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Showing 181 to 200 of 1528 Records
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2022 (6) TMI 1348
Reopening of assessment u/s 147 - Notice by ITO being without jurisdiction - HELD THAT:- Admittedly, no notice was issued by the concerned ITO-Ward-50(4) to the assessee before proceeding to frame the assessment. Any notice issued by ITO, Ward-37(4) being without jurisdiction has no legal sanctity. The issue is squarely covered by the decision of the Co-ordinate Bench of the Tribunal in the case of Mukesh Kumar vs ITO [2015 (6) TMI 1142 - ITAT, DELHI]
Thus the assessment framed by the ITO, Ward-50(4) being bad in law for want of issue of notice u/s 148 of the Act is hereby quashed and consequential addition stands deleted. - Decided in favour of assessee.
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2022 (6) TMI 1347
Reopening of assessment u/s 147 - bogus purchases - HELD THAT:- As decided in assessee own case [2017 (9) TMI 181 - ITAT DELHI] as relying on Unique Metal Industries [2015 (10) TMI 2753 - ITAT NEW DELHI] case we observe that the AO had recorded similarly worded reasons and name of the parties form whom the assessee alleged to have made bogus purchases were also same except the amount mentioned therein in the reasons recorded in the tabular form, as in the case of the present assessee. We, therefore, respectfully following the above hold that the initiation of reassessment proceedings as well as issuance of notice u/s. 148 of the Act was not valid and the same was void ab initio.
Addition of bogus purchases @ 20% - Estimating profit @ 20%) by taking into consideration the or visions of section 40A(3) will not lead to determination of correct real income. Section 40A(3) is meant for a different purpose when the assessee has made purchases in cash. This provision cannot be applied in such cases. Once the purchases are held to be bogus then the trading results declared by the assessee cannot be accepted and right course in such case is to reject books of accounts and profit has to be estimated by applying a comparative profit rate in the same trade. Though there can be a little guess work in estimating profit rate but such profit rate cannot be punitive.
Thus respectfully following the decision of the Tribunal in the case of Unique Metal Industries (supra), whereby the addition of 20% of the purchases sustained by the Ld. CIT(A) has been deleted in the identical facts and circumstances of the case, are not inclined to sustain the similar addition in the instant case. Appeal of the assessee is allowed.
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2022 (6) TMI 1346
Deduction u/s 36(1)(viia) - deduction of provision for bad and doubtful debts against the advances of rural branches - provision made for bad and doubtful debts in accordance with the provision of the Gujarat Cooperative Societies Act,1961 read with the consequential provision in the bye-laws of the assessee - assessee is a District Co-Op Bank and as such engaged in the business of banking activities, having various branch including rural branch - HELD THAT:- As it is a settled position in the law that explanation to Section 36(1)(viia) includes ‘rural branch’ of ‘cooperative banks’ as per the decision KANNUR DISTRICT CO-OPERATIVE BANK LTD. [2014 (8) TMI 635 - KERALA HIGH COURT] - We find merit in the submission of ld. AR of the assessee. We find that Section 36(1)(viia) was amended vide Finance Act, 2007 and after amendment the benefit of deduction under Section 36(1)(viia) which was available to a scheduled and non-scheduled bank is sought to be extended to a co-operative banks other than primary agricultural credit society or a primary cooperative agriculture and rural development bank w.e.f. 01/04/2007. Further rest while deduction available to such eligible cooperative banks under Section 80P stood withdrawn by Finance Act, 2006 w.e.f. 01/04/2007.
Thus, there was an amendment by way of Finance Act, 2007 to Section 36(1)(viia) w.e.f 01/04/2007 wherein cooperative bank other than primary agricultural credit society or a primary cooperative agriculture and rural development bank, were brought under the provision of Section 36(1)(viia) for claiming deduction in respect of provisions made for bad and doubtful debts. Thus, in view of aforesaid factual discussion and the legal view taken by the Kerela High Court in Kannur District Cooperative Bank (supra), we find that the order of ld. CIT(A) is based on proper appreciation of amended provision of Section 36(1)(viia) which we affirm.
So far as objection of CIT-DR and his reliance on the decision of Indore Bench in Jhabua Dhar Khatriya Gramin bank [2018 (9) TMI 533 - ITAT INDORE] we find that the ratio of finding of Tribunal is not applicable on the facts of the present case. In the said case the Tribunal relied on the earlier case law in Narmada Malwa Gramin Bank 2012 (3) TMI 619 - ITAT INDORE wherein the issue was restored to the file of assessing officer to re-computing the claim of deduction to the extent of amount written off in the books of accounts. Thus, the finding in the said decision is not at all applicable on the facts of his case. In the result, the ground No. 2 of appeal raised by the Revenue is dismissed.
Deduction on account of diminution of value of Government securities - shifting of investment from HTM category to AFS category - change in categorisation from HTM category to current category, is not reflected separately by the assessee in its Balance Sheet as on 31.03.2009 - whether change in valuation as a result of reclassification/shifting is allowable? and/or whether only change in market price during the current year is allowable or entire difference between book value and market price as on 31/03/2009 is allowable? - CIT-A deleted the addition - HELD THAT:- CIT(A) held that there is no bar to change the classification in the middle of the year, the classification can be changed only on approval of ‘Board of Directors’ approved such classification, as has been done in the middle of the year, then claim of loss on account of diminution of value in Govt. securities has no connection availability of deduction.
Even if change would have been done in the beginning of the year it could change on 31.03.2009 and the amount of claim would still remain same. On the objection of Assessing Officer that for allowance of claim of deduction is that has assessee regularly followed the method of diminution of value investment under AFS category.
CIT(A) held that in case loss as available to assessee would be only Rs.51.17 lakhs for the year under fluctuation and not Rs.5.86 crores and if such theory of AO is accepted then assessee would lose all the loss relating to earlier depreciation and which cannot be said to be just or fair, if the assessee has claimed the loss on account of diminution of securities for the first time and genuineness and correctness of such losses are not doubtful then such case is the claim of loss is allowable.
CIT(A) held that there is no requirement of separate disclosure of HTM category and ASF category and as per the RBI’s Master Circular, the investment should continue to be classified in Govt. Securities, shares & Bond of PSU and others. The categorization in the case of assessee has been done separately as per RBI’s requirement and held that assessee is eligible for claim of deduction under diminution in the value investment shifted from HTM category to ASF category. See STATE BANK OF MYSORE VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-12(3), BANGALORE [2009 (5) TMI 610 - ITAT BANGALORE] wherein claim of the assessee towards provision of depreciation on account of transfer of securities from AFS Category to HTM Category is allowed - Decided against revenue.
Disallowance of claim of deduction u/s 36(1)(viia) by taking a view that the definition of rural branch in explanation (ia) does not cover cooperative banks - HELD THAT:- We find that merit in the submissions of the ld AR for the assessee and find that as per section 67A of Gujarat Cooperative Society Act, every society, working in the State of Gujarat, which earned profit from its transactions, shall maintain a bad debts reserve funds. As per sub-section (2) of section 67A, every year, the society shall carry at least 15% of the net profit to the debts reserve funds. All such funds shall be certified by the certified auditors and the expenses incurred in recovering the same shall first be written off as per section 67A(3). It is settled position under law that co-operative banks are primarily a co-operative society. We also noted that the financial statement of the assessee is not only subject to the statutory audit but also subject to the approval of the Registrar of Co-operative society. Thus, considering the aforesaid factual and in view of the statutory provision in the State Co-operative Act, the assessee is also allowed deduction which in line with the provisions of section 67A of Gujarat Co-operative Society Act.
So far as objection of assessing officer is that in the profit and loss accounts of the year no such provision is made by the assessee, is concerned, we find that in Kedar Nath Jute Manufacturing Company 1971 (8) TMI 10 - SUPREME COURT held that nomenclature or treatment in the books of accounts in not decisive or conclusive for a particular deduction otherwise allowable under the law. In the result, the ground of appeal raised by the assessee is allowed.
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2022 (6) TMI 1345
Rectification of mistake - Levy of interest u/s 201(1A) - on a rectification application filed by the Assessee, demand raised under Section 201(1A) of the Act was reduced to Nil. however, CIT(A) confirmed the levy of interest under Section 201(1A) of the Act for the period commencing from the date on which the tax was first deductible to the date of filing of relevant return of income by the recipient–deductee - HELD THAT:- Having perused the material on record, and the order [2019 (7) TMI 73 - ITAT MUMBAI] passed by the Tribunal, we find merit in the contention of the Assessee that Ground No. 1, 1.1, and 1.2 of the appeal have not been adjudicated which constitutes a mistake apparent on record. Accordingly, the appeal is restored for the limited purpose of adjudication of Ground No. 1, 1.1 and 1.2 of the appeal.
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2022 (6) TMI 1344
Rectification of mistake u/s 154 - CIT justification in invoking jurisdiction u/s.263 and modifying the assessment order passed u/s.143(3) under 'Limited Scrutiny' category in conformity with CBDT instructions on the facts and in the circumstances of the case and valuation of closing stock when the same was not the subject matter of "Limited scrutiny" in the assessment completed u/s.143(3) on the facts and in the circumstances of the case.
HELD THAT:- A perusal of the appeal, more specifically the grounds of appeal before the Tribunal, shows that at the side of grounds No.2 & 3, it is mentioned as “Not. P”, however, it is not signed by either the assessee or the authorised representative. The Vakalatnama in case of the AR was verified. The said Vakalatnama does not give any power to the authorised representative to withdraw the appeal.
This being so, as the director of the assessee company has specifically filed an affidavit that he has not authorised to withdrawal of the grounds as also the fact that he was present to the court and the grounds were not withdrawn as also on the ground that the Vakalatnama of the authorised representative, who represented the assessee in the appeal originally does not have authority to withdraw the grounds, we are of the view that there is a mistake apparent from the order of the Tribunal insofar as grounds No.2 & 3 have been which have been recorded as not pressed. Consequently, the order of the Tribunal passed [2021 (5) TMI 398 - ITAT CUTTACK] for the assessment year 2014-2015 in the case of the assessee stands recalled only for the purpose of the adjudication of the grounds No.2 & 3 of the grounds of appeal.
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2022 (6) TMI 1343
Reopening of assessment u/s 147 - proceedings were put to challenge on the ground of violation of principles of natural justice -appeal filed by the writ petitioner challening the order passed by single Judge while directing the affidavit-in-opposition to be filed by the respondent department declined to grant an interim order in favour of the appellant/ assessee - HELD THAT:- It is prima facie seen that the assessee has not been furnished the full information based on which the reopening proceedings were proposed. Furthermore, there is a reference to a search action which is conducted and statement being recorded from a Director of the company on 03.01.2019 etc. If that is so, the appellant should have full information so as to enable them to give effective reply. This having not done, this court is of the view that the principles of natural justice have been violated and the appellant should be afforded with an opportunity to put forth their contention.
In the light of the above, the order dated 30.03.2022 under Clause (d) of Section 148A of the Act shall be reckoned for reasons for reopening and the appellant assessee is directed to file an objection not later than two weeks from the date of receipt of server copy of this order and also enclose all documents in support of the claim and thereafter the assessing officer shall consider the reply and documents and afford an opportunity of personal hearing to the appellant/writ petitioner and pass fresh orders under Section 148A(d) of the Act in accordance with law.
In the light of the above, the notice issued under Section 148 of the Act dated 06.04.2022 shall not be enforced and further proceedings be initiated after compliance of the above directions.
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2022 (6) TMI 1342
Seeking provisional release of seized vehicle - Evasion of duty by fraudulently availing duty exemption - HELD THAT:- The duty as per the respondents which is recoverable is Rs.60,13,920/-. Under the circumstances, it would be reasonable to ask the petitioner to deposit 50% of the maximum duty payable and provide bank guarantee in respect of other 50% along with necessary bond as demanded by the authority apart from an undertaking that the vehicle shall not be further encumbered or alienated pending disposal of the adjudication.
The beneficial owner shall pay 50% of differential duty out of Rs.60,13,920/- and execute bank guarantee in respect of other 50% and shall keep it renewed and valid till final adjudication of case, or in the event of non-renewal of Bank Guarantee as above, the guaranteed amount be credited to the Government account by the bank on its own as prescribed in para 5 of the Circular No.35/2017-Customs dated 16.08.2017 - Shall execute a bond of Rs.29,48,000/- with an undertaking that they shall pay the duty, fine and/or penalty as may be adjudged by the Adjudicating Authority subject to appellate provisions under the Customs Act, 1962 as prescribed in para 5 of Circular No.35/2017-Customs dated 16.08.2017.
Writ petition is disposed off.
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2022 (6) TMI 1341
Person aggrieved’ in section 17 of FEMA - deemed complainant - Whether appellant is not an aggrieved person? - writ petitioner entiltment for copy of the adjudication order as he was only an informer and he cannot be treated as complainant - Central Government Counsel [CGC] contended that the petitioner is not entitled for a copy of the adjudication order, since he is only an informer and cannot be termed as the complainant - HELD THAT:- We find substantial force in the contention urged by the learned CGC. Other than alerting the officials of the Department regarding violations of the Act, an informer has no further role as per the scheme of the Act. The complaint based on the information has to be filed by an authorised officer, upon which alone the adjudicating authority can conduct enquiry. The Rules envisage issuance of copy to the person against whom an order of adjudication is passed. The term ‘aggrieved person’ in Section 17 will take in only the person against whom the order is passed and the complainant. Being so, the informer is not entitled for a copy of adjudicating order has no legal right to challenge the order by filing an appeal under Section 17.
In the result, the writ petition is dismissed, without prejudice the petitioner’s right to pursue his application for obtaining a copy of the order under the Right to Information Act, 2005.
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2022 (6) TMI 1340
Addition u/s.56(2)(viib) - excess consideration received on allotment of equity shares over and above fair market value as on date of allotment is income of the assessee - price charged for allotment of equity shares, including premium - HELD THAT:- We ourselves do not subscribe to the reasons given by the AO for simple reason that the assessee has determined value of shares as per discounted cash flow method, as per which fair market value of shares as on date of issue was at Rs.109.21 per share. Assessee has determined such valuation on the basis of discounted cash flow of subsequent years by taking into account project under implementation and its relevance, including intangibles possessed in the line of business carried out by the assessee.
Assessee has also justified fair market value determined as on date of allotment of shares by filing necessary details to establish fair market value of the shares as per net asset value method as at end of the assessment year 2014-15, as per which value per equity share is at Rs.146.3 per share which is higher than issue price at Rs.109.21 per share, which means, fair market value determined by the assessee at the time of allotment of shares is not hypothetical, but intrinsic value of the share based on its future earning capacity.
Therefore, we are of the considered view that even on merits, the assessee has justified price charged for allotment of equity shares, including premium.
In this case, the assessee has filed fair market value of the shares worked out as at end of the impugned assessment year on net asset value method, as per which, share price has been worked out at Rs.147.36 per share which is much higher than issue price of Rs.109.21 per share.
Assessee had also allotted 5 lakhs equity shares to non-resident shareholder M/s.Sojitz Corporation, Japan, at issue price at Rs.450.10 per share, which includes premium of Rs.440.10 per share. If you compare, premium charged on resident shareholders, when compared to non-resident shareholder, premium charged to resident shareholders is much below to premium charged on non-resident shareholders.
It is very clear that the assessee has justified premium charged on issue of shares with necessary evidences, including fair market value of the shares as on date of issue. We are of the considered view that the AO has completely erred in making additions towards securities premium u/s 56(2)(viib) - CIT(A), after considering relevant facts has rightly deleted additions made by the AO. Hence, we are inclined to uphold findings of the CIT(A) and dismiss appeal filed by the Revenue.
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2022 (6) TMI 1339
Ex-parte order passed by the Tribunal due to non-appearance - HELD THAT:- It is an admitted fact that due to continuous non-appearance of the assessee, the Tribunal dismissed the appeals on the ground that the assessee is not interested in prosecuting the appeals filed by it. Further, these appeals are not decided on merit. We deem it fit and proper to recall the orders passed by the Tribunal. As the appeals are posted for hearing on 4.7.2022 which was announced in the Open Court, no separate notice of hearing be sent to the parties.
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2022 (6) TMI 1338
Disallowance u/s 40(a)(ia) - tds u/s 194I - non-deduction of tax at source on go-down rent expenses - non-submission of details regarding payment of the above mentioned amount to different professionals - Scope of amendment brought in by the Finance Act (No. 2) 2014 effective from 01/04/2015 made in the provisions of Section 40(a)(ia) for 100% disallowance of expenditure, the disallowance u/s 40(a)(ia) of the Act was limited to the extent of 30% of such expenditure - hardships caused to the assessee due to 100% disallowance of the expenditure claimed by the assessee in case of non-deduction of TDS - CIT-A Confirmed by holding that the assessee failed to bring any cogent evidence suggesting that the rent was paid to three co-owners instead of one as alleged by the AO - HELD THAT:- As regards the 1st contention of the assessee that the rent was paid to three different parties amounting to ₹1,20,000 per person and therefore there is no violation of the provisions of section 194-I read with section 40(a)(ia) of the Act, appears to be devoid of any merit. It is for the reason that, the assessee has not discharged the onus by furnishing the necessary details about the payees to whom the rent was paid. The assessee has not furnished any agreement for the rent or any other document suggesting that the rent was paid by the assessee to three different parties. Thus in the absence of any other document supporting the contention of the assessee, we do not find any reason to interfere in the finding of the authorities below.
Alternate contention of the assessee that the disallowance should be restricted to the tune of 30% of the rent paid under the provisions of section 40(a)(ia) read with section 194-I of the Act, we find force in the argument. The amendment was brought by the Finance Act (No. 2) 2014 effective from 1-4-2015 whereas the year before us relates to the assessment year 2012-13. The Finance Act, 2014 brought an amendment to the first proviso to the section 40(a)(ia) of the Act.
In the case of Neena Kaul [2019 (5) TMI 1697 - ITAT MUMBAI] assessee contended that said provisions have been amended in order to ease the hardships caused to the assessee due to 100% disallowance of the expenditure claimed by the assessee in case of non-deduction of TDS. Assesse also submitted that it has been mentioned in the para 14.3 that withholding of taxes is a mode of collection of tax and does not result into final discharge of tax liability.
As in the case of Amruta Quarry works [2016 (7) TMI 1246 - ITAT AHMEDABAD] it was contended by the assessee that Since the amendment has been brought to remove the hardship caused to the assessee, the amendment assumes the character of being clarificatory in nature and is retrospectively applicable. Reliance is placed on Five Members Constitution Bench of Supreme Court in the case of CIT v. Vatika Township (P.) Ltd [2014 (9) TMI 576 - SUPREME COURT] wherein it has been observed that in case the amendment is brought to remove the hardship caused to the assessee, the same assumes the character of being clarificatory in nature. Hon'ble Tribunal upheld this contention and allowed appeal in favour of the assessee restricting disallowance to 30%. In view of the above, we hold that the disallowance on account of non- deduction of TDS should be limited to the extent of 30% of the rent expenses incurred by the assessee. Thus the ground of appeal of the assessee is partly allowed.
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2022 (6) TMI 1337
Validity of succession certificate - it is contended that the petitioner has made a false representation and has obtained a Succession Certificate by concealing the material facts before the Trial court - HELD THAT:- Having regard to the said material on record, it would be difficult to accept the contention of the learned counsel for the petitioner that the petitioner has been erroneously described as the sister of late Chandrashekar. Further, the petitioner has sought to contend that the petitioner was adopted by late Chandrashekar and his wife Damayanthi in the year 1970. In the cause title of the writ petition, the petitioner's age is described as 51 years. If that is so, the petitioner might have been born somewhere in the year 1971. Therefore, it would be highly difficult to believe that the petitioner was taken in adoption by Chandrashekar and his wife in the year 1970.
Prima facie it appears that the petitioner has misrepresented before the trial court and by concealing the material facts she has obtained a certificate under Section 372 of the Act and the trial court having appreciated this aspect of the matter in exercise of its inherent powers under Section 151 of CPC has rightly directed the petitioner to re-deposit the amount of Rs.17,69,332/-, which is withdrawn by her from the Pragathi Krishna Grameena Bank on the strength of the certificate issued to her in P & SC No.1/2016 - the order of the trial court does not suffer from any illegality or irregularity, which calls for interference by this court.
Petition dismissed.
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2022 (6) TMI 1336
Maintainability of petition - availability of alternative remedy - paramount contention advanced by the appellants is that the learned single Judge egregiously erred in dismissing the writ petition on the ground of availability of alternative remedy - HELD THAT:- When a provision is interpreted by the Tribunal to arrive at a conclusion in regard to the application filed before it, it cannot be said that the Tribunal has passed the order without jurisdiction. At the most, what the appellants could allege is only the illegality of the order passed, which is a subject matter to be considered by the appellate Tribunal in terms of Section 61 of the Insolvency and Bankruptcy Code, 2016, which is a well defined provision exemplifying the powers of the Tribunal - the appellate Tribunal is empowered to identify as to whether the approved resolution plan is in contravention of the provisions of any law for the time being in force and as to whether there has been any material irregularity in exercising the powers by the resolution professional during the corporate insolvency resolution period.
Yet another aspect that has come to our mind is that from the order of the Tribunal, it is clear that the secured creditor Bank has relinquished its security interest to the litigation estate and received proceeds from the sale of the estates by the liquidator in the manner specified in Section 53 of the Code, 2016. It is an admitted fact that the appellants have offered a guarantee to the loan availed by the Corporate Debtor from the first respondent Bank. It is under the above circumstances the Company Law Tribunal has arrived at its conclusions in its impugned order.
Since the order was passed by the Tribunal after providing an opportunity of hearing to the appellants and other interested persons and taking into account the legal questions raised by the appellants, we are of the clear opinion that the learned single Judge was right in holding that there is no arbitrariness or illegality to be interfered with by exercising the power of judicial review under Article 226 of the Constitution of India.
The appellants could not establish any jurisdictional error or other legal infirmities justifying our interference in an intra court appeal filed under Section 5 of the Kerala High Court Act, 1958 - Appeal dismissed.
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2022 (6) TMI 1335
Seeking extension of time to file affidavit-in-opposition to the writ petition - HELD THAT:- Learned advocate appearing for the respondents time to file affidavit-in-opposition to the writ petition is extended two weeks, petitioners to file reply thereto, if any, within one week thereafter.
List this matter for final hearing after four weeks.
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2022 (6) TMI 1334
TP Adjustment - Comparabaility - HELD THAT:- Companies functionally dissimilar with that of assessee functional profile need to be deselected from final list - RPT filter has to be applied adopting the threshold limit of 15%.
Disallowing the import of equipment under the surmise that there were no supporting documents to prove its genuinity - AO treated the value of this asset as a benefit or perquisite by the assessee in the course of its business brought to tax the aforesaid sum under section 28(iv) - DRP rejected the claim of the assessee on the ground that no evidence was placed on record to show that the assessee returned back the equipment - HELD THAT:- We are of the view that this approach of the DRP is incorrect because the question of return of the equipment will arise only when there is evidence to show that the assessee received the benefit in the form of benefit or perquisite from the RDT. Revenue cannot place negative onus on assessee and seek to make impugned addition. The impugned addition is therefore directed to be deleted.
Addition for non production of import invoices - HELD THAT:- From a perusal of the given table of import information for the balance assessable value along with the purpose for which these have been imported and the purpose of import as given in the last column of the above table, it is clear that the equipments in question were received from respective suppliers for testing and functionality of IT services provided by the Assessee to them. The issue therefore is identical to ground No.15 and for the reasons stated while deciding those grounds, we are of the view that the addition made cannot be sustained and the same is directed to be deleted.
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2022 (6) TMI 1333
Addition being cash deposit made into his bank account during the demonetisation period - HELD THAT:- A.R. took us through the copies of bank account placed in the paper book. A perusal of the same would show that the assessee has withdrawn a sum from his bank account maintained with ICICI Bank on 05.06.2015. We notice that the assessee has withdrawn cash in small amounts in subsequent period also. Since the assessee is an aged person and retired from army, it is quite possible that the assessee had kept the money in cash with him in order to meet medical emergencies.
The assessee is a pensioner and there is no other material to show that the cash withdrawn earlier had been spent away. Accordingly explanation of the assessee that he has made the deposit out of the cash withdrawal made earlier is quite plausible. Accordingly sources for making deposits stand explained in this case. Appeal filed by the assessee is allowed
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2022 (6) TMI 1332
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time limitation - HELD THAT:- The instant C.P. has been filed on 09.04.2021. The agreement for the Digital Application Development Services executed by the parties was on 05.05.2016 and the Addendum thereof was on 04.06.2018. The Annexure-A2, Statement of Accounts reflecting the amounts in default was consisting of various Invoices issued during the period from 04.02.2019 to 10.02.2020. The various email correspondences and the Annexure-A6 reconciliation statement dated 27.03.2020, where the amount was reconciled between the parties though the Respondent allegedly disputed the total debt amount, saved the limitation period and hence the instant C.P. is held to be filed within the period of limitation.
It is the settled law that the relevant date for determining the existence of a dispute is the date of the demand notice issued under Section 8 of the IBC, 2016. In the instant case, the Petitioner at the first instance, issued Annexure-8 Demand Notice dated 04.09.2020 for which the Respondent/Corporate Debtor given a reply vide Annexure-A9 dated 03.10.2020, wherein categorically mentioned about the various disputes pending between the parties. Admittedly, the Petitioner having realized that Annexure-A8 demand notice dated 04.09.2020 was not in accordance with the facts and transactions occurred between the parties, issued a fresh Annexure-A10 notice dated 05.03.2021 again under Section 8 of the IBC, 2016 - the date of the valid Demand notice issued by the Petitioner was on 05.03.2021 (Annexure-A10) and the Respondent/Corporate Debtor is able to show that there were disputes between the parties vide Annexure-A6 dated 27.03.2020 i.e., even prior to the issuance of the discarded demand notice dated 04.09.2020 and also from the reply dated 03.10.2020 of the Respondent/Corporate Debtor which was much prior to the date of issuance of the demand notice dated 05.03.2021.
The Respondent/Corporate Debtor able to show the existence of the dispute between the parties prior to the relevant date i.e., prior to 05.03.2021 - Petition dismissed.
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2022 (6) TMI 1331
Seeking grant of bail - recovery of commercial quantity of heroin (in addition to an intermediate quantity of charas) - contraband item - baggage rules - whether or not the applicant is entitled to be released on bail on the ground of prolonged incarceration as an undertrial prisoner? - HELD THAT:- The Supreme Court Legal Aid Committee (Representing Undertrial Prisoners) vs. Union of India and Others [1994 (10) TMI 290 - SUPREME COURT] judgment is of foremost significance in this regard. The petition before the Supreme Court was motivated by the delay in disposal of cases under the Act, particularly involving foreigners. During the proceedings, the scope was expanded to cover all undertrial prisoners who were in jail for offences under the Act for a period of over two years. The Court noted that, despite the provision for trial before Special Courts under the Act, the disposal of cases has taken much longer than originally envisioned. The Supreme Court found that the delay in trial, when read with the stringent provisions of Section 37 of the Act, render the fundamental rights of the accused under Articles 14, 19 and 21 of the Constitution in jeopardy. Although the Court declined to quash the charges against the accused on this basis, it accepted the alternative submission that the accused should be released on bail after a certain period of incarceration, if the trial has been delayed beyond a reasonable time. The Court categorized the cases according to the punishment prescribed for the offence in question.
As the applicant has been in custody for eight years already, six PWs are yet to be examined, and on the consideration of the various factors noted above, including the provision of Section 37 of the Act, as interpreted in the above judgment of the Supreme Court, it is opined that the applicant is entitled to be released on bail.
It is, therefore, directed that the applicant herein be admitted to bail subject to conditions imposed - application allowed.
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2022 (6) TMI 1330
Interest levied for delay in the remittance of the taxes - Application seeking waiver of interest u/s 220 (2A) - voluntary disclosure of amounts by the respective petitioners in the course of the search - HELD THAT:- Petitioners would stress upon the extreme hardships faced by the assessees in remitting taxes, though with delay. Moreover, he attributes the difficulties to the substantial delay on the part of the respondents in issuing refunds to the companies in which the petitioners’ were Directors.
Had such refunds been paid in time, he submits that the same would have been utilized by them to settle their tax demands earlier and intime. This submission would hold no water in the present case, seeing as the demand of tax has been made on the admitted income offered by the petitioner to tax in the returns of income.
Had it been a case where the tax demand had arisen on account of additions/disallowances to the admitted income, the position may have been viewed differently. However, seeing that the tax demand in the present case arises entirely from admitted income and the order of has assessed and attained finality, there is no merit in these writ petitions. The impugned orders are confirmed and these writ petitions, dismissed. Connected writ miscellaneous petitions are closed.
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2022 (6) TMI 1329
Income deemed to accrue or arise in India - Applicable rate of taxation - retrospective insertion to Explanation to Section 90 - Assessee claim for the benefit of the non-discrimination clause of the India-Korea Double Taxation Avoidance Agreement (‘DTAA’) -taxing the Appellant’s income @ 40% (plus surcharge and education cess) or at rate applicable to a resident taxpayer - levy of the income tax on the assessee company at a rate higher than the domestic companies - HELD THAT:- We hold that the applicable rate of taxation, under the Income Tax Act 1961, for the assessee company cannot be read down in the light of the provisions of a double taxation avoidance agreement, as is the specific mandate of Explanation 1 to Section 90 or even on the first principles without the benefit of this Explanation.
As for the mention, in paragraph 7 of the Bank of Tokyo Mitsubishi decision [2019 (8) TMI 895 - CALCUTTA HIGH COURT] of some clarification issued by the CBDT with respect to ABN Amro Bank, even if that be so, it is only elementary that Section 119(1)(a) does not visualize issuance of a circular “so as to require any income-tax authority to make a particular assessment or to dispose of a particular assessment in a particular manner”, and, therefore, such a clarification will not have any bearing on cases other than ABN Amro Bank, or the legally binding force of Section 119. In any event, even going by the observations made by the Hon’ble High Court, this communication was issued prior to 24th November 1997 – much before the retrospective insertion of Explanation 1 to Section 90 took place. With the amendment in law and with this significant change in the legal position, even if there is an old circular, issued in the context of pre-amendment law, it will not hold good any longer. Nothing, therefore, turns on the said communication either, and, in any event, even this communication has not been sighted before us.
We are of the considered view that the plea of the assessee is, therefore, devoid of any sustainable merits. We reject the plea of the assessee, and decline to interfere in the matter.
Deductibility of Interest paid by the Appellant to its Head Office - AO/DRP disallowing interest paid by the Appellant to its head office - HELD THAT:- The short reason for which the impugned disallowance is made is that the payment by an entity to itself, i.e. by its permanent establishment to the head office, and, therefore, it is an inadmissible deduction. What this approach overlooks is that this theory of tax neutrality vis-à-vis intra-company payments and incomes, whatever be its relevance or irrelevance in the cross-border situations, finds its support from judicial precedents in the cases of Sir Kikabhai Premchand [1953 (10) TMI 5 - SUPREME COURT] and Betts Hartley Huett & Co Ltd [1978 (4) TMI 58 - CALCUTTA HIGH COURT] is in the context of the computation of profits under the Income Tax Act. This theory would not, therefore, extend to the computation of profits attributable to a permanent establishment under the scheme of the tax treaties.
The five-member bench decision, in the case of Sumitomo Mitsui Banking Corp [2012 (4) TMI 80 - ITAT MUMBAI] recognizes this position and specifically states that “the position under the domestic law, as emanating from the above judicial precedents is that one cannot make profit out of himself”, and in the lights of the corollaries to this position, declined the applicability of this theory in the treaty situation. There is no other reason assigned in this case in support of the disallowance of interest paid by the PE to the head office or the GE. For this short reason alone, therefore, the impugned interest disallowance must be deleted.
The computations of profits attributable to the PE are to be computed on the basis of this hypothetical independence of the PE from its GE, and, to that extent, the profit neutrality theory of intra-company transactions will not come into play - though the assessee had initially raised a grievance against the taxability of interest received from its head office, when the appeal came up for hearing before us, this plea was abandoned even as there was a five-member bench decision, in support of the assessee, on that point. The assessee has claimed a deduction for interest paid by the PE to GE, and included in its taxable income, interest received by the PE from its GE. That is what, in our humble understanding and for the reasons set out above, the computation of profits of the PE, under the scheme of the tax treaties, envisages. In view of these discussions, and bearing in mind the entirety of the case, we hold that the disallowance of interest is not sustainable in law. Assessing Officer is directed to delete the same.
Whether the said interest paid by the PE to GE (i.e. PE-GE interest) can be taxed in the hands of the assessee company as income of the GE, as has been done by the Assessing Officer? - It may perhaps be too much to contend that the taxability of PE-GE interest receipt is required to be considered on the basis of the domestic law provisions, but even this discussion seems entirely academic in the light of our finding, as above, that an internal charge for the PE profit attribution does not amount to taxable income in the hands of the GE anyway. Be that as it may, having decided this aspect of the matter on the treaty principles so far as taxability of PE-GE interest in the hands of the GE is concerned, we need not examine that aspect any further. In our considered view, for the detailed reasons set out in this order, dehors this theory of tax neutrality for intra-GE transactions also, this PE-GE interest is not taxable in the hands of the assessee. Of course, we have reached the same destination by following a different path but then as long as reach the same destination, our traversing through a different path does not really matter at all.
We uphold the plea of the assessee that the interest paid by the PE to the GE cannot be brought to tax in the hands of the assessee company, even though it is to be allowed as a deduction in the computation of profits attributable to the permanent establishment. The Assessing Officer is directed to grant the relief accordingly. The assessee has already offered to tax the interest income received from its head office, and there is no surviving dispute in respect of the same.
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