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Showing 201 to 220 of 1354 Records
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2024 (3) TMI 1154
Reopening of assessment u/s 147 - Reasons to believe for escapement of income - power of reopening v/s review - notice issued after expiry of four (4) years - assessee claim of deduction u/s 80IB(10) - HELD THAT:- As in the original assessment, the AO had noted about the housing project in question and noted that the assessee had claimed deduction u/s 80IB(10) and after verification of the claim has accepted the claim after due application of mind. And it is further, noted from perusal of the reasons recorded AO had belief of escapement of income only after verifying the records of the assessee viz assessment folder wherein original assessment proceedings would be available including assessee’s submission on this issue.
Therefore, we find that there was no new/tangible material other than the documents already available in the original assessment records. In such a scenario, it can be safely inferred that AO has re-opened the assessment on mere change of opinion, which impugned action AO is not permitted to do because he doesn’t enjoy the power of review as held in the case of CIT v/s Kelvinator of India Ltd., [2010 (1) TMI 11 - SUPREME COURT] wherein after taking note of the amendment brought to section 147 of the Act w.e.f. 1st April 1989 has held that though, post amendment the power to re-opening is much wider, however, a schematic interpretation to the words “reason to belief’ has to be given, otherwise, the AO would exercise arbitrary power by re-opening the assessment on mere change of opinion.
The Hon'ble Court clarified that the AO has no power to review but has power to re-assess and such power to re-assess has to be based on fulfilment of certain pre-conditions one of which is, such re-assessment cannot be on the basis of a mere change of opinion. The Hon'ble Court held, even after 1st April 1989, the AO has power to re-open provided there is tangible material to come to the conclusion that there is escapement of income from assessment.
In the present case, AO only on re-appraisal of the material available at the time of original assessment has re- opened the assessment under section 147 of the Act by forming a belief that the assessee is not eligible to claim deduction under section 80IB(10) of the Act due to non-completion of the project within the stipulated time. Thus, considering the facts and material on record in the light of well settled legal principle leads to the irresistible conclusion that the AO has re-opened the assessment on mere change of opinion without having in his possession any tangible material. Therefore, it amounts to review of the original assessment order passed in case of the assessee, which is legally impermissible. Therefore re-opening assessment un/s147 of the Act in the instant case is not valid - Decided in favour of assessee.
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2024 (3) TMI 1153
Revision u/s 263 - another possible view of the matter - PCIT opined that no exemption on account of dividend income could be claimed / allowed but the Ld. AO accepted the claim of the assessee - assessee’s case was picked up for scrutiny under CASS for four specific reasons, namely, reduction in profit, excess claim of exemption of dividend income, large increase in unsecured loans during the year and large refund claimed out of advance tax - HELD THAT:- It is now well established that an incorrect assumption of fact and an incorrect application of law will satisfy the requirement of assessment order being erroneous. In the assessee’s case it would be obvious that the Ld. AO has neither assumed facts incorrectly nor there is incorrect application of law. On the contrary, he applied his mind. In our opinion, therefore the impugned order of the Ld. AO is not erroneous. If that be so, the question of it being prejudicial to the interest of Revenue will hardly arise in the given facts and law related to them.
The deeming provision contained in Explanation 2 to section 263(1) inserted w.e.f. 01.06.2015 referred to by the Ld. PCIT is inapplicable to the assessee’s case in view of admitted submission of details, e.g. income from dealing in shares and securities (NET); sale and purchase of shares and securities along with proof of transaction ledger/trading account, DEMAT account; Form -10DB and evidence of dividend income in the form of Dividend Advice issued by Taurus Mutual Fund and JM Financial Mutual Fund before the Ld. AO/PCIT in reply to questionnaires. This amply demonstrates that adequate requisite enquiry was made by the Ld. AO on the issue of excess claim of exemption of dividend income and necessary verification was made by him examining the details and documentary evidence produced before him by the assessee.
This finding recorded by the AO in the assessment order could not be controverted by the Ld. PCIT. The direction of thePCIT to the AO to examine and reconcile claim of dividend income and its exemption is therefore unwarranted and to say the least superfluous.
The remaining direction of the PCIT to the AO to reconcile the information on purchase of mutual fund units and to examine the sources of investment therein is beyond the reason being not even part thereof for selection of assessee’s case for scrutiny.
AR has relied on several judicial precedents in support of the view that revisionary powers u/s 263 of the Act can be exercised only on issues for which the case was selected for scrutiny under CASS. The details of purchase and sale of mutual fund units were furnished in reply to notice u/s 142(1) of the Act issued by the Ld. AO. Enquiry as to the source of investment in mutual fund units was neither envisaged nor called for.
Thus we are of the opinion that suo-moto assumption of jurisdiction by the Ld. PCIT u/s 263 of the Act in the case of the assessee is not sustainable. Decided in favour of assessee.
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2024 (3) TMI 1152
Addition u/s 69A - unexplained cash deposits in the bank account - onus to prove - HELD THAT:- We find that before the lower authorities the assessee had provided source of cash deposits in the bank account. Revenue has not brought any material to controvert the claim of the assessee that the assessee was having cash in hand to make the impugned deposits.
Thus when the assessee has provided the source of cash deposits being cash withdrawals, AO without bringing adverse material ought not have treated the same as unexplained. Therefore, hereby direct the AO to delete the impugned addition - Decided in favour of assessee.
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2024 (3) TMI 1151
Addition u/s 40A(2)(b) - Allegation of excessive and unreasonable salary paid to the relative of partner acting as administrative head - appellant has shown salary payment to the Specified Period and deducted TDS, upon deduction of the same, the remaining amount has been shown as unsecured loan obtained from her - She is the Administrative Head, possesses the degree of Masters in Business Administration from University of Houston-Downtown engaged in looking upon areas related to students like accommodation, food facility, water supply, disciplinary actions etc. of the hostel - HELD THAT:- Payment of salary and granting of interest free loan are two different transactions and there is no scope of clubbing the same to attract the provision of Section 40A(2)(b). The same salary would have been given to any other person recruited by the appellant for the said post. Thus, question of diversion of funds or routing of funds does not and cannot arise as these two transactions i.e. payment of salary as well as loan is through journal entry and the amounts stands payable, on the other hand, in the form of creditor or lender as rightly pointed out by the appellant. As Smt. Palak A Shah did not withdraw salary, the amount was lying as unsecured loan as per normal accounting principle. Had the interest been paid the Revenue would have at loss because the appellant firm attracts 30.9% tax whereas Smt. Palak A shah, an employee falls under 20.6% tax slab.
Income Tax Authority must put themselves in the shoes of the appellant and to see as to how a prudent businessman would act. The authorities must not look at the matter from their own view point but of a prudent businessman.
When the expenditure incurred by the appellant is otherwise deductible but deduction is restricted to a part of the sum by considering such expenditure to be excessive, having regard to the fair market value of the goods or services etc. and so much part of the expenditure is disallowed or in other words, if the expenditure incurred by the appellant is proved by the Ld. AO to be excessive or unreasonable considering the fair market value of the goods or services for which the payment as made the deduction under Section 40A(2)(b) of the Act is permissible. None of the order passed by the authorities below doubted the services so rendered by Smt. Palak A Shah nor alleged to have been paid salary excessive or unreasonable which is sine qua non in invoking the provision of Section 40A(2)(b) of the Act, in the absence of which, the order of disallowance is found to be not sustainable, bad in law and therefore, quashed. Decided in favour of assessee.
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2024 (3) TMI 1150
Income from other sources - Deduction of interest expenditure - direction of the CIT – A in restricting the deduction to the extent of income earned of term deposit - whether the expenditure of interest is laid out or expended wholly and exclusively for the purpose of making or earning such income is required to be tested - HELD THAT:- Undoubtedly the assessee has earned bank interest of Rs. 41 lakhs. According to section 57 of the income tax act, assessee is entitled to deduction under section 57 (iii) of any other expenditure which is not in the nature of capital expenditure which is laid out or expended wholly and exclusively for the purpose of making or earning such income.
Same has been verified and decided by the coordinate bench in case of assessee for assessment year 2013 – 14 till 2015 – 16 [2020 (11) TMI 326 - ITAT MUMBAI]. Further the direction of the CIT – A in restricting the deduction to the extent of income earned of term deposit is also not in accordance with the decision of the coordinate bench wherein in case of Mr. Ashwin Mehta [2019 (11) TMI 1450 - ITAT MUMBAI] wherein against the interest receipt of ₹ 1,801,778/– the coordinate bench has granted the deduction of ₹ 21,969,050/–.
Thus we direct the learned assessing officer to allow the claim of the assessee of deduction of interest expenditure. Accordingly, ground is allowed.
Charge of interest u/s 234B - HELD THAT:- The proviso to section 209 (1) has been inserted with effect from 1 April 2012. Therefore if any income of the assessee on which tax is deductible, the interest under section 234B shall not be chargeable prior to 1 April 2012. AO is directed to compute the interest in accordance with the law as it was prevailing for assessment year 2006 – 07. Accordingly ground number 3 of the appeal is allowed with above direction.
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2024 (3) TMI 1149
Addition u/s 68 - bogus share transactions - as alleged transactions in shares, “penny stock” are fraudulent and accommodation entries - HELD THAT:- Assessee has filed complete supporting evidences like sale was effected through open market using an authorized SEBI broker, contract notes were also produced before the AO and also submitted Demat statement and bank account statement, where the assessee has made purchase and subsequently, sold the shares and received the amount.
AO has nowhere pointed out any defect in assessee’s credit note or the shares entered into demat account or the amount paid for purchase of these shares and held these shares in Demat account for more than one year. The AO and CIT(A) both noted only that these are accommodation entries as observed from investigation proceedings, statement recorded from various operators, promoters and related persons, wherein they admitted how the unaccounted money of the beneficiaries get into the books of accounts of various assessee’s in the grab of long term capital gain.
CIT(A) and AO based their decision only on one investigation report of investigation wing of income-tax department, which does not contain the name of the assessee. Both the parties below also noticed, sharp jump and sharp decline in price, wherein it was noted that the share price of Finalysis Credit and Guarantee Co. Ltd., arose from Rs. 7 in March, 2012 to Rs. 180 in March, 2013 and thereafter dipped to Rs. 5 in October, 2013, in a period between 18 months only. We noted that all these are presumptions of the AO and CIT(A) and AO has nowhere pointed out any defects in the documents furnished by the assessee. Admittedly, the transaction carried on by the assessee is from open market and not grey market.
Assessee has produced copy of credit notes, contract notes, demat account and bank statements. The assessee has made payments through banking channel for purchase and even received sale consideration through banking channel only. AO could not find any defect in the above but based his decision on assumptions and presumptions. Hence, we have no hesitation in reversing the order of the lower authorities and allowing the appeal of assessee. Therefore, the appeal of the assessee is allowed.
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2024 (3) TMI 1148
Framing assessment u/s 143(3) without serving notices at the registered e-mail address - changing of the e-mail id - assessee on failure to provide reasonable and adequate opportunity of hearing, thus sought for setting aside the order impugned - HELD THAT:- Assessee had partially complied to notice issued u/s 143(2) and the notice u/s 142 (1) dated 01/02/2020, which proves that the assessee was accessing to his registered e-mail address till 1st February, 2020. It is the claim of the assessee before the AO that the assessee had changed the e-mail id subsequently, therefore, the notice has not been served on the Assessee.
It is seen that the said changing of the e-mail id has not been brought to the notice of the Revenue Authorities, in such events, the A.O. cannot be found fault of not serving the notices. Thus, we find no merit in Ground raised by assessee.
Disallowance in respect of exceptional items claimed in the profit and loss account - Assessee claimed expenditure in form of exceptional item - Assessee has entered into concession agreement with Ramagundam Fertilizer & Chemical Limited (RFCL) on 23/03/2016 towards grant of right and concessional to RFCL with regard to facility area - HELD THAT:- It is an admitted fact that the assessee has given right of lease of 99 years of the property of the Assessee to RFCL vide concession agreement dated 23/03/2016. In view of the said lease, RFCL has issued 11% of the total capital expenditure of the said property as equity shares to the Assessee valuing at Rs. 144.49 crores. The assessee charged the said amount to P & L account claiming as exceptional item, thus, the Assessee claimed as Revenue expenditure while computing the income of the Assessee. The said claim of the assessee was not based on any prudent accounting principles. The same is an income earned by the Assessee on giving the right to use the land at a concession rate. In any normal circumstances, if any third party would be required to pay Rs. 144.49 crore to acquire those shares. The shares were acquired in lieu of right to use the Assessee’s capital assets by RFCL. Thus, we find no merit in the grounds of Appeal of the Assessee.
AR made an oral submission that the Assessee had indeed offer to tax this sum in AY 2020-21. As we have already held herein above that income had indeed accrued to the Assessee during the year under consideration sum of Rs. 144.49 crores, which has been received by the Assessee in the form of shares in the Joint Venture Company to the tune of Rs. 92.51 crores, remaining sum of Rs. 51.98 crores has been shown as receivable in the balance sheet of the Assessee, in case if the said sum has been again offered to tax by the Assessee in subsequent years, the same should be deleted in the Assessment Year, in order to avoid double taxation. In our considered opinion, this direction is given to the Ld. A.O. to avoid double taxation and to meet the ends of justice.
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2024 (3) TMI 1147
Benami transaction - Jurisdiction by the Investigating Authority or the Adjudicating Authority under the Benami Act - Benami transaction - summons issued u/s 19 of Benami Act and the provisional order of attachment as well as extension of such order passed u/s 24 of the said Act challenged - petitioner argues that the respondent-Authorities do not have any jurisdiction to initiate a proceeding under the Benami Act - HELD THAT:- The petitioner obviously acted as a conduit, being owned by shareholders which were none other than shell companies having fictitious existence, for channelizing money from undisclosed sources, shown to have been advanced by Shakambhari and others, into tangible properties by the 37 purchases which are in issue. Taking a broad view of Section 2(9)(D), the purchase of the properties through consideration which came from fictitious sources squarely attracts the said provision to the present transactions. It is to be noted that sub-clause (D) does not merely restrict itself to non-traceable sources of consideration but also to “fictitious” sources of consideration. Hence, there is sufficient prima facie material to indicate that the transactions-in-question were arrangements in respect of properties where the person providing the consideration is fictitious.
Hence, this Court does not find that there is ex facie erroneous assumption of jurisdiction by the Investigating Authority or the Adjudicating Authority under the Benami Act sufficient to displace the legitimate opinion formed in writing by the Investigating Authority, which justifies the reference to the Adjudicating Authority after issuance of notice and passing of provisional assessment order, which was continued subsequently.
For an adjudication of merits on the issues involved in the present case as indicated above, a full-fledged enquiry on factual assessments based on appreciation of evidence is required, which is entirely unwarranted at the instance of the writ court, since a comprehensive procedure is provided in Section 26 of the Benami Act, which is, as the Madhya Pradesh High Court held, in the nature of a self-contained code.
Thus, no ground to interfere with the impugned notice u/s 24 or the provisional orders passed therein, particularly, since the matter has already been referred to the Adjudicating Authority and is under consideration before it within the contemplation of Section 26 of the Benami Act. The appropriate remedy before the petitioner is to participate in the said proceedings, and to have its defence vindicated there. In any event, even thereafter, the petitioner has two stages of remedies – one, a hearing before confiscation and the other by way of an appeal under Sections 30 and 31 of the Benami Act, if aggrieved by the decision of the Adjudicating Authority.
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2024 (3) TMI 1146
Seeking benefit of Merchandise Exports from India Scheme (MEIS) - submission of online declaration indicating that it would not avail the benefits of MEIS - HELD THAT:- Following the Judgment in the case of “Jubilant Biosys Limited vs. Directorate General of Foreign Trade and Ors. [2022 (12) TMI 1254 - DELHI HIGH COURT]. The Petitioner will now be able to take the benefit of Merchandise Exports from India Scheme (MEIS) and the fact that the last date has expired, will not come in way of the Petitioner and the Respondents are directed to consider the case of the Petitioner in accordance with the law laid down by this Court.
The present writ petition is allowed on the same terms and conditions. Pending applications, if any, stand disposed of.
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2024 (3) TMI 1145
Classification of imported goods - Electronic Control Unit (ECU) - classifiable under CTI 8708 99 00 or under CTI 9032 89 10? - case of the department is that since it is an automotive part, it should be classified as parts of automobile under CTI 8708 89 10, regardless of the fact that it is a printed circuit board - whether or not ECU is an article under Chapter 90? - HELD THAT:- The submissions of the learned authorised representative for the department deserve to be accepted. From the records of the case and the detailed technical submissions made by the learned counsel for the appellant, it is evident that the ECU does not and cannot either measure or regulate anything. It only analyses the data provided to it by other parts of the ABS (sensors) and compares it with standards and issues instructions. Based on these instructions, other parts of the ABS regulate the manner in which the car brakes ensure that the braking is safe - Merely because it is in the form of a PCB does not change it from a part of an automobile into an instrument or an apparatus. Automatic regulators, even according to the HSN Explanatory Notes relied upon by the appellant, essentially consist of a measuring device, a control device and a starting, stopping or operating device and ECU does not have these abilities, except that of the analysis of data.
Evidently, Section Note 7(b) deals with either regulators of electrical quantities or instruments or apparatus for automatically controlling non-electrical quantities which depend on electrical phenomenon. ECU is not a regulator of electrical quantity nor is it an instrument or apparatus for regulating non-electrical quantities which depend on electrical phenomenon. It is not an instrument or apparatus by itself. It is the ABS which regulates the braking to ensure safe braking - Merely because ECU is a chip which analyses the data (and through any chip electricity flows), the function of the ABS or its part ESCS (manufactured by the appellant) or its further sub-part ECU (imported by the appellant) do not, in our considered view, qualify as “automatic regulators of electrical quantities and instruments or apparatus for automatically controlling non-electrical quantities the operation of which depends on electrical phenomenon”.
It however, needs to be noted that ABS regulates the braking and not the speed. This regulation is based on certain other phenomena like speed, regular rotation, etc. and not based on the extent of braking. In other words, there are three non-electrical quantities viz. speed, sideways movement and angular rotation based on which a fourth quantity viz., braking is regulated. The factor to be controlled is the braking, a non-electrical quantity, and ECU issues instructions in the form of electrical signals which vary not according to the factor to be controlled (braking) but according to three other non-electrical quantities.
Neither the ABS nor the ESCS manufactured nor the ECU imported by the appellant can fit into Section Note 7 (b) by any stretch of imagination. Since Section Note 7 makes it explicit that CTH 9032 applies only to such goods which fall under (a) or (b), ECU gets clearly excluded from CTH 9032.
All the Customs Appeals are dismissed and the impugned orders are upheld.
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2024 (3) TMI 1144
Oppression and Mismanagement - Appointment of Whole Time Director to the Company for a period of three years under Section 408 of the Companies Act, 1956 - control and interference by the Central Government appointees in the Board to cease consequent to the repeal of Section 408 of the Companies Act, 1956 or not - Advocates representing the appellants argued against the CLB's orders, focusing on the irregularities in the appointment of directors, the lack of effective management, and the adverse impact on the residents due to undeveloped infrastructure.
HELD THAT:- It is a matter of record that the Government nominated Directors, over the last four decades, have been unable to undertake any appreciable measures so as to develop the site in question despite having sold over 300 plots of the company. Even the CLB in the impugned order dated 24.05.2011, had the occasion to comment that the Directors nominated by the Central Government had thoroughly mismanaged the affairs of the company and yet on account of inter se disputes amongst the appellant/shareholders that exhibited lack of interest in managing and running the affairs of the company, it was not possible to give them back the control of the company.
It is pertinent to mention that although doubts have been orally raised on the status of the unsold inventory described vide Annexure- C, no one has filed any objections disputing it, except the Greenfields Plot Holders-cum-Residents Association, the appellant in CO. A (SB) NO. 37/2011, but apparently there are just levelled bald allegations in their reply to the affidavit dated 03.01.2024, without substantiating the same with any categorical averment and/or documents - It is also pertinent to mention that the entire mess has been created due to inter se disputes amongst the shareholder. There is no plea except for the mismanagement of the affairs of the company by the erstwhile shareholders and that none of the promoters and/or the directors have been proceeded with any kind of cheating, fraud or misappropriation in any criminal court or by the Serious Fraud Investigation Office (SFIO).
In view of the dismal track record of the shareholders which demonstrates a history of lack of credibility on their part, the disposition agreed as per the MOU dated 18.04.23 with regard to the sale, alienation or disposal of the properties of the company, is quite understandably, not acceptable to the other stakeholders. All said and done, there is no gainsaying that the proposal put forth by the MCF is worth consideration.
The crux of the problem is that there are too many stakeholders and each wants to have a say in the matter. While that is understandable as they have suffered insurmountable problems due to lack of basic amenities and facilities for a very long and difficult forty years, that were promised by the company - This Court finds that certain calculated and strategic measures can be initiated so to commence development work at the site and ameliorate the suffering of the stakeholders.
In view of the aforesaid disposition laid down by this Court, all the pending applications shall stand answered with regard to the management and running of affairs of the company. However, it is provided that in case this disposition does not fructify and the desired results are not reached on being assessed objectively, the concerned applicants shall be at liberty to revive the applications in future, for hearing and disposal.
Re-notify for compliance on 15.05.2024.
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2024 (3) TMI 1143
Jurisdiction/Validity of show-cause notice issued u/s 11(1), 11(2)(b), 11(4) and 11(B) of SEBI Act - as submitted show-cause notice is identical to what was issued to the Petitioner on the earlier occasion which came to be adjudicated and on which Petitioner was discharged and exonerated - Petitioner had earlier moved this Court by filing a Petition, however, the same was withdrawn by the Petitioner with liberty to approach the Security Appellate Tribunal and on such Interim Application came to be passed by the Tribunal ordered that in the interest of justice, the Respondent be directed to give an opportunity of a cross-examination and personal hearing and when an opportunity of a personal hearing before the WTM would be given to the Petitioner, the Petitioner could raise all issues including that of jurisdiction
Contention as urged on behalf of the Petitioner is that the impugned show-cause notice is without jurisdiction and the issue of jurisdiction is required to be decided as a preliminary issue before the show-cause notice itself is taken up for adjudication.
HELD THAT:- It appears to be not the case that the Petitioner at any point of time including in the proceedings filed before the tribunal had given up his case that the impugned show-cause notice was without jurisdiction. In fact, the Tribunal itself has observed that the Petitioner would be permitted to raise the issue of jurisdiction in the proceeding of the show-cause notice to be held on 16th February, 2024.
Thus we are of the opinion that the present Petition can be disposed of by directing the concerned Officer of the Respondent to decide the issue of jurisdiction being raised by the Petitioner as a preliminary issue and only after such issue is decided, take an appropriate call on the adjudication of the show-cause notice. All contentions of the parties in that regard are expressly kept open.
Petitioner shall be intimated the date on which the Petitioner would be heard on the issue of jurisdiction and appropriate orders in deciding such issue be passed as expeditiously as possible.
We clarify that till the issue of jurisdiction is decided, the concerned officer of the Respondent shall not adjudicate the show-cause notice on merits including recording of any evidence of the same.
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2024 (3) TMI 1142
Condonation of delay in filing appeals - relevant date would be the date of knowledge of order or not - Section 61(2) of IBC - HELD THAT:- In the present case, the Impugned Order dated 24th April, 2023 was pronounced on 24th April, 2023 which is mentioned in the Impugned Order itself when order is pronounced by the Court the pronouncement is for all concerned - having already held that Hon’ble Supreme Court in Safire Technologies Pvt. Ltd. [2022 (6) TMI 285 - SC ORDER] laid down that commencement of the period of limitation for filing an appeal under Section 61 is not date when Appellant came to knowledge of the Order.
The mere fact that Appellants claim that they were not aware of the process of CIRP nor they could file any claim in the CIRP cannot be a ground to permit the condonation of delay which is beyond condonable period. Ignorance of entire CIRP Process cannot be a ground to condone the delay which is beyond condonable period. From the facts brought on record by the parties, it is clear that several Appellants who had filed the Appeals against the Order dated 24th April, 2023 along with delay condonation applications which applications were rejected on the ground that delay was beyond 15 days. The order passed by this Tribunal rejecting similar applications filed by the other Appellants/Applicants cannot be ignored.
There are no grounds made in these applications to condone the inordinate delay of 223/230 days in filing these Appeals - the delay condonation applications are dismissed.
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2024 (3) TMI 1141
Condonation of delay in filing appeal - Appellant submitted that Impugned Order was not available prior to 12.12.2023 and Impugned Order was made available on website of NCLT on 12.12.2023 - HELD THAT:- The Order Impugned Itself indicates that counsel on behalf of the Appellant who is referred as intervening in application was present and order was passed in presence of counsel for the Appellant. The order having pronounced in the presence of the counsel for the Appellant, he cannot be heard in claiming that Appellant was not aware of the order and he came to know only when order was uploaded in website of the NCLT.
Whether the Appellant has filed any application for obtaining certified copy? - HELD THAT:- There is no material on record or affidavit or additional affidavit to indicate that any Application has been filed. Rule 2(14) defines “filed” means filed in the office of the registry of the Tribunal. There is not even pleading that any application was filed for certified copy of the Order.
Whether Appellant was entitled to file an application for obtaining certified copy of the order passed on 10.11.2023? - HELD THAT:- A party means a person who prefers an appeal or application or petition. The present is a case where Section 7 Application was filed by the Appellant- State Bank of India on which CP(IB) No. 3025/2019 was registered. When Appellant is a party to the main company petition, it does not appear to be reason that he cannot make an application for certified copy of the order in I.A. passed in the same company petition which was filed by the Appellant. All I.As filed in the same company petition by different parties are I.As in the Company Petition and when main Company Petition has been filed by the Appellant, it cannot be said that Appellant was not entitled to apply for certified copy of the Order passed in Company Petition or in I.A.s including I.A. No. 127 of 2022.
Hon’ble Supreme Court in V. Nagarajan Vs. SKS Ispat and Power Limited & Ors, [2021 (10) TMI 941 - SUPREME COURT]makes it clear that the limitation commences when order is pronounced and only the time taken by the Court to provide certified copy shall be excluded. The commencement of limitation thus is not suspended till the order is uploaded in the website of the NCLT. Hon’ble Supreme Court in the said Judgment noted the conscious omission “order is made available to the aggrieved party which was occurring in Section 421(3) in Section 61 of IBC”.
The order was pronounced on 10th November, 2023 in the presence of counsel for the Appellant, period for limitation shall commence from the next date i.e. 11.11.2023 and the Appeal having been filed with delay of 18 days on 29th December, 2023 was beyond condonable period. Our jurisdiction to condone the delay is limited to 15 days only hence delay of 18 days cannot be condoned.
Delay Condonation Application is dismissed.
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2024 (3) TMI 1140
Review petition - impugned order passed by this Appellate Tribunal, without hearing him, as an Aggrieved and Necessary Party - Issuance of directions for initiating Perjury Proceedings, against the Respondent Nos. 1 & 2, to protect Authority and Majesty of this Tribunal, and thus restore the Purity of Administration of Justice - Whether the presence of a Particular Party, is necessary in order to enable the Court(s), effectively and completely, to adjudicate upon and settle all the questions, which are involved in the Petition?.
Power to Recall - HELD THAT:- The Power to Recall a Judgment, will not be exercised when the ground for Re-opening the Proceedings or Vacating the Judgment was available to be pleaded in the original action, but was not done or a proper remedy, in some other proceedings, such as, by way of Appeal, was available, but was not availed. Also that, the right to seek Vacation of a Judgment, may be lost by, either Waiver or Estoppel or Acquiescence.
Power of Review - HELD THAT:- The Power of Review is not an Inherent Power, but it is a creation of Statute. A Review of Judgment, cannot be granted in the garb of Clarification, as per decision of Hon’ble Supreme Court, reported in [2004 (5) TMI 606 - SUPREME COURT]. A Review Court, cannot sit in Appeal, over its own Order and rehearing of matter is impermissible in Law - A Debatable and Legal issues are not covered by the expression Sufficient Reason and as such, no Review, would lie. Also that, where, all the Pleas, urged in Review Petition, were reiteration of grounds, urged during the Hearing of Appeals, Review Petitions, were held not maintainable.
Since Power of Review, is a Right, created by a Statute, it cannot be exercised by the Tribunal, in the absence of Statute, providing for it. As a matter of fact, the term Recall, should not be expanded to be read as Synonym for Review.
The present Review Petitioner (Erstwhile Liquidator of M/s. The Jeypore Sugar Company Limited / Corporate Debtor), has no Vested Right, to file the Review Application and further, he cannot pray for Recall of the Impugned Order, passed by this Tribunal.
More importantly, the Review Petitioner (in person), cannot indulge in a Fishing Expedition, in filing the Review Application No. 3 / 2024, without any foundation / justification or any legal basis.
Keeping in mind of the well laid down Proposition of Law that Power of Recall, is not the Power of the Tribunal, to Re-hear the case, to find out any apparent error, in an Order or Judgment, as the case may be, this Tribunal, comes to an irresistible and cocksure conclusion, that the instant Review Application, filed by the Review Petitioner, in his personal capacity is not perse Maintainable, especially, in the teeth of he being neither a Necessary or Proper Party, to the case.
Review application dismissed.
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2024 (3) TMI 1139
Objection to Resolution Plan submitted - categorization of the Appellant as ‘affected’ homebuyer - HELD THAT:- On looking into the Agreement dated 09.08.2018, the Agreement although refers to several earlier events and proceedings prior to 09.08.2018, but it does not refer to Agreement dated 10.07.2015. Agreement dated 09.08.2018 having been executed subsequent to 15.09.2017, on which date the Corporate Debtor obtained loan from LICHFL, which obliged the Corporate Debtor to make an allotment only after the NOC from the LICHFL. The requirement of obtaining NOC was very much there and it is not the case of the Appellant that for allotment dated 09.08.2018, any NOC was obtained from LICHFL by the Appellant. Thus, categorization of the Appellant as ‘affected’ homebuyer cannot be faulted - there is no error committed by the SRA in classifying the Appellant into ‘affected’ homebuyer as his allotment dated 09.08.2018, having been obtained without NOC of LICHFL.
Back door entry in the CIRP - HELD THAT:- EOI was considered by the CoC. The subsequent events as noticed above indicate that IA No.643 of 2021, which was filed for approval of Resolution Plan of Vira Realspace LLP for Phase-1 was decided to be withdrawn by the CoC in its Meeting on 03.08.2021 and it was further resolved by CoC to rescind the previous From-G and issue a fresh advertisement for holistic resolution of the Corporate Debtor. Subsequently, on 08.08.2021 fresh Form-G was published, where, the last date for submitting of EOI was 23.08.2021. Respondent No.5 has submitted EOI on 17.08.2021 and thereafter submitted a Resolution Plan, which was deliberated and approved by the CoC. The submission advanced by the Appellant with regard to EOI submitted against Form-G, which was subsequently rescinded by the CoC is no more relevant - Resolution Plan, which ultimately was approved was in consequent to Form-G published on 08.08.2021 and there is not even any submission that with regard to Form- G dated 08.08.2021, there is any breach of timeline by Respondent No.5.
Next submission of the Appellant is that when Plan with regard to Phase-1 was approved on 01.03.2021 by CoC and IA No.643 of 2021 was filed for approval of such Resolution Plan, the CoC could not have taken any decision to invite fresh Form-G, which makes the entire process of CIRP contrary to the Code and the CIRP Regulations - HELD THAT:- In view of the CoC decision in its 13th Meeting to withdraw the Resolution Plan of Phase 1, the approval of Resolution Plan of Phase-1 was rendered infructuous, which was recorded by the Adjudicating Authority and no one has challenged the said order. It is also relevant to notice that CoC noted the issue as to whether the Resolution Plan of Phase-1 to be withdrawn and the said Agenda was approved by the CoC for withdrawal of Phase-1 Resolution Plan and Appellant also voted in favour of withdrawal of Phase-1, Resolution Plan, which material is on the record. It is difficult to see how the learned Counsel for the Appellant is raising submission that when there was approval of Resolution Plan of Phase-1, the CoC could not have proceeded further to issue fresh Form-G - there are no substance in this submission of learned Counsel for the Appellant.
The next submission of learned Counsel for the Appellant that there was no due diligence with regard to Section 29A while approving the Resolution Plan of SRA - HELD THAT:- From the facts brought on record, it does appear that Appellant is minority homebuyer, who is objecting to the approval of Resolution Plan, where majority homebuyers have voted in favour of the Resolution Plan, which is evident from the 99.96% vote share, the Plan has been approved - In view of the judgment of the Hon’ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association [2021 (3) TMI 1143 - SUPREME COURT] the Appellant has to sail with the decision of the majority of the homebuyers, who have decided to approve the Resolution Plan. Total number of homebuyers are 272, out of which 140 are ‘affected’ home buyers and 132 are ‘unaffected’ homebuyers. Out of 140 ‘affected’ homebuyers, 86 have voted in favour of the Plan and only 26 have voted against the Plan. Thus, majority of homebuyers have voted in favour of the approval of the Resolution Plan. Hence, the Appellant cannot be heard to contend against the majority of homebuyers, who have decided to approve the Resolution Plan.
The submission of the Appellant that RP conducted the CIRP in contravention of the Code and CIRP Regulations also does not find any substance from the materials on record and proceedings undertaken by the RP - there are no material irregularity in conducting the CIRP by the RP, which warrant interference.
There are no ground to interfere with the impugned orders dated 19.07.2023, which are sought to be challenged in these two Appeals - appeal dismissed.
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2024 (3) TMI 1138
Invocation of jurisdiction of this Court under Section 482 of the Cr.P.C - cognizance of offences on basis of supplementary complaint filed by the respondent against the petitioner second time - petitioner has challenged the impugned order primarily on the ground that it was not open to the learned Special Judge to take cognizance of the offences second time and to issue process against the petitioner, who was already facing prosecution before the Special Judge in the first complaint filed by the respondent against him before the said Court.
Whether the supplementary complaint could have been filed by the respondent against the petitioner and co-accused in respect of the same occurrence, which is subject matter of the initial complaint? - HELD THAT:- Section 173 (8) of Code of Criminal Procedure, 1973, which authorises the Police to conduct further investigation into an offence even after challan has been produced before the Court is, therefore, applicable to the investigation of cases under PMLA. This view finds further strength from the provisions contained in Clause (ii) of the Explanation to sub section (1) of Section 44 of PMLA, which provides that the complaint would include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary against any accused person involved in respect of the offence for which complaint has already been filed, whether named in the original complaint or not - there is no manner to doubt in holding that a supplementary complaint can certainly be filed by the respondent-Enforcement Directorate against an accused, who is already facing prosecution for offence under Section 3 of the PMLA before the Special Judge.
The irresistible conclusion that can be drawn is that once the power of investigation is vested in an agency and further investigation is carried out by the said agency in order to place on record material collected during further investigation, it is open to the said investigating agency to file a supplementary complaint.
Whether the learned Special Judge was justified in taking cognizance of offence on the second occasion and issue process against the petitioner on the basis of the supplementary complaint? - HELD THAT:- In the case of CREF FINANCE LTD. VERSUS SHREE SHANTHI HOMES PVT. LTD. & ANR. [2005 (8) TMI 664 - SUPREME COURT], the Supreme Court has held that once the Magistrate applies his judicial mind with reference to the commission of an offence, the cognizance is taken at that very moment - it is clear that taking of cognizance would mean application of mind by the Magistrate/Court to the offence alleged to have been committed. It is also clear that cognizance is to be taken of the offence and not of the offender.
Whether a Magistrate can take cognizance of an offence more than once upon filing of supplementary challan/supplementary complaint? - HELD THAT:- It is well settled that cognizance of an offence/offences can be taken only once. If cognizance of the offences has been taken by a Court/ Magistrate, the same cannot be taken again for the second time.
The cognizance of the offences under Sections 3/4 of the PMLA was taken by the Special Judge on 16.07.2018 when the initial complaint was filed by the respondent against the petitioner and the co-accused in the year 2018, therefore, upon filing of the supplementary complaint by the respondent in respect of the same offence against the petitioner and the co-accused, the learned Special Judge could not have taken the cognizance of the offences once again and issued process the petitioner and the co-accused, who were already facing prosecution before the learned Special Judge - Upon filing of supplementary complaint, the only course left to the learned Special Judge was to take on record the said supplementary complaint and proceed ahead with the prosecution of the petitioner and the co-accused, who are already facing prosecution before the learned Special Judge on the basis of initial complaint.
The impugned order passed by the learned Special Judge is set aside, with a direction to pass fresh order in the manner indicated hereinbefore and to proceed ahead in the matter in accordance with the law - Appeal allowed.
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2024 (3) TMI 1137
Grant of Bail - Money Laundering - predicate offence - invocation of jurisdiction of this Court under Article 226 of the Constitution of India read with section 482 of the Code of Criminal Procedure (Cr.P.C.) - bank loan fraud - HELD THAT:- It is an admitted fact that the petitioner has invoked the jurisdiction of the High Court of Punjab and Haryana for challenging the proceedings initiated against him under PMLA and he has also challenged the summons issued by the respondent against him. In the instant case, the petitioner has challenged the action of the respondent leading to his arrest as also the order of learned Special Judge designated PMLA, Jammu, whereby he has been remanded to custody of the respondent. Both these events viz., arrest of petitioner and his remand to custody of the respondent have taken place within the territorial jurisdiction of this Court, therefore, the petitioner has rightly approached this Court by invoking the jurisdiction of this Court under Section 226 of the Constitution read with Section 482 of the Cr.P.C. for challenging the aforesaid actions.
The question whether the High Court of Punjab and Haryana has jurisdiction to entertain the challenge to the proceedings initiated by the respondent against the petitioner and co-accused will have to be determined by that Court. It would not be appropriate for this Court to render any opinion on this issue in the present proceedings - Merely because grounds of challenge raised before this Court are identical to the grounds of challenge raised by the petitioner in the petition filed by him before the High Court of Punjab and Haryana, does not disentitle him from invoking the jurisdiction of this Court. The preliminary objection of the learned DSGI to the maintainability of this petition, prima facie, appears to be untenable.
Though offences under PMLA are stand alone offences, yet their origin is the Scheduled offences. Once the Scheduled offence ceases to exist or is extinguished, an accused cannot be proceeded against in respect of offences under PMLA. It is for this reason that the Supreme Court has, in Vijay Mandanlal Choudhary’s case [2022 (7) TMI 1316 - SUPREME COURT] clearly laid down that if a person is finally discharged/acquitted of the scheduled offences or a criminal case against him is quashed, there cannot be any offence of money laundering against him. As an obvious corollary to this is that once investigation in FIR relating to predicate scheduled offences is stayed, the proceedings in the said FIR would get eclipsed. The same will definitely have a bearing upon the offences of money laundering as the said offences owe their origin to the predicate offences. Therefore, the said offences would also stand eclipsed till such time the stay of investigation is in operation.
In Sudhamani Dorai’s case [2018 (10) TMI 330 - MADRAS HIGH COURT], a Single Judge of Madras High Court has observed that stay of predicate offence is not a ground for preventing Directorate of Enforcement from proceeding under PMLA.
In the instant case, the Case Diary that has been produced by the learned DSGI would reveal that the grounds of arrest have been furnished to the petitioner immediately after his arrest. However, a perusal of the impugned Order of Remand passed by the Special Judge, PMLA reveals that it is nowhere recorded in the said order as to whether or not the grounds of arrest have been furnished to the petitioner - The learned Judge has not even recorded a finding as to whether or not she has perused the grounds of arrest so as to ascertain whether the ED had recorded reasons to believe that the petitioner was guilty of an offence under PMLA and whether or not there was proper compliance with the mandate of Section 19 of the PMLA.
This Court is of prima facie view that the impugned order dated 07.02.2024 passed by the learned Special Judge, PMLA smacks of non application of mind.
The petitioner has been able to carve out a case for grant of interim relief. Accordingly, the petitioner is directed to be released from custody in the subject ECIR, subject to fulfilment of conditions imposed - bail application allowed.
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2024 (3) TMI 1136
Non-payment of service tax - Customs House Agent and Storage and Warehousing Services - non-payment of service tax on the value of services rendered on account of ground rent of empty containers - non-payment of service tax on services rendered in respect of handling of empty containers under the category of Storage and Warehousing Services - HELD THAT:- Due to the plea of the appellant being eligible of cum tax benefit that this Tribunal vide Final Order No. 56944/2013 dated 04.07.2013 had remanded back the matter. It is observed that subsequent to remand, the benefit of cum tax has been given to the appellant, accordingly, the entire demand on the aforementioned first issue was absolutely dropped.
However, the demand on second count is confirmed holding the activity done by the appellant to be called as storage and warehousing services. It is observed that there is no denial about discharge of service tax by the appellant with respect to handling of empty containers which were stored in the appellant’s area or were warehouse. The demand is with respect to such empty containers which were handled prior reaching the appellant’s storage area/warehouse. The issue therefore is as to whether the said activity can be called as the part of taxable service “Storage and Warehousing”.
No doubt Circular No. 60/9/2003-ST dated 10.07.2003 clarifies that handling of empty containers would be covered within the scope of Storage and Warehousing Services. However, for the applicability of this circular the goods/empty containers should first have been stored or warehoused and should be handled within the said warehouse or the storage space. Apparently and admittedly, the same is not the case for the impugned demand. Hence the appellant’s activity of handling containers cannot be called as taxable activity of storage and warehousing. The handling of the containers which were never stored or warehoused since is not covered in the taxable activity of storage and warehousing, the service tax on the amount received for handling of nonstored/ non-warehoused empty containers is wrongly demanded and thus is held to have wrongly been confirmed.
The activity of handling of container cannot to be covered under the taxable activity of cargo handling as cargo handling service also. This activity is essentially a service in relation to merchandise - The Circular No. B11/1/2002-TRU has explained that empty containers cannot be treated as cargo. In light of these observations, the activity in question cannot even be called as the taxable activity of Cargo Handling Service. The order under challenge for the said reason is liable to be set aside.
The order under challenge is held not sustainable. Same is accordingly therefore set aside - Appeal allowed.
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2024 (3) TMI 1135
Valuation - inclusion of advertisement and publicity expenses incurred by the dealers as per the terms and conditions of the dealership agreement mutually agreed between the appellant and their dealers, in the assessable value of the vehicles sold by the appellant - Extended period of Limitation.
The case of the Department is that the price at which the appellant sold the vehicles to the dealers is not the sole consideration and that is the reason that the learned Commissioner in the impugned order confirmed the demand of duty by treating the expenses borne by the dealers on advertisement and publicity as additional consideration liable to be included in the assessable value, on which duty was not paid by taking resort to the provisions of Section 4(1)(b) of the Act read with Rule 6 of the Central Excise Valuation Rules, 2000.
HELD THAT:- The perusal of various clauses of the dealership agreement shows that the expenses incurred by the dealers, have been incurred by them on their own accord, and not for or on behalf of the appellant because the dealership agreement does not provide for any such expenses to be incurred by the dealers on behalf of the appellant.
The price of the vehicles remains the same and is not dependent upon whether the dealers are incurring expenses on advertisement or not. No doubt that the main reason for undertaking advertisement by the dealers is to promote their own business and incidentally the appellant is also benefitted by increase sale of the vehicles, but it cannot be the only ground for inclusion of advertisement expenses incurred by the dealers to the assessable value for the purpose of determining the duty payable from the sale of the excisable goods - perusal of various terms and conditions shows that such expenses are purely optional at the end of the dealers and they have to decide whether to incur such expenses or not, because it is found that there are certain dealers who do not opt for incurring such expenses and a list of those dealers has also been given by the appellant in their additional submissions.
There is no dispute with regard to the advertisement expenses which stands reimbursed by the appellant to the dealer, which already stands factored in the assessable value of the goods.
This issue has been considered by various benches of the Tribunal and some of the judgments relied upon by the appellant, specifically held that the advertisement expenses incurred by the dealers on their own accord, is not to be included in the assessable value for the purpose of payment of excise duty. In this regard, we may refer to the decision of this Tribunal in the case of M/S HONDA SEILS POWER PRODUCTS LTD & OTHER VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-III [2013 (10) TMI 450 - CESTAT NEW DELHI] wherein the identical issue was involved and the Tribunal, after considering the submissions of both the parties, held there is nothing in their agreements from which it can be concluded that appellants had enforceable legal right against the dealers to insist on incurring of certain amount of expenses on advertisement and publicity of the appellant’s products. Just a Clause in the agreements requiring the dealers to make efforts for promoting sales of the appellant’s products cannot be treated as a clause imposing legal obligation on the dealers to incur certain level of expenses on advertisement. In view of this, we hold that the impugned orders are not sustainable.
The advertisement expenses incurred by the dealers are not to be included in the assessable value unless there is a enforceable legal right of the appellant to insist on incurring of certain quantum of expenses on advertisement by the dealers which is not the facts in the present case.
Extended period of Limitation - HELD THAT:- The issue relates to interpretation of the complex provisions of law and the fact, and further that various benches of the Tribunal have considered and decided the said issue, clearly shows that there is no intention to evade payment of duty. Moreover, for invoking the extended period of limitation, the Department is required to establish fraud, collusion, wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or Rules with an intent to evade the payment of tax. There is nothing in the impugned order that any of these ingredients stand proved. Hence, the substantial demand up to September, 2010 is barred by limitation.
The impugned order is not sustainable in law and therefore, the same is set aside - appeal allowed.
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