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2022 (7) TMI 1069
Seeking appointment of Authorized Representatives for financial creditors for the class of creditors for the ‘Home Buyers’ and ‘Deposit Holders’ - Section 21(6A) (b) of the IBC,2016 read with Regulation 2(1) (aa), 4A, 16A of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- It is seen from the documents produced that the Applicant/Resolution Professional has complied with all the procedures prescribed under the law. Since this Tribunal is satisfied that Mr. Vibin Vincent and Mrs. Celine P. Thomas who were selected by the Home Buyers and Deposit Holders respectively to act as their Authorized Representative, they may be appointed as the Authorized Representatives of Home Buyers and class of creditors of Deposit Holders.
Mr. Vibin Vincent, Insolvency Professional, having Registration Number IBBI/IPA-001/IP-P01997/2020-2021/13134 residing at Chakiath House, Elavoor P.O., Ernakulam, and Mrs. Celine P. Thomas having Registration Number IBBI/IPA-001/IP-P02358/2021-2022/13612 residing at 4B, Tulip, Skyline Riverdale Apartments, Petta, Tripunithura, Ernakulam are appointed as the Authorized Representatives for the Class of Creditors of Home Buyers in the CIR Process and class of creditors of Deposit Holders respectively in the CIR Process in the matter of Samson and Sons Builders and Developers Pvt. Ltd.
Application allowed.
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2022 (7) TMI 1068
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtor - existence of debt and dispute or not - HELD THAT:- The Principal Borrower "AGEPL" and guarantor had approached the applicant seeking grant of various Credit Facilities. On the representations made by the "AGEPL", the Applicant had extended various Credit facilities from time to time for its business purpose. As per the Credit Facilities, "AGEPL" was obliged to repay the principal sum of Credit along with interest thereon in accordance with repayment schedule as set out in the agreements - For the Credit facilities, Deed of Guarantee was executed by the respondent-personal guarantor towards security for due repayment of the loans and advances granted to principal debtor with interest, cost and expenses from time to time. The "AGEPL" and the respondent/personal guarantor had failed and/or neglected to make payment as per terms of the said Agreements. That due to failure of the Corporate Debtor to comply the terms and conditions of the loan accounts, the said loan accounts have been classified as NPA as per the guidelines of RBI.
The personal guarantor, viz., Mr. Pratyush Kumar Sureka, had executed several personal guarantees lastly on 22.10.2013 in favour of the Applicant to secure the repayment of the principal amount of the Credit Facilities together with all interest, additional interest, liquidated damages, premium on repayments, reimbursement of all costs, charges and expenses and all other obligations payable by "AGEPL" in respect of the Facility Agreements. The Applicant on 15.07.2021 has issued a Demand Notice in Form B under Rule 7(1) of the IB Rules, 2019 demanding Rs. 25,05,78,059.60/- along with unapplied interest, other charges and costs till repayment in full.
The applicant prays for initiation of insolvency resolution process, against the respondent/personal guarantor - It is made known to everyone that on filing this Application by the Applicant/Creditor the interim-moratorium commences in terms of section 96(1)(a) of IBC, 2016.
List this matter on 16.08.2022.
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2022 (7) TMI 1067
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- A perusal of counter filed by Corporate Debtor shows that, the Corporate Debtor has not disputed the debt and only disputed the quantum of the debt.
As per Section 5(6) of the code, dispute if any as to debt, shall be regarding existence of debt - In the case in hand, the existence of debt is not disputed, as according to corporate debtor, the quantum of debt alone is in dispute. Hence, the operational debt in this case remain undisputed stands admitted and established. Since, it is not the case of corporate debtor that it discharged the said debt, the default also stands established.
This Adjudicating Authority admits this Petition under Section 9 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code - Application admitted - moratorium declared.
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2022 (7) TMI 1066
Permission to travel abroad - Recovery of Bribe amount - certain records were seized regarding the company of the respondent using forged documents/invoices to make bogus entries in the books of its accounts and using the same as genuine - It is the case of the respondent that only two grounds were raised before learned Trial Court that the treatment was available in the country and the respondent may tamper with the evidence - HELD THAT:- As far as availability of the treatment in India is concerned, as per respondent’s counsel, the father of the present respondent had died in Apollo Hospital while suffering from the same/similar ailment, so the respondent does not wish to get himself treated in Apollo Hospital, where the requisite CT Scan machine is available - The maxillofacial cyst surgery is to be done by and under the supervision of the Doctors who are treating him regarding his heart ailment. The grandfather and the father of the present respondent had also died with the same heart disease. Even the respondent had undergone major surgery (angiography) in the year 2016 and he is taking blood thinning medicines prescribed by his treating doctors. For removal of maxillofacial cyst, he has to stop taking the said drug. Hence, the supervision, care and treatment under Doctor Ramasamy Danapal based in London is required, who is well aware of the respondent’s medical history.
A report has been also placed on record by the petitioner obtained from medical Superintendent AIIMS Hospital regarding availability of the treatment of maxillofacial cyst at the Center for Dental Surgery at AIIMS and the 640 Slice CT Scan machine being available in Apollo Hospital - It is the admitted case of both the parties that after the registration of the earlier ECIR in the year 2010, the respondent has travelled abroad on a number of occasions after getting his passport released from the Court and he has never violated any of the terms and conditions, which were imposed by the learned Trial Court. The only change in circumstance is that another ECIR has been registered against him, in which he is on bail and a condition for deposit of passport was put afresh.
One of the apprehensions expressed by the present petitioner is that the respondent may tamper with the evidence and he may influence the witnesses. Learned counsel for the respondent has submitted that till date, officials of the petitioner have failed to point out as to what is the evidence abroad, which will be tampered with by the respondent during his treatment period or who are the witnesses who will be influenced by him - the learned Trial Court has rightly allowed the present respondent to travel abroad because he needs to be under the treatment of the concerned Doctor, who knows his medical condition and because of his heart condition, his cyst cannot be removed without a competent Doctor being in charge of his heart condition during procedure, when the cyst is being removed.
Merely stating that the treatment for removal of maxillofacial cysts is available in AIIMS where appointment is not available till August, 2022 end and the 640 Slice CT Scan is available in Apollo where the respondent has lost his father during the treatment, cannot be a ground to deny the respondent the permission already granted by the learned Trial Court. If the cyst is to be removed in AIIMS then how the machines available in Apollo Hospital can be of any help?
It is deemed proper to put one more condition in addition to the conditions put by the learned Trial Court while granting the permission to the respondent to travel abroad and the said condition is that the respondent shall share all his Mobile numbers with the officials of the petitioner and he shall keep the mobile location on at all times - In case, the respondent violates any of the conditions mentioned in the impugned order as well as the condition put today, the official of the petitioner are at liberty to move the Court of learned Special Judge for recalling the said order.
Petition disposed off.
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2022 (7) TMI 1065
Collection of amount in the name of service tax - mandatory nature of sub-section (2) of Section 73A of the Finance Act, 1994 - It is submitted that, It is for the Central Government to make the deposit to the Consumer Welfare Fund or to refund the amount to the person who has borne the incidence of indirect tax in terms of sub-section (6) of Section 73A of the Finance Act, 1994. Law does not require that the assessee will either refund the amount to the person who has borne the incidence of tax or pay the amount to the Consumer Welfare Fund.
Issue notice, returnable within 6 weeks.
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2022 (7) TMI 1064
Levy of Service Tax - VAT liability on subject goods duly paid - HELD THAT:- In the facts of the present case as it is not disputed that the respondent had regularly paid amount towards VAT liability in respect of the subject goods during the relevant period, the question of claiming service tax thereon does not arise.
Appeal dismissed.
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2022 (7) TMI 1063
Refund of CENVAT Credit - rejection of refund on the ground that the appellant did not debit the amount of refund claim in their cenvat credit record/ ledger at the time of filing refund claim, under the admitted fact that such debit was made later on under intimation to Revenue before adjudication of the claim - Rule 5 of Cenvat Credit Rules read with Notification No. 27/2012-CE (NT) - HELD THAT:- The debit of the amount of refund claim in the cenvat credit account suo moto before the adjudication, is sufficient compliance of Condition No. 2(h) of the Notification No.27/2012-CE. Further relying on the ruling of the Hon’ble Supreme Court in the case of CCE VERSUS M/S HARI CHAND SHRI GOPAL [2010 (11) TMI 13 - SUPREME COURT], it is further held that the Commissioner (Appeals) have mis-conceived and mis-directed himself by ignoring the ruling of the Hon’ble Supreme Court, which is both judicial indiscipline and also in violation of Article 141 of the Constitution of India.
The Adjudicating Authority is directed to grant refund within a period of 45 days from the date of receipt of this order along with interest as per Rules (starting from the end of 3 months from the date of filing of the refund claim till the date of grant of refund claim) - Appeal allowed - decided in favor of appellant.
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2022 (7) TMI 1062
Refusal to de-seal cigarette manufacturing machines and DG sets - validity of the declaration of trade notice dated 18.01.2021 - arbitrary and violation of Article 14 of the Constitution of India or not - inconsistent and contrary to the provision of the Central Excise Act, 1944 or not - whether the action of the respondents is legal in keeping the manufacturing machine and DG set under seal and depriving the petitioner to start the business?
HELD THAT:- The Central Excise Authorities cannot compel any manufacturer to utilize 50% of the machine hours in shift based on the declared capacity of the machine. The production of any goods always depends on demand in markets, availability of raw material, availability of electricity, manpower, working capital etc. The only provision under the Excise Act is section 3A under which the Central Government can charge the excise duty on the basis of capacity of production in respect of notified goods and admittedly, the cigarette is not notified goods under Section 3A, therefore, apart from Section 3A, Shri Prasad has failed to point out any provision under the Act and Rules under which the Central Government can insist the manufacture to operate the machine up to 50% of its total production capacity machine hours.
The respondents have completed the search and investigation and thereafter issued a show cause notice to the petitioner, therefore, there is no need to keep the machine and DG sets under seal. The respondents have already assessed the capacity of the machine by calling Chartered Engineers. When the respondents have already assessed the capacity then there is no question of seeking a declaration about the capacity of the machine under seal from the petitioner. Since there is no mandatory provision in the statute to give production as per the capacity of the machine then the respondents cannot compel any manufacturer to give a declaration or run the factory up to its 50% capacity - The Excise officer is posted there 24x7 hours to check the production and accordingly, charged the excise duty, therefore, no purpose would be served by keeping the record or insisting the manufacturer to declare the capacity of the machine. It is the responsibility of the Excise Officer to watch 24x7 hrs and check the capacity of production in the factory before removing the goods.
The impugned action of the respondents is wholly without jurisdiction for which the petitioner is liable to be compensated, hence instead of assessing losses caused in this writ petition, it is left to the petitioner to take recourse available under the law against the respondents. As far as loss of revenue to the Government is concerned, the higher officials of the respondents shall take appropriate action against the responsible officers.
The respondents are directed to de-seal the machine and two DG sets forthwith - application disposed off.
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2022 (7) TMI 1061
EOU - achievement of NFE - Demand of Central Excise Duty alongwith Interest and Penalty - Goods cleared directly and also through merchant exporters - it is alleged that in respect of the exports made through Merchant Exporters certain discrepancies such as on some of the shipping bills in respect of these exported goods, the status of the appellant EOU was not shown, in others, the name of the noticee and its status as an EOU was not mentioned - export of goods or not - third party clearances of goods without payment of central excise duty under invoices in DTA - Board's Circular number 03/ 91-Cus dated 24.01.1991 - HELD THAT:- The goods cleared by the appellant and exported through third party have been considered as clearance made in DTA, for making the demand of the duty for the reason that the documents filed for the export of goods did not indicated the name or the status of the Appellant. In view of the adjudicating authority, for this reason the goods which were cleared for exports did not fulfilled the requirement of the Board's Circular number 03/ 91-Cus dated 24.01.1991, and hence were clearance made in DTA - Commissioner admits on the basis of the documents submitted by the appellant that these goods were duly exported. Even the annexure to the show cause notices clearly show that all the goods were cleared against the ARE-1 and hence were cleared for exports only.
Annexure to each of the show cause notice is an admission of the fact that goods were cleared for export from the premises of appellant. Also neither the show cause notice nor the impugned order state that the proof of export was not submitted by the appellant/ merchant exporter/ third party exporter, in any of the cases. When the goods were cleared for exports and proof of export submitted in each and every case, the demand made treating these goods to be cleared in DTA, is contrary to the provisions of the Rule 18 of the Central Excise Rules, 2002. In case of any unit whether an EOU or any DTA unit exporting the goods, the proof of export once submitted establishes the factum of export. Impugned order could not have proceeded to demand the Central Excise Duty contrary to the provisions of the Rule 18.
It could have been the case of the revenue that in view of the Circular of 1991 and of 2006, the benefit of export for the purpose of determining NFE, for the purpose of evaluating the performance of the unit should have been denied. However the performance of the EOU’s is monitored by the Development Commissioner to whom the return showing the export turnover is furnished by the unit in the manner as prescribed. There is not even a whisper in the show cause notice or in the impugned order, that Development Commissioner has while evaluating the export performance of the unit, has denied the benefit of export in respect of these consignments cleared by the appellant in terms of para 6.10 of the Import Export Policy, 2009-14 read with para 6.18 of the Handbook of Procedures, 2009-14.
Thus, if the benefit is provided in terms of the statutory provision, the same can be circumscribed/ denied by taking resort to a circular.
Thus, there are no merits in the demand made - appeal allowed.
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2022 (7) TMI 1060
Validity of assessment orders - Seeking writ of mandamus staying revenue recovery proceedings or any other steps against the appellant - violation of the provisions contained in Section 25AA of the KVAT Act or not - violation of principles of natural justice - HELD THAT:- The learned Single Judge on finding that the points raised are clear disputed facts and even if the question whether the mandate under Section 25AA of the KVAT Act has been followed by the Assessing Officer, the appellant has got an appellate remedy and so entertaining the said issue in the Writ Petition, is not warranted - It is now settled law that a jurisdictional error or violation of principles of natural justice resulting in travesty of justice are the principal grounds for the invocation of remedy under Article 226 of the Constitution of India.
There is no ground to interfere with the judgment of the learned Single Judge - appeal dismissed.
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2022 (7) TMI 1059
Territorial Jurisdiction - Maintainability of the application under Section 11(6) of the Arbitration Act before the Orissa High Court - respondent claimant had initiated proceedings under Section 9 of the Arbitration Act in the Court at Vishakhapatnam - Appointment of an Arbitrator to adjudicate the dispute between the parties - Section 11(6) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Without deciding the said issue which goes to the root of the jurisdiction of the High Court of Orissa at Cuttack, the said High Court by the impugned order has entertained the application under Section 11(6) of the Act and has appointed the sole arbitrator by observing that since the appellants – East Coast Railway, in principle, has not opposed the appointment of an arbitrator, there is little purpose served in relegating the original petitioner to the concerned High Court as that will only delay the adjudication of the disputes. The appellants might not have opposed the appointment of an arbitrator (though the fresh appointment of an Arbitrator was also opposed by the appellants herein) by that itself it will not confer the jurisdiction upon the High Court if otherwise, the High Court had no jurisdiction.
It is not in dispute that before filing an application under Section 11(6) of the Act before the High Court of Orissa at Cuttack, the respondent – claimant moved an application before the Court at Visakhapatnam under Section 9 of the Arbitration Act. In that view of the matter considering Section 42 of the Arbitration Act, the High Court of Andhra Pradesh at Hyderabad alone would have jurisdiction to decide the subsequent applications arising out of the Contract Agreement and the further arbitral proceedings shall have to be made in the High court of Andhra Pradesh at Amaravati alone and in no other court. In that view of the matter the High Court of Orissa at Cuttack has committed a serious error in entertaining the application under Section 11(6) of the Act before it and appointing the sole arbitrator.
The impugned judgment and order passed by the High Court of Orissa at Cuttack in Arbitration Petition No.10 of 2021 and appointing the sole arbitrator is hereby quashed and set aside solely on the ground that the High Court of Orissa at Cuttack would have no jurisdiction to entertain the application under Section 11(6) of the Act with respect to the contract agreement for which the respondent claimant earlier initiated the arbitration proceedings under Section 9 of the Arbitration Act in the Court at Vishakhapatnam.
Appeal allowed.
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2022 (7) TMI 1058
Addition of interest credited in Escrow Account - AR contended that the assessee has no right to receive the interest in the impugned year and mere credit of the interest in the Escrow Account would not result in accrual until there is a right to receive the same - whether assessee had not earned any right in respect of the sale consideration nor the interest credited in the Escrow Account? - whether the interest has accrued in the relevant assessment years and can be brought to tax? - HELD THAT:- In the instant case, the condition was imposed for withdrawal of the money as per clause 10 of the SPA entered by the assessee and others with M/s.Exide Industries Limited. As per clause 5.1 of the Escrow Agreement, the assessee did not have any right to receive the interest credited in the Escrow Account unless and until the Sales Tax liability was cleared. The total sales tax liability in the instant case was far exceeding the consideration which was deposited in the Escrow Account by the purchaser.
The assessee’s had disclosed for assessment, the entire interest income that was credited over a period of time and received by the assessee during the financial year relevant to the assessment year 2018-2019. In the light of the above said factual situation, we deem it appropriate to delete the addition made by the A.O. and sustained by the CIT(A) with reference to the interest income that is credited in the relevant assessment year.
Unexplained Cash Deposit - assessee has furnished a copy of cash flow summary and the cash book along with the bank statement, wherein it is seen that there are cash withdrawals - HELD THAT:- In the interest of justice and equity, we restore the issue to the files of the A.O. The A.O. is directed to examine the cash flow summary and the cash book along with the bank statement and decide the matter afresh in accordance with law. Needless to state, the assessee shall be heard before a decision is taken in the matter.
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2022 (7) TMI 1057
Maintainability of petition - availability of alternative remedy of appeal - Validity of assessment order - non-filing of returns - Section 62(1) of the GST Act - HELD THAT:- Insofar as the provision made under Section 62 of the Act, under which, as has been rightly pointed out by the learned counsel appearing for the petitioner, since he has not chosen to file the return within 30 days from the date of the orders which are impugned herein, the chance of getting a deemed withdrawal of the assessment orders are lost and therefore, the chance of the petitioner to get remedy under Section 62(2) was closed and therefore, the further appeal alone is the only remedy for the petitioner - When there is an appeal remedy available under Section 107, it is the settled proposition that, writ petition cannot be filed by invoking the extraordinary jurisdiction of this Court as that would be possible in three circumstances viz., violation of principles of natural justice, violation of statutory provisions or for want of jurisdiction of the authority who passes the impugned order.
The reason being that, the impugned orders invariably in all these cases were dated 10.01.2020, the three months limitation and one month condonable period to file an appeal ends only some time in April 2020, by that time the Covid-19 pandemic first wave situation started and there was a complete lock down of the entire Country from the third week of March 2020 and taking that grim situation, the Hon'ble Supreme Court also in the suo motu writ petition has extended the limitation period upto May 2022.
The recovery proceedings for the balance amount, for which, if at all the Bank accounts of the petitioner are attached, the same can also be directed to be lifted by way of interim order, hence that can very well be considered objectively by the Appellate Authority if such an application is made by the petitioner.
The impugned orders cannot be successfully challenged before this Court on the ground of non-exhausting the alternative, efficacious appellate remedy which is available to the petitioner under Section 107 of the GST Act, hence, these writ petitions are rejected with the liberty to the petitioner by relegating the petitioner to go before the Appellate Authority to file appeals - Petition disposed off.
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2022 (7) TMI 1056
Reopening of assessment u/s 147 - scope of new provision section 148A - As contended present case should be governed by the newly amended provisions relating to proceeding under section 147 and the formalities of which have not been observed and complied with, and as such, the same is bad in law - HELD THAT:- As decided in UNION OF INDIA & ORS. VERSUS VERSUS ASHISH AGARWAL [2022 (5) TMI 240 - SUPREME COURT] instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021, subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the IT Act and which may be available under the Finance Act, 2021 and in law
As the present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge.
The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only.
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2022 (7) TMI 1055
Disallowance u/s 80P - interest income earned by a cooperative society on its investments held with a co-operative bank - HELD THAT:- We are of the considered view that the assessee is a co-operative society which is entitled for deduction under section 80P(2)(d) being interest earned from deposits in a co-operative society. In the case of New Ideal Co-operative Housing Society Ltd [2021 (2) TMI 578 - ITAT MUMBAI] and also in the case of M/s Solitaire CHS Ltd [2019 (12) TMI 80 - ITAT MUMBAI] held that the interest income earned by a cooperative society on its investments held with a co-operative bank would be eligible for claim of deduction under section 80P(2)(d) - In the case on hand, the CIT(A) has not disposed of the appeals on merit citing reasons that the assessee has not furnished complete details of the ITR, we deem it appropriate to restore the matter to the file of the Ld.CIT(A) for deciding the appeal fresh - Appeal of the assessee is allowed, for statistical purpose.
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2022 (7) TMI 1054
TDS u/s 194J or 194C - transactions entered into by the assessee with Social Kinnect by construing it to be in the nature of professional services - HELD THAT:- We find that assessee company had entered into an agreement with Social Kinnect (vendor) whereby vendor would act as digital media agency for the assessee company. The said agreement envisaged provision of various services by Social Kinnect to the assessee such as e-mail services, web management, online media buying and management fees. During the year under consideration, the assessee had received single invoice specifying respective services provided by Social Kinnect. The sample invoices copies were duly produced by the assessee before the ld. AO.
For web management and management fees, the assessee has deducted tax at source @10% u/s.194J of the Act and for e-mail services and online media buying, influencer charges, the assessee had deducted tax at source @2% u/s.194C of the Act.
It is not in dispute that assessee made payment to Ad agency i.e. Social Kinnect. We find from the perusal of the agreement with Social Kinnect and scope of services defined therein, Social Kinnect would engage various professional artists for preparation and execution of the advertisement content and Social Kinnect would provide ultimate advertisement content on behalf of the assessee in digital platform
We find that there is no direct connection or direct agreement between assessee company and the professional artists who had assisted in advertisement content. The agreement with professional artists are only with the advertisement agency i.e. Social Kinnect and not the assessee. Hence, Social Kinnect while making payments to those professional artists, would be liable for TDS @10% u/s.194J of the Act as those professional artists are rendering professional services to Social Kinnect. The assessee had merely taken the services only from Social Kinnect. It is not the look out of the assessee to understand the source from where the Social Kinnect obtains its professional services. Once the advertisement content is provided by Social Kinnect in a digital platform, the assessee is bound to make payments to Social Kinnect for that advertisement content. This would constitute the payment made for carrying out any “work” falling within the ambit of provisions of Section 194C of the Act only.
We find from the sample bills issued by Social Kinnect to the assessee, Social Kinnect had raised in its invoice two components of its charges - (i) Seeking reimbursement of professional charges paid by it to various artists with mark up and (ii) its service charges. The assessee had infact deducted tax @10% on the service charges component charged by Social Kinnect. In our considered opinion, even this payment would be liable for tax u/s.194C of the Act as admittedly Social Kinnect is not rendering any professional services to the assessee as detailed supra. The assessee had deducted excess TDS in the instant case in respect of this service charges paid to Social Kinnect. In respect of reimbursement sought by Social Kinnect with mark-up, the same is payable only pursuant to a contract of work entered into by the assessee with Social Kinnect which falls within the ambit of Section 194C of the Act and not u/s.194J
Thus we hold that the entire payments made by the assessee to Social Kinnect would fall only within the ambit of provisions of Section 194C of the Act and not u/s.194J of the Act. Accordingly, the ground raised by the assessee is allowed.
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2022 (7) TMI 1053
Condonation of delay - appeal filed by the assessee is delayed by 384 days - Denial of natural justice - no opportunity to explain whether such delay was for sufficient cause or not - order under Section 154 of the Act according to which the demand has arisen - HELD THAT:- According to the provision of Section 249(2)of the Act, the appeal to the learned CIT (A) shall be presented within 30 days from the date of service of the notice of demand relating to the assessment order. As claimed by assessee that order under Section 154 of the Act was not available on ITBA but only the tax computation sheet is available. Such order was made available to the assessee only on 28 February 2019 and therefore, according to the assessee the appeal is field within time provided under Section 249(2) of the Act.
CIT (A) perused column no. 14 of form no. 35 but did not peruse the column 2(b) and (c) of the same form. Merely, based on column no. 14 of form no. 35 the appeal of assessee was considered as delayed by taking the date of the order as 9 February 2018. There was dispute that the order was passed on 9 February 2018 but received by assessee on 28 February 2019. Appeal is required to be filed within 30 days from the date of receipt of order. Therefore, appeal as claimed by the assessee is filed in time and therefore, learned CIT (A) should have perused the various columns filed in form no. 35, which is stated to be true to the best of the information of the director of the company.
CIT [A] looked at the date of order i.e. 9/02/2018 , noted that appeal is filed on 28/03/2019 , in column where it is mentioned that there is no delay in filing appeal, held that appeal is delayed by 384 days , no condonation request is filed, hence, dismissed appeal.
CIT (A) should have at least given an opportunity to the assessee of clarifying the above facts stated when mobile number and email address of the assessee are provided at column no. 17 of form no. 35. If one looks at the stand of the assessee, appeal is not delayed. Therefore, according to us, the learned CIT (A) could not have held without giving an opportunity of clarifying about the timely filing of the appeal that appeal is delayed and dismissing the appeal of the assessee holding that it is filed late.
We set aside this appeal back to the file of the learned CIT (A) to first examine,
a. What is the mode and delay of the service of the order u/s 154 to the assessee and whether such service is in accordance with the law or not.
b. Whether there was any deal in filing of the appeal or not for the reasons stated above and then decide about the condonation of the same.
c. If it is found that appeal is really delayed, assessee must be given an opportunity to explain whether such delay was for sufficient cause or not. In the event , assessee submits such an explanation, to consider it in accordance with law.
d. If the appeal of the assessee is found to have been filed in time and in accordance with law, the appeal of the assessee should be decided on the merits of the case in accordance with the law.
e. If it is found that appeal is really delayed, assessee must be given an opportunity to explain whether such delay was for sufficient cause or not. In the event , assessee submits such an explanation, to consider it in accordance with law.
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2022 (7) TMI 1052
Levy of penalty proceedings u/s 271(1)(c) - additions made of the amount deposited in Bank A/c maintained with HSBC, Geneva, Switzerland - HELD THAT:- We find that similar addition arising out of the same bank deposits in the same bank account was made in the case of husband of the assessee Mr. Bhushan Lal Sawhney has been deleted [2021 (6) TMI 99 - ITAT DELHI]
Before us, no distinguishing facts in the present case and the case of assessee’s husband i.e., Mr. Bhushan Lal Sawhney has been pointed-out by the Ld. D.R. In such a situation, since the facts of the present case are identical to that of Mr. Bhushan Lal Sawhney, the husband of assessee, therefore, following the reasons for decision by the ITAT, Delhi Benches in the case of husband of assessee Mr. Bhushan Lal Sawhney, no addition is called for in the hands of the assessee. In view of the above, we set aside the orders of the authorities below and delete the entire addition.
As no basis is left for levying of penalty under section 271(1)(c) of the I.T. Act. Thus, no penalty could be levied against the assessee. In view of the above discussion, we set aside the Orders of the authorities below and cancel the penalty in all the assessment years under appeals. - Decided in favour of assessee.
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2022 (7) TMI 1051
Deduction u/s. 10B - fluctuation in the rate of foreign exchange as on the date of balance sheet - HELD THAT:- As far as foreign exchange fluctuation rate is concerned, this issue has been settled by the jurisdictional High Court in the assessee’s own case for the Assessment Year 2008-09 and also in the case of CIT vs. M/s. Pentasoft Technologies Ltd.[2010 (7) TMI 75 - MADRAS HIGH COURT] - Respectfully following the above judicial precedents, we have no hesitation in holding that fluctuation in the rate of foreign exchange as on the date of balance sheet is an item of expenditure allowable u/s. 37(1) of the Act and the assessee is eligible for deduction under 10B as well as u/s. 80IA of the Act respectively.
Scrap sales and claim of deduction u/s. 10B - As has been rightly argued by the ld. A.R., the assessee being engaged in the business of dies and chemicals, normal wear and tear used to happen on the machineries used for its manufacturing activities, which requires regular replacement. As it can been seen from the invoice, the purchaser’s TIN Number. is reflected and mode of transport is also said to be through Local Truck and the Vehicle No. is also reflected in the invoice for removing of 4890 KG of loose Heavy MS Scrape.
AO simply rejected the invoice on the ground that the scrap is not generated from the EOU unit. The Assessing Officer has not made any attempt to verify the buyer of the scrap namely M/s. Hanuman Traders, whose full address is being given in the invoice with TIN Number and proper VAT tax and Additional VAT taxes were collected on the above sales. Thus, the Assessing Officer without making proper enquiry simply denied the claim of scrap sales eligible for deduction u/s. 10B of the Act, which is in our considered view is not proper in law and unjustified. Therefore, the A.O. is directed to grant the claim of deduction under 10B of the Act on the sale of scraps.
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2022 (7) TMI 1050
Exemption u/s 11 - assessee is a Trust registered u/s. 12AA - assessee has not filed the Audit Report in Form 10B along with the return - HELD THAT:- As filing of Form 10B electronically along with the Return of Income has become mandatory because of the amended Sections 11 & 13 of the Act, by the Finance Act, 2015. This being the first year of e-filing of these forms, representations have been received by the Board/field authorities stating that the Form No. 10 could not be filed with in the specified time for the assessment year 2016-17.
Considering the hardship faced by the assessee, the CBDT issued Circular No. 7/2018, authorizing Commissioner of Income Tax, to admit belated application in Form No. 10 in respect of Assessment Year 2016-17 which were filed belatedly. Thus, the finding of the ld. CIT(A) that, he has no power in condoning the delay in filing Form 10B is legally correct in law. As rightly argued by the Ld. D.R., the assessee seems to be consistently filing the above Form 10B belatedly, for which proper remedy left to the assessee is approaching the Administrative CIT, who is to condone the delay but not with filing appeal u/s. 250 of the Act.
We do not find any infirmity in the order passed by the CIT(A) and it has open to the assessee to avail the appropriate legal remedy in accordance with Income Tax Act. We also further found that the case laws relied upon by the Ld. Senior Counsel will not be applicable to the present case, since in the case of Mayur Foundation cited [2004 (12) TMI 48 - GUJARAT HIGH COURT] wherein the Assessment year involved is 1980-81 and in the case of Xavier Kelavani Mandal P. Ltd. (2004 (12) TMI 48 - GUJARAT HIGH COURT] wherein the Assessment Year involved is 2006-07. In our considered view, filing of Form 10B is being mandatory because of the amendment made in Finance Act, 2015 with effect from 01.04.2016 applicable for the Assessment Year 2016-17. Therefore the above case laws are clearly distinguishable to the facts of the present case. Thus, the grounds raised by the assessee are hereby rejected and the appeal filed by the Assessee is dismissed.
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