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2021 (11) TMI 863
Provisional attachment of accounts - initiation of proceedings by Respondent against the Petitioner - Section 67 of the CGST Act - HELD THAT:- At Court’s direction, learned counsel for respondent no.1 has obtained instructions. He admits that every provisional attachment shall cease to have effect after the expiry of period of one year from the date the order had been passed under Section 83(1) of the Act.
The present writ petition is allowed and the Respondents are directed to de-freeze the Petitioner’s Current Account with Respondent no.2-Bank, within three working days of uploading of the present order - petition disposed off.
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2021 (11) TMI 862
Release of seized goods alongwith conveyance - exempt goods - Section 129 of the TNGST Act, 2017 - HELD THAT:- Considering the fact that the order has been passed under Section 130 of the TNGST Act, the impugned order dated 27.09.2021 stands quashed and the same shall be treated as Show Cause Notice issued under Section 129 of the TNGST Act, 2017.
The petitioner is directed to comply with the requirements of Section 129 of the TNGST Act, 2017. If the petitioner pays the amount as is completed under Section 129 of the TNGST Act, the respondents shall release the vehicle. It is made clear that the respondents shall accept the amounts if the same is tendered by the petitioner.
Writ Petition stands disposed of.
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2021 (11) TMI 861
Classification of services - rate of GST - Input tax credit - Air Conditioned Stage Carriage - inward supply of services received from the suppliers who are in the same line of business - Sl.No.8 (ii)(b) and Sl.No.8(vi) of Notification No. 11/2017-Central Tax (Rates), dt: 28-06-2017 - option of 12% (6% each towards CGST & SGST) with no conditions attributed to it is applicable or not - HELD THAT:- The service mentioned at Sl.No.8(ii)(b) is “Air Conditioned Stage Carriage” whereas the service mentioned at Sl.No.8(vi) is transport of passengers in any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charges from the service recipient. Evidently though both the entries deal with motor vehicles for carrying passengers, the entry at Sl.No.8(vi) is a general entry whereas the entry at Sl.No.8(ii)(b) is the specific entry, i.e., Air Conditioned Stage Carriage. And it is the principle of interpretation of statute that general things do not derogate from special things and therefore that special provision prevails over the general provision.
As the applicant has stated that they will be in the business of passenger transport in Air conditioned buses as stage carriages, the applicable entry in view of the above discussions is Sl.No.8(ii)(b) of Notification No.11 of 2017, dt: 28-06-2017 - Further they are liable to pay tax at the rate of 2.5% under CGST & SGST respectively if they are not claiming any ITC on goods and services used in supplying service in the said entry.
There is no exclusion of services from other taxable persons in the same line of business from this condition, as the entry clearly mentions that ITC should not be taken on “Goods & Service used in supplying the service”. Therefore if they are recipient of services from other suppliers who are in the same line of business and would like to claim a lower rate of tax under Sl.No.8(ii)(b), they cannot claim the credit of input tax charged on services from these other suppliers of similar service - the entry Sl.No.8(vi) is not applicable to the nature of business of the applicant.
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2021 (11) TMI 860
Classification of services - telecom services provided by Airtel to Greater Hyderabad Municipal Corporation (GHMC) - Nil rated under GST as per the S. No. 3 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 or not - pure services - functions entrusted under article 243W - Invoices for telecommunication services are to be issued with (or) without GST - HELD THAT:- Under serial no. 3 of Notification No. 12/2017 pure services provided “in relation to any function” entrusted to a municipality under Article 243W of the Constitution of India is eligible for exemption from GST. Clearly the exemption should be directly related to the functions enumerated under Article 243W of the Constitution of India i.e., Responsibilities specified at Sl No.(1) or those functions listed under 12th schedule.
Hon’ble Supreme Court of India in the case of HH. MAHARAJADHIRAJA MADHAV RAO JIWAJI RAOSCINDIA BAHADUR VERSUS UNION OF INDIA [1970 (12) TMI 87 - SUPREME COURT] observed that the expression “relating to” means to bring into relation or establish a relation. It was further clarified that there should be a direct and immediate link with a covenant and that there cannot be any independent existence outside such covenant.
Thus, the applicant is providing data and voice services to GHMC and to the employees of the municipalities and general purpose for office and administrative purposes. Thus there is no direct relation between the services provided by the applicant and the functions discharged by the GHMC under Article 243W read with schedule 12 to the Constitution of India. Therefore these services do not qualify for exemption under Notification No. 12/2017.
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2021 (11) TMI 859
Admissibility of application - Classification of services - rate of GST - EPC contract engaged in works, viz; site grading, earth filling, road works, storm water drains, utility corridor, street lighting, water storage and distribution system - civil contractor engaged in civil construction works, viz; prefabricated PUP (polyurethane) Administrative building, training centre, technology facilitation centre, etc. - HELD THAT:- It is evident that an applicant can seek an Advance Ruling only in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. Further, as per Section 103 (1) of the GST Act, the ruling is binding only on the applicant and the concerned officer or the jurisdictional officer of the applicant. In the case at hand, the applicant is the recipient of the services and not supplier of such service.
The application is not admitted, under Section 98(2) read with Section 95 (a) of CGST Act, 2017/TNGST Act, 2017.
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2021 (11) TMI 858
Classification of GST - applicant to provide the boarding, lodging facilities and such other agreed services, to AMSL - composite supply or a mixed supply? - principal supply or not - exemption under N/N. 12/2017-CT (Rate) dated 28.06.2017 - difference of opinion - HELD THAT:- The applicant is engaged in the business of hospitality providing boarding, lodging facilities and such other services to AMSL, who is into training youth in various healthcare’ related vocational programs as part of implementation of its projects under Deen Dayal Upadhyay Grameen Kaushalya Yojana (DDU-GKY). AMSL has engaged the applicant to provide the boarding, lodging facilities and such other agreed services, to AMSL in line with the SOP given by the Government of India for the implementation and furtherance of its projects under Id DDU GKY.
As per the terms of agreement entered into by the applicant with AMSL, the consideration payable shall include fixed and variable cost towards accommodation and provision of food and other facilities based on the actual number of candidates availing the services at the hostel. The applicant has stated that, their primary and predominant activity is to provide accommodation to the candidates at the hostel, the supply of food and other amenities is ancillary but an integral part of the principal supply. The applicant has stated that the activity is a composite supply, where the principal supply is accommodation services. The applicant has stated that SAC 996322 shall be applicable to their activities and the services are exempted under Sl.no. 14 of Notification no. 12/2017CT (Rate) dt. 28.06.2017.
From the Schedule of Charges (Schedule III) of the Agreement, it is seen that ₹ 3500/ is fixed towards the Rent per Candidate, per month for regions of Chennai and ₹ 3000/ towards the Rent per candidate for the accommodation per month in any region out of chennai, which translates to per day equivalent tariff of ₹ 117/₹ 100 and the consideration for other supplies is ₹ 183/₹ 150 per day. The total consideration/ equivalent declared tariff as per the agreement for the composite supply per day, amounts to ₹ 300/- ₹ 250/- per candidate per day which is below the specified limit of ₹ 1000 per day. Therefore, I find that the exemption at SI.No. 14 of Notification no.12/2017 CT(Rate) dt.28.06.2017 is applicable to the case in hand.
The supply envisaged in the agreement entered with AMSL is a composite supply of hospitality services in which provision of accommodation, food and other amenities are naturally bundled in the course of business and supplied in conjunction. The provision of accommodation is the principal supply, being provided to all the candidates (headcount wise) and the applicable SAC is 9963 and per day equivalent tariff being less than ₹ 1000, the exemption provided under SI.No.14 of Notification no. 12/2017-CT(Rate) dt.28.06.2017 is applicable to the ease in hand.
In view of the difference in the opinions of the Members, the case is referred to the Appellate Authority for hearing and decision on this issue in terms of Section 98(5) of the CGST/TNGST Act 2017, which provides that where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question.
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2021 (11) TMI 857
Validity of Assessment order passed by the National Faceless Assessment Centre - as argued the impugned order passed without appropriate Risk Management Strategy of the Board is contemplated under Section 144 (B) (1) (xvi) - HELD THAT:- Section 144 (B) of the Income Tax Act, 1961 was inserted with effect from 01.04.2021. As a matter of act the aforesaid provision contemplates that National Faceless Assessment Centre to examine the draft assessment order in accordance with the Risk Management Strategy specified by the Board. The Counsel for respondents was unable to confirm whether any Risk Management Strategy has been specified by the Board. How assessment orders have been passed by the respondents in terms of the aforesaid provisions.
The writ petitioner is, therefore, directed to file a statutory appeal in terms of the above provisions within a period of 30 days from the date of receipt of this order. Considering the fact that the impugned order passed without appropriate Risk Management Strategy of the Board is contemplated under Section 144 (B) (1) (xvi) the Appellate Commissioner may consider the appeal of the writ petitioner, if such appeal is filed on merits and in accordance with law. The mandatory requirement a pre deposit under Section 220 (6) shall however, be waived in the light of the fact that the entire assessment proceedings was complete by the respondents at the fag end of the limitation to avoid lapsing of on account of limitation. The Appellate Commissioner is, therefore, directed to pass appropriate orders on merits.
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2021 (11) TMI 856
Revision u/s 263 by CIT - Reopening of assessment u/s 147 initiated against assessee - As pe CIT AO had failed to make independent inquiries to verify the source of cash deposited in bank by the assessee and also the claim of interest expenditure as per section 36(1)(iii) - HELD THAT:- What is crucial and important for assuming the jurisdiction to reopen the case of an assessee u/s 147 of the Act is the “belief of the AO of the escapement of income”. The mere fact that the cash is found deposited in the bank account may lead to a suspicion at best but it definitely cannot lead to belief of escapement of income. The cash deposit may be justified by the facts and figures revealed in the income tax return filed by the assessee.
In any case there has to be more information in the possession of the AO to form belief that the cash deposits represent assesses own escaped income. In the present case we find that the AO has no categorical information in his possession either regarding the fact of return having been filed by the assessee nor any other information to the effect that the source of the cash deposits was unexplained. No inquiries were independently conducted by the AO regarding the source of cash deposits, which would have surely assisted in the formation of belief of escapement of income with regard to the same.
The reasons recorded therefore do not justify the assumption of jurisdiction by the AO to reopen the case of the assessee u/s 147 of the Act. The order passed u/s 147 of the Act therefore is clearly not a valid order in the eyes of law.
Collateral proceedings on the said order, u/s 263 of the Act, are therefore, we agree, not sustainable in law. The order passed by the Ld.PCIT u/s 263 of the Act is accordingly set aside. - Decided in favour of assessee.
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2021 (11) TMI 855
Validity of Reopening of assessment u/s 147 - addition on the basis of valuation report of District Valuation Officer (DVO) - reopening of assessment was beyond four years - HELD THAT:- Since the allegation of escapement of income is more than ₹ 1 lakh, the reopening cannot be said to be invalid in view of the provision of Section 149(1)(b) of the Act. Thus, the ground of maintainability of the reassessment proceeding as raised by the assessee fails.
Reopening of assessment on DVO’s report - Where the AO completed assessment under Section 143(3) making certain addition in respect of unexplained investment he could not reopen the said assessment for enhancement of said addition merely on the basis of the report of the DVO. In this regard, we are enlightened by the ratio laid down in AKSHAR INFRASTRUCTURE PVT LTD [2017 (3) TMI 393 - GUJARAT HIGH COURT].
Also in MUNIR ISMAIL VORAJI [2017 (5) TMI 684 - GUJARAT HIGH COURT] where on the basis of DVO’s report reopening notice was issued and challenged before the Court. It was further found that no further enquiry was conducted to find out fair market value, neither was there any tangible material available to the AO to form an opinion that income chargeable to tax has escaped assessment. Ultimately such reopening of assessment merely on the basis of the DVO’s report was held to be unjustified. We find similar fact in the case in hand which has been failed to be controverted by the Ld. DR before us. Therefore, we find no merit in the reopening the assessment under Section 147 of the Act merely on the basis of the DVO’s report. - Decided in favour of assessee.
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2021 (11) TMI 854
Validity of assessment - Addition towards family cash found in search - AR submitted that notice u/s 143(2) was not served to the assessee within the specified time - HELD THAT:- Revenue can avail Section 292BB only if notice u/s 143(2) was issued and not when admitted position is that no notice was issued as in the instant case.
As the notice u/s 143(2) should have been issued till the date 30/9/2014 but the same was issued after the statutory limit. This fact was not denied by the Ld. DR after going through the assessment records. Hence, the additional ground raised by the assessee are allowed. Thus, the assessment order itself becomes null and void ab initio as the notice issued was not issued within the specified time. Since, the assessment itself becomes nullity; there is no need to discuss the merits of the case. The appeal of the assessee is allowed.
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2021 (11) TMI 853
Validity of reopening of assessment u/s 147 - as argued notice u/s 143(2) was not properly served to the assessee - bogus purchases - HELD THAT:- As in the assessee's case, under the guise of reopening of the assessment, the AO wants to have a roving inquiry ; as observed hereinabove. Even as per the AO in the reasons recorded, has specially mentioned that for the purpose of verification of the claim, it is necessary to reopen the assessment. Under the circumstances, it cannot be said that the AO had any tangible material to form an opinion that the income chargeable to tax has escaped the assessment. Under the circumstances, the impugned action of reopening of the assessment in exercise of power under section 148 of the Income-tax Act for the reasons recorded hereinabove cannot be sustained.
As in the assessee's case, the Assessing Officer has initiated proceeding of reopening on the facts that the assessee had not filed return of income and provision of section 147(b) is also not applicable for reopening of assessment proceeding - However, these details are factually incorrect. The assessee had filed his return of income on September 18, 2007 and duly acknowledged by the Assessing Officer in para No. 2 of the assessment order. As the return is originally filed by the assessee and no assessment was made earlier therefore, the assessee's case falls in section 147(b) of the Act. Thus, the case was reopened on incorrect fact which shows non-application of mind by the learned Assessing Officer. Hence, the proceeding is itself bad in law. See RMG POLYVINYL (I) LTD. [2017 (7) TMI 371 - DELHI HIGH COURT].
Thus reasons recorded by the Assessing Officer suffer from an infirmity of being misconceived in law and, therefore, initiation of proceeding thereupon is bad in law. - Decided in favour of assessee.
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2021 (11) TMI 852
Reopening of assessment u/s 147 - addition account of unexplained investment - HELD THAT:- There is no reference to any subsequent facts, i.e., subsequent to assessment of March, 2016, or information coming to the possession of the AO, even if available on record though discovered later, i.e., after 10/3/2016, giving rise to the reason to believe escapement aforesaid, and which is a condition precedent for the issue of notice u/s. 148 and assumption of jurisdiction u/s. 147. The reasons recorded u/s. 148(2) refer to the AO’s letter dated 22/2/2016 and the assessee’s reply thereto, both events occurring prior to 10/3/2016, i.e., during the course of the original assessment proceedings. Further, the AO’s comments to the audit objection make it amply clear that the assessee’s reply to his letter dated 22/2/2016 was accepted by the AO. The Revenue has not shown the said acceptance to be infirm, much less perverse, even as the course available in the former case would be a revision u/s. 263.
It is also not the Revenue’s case that the AO’s opinion accepting the assessee’s reply was perverse, i.e., a view no person properly instructed on facts and in law could take, as where the said reply is irrelevant or does not meet the letter dated 22/2/2016 by the AO. I am conscious, while so discussing, that there is no challenge to the notice u/s. 148(1) by the assessee, which aspect, i.e., the validity of the reasons recorded u/s. 148(2) or of the assumption of jurisdiction u/s. 147, must, therefore, be regarded as having attained finality.
The present discussion only seeks to emphasize the non-sustainability of the argument advanced by the ld. Sr. DR inasmuch as there has been, both factually or legally, no omission to consider the assessee’s explanation qua the impugned investment during the original assessment proceedings, nor the AO’s view in accepting the said explanation perverse, in which either case the AO’s objection to the audit objection would be rendered invalid in law. And the Revenues’ subsequent action in issuing notice u/s. 148 interpreted, even as argued by the ld. Sr. DR, as an acceptance by the Revenue of the revenue audit objection. Needless to add, the Revenue has not shown me any counter by the RAP to the AO’s comments dated 13/4/2016, meeting his objection, so as to exhibit thereby that the audit objection would survive the AO’s comments, i.e., obtain despite the same, which (comments) would thus stand rendered inconsequential - Decided against revenue.
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2021 (11) TMI 851
TP adjustment - Comparable selection - international transactions pertaining to provision of sales and marketing support services - Comparability of Axis Integrated Systems Limited - HELD THAT:- Axis is engaged in the business of trading digital signatures. Further, Axis is also engaged in providing Liasioningservices in the area of service tax, excise, foreign trade policy licensing, duty free credit entitlement certificates, etc -Axis develops and owns unique intellectual property tool 'Axis Mine'. Judicial Pronouncements supporting exclusion of companies deriving significant benefit from proprietary process - See M/S ROLLS ROYCE MARINE INDIA PVT. LTD. [2014 (11) TMI 429 - ITAT MUMBAI],GLOBAL LOGIC INDIA PVT. LTD.[2015 (6) TMI 132 - ITAT DELHI],GENZYME INDIA PVT. LTD. [2018 (4) TMI 1772 - ITAT DELHI] - Axis rejected as a comparable as relying on LI AND FUNG (INDIA) PVT. LTD. [2018 (5) TMI 1009 - ITAT DELHI].
Unearned revenue from subscription services - HELD THAT:- As decided in own case we find that assessee has been following consistent system of revenue recognition. The assessee is inter alia engaged in the business of marketing, promotion and sale of 'Red Hat subscriptions' to customers in Indian sub-continent to avail support services that are for the open source software system during the subscription period ranging from one to seven year, which is established by the special services agreement or contract.
AO has clearly erred in changing consistently followed method of revenue recognition adopted by the assessee.We find due merits of the revenue recognition adopted by the assessee which is duly supported by mandate of AS-9 and other parameters referred above - it is also a settled law that unless there is change in the facts and circumstances or that it can be said that earlier adopted system was wrong, revenue recognition method cannot be disturbed. We note that such case exists here. In these circumstances, we set aside the order of the Assessing Officer and delete the addition in this regard.- Decided in favour of assessee.
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2021 (11) TMI 850
Exemption u/s 11 - claim denied relying on Principle of mutuality - AO considering the activities of the appellant trust as that of a "mutual association" - HELD THAT:- Authorities below have proceeded on the misconception that the assessee trust has claimed tax exemption on the basis of mutuality principle alone. Learned CIT(A) has rather summarily dismissed the contention of the assessee with respect of exemption under section 11 by the virtue of being a charitable institution, and simply observed that “all the case laws relied upon by the AR are distinguishable”.
In our considered view quite clearly the object of the appellant trust is to promote education in the field of science of medicine and the profit on sale of books/journals is incidental thereto. In this view of the matter, proviso to Section 2(15) will have no application in the present case. It may be borne in mind that proviso to Section 2(15) comes into play only in respect of “any other object of general utility” and not in respect of relief to poor, education, medical relief etc. As long as object of the institution is charitable, as in our considered view, in this case, exemption cannot be declined merely on the ground that the assessee has received consideration for sale of training material or journal etc. incidental to furtherance of it’s objective of imparting education.
Thus we uphold the plea of the assessee. The Assessing Officer is, accordingly, directed to allow exemption under section 11 in respect of income of the assessee.
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2021 (11) TMI 849
Revision us 263 - time limit for passing the order of assessment - whether the date of dispatch has to be considered as the date of the order and consequently the impugned order has to be held as bad in law and barred by limitation? - HELD THAT:- As relying on M/S MAHARAJA SHOPPING COMPLEX [2014 (10) TMI 880 - KARNATAKA HIGH COURT] wherein held the date of dispatch of the order of assessment should be construed as the date of order of assessment and consequently quashed the orders of assessment as barred by limitation - Following the aforesaid judgment of Hon'ble High Court of Karnataka, the impugned order has to be held as barred by time and is liable to be annulled and is hereby annulled. - Decided in favour of assessee.
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2021 (11) TMI 848
Auction - ownership of the asset vests in the petitioner - NCLT is the appropriate forum to adjudicate the petitioner’s prayers or not - re-export of goods - HELD THAT:- There is no dispute on facts and the question of i) error in the contract heading, ii) inadvertent absence of the signature of R5 in the copy of the contract placed in the typed set, iii) quantification of the asset supplied and paid for being 9899 MT and the remaining being 19537.50 MT stand categorically explained. Thus, the so-called factual discrepancies will not frustrate the maintainability of this writ petition.
The Code is intended to consolidate and address the laws relating to re-organisation and insolvency resolution of corporate persons, firms and individuals in a time bound manner and in the interests of all stake holders. The RP is appointed to guide the process of CIRP under Section 20 of the Code and is expected to manage the operations of the corporate debtor as a going concern. As a part of such management, he is to make every endeavour to protect and preserve the value of the ‘property of the corporate debtor’ - In the present case, the RP endeavours to auction the asset and secure the proceeds of such sale to the credit of the debtor and the benefit of the insolvency proceedings. In order to preserve the property either by way of auction or otherwise, the pre-condition under Section 20 is that what is stated to be preserved would be the ‘property of the corporate debtor’. This is on the one side.
It is thus clear that the intention of the Code is never to address those assets over which a debtor has no title. Such assets, infact, stand specifically excluded from the liquidation process, being assets where the debtor might hold some right, but is not the owner to title of the asset. A pre-condition set out is the inclusion of the asset in question in the inventory of the debtor - The facts and circumstances that arose in those writ petitions are different and distinct from those that present themselves in the matter under consideration now. Reliance upon those decisions is thus to no avail.
The petitioner thus assumes the status of an unpaid seller who continues to hold title/ownership to the asset imported - the official respondents are directed to dispose the representations of the petitioner dated 04.10.2019 and 04.02.2020 within a period of four weeks from today.
Writ Petition is held to be maintainable.
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2021 (11) TMI 847
Levy of penalty u/s 114AA of Customs Act, 1962 - reassessment of the goods by amending the documents under Section 149 of the Act - wrong invoice was sent by the foreign supplier - misuse of provisions of Section 149 to undervalue the goods and evade customs duty - HELD THAT:- There is no previous incidence put forth by the department to prove that the appellant has been indulging in such practice of requesting for amendment of invoice to a lower value and thereafter remitting the balance amount to the foreign supplier, in fact, in the present case, appellant has remitted only US 7140 to the foreign supplier and no further amount has been paid. In later correspondence, the foreign supplier, the Company GY, China has requested the appellant to reexport goods so that they can send the goods actually ordered by the appellant.
It was a genuine mistake of issuing wrong invoice which has been used by the CHA to file the Bill of Entry. The wrong invoice of USD 23750 was not given by the appellant, but the same was collected by CHA from the shipping liner. The appellant cannot be implicated for such mistake by imposing penalty. Moreover, the penalty imposed under Section 114AA is attracted only when there is deliberate falsification of documents in order to get undue benefit.
Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 846
Sanction of Scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016, and under Section 66 of the Companies Act - HELD THAT:- Various directions with regard to holding, convening and dispensing of various meetings issued - directions with regard to issuance of various notices also issued.
The scheme is approved - application allowed.
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2021 (11) TMI 845
Sanction of Composite Scheme of Arrangement - Section 230-232 read with Section 66 of the Companies Act, 2013 and read with of the Companies (Compromise, Arrangement, and Amalgamations) Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions regarding issuance of various notices also issued.
The scheme is approved - application allowed.
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2021 (11) TMI 844
Sanction of Scheme of Arrangement - Section 23(1)(b) Read with Section 232 of the Companies Act, 2013, Read with Rule 15 (1) of Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 and Rule 23A of the National Company Law Tribunal Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - various directions with regard to issuance of notices also issued.
The scheme is approved - application allowed.
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