "an applicant" used in Section 98(2) of CGST Act 2017. English has two articles, the and a an. The is used to refer to specific or particular nouns; a/an is used to modify non-specific or non-particular nouns. The is called definite article and a/an is called the indefinite article. The use of the article 'an' before the noun applicant is meant to denote non-specific. In other words, the term "an applicant' has to mean any applicant and not a particular applicant. Thus. The interpretation of 'an applicant' made by the AAR in their Ruling cannot be faulted.
In fact, in spite of being pointed out by the appellant about the show cause notice mentioning only two issues in common with the writ, it appears that the applicant was summarily rejected without in depth scrutiny.
The Ruling is set aside and the matter is remanded for fresh consideration.
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2020 (11) TMI 1068 - DELHI HIGH COURT
Territorial jurisdiction - Transfer of the case - the ld. Addl. Sessions Judge ceased to have jurisdiction in respect of Karkardooma Courts matters upon being transferred with immediate effect - validity of Note 2 appended to the transfer order dated 13th March, 2020 which empowered the judicial officers to pronounce the judgment/order in the reserved matters.
HELD THAT:- Article 227 of the Constitution empowers the High Court with the superintendence over all the Courts and Tribunals throughout its territory. The power of superintendence under Article 227 includes the administrative as well as judicial superintendence i.e. the High Court can transfer a case by exercising its administrative power of superintendence or its judicial power of superintendence. Articles 227 and 235 of the Constitution empowers the High Court to have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction and control over subordinate Courts including matters with respect to the posting and promotion of Judicial Officers.
Code of Criminal Procedure vests plenary powers in the High Court relating to the superintendence over the subordinate Courts including the appointment, posting, promotion and transfer of the judicial officers. Section 33 provides that the Judicial Officers shall have the powers conferred upon them by High Court and High Court is empowered to withdraw the powers conferred on any officer - Section 407 empowers the High Court to transfer the cases on judicial side and Section 483 empowers the High Court to transfer the cases on the administrative side. Section 482 vests inherent power in the High Court to make such orders as may be necessary to give effect to any order under this Code or to prevent abuse of process of any Court or otherwise to secure the ends of justice.
There are two types of jurisdictions of a Criminal Court, namely, (i) the jurisdiction with respect to the power of the Court to try particular kinds of offences, and (ii) the territorial jurisdiction. While the former goes to the root of the matter and any transgression makes the entire trial void, the latter is not of a peremptory character and is curable under Section 462 CrPC. Territorial jurisdiction is a matter of convenience, keeping in mind the administrative point of view with respect to the work of a particular Court, the convenience of the accused who will have to meet the charge leveled against him and the convenience of the witnesses who have to appear before the Court - The Code of Criminal Procedure does not impose a bar on pronouncement of orders/judgments by the Judge who recorded the entire evidence and heard the matter or who heard the matter finally after evidence was recorded by someone else, merely because the said Judge has been transferred to another Court.
In the present case, ld. Addl. Sessions Judge concluded the hearing of the oral arguments on 06th March, 2020 when he reserved the judgment. The Ld. Addl. Sessions Judge pronounced the judgment in open Court on 09th July, 2020. The pronouncement of the judgment by the ld. Addl. Sessions Judge is in terms of Section 353 CrPC. The delay of over four months in delivering the judgment by the ld. Addl. Sessions Judge is a mere irregularity since it has not caused any prejudice to the accused and is, therefore, curable.
Victims are unfortunately the forgotten people in the criminal justice delivery system. The criminal justice system tends to think more of the rights of the offender than that of relief to the victims. The anxiety shown to highlight the rights of the offender is not shown in enforcing law relating to compensation for the victim, which too has a social purpose to serve - The Court has to take into consideration the effect of the offence on the victim's family even though human life cannot be restored, nor can its loss be measured by the length of a prison sentence. No term of months or years imposed on the offender can reconcile the family of a deceased victim to their loss, nor will it cure their anguish but then monetary compensation will at least provide some solace.
Justice remains incomplete without adequate compensation to the victim. Justice can be complete only when the victim is also compensated. In order to give complete mental satisfaction to the victim, it is extremely essential to provide some solace to him in the form of compensation so that it can work as a support for the victim to start his life afresh.
Sections 357 and 357A of CrPC - Compensation to victim(s) of crime - HELD THAT:- Section 357 CrPC empowers the Court to award compensation to the victim(s) of the offence in respect of the loss/injury suffered. The object of the section is to meet the ends of justice in a better way. This section was enacted to reassure the victims that they are not forgotten in the criminal justice system. The amount of compensation to be awarded under Section 357 CrPC depends upon the nature of crime, extent of loss/damage suffered and the capacity of the accused to pay for which the Court has to conduct a summary inquiry - The law contained in Section 357(3) CrPC, has, by and large, been mostly neglected or ignored.
There is, therefore not only statutory empowerment under Section 357(3) CrPC of the appellate court to make an appropriate order regarding compensation but the mandatory duty of every court, at the trial stage as well as the appellate court to consider and pass an order of fair and reasonable compensation on relevant factors.
Principles in regard to methodology of assessing compensation - HELD THAT:- The multiplier method is based on the pecuniary loss caused to the dependants by the death of the victim of the road accident. The dependency of the dependants is determined by taking the annual earning of the deceased at the time of the accident. Thereafter, effect is given to the future prospects of the deceased. After the income of the deceased is established, the deduction is made towards the personal expenses of the deceased which he would have spent on himself. If the deceased was unmarried, normally 50% of the income is deducted towards his personal expenses. If the deceased was married and leaves behind two to three dependents, 1/3rd deduction is made; if the deceased has left behind four to six family members, deduction of 1/4th of his income is made and where the number of dependent family members exceeds six, the deduction of 1/5th of the income is made - The annual loss of dependency of Rs.90,000/- is multiplied by the multiplier of 15 to compute the total loss of dependency as Rs.13,50,000/-. Compensation has to be added towards loss of love and affection, loss of consortium, loss to estate, medical expenses, emotional harm/trauma, mental and physical shock etc. and funeral expenses.
Interim compensation - HELD THAT:- In Bodhisattwa Gautam v. Subhra Chakraborty, [1995 (12) TMI 420 - SUPREME COURT], the Supreme Court held that the Court has the right to award interim compensation and the jurisdiction to pay interim compensation shall be treated to be part of the overall jurisdiction of the Courts trying the offence.
Code of Criminal Procedure vests in the High Court plenary powers relating to the superintendence over the subordinate Courts including the appointment, posting, promotion and transfer of the judicial officers. Section 194 empowers the High Court to direct a Sessions Judge to try particular cases. Section 407 empowers the High Court to transfer the cases on judicial side and Section 483 empowers the High Court to transfer the cases on the administrative side - Section 483 empowers the High Court to exercise superintendence over the subordinate judiciary. Rule 3 of Part B of Chapter 26 of Delhi High Court Rules empowers the High Court to transfer the cases on administrative grounds. To summarize, the High Court has both judicial as well as administrative power to regulate administration of justice.
The ld. Addl. Sessions Judge was duly empowered to pronounce the judgment by virtue of Note 2 appended to the transfer order dated 13th March, 2020. The pronouncement of the judgment by ld. Addl. Sessions Judge is in terms of Section 353 CrPC. The delay in pronouncing the judgment is a mere irregularity and is hereby condoned.
Notwithstanding validity of Note 2, the impugned judgment is also protected by Sections 462 and 465 CrPC and the de facto doctrine.
Victimology - HELD THAT:- Victims are unfortunately the forgotten people in the criminal justice delivery system. Victims are the worst sufferers. Victims” family is ruined particularly in cases of death and grievous bodily injuries. This is apart from the factors like loss of reputation, humiliation, etc. The Court has to take into consideration the effect of the offence on the victim's family even though human life cannot be restored but then monetary compensation will at least provide some solace - Justice remains incomplete without adequate compensation to the victim. Justice can be complete only when the victim is also compensated.
Sections 357 & 357A of CrPC - HELD THAT:- The object of the Section 357(3) CrPC is to provide compensation to the victims who have suffered loss or injury by reason of the act of the accused. Mere punishment of the offender cannot give much solace to the family of the victim – civil action for damages is a long drawn and a cumbersome judicial process. Monetary compensation for redressal by the Court finding the infringement of the indefeasible right to life of the citizen is, therefore, useful and at time perhaps the only effective remedy to apply balm to the wounds of the family members of the deceased victim, who may have been the bread earner of the family - The Supreme Court in Ankush Shivaji Gaikwad [2013 (5) TMI 1015 - SUPREME COURT] has given directions that the Courts shall consider Section 357 CrPC in every criminal case and if the Court fails to make an order of compensation, it must furnish reasons.
Quantum of compensation - HELD THAT:- The amount of compensation is to be determined by the Court depending upon gravity of offence, severity of mental and physical harm/injury suffered by the victim, damage/losses suffered by the victims and the capacity of the accused to pay. While determining the paying capacity of the accused, the Court has to take into consideration the present occupation and income of the accused. The accused can also be directed to pay monthly compensation out of his income.
Financial capacity of the accused - HELD THAT:- Before awarding compensation, the Trial Court is required to ascertain the financial capacity of the accused. This Court has formulated the format of an affidavit to be filed by the accused after his conviction to disclose his assets and income which is Annexure-A hereto.
Victim Impact Report - HELD THAT:- This Court has formulated the format of Victim Impact Report (VIR) to be filed by DSLSA in every criminal case after conviction. Victim Impact Report (VIR) shall disclose the impact of the crime on the victim. The format of the Victim Impact Report in respect of criminal cases, other than motor accident cases, is Annexure B-1. The format of Victim Impact Report in respect of motor accident cases is Annexure B-2.
Summary Inquiry - HELD THAT:- A summary inquiry is necessary to ascertain the impact of crime on the victim, the expenses incurred on prosecution as well as the paying capacity of the accused - This Court is of the view that the summary inquiry be conducted by Delhi State Legal Services Authority (DSLSA) considering that DSLSA is conducting similar inquiry under the Delhi Victim Compensation Scheme, 2018 and is well conversant with the manner of conducting the inquiry.
The Trial Court shall thereafter consider the Victim Impact Report of the DSLSA with respect to the impact of crime on the victims, paying capacity of the accused and expenditure incurred on the prosecution; and after hearing the parties including the victims of crime, the Court shall award the compensation to the victim(s) and cost of prosecution to the State, if the accused has the capacity to pay the same - If the accused does not have the capacity to pay the compensation or the compensation awarded against the accused is not adequate for rehabilitation of the victim, the Court shall invoke Section 357A CrPC to recommend the case to the Delhi State Legal Services Authority for award of compensation from the Victim Compensation Fund under the Delhi Victims Compensation Scheme, 2018.
Delhi State Legal Services Authority is directed to prepare a proposal for additional manpower after examining number of summary inquiries that are likely to be conducted by DSLSA every month and the proposal be sent to Government of NCT of Delhi within one week whereupon Government of NCT of Delhi shall complete all necessary formalities within three weeks to ensure that the directions of this Court relating to the summary inquiry by DSLSA in every criminal case are implemented w.e.f. 01st January, 2021 - List for reporting compliance and further directions on 25th February, 2021.
This Court is of the view that the mandatory summary inquiry by DSLSA into the loss/damage suffered by the victim and the paying capacity of the accused after conviction; and the affidavit of accused in format of Annexure-A; and Victim Impact Report by DSLSA in the format of Annexure-B and Annexure B-1 should be incorporated in the Statue/Rules - National Judicial Academy is reporting the best practices of the High Courts on their website (www.nja.nic.in) under the head of Practices & Initiatives of various High Courts. Copy of this judgment along with Annexure-A, Annexure-B and Annexure B-1 be sent to National Judicial Academy.
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2020 (11) TMI 1067 - NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the Corporate Debtor committed default in paying the financial debt to the Applicant. On perusal of record, it is held that there is existence of default and that the application under Section 7(2) of the Code is also complete in all respect - In the instant case, the documents produced by the Financial Creditor clearly establish the ‘debt’. Section 13 (2) Notice issued by the Financial Creditor clearly indicates that entire debt was recalled. There is a default on the part of the Corporate Debtor in payment of the ‘financial debt’.
There is no dispute in the case that the petitioner is the financial creditor. The application is also furnished in the prescribed form - 1 of the Rules and the prescribed fee has also been paid. Along with the application, the applicant has proposed the name of the Interim Resolution Professional namely Mr. Naresh Sheth.
The petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted - Petition admitted - moratorium declared.
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2020 (11) TMI 1066 - APPELLATE AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH
Input tax credit - inward supply of Motor Vehicles which are used for demonstration purpose in the course of business of supply of motor vehicles - capital goods - utilisation of credit for the payment of output tax payable under this Act, allowed or not - HELD THAT:- Section 17 (5)(a) prescribes the condition in which input tax credit shall not be available on motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies:-
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicle.
The demo vehicles used for demonstration and for offering trial facility to customers, are not covered in above exceptions.
The ruling of Madhya Pradesh Authority for Advance Ruling is agreed upon - the Appellant is not entitled to avail input tax credit on inward supply of motor vehicles which are used for demonstration purpose.
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2020 (11) TMI 1065 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Maintainability of petition - prosecution of the case or not - HELD THAT:- On perusal of the record, it is found that on 15.07.2020 and on 18.08.2020 the learned lawyer for the petitioner was found absent and, thereafter, on 29.09.2020, he has shown his appearance. Today also the petitioner is found absent.
It appears that the petitioner is not interested in prosecuting the case - the instant IB Petition is dismissed for non-prosecution.
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2020 (11) TMI 1064 - BOMBAY HIGH COURT
Application seeking stay of the proceedings in an appeal filed by them before the Court of Principal District and Sessions Judge - application under Order 9 Rule 13 of the Civil Procedure Code, 1906 (CPC), filed before the Trial Court for setting aside ex-parte decree was pending - HELD THAT:- A perusal of Order 9 Rule 13 of the CPC shows that it affords an opportunity to a defendant to apply to the Court for setting aside ex-parte decree by satisfying the Court that in the facts of the case, such an ex-parte decree could not have been passed. There cannot be dispute about the position of law that a defendant who has suffered an ex-parte decree can simultaneously invoke two remedies, firstly, by filing an application for setting aside ex-parte decree under Order 9 Rule 13 of the CPC and secondly, by filing an appeal under Section 96 of the CPC.
It was observed by the Hon’ble Supreme Court in the case of RANI CHOUDHURY VERSUS LT. COL. SURAJ JIT CHOUDHURY [1982 (8) TMI 217 - SUPREME COURT] that as per explanation to Order 9 Rule 13 of the CPC, after the appeal filed by the defendant against an exparte decree stood disposed of, it constituted sufficient reason for a ban on proceeding in an application for setting aside ex-parte decree filed by such aggrieved defendant - In the case of BHANU KUMAR JAIN VERSUS ARCHANA KUMAR & ANR. [2004 (12) TMI 676 - SUPREME COURT], the Hon’ble Supreme Court held that application under Order 9 Rule 13 of the CPC would not be maintainable once the Appellate Court disposes of the appeal, as the decree passed by the Trial Court merges with the order passed by the Appellate Court. It was also recognized that explanation to Order 9 Rule 13 of the CPC did not suggest that the converse was also true.
A bare perusal of the aforesaid provision, along with position of law laid down and emphasized by the Hon’ble Supreme Court, would show that the petitioners in the present case were entitled in law to seek stay of proceedings in the pending appeal before the Appellate Court, while pursuing the application for setting aside ex-parte decree under Order 9 Rule 13 of the CPC. It is clear that if the appeal proceeds and stands disposed of, the application for setting aside ex-parte decree filed by the petitioners cannot be proceeded with and it would be rendered infructuous.
It is in this backdrop, that the petitioners filed the aforesaid application for stay Exh.17 before the Appellate Court on 13/02/2017 i.e. more than two years after filing the appeal and the application for setting aside of ex-parte decree. There is no dispute about the fact that in the meanwhile the respondent No.1 (plaintiff/decree holder) deposited the balance amount of consideration on 06/08/2009 i.e. immediately after the decree was passed on 27/06/2009 and that the respondent No.1 also filed draft sale deed on 03/12/2011 before the Executing Court. Thus, a period of more than ten years has elapsed and the respondent No.1 was not been able to enjoy fruits of the decree, despite the fact that the entire balance consideration was deposited more than ten years earlier. The conduct of the petitioners is evident from the aforesaid material on record.
This Court is of the opinion that law must act in aid of justice. In peculiar facts and circumstances of a case, while recognizing settled position of law the Court must ensure that the ends of justice are not frustrated in the process.
Keeping in view the conduct of the petitioners before the Courts below, this Court expressed that in furtherance of justice, the petitioners ought to hand over possession of the suit property to the respondent No.1, subject to appropriate conditions and subject to the result of the pending proceedings - considering the position of law pertaining to explanation to Order 9 Rule 13 of the CPC, this Court finds that the impugned order cannot be sustained - Petition disposed off.
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2020 (11) TMI 1063 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - time limitation - Article 137 of the Limitation Act, 1963 - HELD THAT:- The ground agitated for assailing the impugned order is founded on plea of extension of limitation. The date of default being 1st July, 2001, the cause of action would not shift and therefore, limitation for initiating Corporate Insolvency Resolution Process would commence from the date of default - Subsequent restructuring of debt vide negotiated settlement which admittedly aborted and failed, would not give a fresh cause of action to Appellant. Such plea would not sustain even if the limitation is computed from the date of failure of such negotiated settlement as the application is still hit by limitation.
The Appellant submits that there is continuing cause of action. This is a misplaced argument as once the date of default is there which provides cause of action to the Appellant, limitation begins to run from such date.
There are no merits in the appeal - appeal dismissed.
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2020 (11) TMI 1062 - NATIONAL COMPANY LAW TRIBUNAL GUWAHATI
Realization of claims against the CD which has already taken over by the Respondent No.2 - section 60 (5) of IBC, 2016 read with Rule 11 of the National Company Law Tribunals Rules, 2016 - HELD THAT:- The present Applicant being an Operational Creditor has filed this application praying for setting aside the Resolution Plan approved by this Adjudication Authority on 07.12.2018 or to direct the Resolution Professional to pay its claim of Rs.1,21,86,626/- as the Applicant could not know about admission of the petition/CIRP/Approval of Resolution Plan because the R.P. had published notice inviting the claim at Registered and Corporate Office Areas only i.e. Guwahati and Kolkata. Resolution Professional should have also published the notice in the Newspapers in the city of Mumbai and Nasik as in these places the CD used to conduct business and also the Registered office of the OC (Mumbai) - this Applicant/OC had supplied materials during the period from 03.02.2010 till 28.08.2010 and the last payment was received by the Applicant on 11.12.2010.
Hon’ble Supreme Court in the matter of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] has held that a Successful Resolution Applicant cannot suddenly be faced with “undecided” claims after the resolution plan submitted by the Resolution Applicant has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by the successful resolution applicant. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the CD.
The prayer of the Applicant/OC for setting aside the Resolution Plan approved by this Adjudication Authority on 07.12.2018 or to direct the Resolution Professional to pay its claim of Rs.1,21,86,626/- is rejected - Application disposed off.
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2020 (11) TMI 1061 - SC ORDER
Grant of anticipatory bail - petitioner acted as a guarantor to a loan facility obtained by one of the sister concern Society of the Company - default in repayment of loan - HELD THAT:- Delay condoned.
Issue notice, returnable on 27.11.2020.
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2020 (11) TMI 1060 - APPELLATE AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Exemption from GST - Lease Agreement between the Appellant Company i.e. the Lessee and RLDA for a period of 99 years - whether amount transferred by the Appellant Company as Security Deposit in pursuance to the tender and lease agreement dated 08.11.2019 is exempt under GST in view of the N/N. 04/2019-Central Tax (rate) dated 29.03.2019 or N/N. 12/2017-Central Tax (rate) dated 28.06.2017? - HELD THAT:- It is observed that the appellant has totally misconstrued the clause 26.3 which provides for forfeiture of bid security deposit in case of breach of the Bid by the Bidder. We are not in agreement with contention of the appellant that if any instalment of lease premium amount is refunded in case of breach of Bid, its nomenclature will be changed from Premium to Security amount. In the LOA and the Lease agreement it is clearly mentioned that the first instalment of lease premium shall be Rs. 143667891/- and the Bidder has deposited an amount of Rs.158657105/- (Premium+ Interest) in the month of February, 2019. Lease agreement has acknowledged the payment of first instalment of lease premium in compliance of LOA which forms integral part of Lease Agreement - every agreement is independent in itself and conditions may vary from each other except the conceptual facts and principles. The Appellant has deposited the amount as lease premium after issuance of LOA. Furthermore, in the main portion of lease agreement which occurs on 18.11.2019, both parties i.e. RLDA and Appellant themselves has found it as 1st installment of the lease premium.
It is a fact that RLDA has issued LOA on 26.09.2018 addressed to M/s H. S. Mehta Infra Pvt. Ltd. Lead Partner of consortium. As per condition of LOA the consortium was required to create a SPC, therefore, appellant company has been incorporated as SPC. The Appellant in pursuance to LOA has deposited first installment of lease premium of Rs.15,86,57,105/- by various RTGS on different dates from 16.02.19 to 22.02.19. Therefore, in view of above facts and provisions of law, it is observed that time of supply of service is 25.11.2018 which is after 60 days post to LOA and before the date of payment of premium. Even, the date of payment of lease premium is prior to 01.04.2019 - the exemption under Entry No. 41B of the Notification No. 12/2017 dated 28.06.2017 inserted vide Notification No. 04/2019 dated 29.03.2019 is not available to the appellant.
On perusal of LOA, it is noticed that in para 6 of LOA, it is clearly mentioned that LOA shall constitute a binding contract till the lease agreement and remaining paras of LOA tell about total premium and many other things about lease. Therefore, instead of lease agreement, LOA issued on 26.09.2018 should be treated 'the document' to determine the time of Supply of Services. The payment schedule has been prescribed in the para 3 of the LOA dated 26.09.2018 itself, according to which the first installment of lease premium of Rs. 14,36,67,891/- was required to be paid within 60 days of the date of issuance of LOA. Accordingly, the first installment was required to be paid by 25.11.2018 - in absence of invoice, the date of LOA shall be taken into consideration for determining the time of supply of the service in view of Section 13 (3) (b) of the CGST Act, 2017 and SGST Act, 2017. Therefore, it is held that time of supply of service is 25.11.2018 i.e. immediately following sixty days from the date of issue of LOA which is prior to the date i.e. 01.04.2019 from which the exemption under Entry No. 41B of the Notification 12/2017 has been made effective.
As per Section 13 (1) of the CGST Act, 2017, liability to pay tax on services arises at the time of supply. As discussed, the time of supply of service in the instant case is 25.11.2018 whereas, Notification No. 04/2019 dated 29.03.2019 came into effect from 01.04.2019 - the Lease Agreement between the Appellant and RLDA and the amount of Rs. 158657105/-deposited during February, 2019 is not exempted from levy of GST under Notification No. 04/2019-Central Tax (rate) dated 29.03.2019 or Notification No. 12/2017-Central Tax (rate) dated 28.06.2017.
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2020 (11) TMI 1059 - ITAT MUMBAI
Maintainability of appeal against CIT-A orders - low tax effect - tax effect of quantum additions - HELD THAT:- Upon perusal of case records, it transpires that as per Column-10 of Form-36, the tax effect of quantum additions as disputed by the revenue is stated to be Rs.27,93,867/- which is below threshold limit of Rs.50 Lacs and therefore, the appeal is not maintainable in terms of latest low tax effect Circular No. 17/2019 dated 08/08/2019 [F.No.279/Misc. 142/2007- TTJ(Pt.) issued by CBDT. This recent circular further enhances the monetary limit fixed in earlier Circular No.3 of 2018 dated 11/07/2018 issued by CBDT as amended on 20/08/2018.
DR could not controvert the aforesaid fact. No exceptions have been pointed out. Therefore, the appeal is, prima-facie, not maintainable in terms of aforesaid circular issued by CBDT and hence, liable to be dismissed.
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2020 (11) TMI 1058 - GAUHATI HIGH COURT
Recovery of refund - royalty paid for exploration of Mineral Oil and Natural Gas - tax paid by the petitioner in the form of royalty can be considered to be a consideration for service rendered, or not - HELD THAT:- The impugned show-cause notice being erroneous and wholly without jurisdiction and the representations preferred by the petitioner in response to the earlier show-cause notices not having been considered, the petitioners are aggrieved, and therefore the present writ petition has been filed. The learned senior counsel therefore prays for adequate interim relief seeking stay of the impugned show-cause notice.
Issue Notice Returnable after 4 (four) weeks’.
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2020 (11) TMI 1057 - ITAT BANGALORE
Taxability of Education cess - As submitted that, education cess is not tax and hence is not disallowable - HELD THAT:- As rely on the judgment of Hon'ble Rajasthan High Court in the case of Chambal Fertilizers and Chemicals Ltd. v. Jt. CIT [2018 (10) TMI 589 - RAJASTHAN HIGH COURT], which after taking into account aforementioned CBDT circular held that section 40(a)(ii) applies only to taxes and not to education cess - we allow the additional ground raised by assessee
TP Adjustment - comparables alleged for inclusion/exclusion by assessee as well as revenue under engineering design services segment- HELD THAT:- Assessee has been categorised to be rendering engineering design services with the help of software developed by its AE as a captive service provider, thus companies functionally dissimilar with that of assessee need to be deselected.
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