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Showing 1 to 20 of 1279 Records
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2022 (10) TMI 1280
Estimating the income of assessee - Addition on account of low melting gains - CIT(A) deleted addition - HELD THAT:- It is a fact that assessee purchases old ornaments. The purity depends on many factors. It is very difficult to generalise the purity. We have gone through the melting gain register which was submitted in the paper book.
It is observed that assessee has maintained a proper register. The AO has not pointed out any defect in the said melting gain / loss register. AO has also not pointed out any defect in the books of accounts maintained by the assessee.
It is also a fact that the ITAT Pune Bench in assessee’s own case for earlier year has decided this issue in favour of assessee. Therefore, we are of the opinion that the ld.CIT(A) has rightly directed the AO to delete the addition. Appeal of revenue dismissed.
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2022 (10) TMI 1279
Penalty u/s 271(1)(c) - defective notice u/s 274 - non mentioning of specific charge or non striking off irrelevant portions in the notice issued u/s 274 - HELD THAT:- AO has not specified any limb or charge for which the notice was issued i.e. either for concealment of particulars of income or furnishing of inaccurate particulars of such income. It can be seen from the notice issued u/s 274 read with Section 271(1)(c) of the Act, Assessing Officer did not strike off irrelevant limb in the notice specifying the charge for which notice was issued.
As could be seen from case of Mr. Mohd. Farhan A. Shaik [2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s.271(l)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. Decided in favour of assessee.
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2022 (10) TMI 1278
Reopening of assessment u/s 147 - Addition u/s 68 treating the sale consideration of the equity shares of KGN Enterprise Ltd. as unexplained cash credit - HELD THAT:- As per the specific information received by AO from Investigation Wing of the Income-tax Department- Ahmedabad, KGN Enterprise Ltd. was a paper company and the shares of the said company were used for providing accommodation entries by showing purchase and sale transactions in such a way that the same resulted in Long Term Capital Gains to the concerned parties which was exempt from tax.
Since the assessee was one of such beneficiaries who received the bogus Long Term Capital Gains in the scrip of KGN Enterprise Ltd. which was claimed to be exempt in the return of income, the AO, in our opinion, had a reason to believe on the basis of tangible material that the income of the assessee in the form of bogus Long Term Capital Gains had escaped assessment as rightly held by the learned CIT(A) vide his impugned order. The reopening of assessment thus was in accordance with law.
Addition u/s 68 - This issue is squarely covered inter alia by the decisions of this Tribunal in the case of Pawankumar M. Sanghvi [2017 (5) TMI 1159 - ITAT AHMEDABAD] as well as in the case of Shamim M. Bharwani [2015 (4) TMI 257 - ITAT MUMBAI] which have been relied upon by the learned CIT(A) in his impugned order to decide the issue against the assessee wherein similar transactions were held to be bogus and sham..
Thus, we find no infirmity in the impugned order of the learned CIT(A) confirming the addition made by the AO u/s 68 by treating the sale consideration received by the assessee on sale of shares of KGN Enterprise Ltd. as unexplained cash credit. Ground No. 2 of the assessee’s appeal is accordingly dismissed.
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2022 (10) TMI 1277
Assessment u/s 153A - additions made by the AO without any incriminating evidence found at the time of search - HELD THAT:-In the instant cases, the assessment of AY 2015-16 was not pending as on the date of search and hence it would fall under the category of “unabated/finalized/completed assessments”. There is also no dispute with regard to the fact that the search officials did not unearth any incriminating material during the course of search warranting interference of the issues already stood concluded in unabated assessment.
Hence the decisions rendered in the case of Continental warehousing Corporation (Nhava Sheva) Ltd. [2015 (5) TMI 656 - BOMBAY HIGH COURT] and Gurinder Singh Bawa [2015 (10) TMI 1761 - BOMBAY HIGH COURT] in our view, shall squarely apply to the facts of the present case. Accordingly we hold that the AO, in the absence of any incriminating material found during the course of search relating to the impugned additions, was not justified in assessing them in this year.
We set aside the orders passed by CIT(A) in the hands of these assessees for AY 2015-16 and direct the AO to delete the additions made in this year in the impugned assessment order.
Addition made u/s 68 - assessee has availed accommodation entries by way of capital gains in order to convert unaccounted money into accounted one - HELD THAT:- AO has simply relied upon the report of the investigation department and held that the long term capital gains declared by the assessee are not genuine. No other material was brought on record by the AO to prove that the assessee has indeed availed only accommodation entries.
We noticed that the assessee has furnished all documents relating to purchase and sale of securities. The shares have entered into and exited from his demat account. The purchase and sale transactions have been routed through the bank accounts of the assessee. All these documentary evidences produced by the assessee have not been disproved. Accordingly, decision rendered in the said case of Shyam R Pawar [2014 (12) TMI 977 - BOMBAY HIGH COURT] is squarely applicable to the facts of the present case.
We hold that the tax authorities are not justified in disbelieving the long term capital gains declared by the assessee. Accordingly, we set aside the order passed by CIT(A) on this issue and direct the AO to delete the addition relating to assessment of sale consideration realised on sale of shares of Divine Multimedia Ltd.
Claim for deduction of Education Cess - In view of the retrospective amendment brought in by Finance Act, 2022 holding that the education cess is not allowable as deduction, we hold that the claim of the assessee is not tenable. Accordingly, we reject this ground of the assessee.
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2022 (10) TMI 1276
Seeking grant of bail u/s 447 of the Companies Act, 2013 - offence of siphoning of huge public money availed by way of financial assistance from various banks in the name of some shell Companies and puppet Companies - HELD THAT:- On a perusal of the materials available, this court finds that the offence is a serious economic offence of grave magnitude involving around 10,000 crores of hard earned public money. Among other crimes, this sort of white-collar crimes are particularly harmful to society as they are committed by not just literated, but, well educated and influenced persons, who are expected to set a moral example and behave responsibly - if the court finds a prima facie case against the accused in such cases, it cannot come to a satisfaction that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail as specified in Section 212 (6)(ii) of the Companies Act, 2013.
Though there are several statements recorded from the witnesses, the statement recorded from one of the Statutory Auditors viz., Geetha Suryanaranayan under Section 217 of the Companies Act reveals that the petitioner had played a key/pivotal role in the organisation. Further, a perusal of the statements recorded from other witnesses also show that the petitioner is the person, who is responsible for floating puppet and shell Companies in the name of their employees, poor relatives and round tripping and layering of money - A perusal of the materials reveals that the petitioner is the person who has signed in various documents as person in charge of commercial/financial transactions of Surana Power Limited. Apart from the above, the statement recorded from Banvarlal Sharma discloses about the role played by the petitioner and other accused for defrauding the banks and embezzlement of funds.
The golden principle has been time and again held by various courts that no person shall be deprived of his life or personal liberty except according to a procedure established by law. But, at the same time, the courts must strike a balance between the interest of the society in general and the right of an accused to personal liberty.
Conclusion - This court is of the opinion that the petitioner has not satisfied the conditions imposed under Section 212(6)(ii) of the Companies Act for grant of bail for the offence punishable under Section 447 of the Companies Act. Further, it is a case of economic offence of such a huge magnitude affecting the society and thus, this court find that it is highly premature at this stage to grant bail to the petitioner.
Petition dismissed.
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2022 (10) TMI 1275
Seeking grant of bail - implication of a fraudulent scheme of transferring funds from the company to a puppet company - alleged offences punishable under Sections 212 (1)(c) of the Companies Act, 2013 - HELD THAT:- The write-off gold as wastage was in the Financial Year 2014-15 which is before the petitioner's term of directorship, while the fact is that the gold write-off was over a period of three years i.e. Financial Year 2014-15 to Financial Year 2016-17. The petitioner was in-charge of finance and accounts from the year 2011 onwards. As per Section 447 of Companies Act, 2013, the fraud in relation to affairs of a company committed by any person or any other person with connivance in any manner, as such it does not require a person to be director alone to be charged under the Section, rather Section 447 of Companies Act applies to any person who is a party to the fraud.
Under Section 170 of the Companies Act, 2013, the appointment of the petitioner was only registered as a Director and no filing as a Key Managerial Personnel was done within 30 days of such appointment. Therefore, he has never been shown as a Key Managerial Personnel of M/s.Surana Corporation Limited in such Register. It is also submitted that all the other accused persons have released on bail except the founders of the company. The petitioner herein is a Chartered Accountant by profession and he had done his duty as a Chartered Accountant, without involving himself in any of the physical activities alleged against the company.
Conclusion - The petitioner, despite not being a Key Managerial Personnel officially, was involved in the financial affairs of the companies and could be held liable under Section 447 for fraudulent activities.
Considering the facts and circumstances of the case and the period of incarceration suffered by the petitioner from the date of arrest i.e on 05.08.2022, this Court is inclined to grant bail to the petitioner with certain conditions - bail application allowed.
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2022 (10) TMI 1274
Recovery of outstanding dues - although the Appellant was served notice but no reply was filed - HELD THAT:- In pursuance of the order dated 15.09.2022, an Additional-Affidavit has been filed by the Appellant by which the e-mail sent by the Resolution Professional on 27.05.2022 has been brought on the record. The Resolution Professional by e-mail has communicated to the Appellant that there are no outstanding dues of the Appellant and the accounts/ ledger have been reconciled.
The direction issued in the impugned order insofar as Appellant is concerned are set aside - Appeal disposed off.
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2022 (10) TMI 1273
Maintainability of application filed u/s 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by the appellant was barred by Section 10A of IBC - HELD THAT:- On looking into the proviso to Section 10A, the expression is “provided that no Application shall ever be filed for initiation of CIRP of a Corporate Debtor for the said default occurring during the said period” thus default which has been committed from 16.09.2020 to 28.02.2021, no Application could have ever been filed. The Appellant’s submission that cumulatively application can be filed taking all amounts, cannot be accepted. The said submission goes contrary to the statutory scheme delineated by Section 10A proviso. When Appellant could not have filed the Application for the default which was committed, the Adjudicating Authority did not commit any error in rejecting the Application as barred by Section 10A of the Code. In so far as the last two default on 31st March, 2021 and 30th April, 2021 is concerned, the Adjudicating Authority has noticed that the total amount of the aforesaid two defaults is only Rs. 37,50,000/- which is below the threshold as provided under Section 4 of the Code.
Conclusion - Section 10A creates a permanent bar on initiating CIRP for defaults occurring within the specified period and emphasizes the necessity of meeting the threshold requirement under Section 4 for defaults outside this period.
There are no error has been committed in rejecting the Application filed under Section 9 of the Code - appeal dismissed.
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2022 (10) TMI 1272
Dismissal of petition on the ground that it was not maintainable as Gems & Jewellery Export Promotion Council (GJEPC), i.e. Respondent No.2, did not fall within the ambit of State under Article 12 of the Constitution of India, 1950 - invocation of writ jurisdiction under Article 226 - HELD THAT:- “State” as defined under Article 12 is meant to include, inter alia, the Government of India, the Government of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. The Supreme Court, over the years, has examined what constitutes a “State” or “other authorities” as contemplated in Article 12. The rationale for this analysis lies in the fact that any authority falling within the ambit of Article 12 is subject to the same constitutional limitations as the Government and is bound by the basic obligation to obey the constitutional mandate of the fundamental rights enshrined in the Constitutional. By virtue of being accountable to the judiciary and the citizens, Article 12 prevents such authorities from obfuscating its responsibility to adhere to our fundamental rights and hinders them from taking an individual for a ride without any consequences.
The importance of this exercise has been elaborated in AJAY HASIA ETC. VERSUS KHALID MUJIB SEHRAVARDI & OTHERS ETC. [1980 (11) TMI 150 - SUPREME COURT], wherein the Supreme Court was considering whether the Society registered under the Jammu and Kashmir Registration of Societies Act, 1898, and managing the activities of the Regional Engineering College, Srinagar, would fall within the ambit of “State” under Article 12.
It is further well settled that Article 12 should not be stretched so as to bring in every autonomous body which has some nexus with the government within the sweep of the expression “State”. A wide enlargement of the meaning must be tempered by a wise limitation. It must not be lost sight of that in the modern concept of Welfare State, independent institution, corporation and agency are generally subject to State control. The State control does not render such bodies as “State” under Article 12. The State control, however vast and pervasive, is not determinative. The financial contribution by the State is also not conclusive. The combination of State aid coupled with an unusual degree of control over the management and policies of the body, and rendering of an important public service being the obligatory functions of the State may largely point out that the body is “State”.
The primary purpose of GJEPC is to act as a Nodal Agency/interface between the exporters and the Government. The Council being a collective body of the exporters places the interests/problems faced by the exporters before the Government so that the Government can take such decisions which would promote the export of gems and jewellery. The Council, therefore, does not carry out the policy decisions of the Government or is in any way relevant to the decision-making process of the Government regarding exports of these articles. The CoA primarily consists of exporters with only three out of the 27 members being Government nominees. It cannot, therefore, be said that the Council does anything which is even remotely connected with the activities which are conducted by the instrumentalities of the State.
A deep dive into the AoA and MoA of the GJEPC only brings forth the understanding that the GJEPC is a nodal agency, meant to mediate between exporters of gems and jewellery, and the Central Government. The function performed by the GJEPC cannot be termed as “public duty” and any administrative or financial hold that the Central Government is deemed to have over GJEPC is far from pervasive. The GJEPC retains its autonomous character and it is the CoA which not only looks after the affairs of the GJEPC, but is also empowered to make rules and regulations with regard to conditions of service, appointment, elections, etc. GJEPC does not satisfy any of the requirements or tests laid down by various Judgements of the Supreme Court for establishing whether or not an authority can be deemed to be a “State” under Article 12.
Conclusion - The writ petition is not maintainable, as the GJEPC does not fall within the ambit of "State" under Article 12. The GJEPC retains its autonomous character, and the control exercised by the Central Government is limited and specific rather than pervasive.
Appeal dismissed.
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2022 (10) TMI 1271
Reopening of assessment u/s 147 - change of opinion - use of information available at the time of original assessment u/s 143(3) - HELD THAT:- The material based on which the reopening was done, was available with the AO during the assessment proceeding and the same was duly considered during the original assessment proceedings while accepting the amount of taxable LTCG and determining the taxable income.
As decided in Rasalika Trading & Investment Co. (P.) Ltd. [2014 (2) TMI 851 - DELHI HIGH COURT] wherein the issue with respect to use of information available at the time of original assessment u/s 143(3), which was apparently used by the AO for competing the assessment has been precisely explained. Such information was acknowledged as “stale information” and therefore based on such information an attempt to use the provisions of section 147 and initiating proceedings were termed as a result of change of opinion.
On this submission of the assessee before AO during reassessment proceeding, no comment was offered by the AO.
Merely, no query was raised or no view was expressed in the assessment order will not tantamount that the material available before the AO was not considered by him and once the issue has been examined by the AO in the original assessment proceedings, then it is not open for the AO to change his view.
Thus reopening proceedings initiated and assumption of jurisdiction u/s 147 by the AO, without any fresh information against the assessee to establish the allegation which could validate the reopening u/s 147 thus in the present case the assumption of jurisdiction u/s 147 is beyond the authority of law - Decided in favour of assessee.
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2022 (10) TMI 1270
Seeking a writ of mandamus to set aside the order passed by Respondent No. 1 under section 26(1) of the Competition Act, 2002 - jurisdiction to order an investigation into the alleged abuse of dominant position by the Petitioner - HELD THAT:- An order passed under S.26(1) of the Act, directing investigation by the Director General is an administrative order passed only to determine whether the allegations made by the informant under S.19 (1) of the Act, about possible violations of competition law are true. Once information is received under section 19(1) of the Act, CCI, based on the material produced by the informant has to form a prima facie opinion regarding the possible competition law violations. It is relevant to note that while forming a prima facie opinion, CCI has to only determine if the allegations along with the material produced are taken to be true, will that result in breach of competition law. CCI cannot determine the legality or correctness of the allegations by going into the merits of the case. It only has to see whether the allegations, prima facie, constitute violation of competition law.
A same cause of action may have reliefs under different areas of law and the party aggrieved by the same can invoke both remedies. For instance, remedy for fraud is available under civil law which may include a claim of money and under criminal law the said fraud can be prosecuted under IPC. Similarly, a party may claim damages for defamation under tort law and also initiate criminal proceedings under S.499 of IPC. Therefore, it cannot be said that Respondent No. 2 could not have approached CCI with concerns of abuse of dominant position of Petitioner No. 1. A relief for breach of fundamental rights is independent from a relief sought aggrieved by abuse of dominance. Respondent No. 1/CCI was well within its jurisdiction to entertain information under S.19(1) of the Act, and order investigation on the basis of prima facie opinion.
In the present case, there is no threat of contrary findings as breach of principles of natural justice by one party towards other has little or no bearing on abuse of dominance which effects the entire market.
This Court has perused the order dated 3-10-2019. The said order is well-reasoned given that only a prima facie opinion was formed. Respondent No. 1 made it clear that no final opinion was expressed on the merits of the case. Therefore, according to this Court, the Director General shall complete investigation in accordance with law.
Conclusion - The CCI had jurisdiction to order an investigation, the prima facie determination was valid, and the High Court should not interfere with the CCI's order.
Petition dismissed.
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2022 (10) TMI 1269
Jurisdiction and proceedings initiated by the Competition Commission of India (CCI) under the Competition Act, 2002 - HELD THAT:- The CCI is an independent authority to consider any violation of the provisions of the Competition Act, 2002. When having prima facie opined that it is a case of violation of the provisions of the Act and thereafter when the proceedings are initiated by the CCI, it cannot be said that the same are wholly without jurisdiction.
Even considering the observations made by this Court in the case of Competition Commission of India vs. Steel Authority of India Limited and Another [2010 (9) TMI 215 - SUPREME COURT], the proceedings before the CCI are required to be disposed of at the earliest. In para 10, it is observed and held 'The Act and the Regulations framed thereunder clearly indicate the legislative intent of dealing with the matters related to contravention of the Act, expeditiously and even in a time-bound programme. Keeping in view the nature of the controversies arising under the provisions of the Act and larger public interest, the matters should be dealt with and taken to the logical end of pronouncement of final orders without any undue delay. In the event of delay, the very purpose and object of the Act is likely to be frustrated and the possibility of great damage to the open market and resultantly, country’s economy cannot be ruled out.'
Conclusion - The CCI should not be restrained from proceeding further with the enquiry/investigation for the alleged violation of any of the provisions of the Act.
The Special Leave Petitions stand dismissed.
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2022 (10) TMI 1268
Dishonor of the cheque - determination of drawer of cheque - Vicarious liability of Director - Director holding 5% shares in the company, can be deemed a "drawer" under the Negotiable Instruments Act, particularly in the context of Section 148 or not? - HELD THAT:- This Court is of the view, that in the absence of there being a challenge being given to the summoning order, to the principal complaint proceedings, in the light of implications of Section 141 of the Negotiable Instruments Act, hence under the determination, which has been made by the judgement dated 22nd April 2022, for all practical purposes would be treated as to be a drawer.
This Court is of the considered view, that when the principal proceedings was itself under Section 138, to be read with Section 141 of the Negotiable Instruments Act and particularly, when the issue about his status as being a Director was not under challenge or put to determination, when the summoning order was issued by the proceeding where the complaint case, as it was drawn after the judgement of conviction, the applicant, for all practical purposes would be held to be a drawer to attract the provisions of Section 148 of the Negotiable Instruments Act.
Conclusion - The applicant, for all practical purposes, would be held to be a drawer to attract the provisions of Section 148 of the Negotiable Instruments Act. The appellate court's order for a 20% deposit was upheld.
Application dismissed.
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2022 (10) TMI 1267
Grant of sanction for prosecution of a public servant Under Section 19 of the Prevention of Corruption Act, 1988 - period of three months, extendable by one more month for legal consultation for the Appointing Authority to decide upon a request for sanction is mandatory or not - criminal proceedings can be quashed if the decision is not taken within the mandatory period or not.
Whether the order of sanction is illegal due to non-application of mind and acting as per dictation if the appointing authority, the DoPT refers and considers the opinion and advise of the CVC? - HELD THAT:- Sanction for prosecution of an employee of the Union under the PC Act would involve invocation of specific provisions of the Code of Criminal Procedure, the Delhi Special Police Establishment Act, 1946, the PC Act, and the CVC Act, all of which constitute a unified scheme.
The Central Vigilance Commission, constituted under the CVC Act is specifically entrusted with the duty and function of providing expert advice on the subject. It may be necessary for the appointing authority to call for and seek the opinion of the CVC before it takes any decision on the request for sanction for prosecution. The statutory scheme under which the appointing authority could call for, seek and consider the advice of the CVC can neither be termed as acting under dictation nor a factor which could be referred to as an irrelevant consideration. The opinion of the CVC is only advisory - The issue is, therefore, answered by holding that there is no illegality in the action of the appointing authority, the DoPT, if it calls for, refers, and considers the opinion of the Central Vigilance Commission before it takes its final decision on the request for sanction for prosecuting a public servant.
Whether the criminal proceedings could be quashed for the delay in the issuance of the sanction order? - HELD THAT:- Grant of sanction being an exercise of executive power, it is subject to the standard principles of judicial review such as application of independent mind; only by the competent authority, without bias, after consideration of relevant material and by eschewing irrelevant considerations. As the power to grant sanction for prosecution has legal consequences, it must naturally be exercised within a reasonable period. This principle is anyway inbuilt in our legal structure, and Constitutional Courts review the legality and proprietary of delayed exercise of power quite frequently - Delays in prosecuting the corrupt breeds a culture of impunity and leads to systemic resignation to the existence of corruption in public life. Such inaction is fraught with the risk of making future generations getting accustomed to corruption as a way of life. Viewed in this context, the duty to take an early decision inheres in the power vested in the appointing authority to grant or not to grant sanction.
Upon expiry of the three months and the additional one-month period, the aggrieved party, be it the complainant, Accused or victim, would be entitled to approach the concerned writ court. They are entitled to seek appropriate remedies, including directions for action on the request for sanction and for the corrective measure on accountability that the sanctioning authority bears. This is especially crucial if the non-grant of sanction is withheld without reason, resulting in the stifling of a genuine case of corruption. Simultaneously, the CVC shall enquire into the matter in the exercise of its powers Under Section 8(1)(e) and (f) and take such corrective action as it is empowered under the CVC Act.
Thus, the period of three months, extended by one more month for legal consultation, is mandatory. The consequence of non-compliance with this mandatory requirement shall not be quashing of the criminal proceeding for that very reason. The competent authority shall be Accountable for the delay and be subject to judicial review and administrative action by the CVC Under Section 8(1)(f) of the CVC Act.
As there is no material placed on record to examine the accountability of the appointing authority for not deciding the request for sanction within time, it is left to the Appellant to seek appropriate remedy based on principles.
Conclusion - i) There is no illegality in the action of the appointing authority, the DoPT, if it calls for, refers, and considers the opinion of the Central Vigilance Commission before it takes its final decision on the request for sanction for prosecuting a public servant. ii) The period of three months, extended by one more month for legal consultation, is mandatory.
Appeal dismissed.
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2022 (10) TMI 1266
Disallowance of interest received from banks other than Co-operative banks as per section 80P(2)(a)(i) - interest earned from investments in nationalized banks since it is earned from non-members and from the banks other than the co-operative banks or societies - HELD THAT:- Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT] allowing deduction u/s 80P(2)(a)(i) of the Act on interest income in the identical facts and circumstances.
Thus on interpretation of the word ‘profits and gains of business’ attributable to the activities of the assessee in a way that it has been considered when the assessee is in the business of providing credit facilities and earning interest from its members, the basic premise of that fund arises from the said business activity of the assessee society only.
In the absence of that business, there would not have been any question of having surplus fund. Once that surplus fund is accumulated, those are given on investment for short term basis in nationalized banks and interest earned therefrom. This activity is, therefore, held as not alien or foreign to the primary business activity of the assessee society. Set aside the order of ld. NFAC and direct the AO to grant deduction to the assessee u/s 80P(2)(a)(i) - Decided in favour of assessee.
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2022 (10) TMI 1265
Validity of order u/s 250(6) passed in the name of the non-existence assessee - CIT (A) has passed the order in the name of Haryana Gramin Bank (now Sarva Haryana Gramin Bank) which is no longer in existence - HELD THAT:- We find that there is no grievance of the assessee regarding the name in which assessment order has been passed. The same has been duly passed under M/s. Sarva Haryana Gramin Bank. It is the cause title of CIT (A)’s order wherein it is mentioned Haryana Gramin Bank (now Sarva Haryana Gramin Bank). In our considered opinion, in these circumstances, CIT (A)’s appellate order is not liable to be quashed as void ab initio. This is a clerical mistake which does not make the ld. CIT (A)’s order void ab initio. Accordingly, ground no.1 stands dismissed.
Disallowance u/s 14A - assessee has made investment in tax free bonds/debentures, mutual funds, shares etc. which yielded tax free dividend and tax free interest and exempted long term capital gain - HELD THAT:- Assessee reiterated that assessee has sufficient interest free funds to make investment in tax free bonds/debentures/mutual funds/shares etc. and bank has not incurred any interest expenditure. Thus conclude that the proportionate disallowance of interest is not warranted, u/s 14A of Income Tax Act for investments made in tax free bonds/ securities which yield tax free dividend and interest to Assessee Banks in those situations where, interest free own funds available with the Assessee, exceeded their investments.
Amortization of securities premium - HELD THAT:- As decided in CHANASMA NAGRIK SAHAKARI BANK LTD. AND VICE-VERSA [2017 (10) TMI 478 - ITAT AHMEDABAD] as notice that the aforesaid amount represents the excess of acquisition cost over the face value of Government securities taken under HTM category. We find that the issue is squarely covered in favour of assessee by the decision of Rajkot Dist. Co-op Bank Ltd. [2014 (3) TMI 110 - GUJARAT HIGH COURT] placed reliance upon the CBDT Circular No. 17 of 2008 and held that loss on account of premium paid on the face value of the security is required to be amortized for the remaining period of maturity.
Disallowance of loss on sale of obsolete stationery and other petty items - HELD THAT:- We note that the documentary evidences that assessee is now submitting before us, were not filed before the authorities below, so these are documents submitted before us for the first time. We deem it proper to remit this issue to the file of AO. AO shall consider the same in the light of the fresh evidences being the note for loss of obsolete stationery, approval of Chairman of the Bank for disposal of sale of stationery items, etc. After examining these documents, AO shall decide the issue as per law. Needless to add, assessee should be provided an opportunity of being heard.
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2022 (10) TMI 1264
Bogus LTCG - Addition u/s 10(38) - Tribunal cancelling the disallowance of Long Term Capital Gain - HELD THAT:- We find from the order passed by Tribunal that no independent reasoning has been given by the learned Tribunal but the Tribunal chose to follow the decision of the Coordinate Bench.
In fact, in the said decision the earlier decision was affirmed. Those decisions were appealed against in the case of Swati Bajaj [2022 (6) TMI 670 - CALCUTTA HIGH COURT] the appeal filed by the revenue were allowed and the substantial questions of law were answered in favour of the revenue.
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2022 (10) TMI 1263
Assessment order u/s 153A r.w.s. 143(3) passes against non-existent entity/entity merged - whether a defect curable u/s 292B? - HELD THAT:- Facts of thus case are clearly covered by the judgment of Apex Court in the case Maruti Suzuki India Ltd. [2019 (7) TMI 1449 - SUPREME COURT]. Here right from the day one, the AO was brought to the notice and as was brought on record before him that the erstwhile entity M/s Bhadrawati Ispat & Energy Ltd had already stood amalgamated with M/s Reliable Record Keepers Pvt. Ltd. w.e.f. AY 2015-16 only and still he continued with the proceedings u/s 153A in the name of non-existing entity. Thus the entire proceedings including notice u/s 153A and also statutory notice issued in the name of non-existing entity was void ab initio.
Consequently, the entire proceeding was illegal. An order issued in the name of a non-existent company (amalgamating company) was a substantive illegality which was not curable under section 292B of the Act. Decided in favour of assessee.
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2022 (10) TMI 1262
Rejection of request of the Assistant Commissioner of Police, Cyberabad Commissionerate to remand the respondents-accused Nos. 1 to 3 to judicial custody - power of High Court to decide the legality of an order of rejection of remand - applicability of judgment in Arnesh Kumar Vs. State of Bihar [2014 (7) TMI 1143 - SUPREME COURT] - arrest without there being a notice issued under Section 41-A Cr.P.C.
Whether High Court’s power of Revision can be exercised to decide the legality of an order of rejection of remand? - HELD THAT:- In the case on hand, an order accepting the request for remand would send the accused to jail and refusal to do so would let them free. Thus, such an order which tends to decide the liberty of accused on one hand and the right to arrest by police on the other hand finally and conclusively, cannot be termed to be an interlocutory order. Thus, this Court holds that the impugned order certainly amounts to an intermediate order. Therefore, Revision lies.
Is the judgment in Arnesh Kumar Vs. State of Bihar, a sword of Damocles as contended? - HELD THAT:- As rightly pointed out, no where in the judgment that is rendered by the Hon'ble Apex Court in Arnesh Kumar’s case, it is laid down that the police officer is not empowered to arrest the accused for the offences punishable with imprisonment of either description for a term of seven years or less than seven years, though the offences alleged to have been committed are cognizable in nature and falls within the ambit of Section 41(1) Cr.P.C. The discussion that will go on in point No. 3 would make the above observations clear - A parental guidance by the Supreme Court through the judgment in Arnesh Kumar’s case is thus not a sword of Damocles either in respect of police officers or Magistrates who exercise the power of arrest and remand respectively.
Is it the mandate of law that no arrest can be effected without there being a notice issued under Section 41-A Cr.P.C. in all cases relating to cognizable offences which are punishable with imprisonment of either description for a term of seven years or less than seven years? - HELD THAT:- Section 41-A Cr.P.C. clearly lays down that in all cases, where the arrest of a person is not required under the provisions of Section 41(1) Cr.P.C., the police officer shall issue a notice as required under the said provision.
Thus, it is explicit that only when the police officer feels that arrest of a person is not required under the provisions of Section 41(1) Cr.P.C., he is bound to issue notice under Section 41-A Cr.P.C. Therefore, what can safely be held is that where the police officer feels that arrest of a person is required under any of the categories mentioned under Section 41(1) Cr.P.C., he can arrest the person and there is no requirement of issuance of notice under Section 41-A Cr.P.C. - this Court is of the view that the learned Magistrate clearly erred in rejecting the request for remand of the respondents-accused Nos. 1 to 3 on the sole ground that the mandatory requirement of issuance of notice under Section 41-A Cr.P.C. is not followed.
This Court ultimately holds that the order that is rendered by the learned Magistrate which is under challenge is unsustainable and therefore, the same requires to be set aside - the Criminal Revision Case is allowed.
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2022 (10) TMI 1261
Reopening of assessment and issue of notice u/s. 148 - information from the Investigation wing - addition u/s 68 - reason to believe - HELD THAT:- We are of the view that since the assessee has claimed to have substantial loan from a party which was found to be bogus. Therefore, under these circumstances, prima facie, these facts are sufficient for forming a belief that taxable income has escaped assessment. We are further of the view that at the stage of reopening, the only requirement is that the AO should have some tangible material facts which can form the basis to believe that income has escaped assessment and at that stage it is not to be established beyond reasonable doubt that such amount of income had already escaped assessment.
Therefore, the objections so raised by the assessee were rightly rejected by the AO and upheld by CIT(A). We find no reason to interfere into the lawful finding so recorded by the CIT(A) and further the assessee has not put forth any material which compel us to deviate from the findings recorded by the CIT(A). Thus, while concurring with the findings of the ld. CIT(A) on this issue, we dismiss Ground of the assessee.
Unsecured loans - We find that disallowance made u/s 68 of the Act by the lower authorities has no merit and we do not concur with the findings of the ld. CIT(A) as the assessee has proved the identity and creditworthiness of the party from whom the amount was received and genuineness of the transaction. In this view of the matter, the ground of the assessee are allowed.
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