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Showing 1 to 20 of 1652 Records
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2022 (4) TMI 1653
Grant of Regular bail - appellant prosecutrix submits that the High Court erred in granting bail to the respondent no. 2 accused in a mechanical manner without any reasoning - HELD THAT:- This Court has, in a catena of judgments, outlined the considerations on the basis of which discretion under Section 439, CrPC has to be exercised while granting bail. In Gurcharan Singh v. State (Delhi Administration), [1977 (12) TMI 141 - SUPREME COURT] this Court has held as to the various parameters which must be considered while granting bail. This Court held 'The overriding considerations in granting bail to which we adverted to earlier and which are common both in the case of Section 437(1) and Section 439(1) CrPC of the new Code are the nature and gravity of the circumstances in which the offence is committed; the position and the status of the accused with reference to the victim and the witnesses; the likelihood, of the accused fleeing from justice; of repeating the offence; of jeopardising his own life being faced with a grim prospect of possible conviction in the case; of tampering with witnesses; the history of the case as well as of its investigation and other relevant grounds which, in view of so many valuable factors, cannot be exhaustively set out.'
The grant of bail requires the consideration of various factors which ultimately depends upon the specific facts and circumstances of the case before the Court. There is no strait jacket formula which can ever be prescribed as to what the relevant factors could be. However, certain important factors that are always considered, inter alia, relate to prima facie involvement of the accused, nature and gravity of the charge, severity of the punishment, and the character, position and standing of the accused - At the stage of granting bail the Court is not required to enter into a detailed analysis of the evidence in the case. Such an exercise may be undertaken at the stage of trial.
This Court has consistently upheld the necessity of reasoned bail orders, with a special emphasis on matters involving serious offences. In the present case, respondent no. 2 accused has been accused of committing the grievous offence of rape against his young niece of nineteen years. The fact that the respondent no. 2 accused is a habitual offender and nearly twenty cases registered against him has not even found mentioned in the impugned order. Further the High Court has failed to consider the influence that the respondent no. 2 accused may have over the prosecutrix as an elder family member. The period of imprisonment, being only three months, is not of such a magnitude as to push the Court towards granting bail in an offence of this nature.
Conclusion - The impugned order passed by the High Court is cryptic, and does not suggest any application of mind. There is a recent trend of passing such orders granting or refusing to grant bail, where the Courts make a general observation that “the facts and the circumstances” have been considered. No specific reasons are indicated which precipitated the passing of the order by the Court.
The impugned order passed by the High Court is set aside. The Criminal Appeal is accordingly allowed.
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2022 (4) TMI 1652
Assessment u/s 153A - Unexplained cash credits u/s. 68 and unexplained expenditure u/s. 69C - unsecured loans claimed to have been obtained by the assessee and interest expenses thereon - A.Y. 2012-13& A.Y. 2014-15 - HELD THAT:- While making an assessment u/s 153A of the Act in pursuance of a search under s. 132, no addition could have been made by the AO in the assessee’s income in a completed year of assessment without having recourse to any incriminating material. Accordingly, in our considered view, the action of the ld. CIT (A) in confirming the AO’s action of making additions in completed years of assessment i.e. A.Y. 2012-13 and A.Y. 2014-15, without having any recourse to any incriminating material was unjustified and unwarranted.
Addition on account of unsecured loans obtained by the assessee company from various entities - A.Y. 2012-13 & A.Y. 2014-15; A.Y. 2015-16 to A.Y. 2017-18 - As none of the basis taken by the AO during the course of the assessment proceedings has any nexus with any incriminating document or material found during the course of the search operations carried out u/s132 of the Act in the premises of the assessee and its directors. In our considered view, the report of the Special Auditors obtained during the course of the assessment proceedings or the statements of third parties recorded either prior to or after the search or for that matter, finding of one excel sheet containing the detail of loans already recorded in the books of accounts cannot be said to be incriminating evidence or material against the assessee recovered during the course of search. Since, while adjudicating the ground no. 2 of the assessee for A.Y. 2012-13 and A.Y. 2014-15, we have already held that in respect of the completed assessment years, no addition in an assessment made u/s. 153A of the Act can be made without having recourse to any incriminating material, the aforesaid additions so made by the AO vide para (8) of his Order on account of unsecured loans and unexplained interest are not sustainable on this legal ground itself.
Addition u/s 68 - unexplained loan creditors - We find full substance in the contention of the assessee that in the instant case, the AO was not only duty bound to provide copies of the statements of Shri Dinesh Agrawal and Shri Sharad Darak which were recorded by some other authorities in some other proceedings, and which were intended to be used against the assessee as an evidence, but, was also required to afford opportunity of cross examination of such witnesses to the assessee, which he miserably failed to do. In such circumstances, in our considered view, merely on the basis of unconfronted statements, the AO was not legally justified in making the additions in respect of the aforesaid loan creditors.
We find absolutely no justification in the AO’s making the additions in respect of the aforesaid loan creditors, in the income of the assessee either u/s. 68 of the Act or u/s. 69C of the Act for various assessment years.
We find that the sole basis for making the addition by the AO was some statements of Shri Dinesh Agrawal and Shri Sharad Darak recorded by some of the Income Tax Authorities in some other cases, but since, neither the copies of such statements were provided to the assessee nor the assessee was given an opportunity of cross examination of such persons making the statements, in our considered view, such statements have no evidentiary value in the eyes of law against the assessee.
Neither during the course of the search any evidence was found that the assessee company itself provided cash to the lender companies for procuring cheques under the garb of loans nor the AO could bring any single material to this effect on record. In our considered view, except leveling a bald charge against the lending companies, the AO by himself has not conducted any independent inquiry to substantiate his allegation that the lender companies were mere accommodation entry provider companies.
We find that in the similar circumstances, in the case of Oriental International Company Pvt. Ltd. [2018 (1) TMI 607 - DELHI HIGH COURT] has dismissed the appeal of the Revenue by holding that the AO did not conduct his task diligently and had not brought on record that whether the amounts were infused in the shareholders account in cash. We also find that the various case laws relied upon by the AO are not applicable to the assessee’s case.
We are of the considered view that in respect of all the named eight loan creditors, by furnishing the documentary evidences as discussed hereinabove, the assessee could be able to fully discharge its onus of proving all the three ingredients as contemplated u/s. 68 of the Act viz. (i) identity of the creditor; (ii) genuineness of the loan transactions; and (iii) creditworthiness of the loan creditor beyond all doubts. Accordingly, in our considered view, the entire additions u/s. 68 as well as u/s. 69C of the Act is not justified.
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2022 (4) TMI 1651
Entitlement to claim charitable status u/s 11 - HELD THAT:- The issue raised in the present appeal had also arisen in the Assessment Years 2005-06, 2007-08 and 2008-09. No appeal had been filed against the Tribunal judgment with regard to the aforesaid assessment years – which were in favour of the respondent-assessee. He also points out that an appeal[2017 (3) TMI 1962 - DELHI HIGH COURT] filed by the Department for the Assessment Year 2010-2011 was dismissed by the learned predecessor Division Bench. Assessee was entitled to claim charitable status under Section 11 - Decided in favour of assessee.
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2022 (4) TMI 1650
Offence under SEBI - charge of price manipulation - Misuse of the trading system for creation of bogus long term capital gains and short term capital gains - appellants were restrained from accessing the securities market for a specified period as mentioned in the impugned order and were further prohibited from buying, selling or otherwise dealing in the securities either directly or indirectly - HELD THAT:- Acquisition of 17.64% of the shares by the two connected entities Samtal Financial System Pvt. Ltd. and Anant Fin Consultancy Pvt. Ltd. took place on March 21, 2011 and May 31, 2011 and was not spread over a period of time. The acquisition made on March 21, 2011 was around the same time when the first preferential allotment was made.
This is another indication to show that the promoter directors and the connected entities were cornering the entire free float of the shares of the Company so that they could control the buying and selling of the shares.
Evidence has come indicating that inspite of large buy orders pending during Patch 1-A and Patch 1-B no sale were being made and only miniscule shares were being sold so that the price of the shares could rise since it was found that the shares that was being sold was above the LTP.
We also find that during Patch 1-A, 4560 shares were sold by 13 noticees and whereas only 3910 shares were delivered, the balance 650 shares were not delivered. The selling of these miniscule shares above LTP raised the price from Rs. 11/- to Rs. 173.65.
These 3910 shares which were sold by the connected noticees were traced back to Anant Fin Consultancy Pvt. Ltd. and, therefore, the scheme got exposed to the extent that the Company wanted to keep the free float of the shares between the promoter directors and its connected noticees so that they could control the market to increase the price of the shares.
This view is based on the finding that the connected noticees were predominantly the sellers contributing 85.04% as sellers and the liquidity of the shares in the market was meager. Further, we find that in Patch 1-B the 13 noticees who were sellers in Patch 1-A became the buyers in Patch 1-B.
Promoter directors and other connected noticees indulged in manipulation in the scrip and benefited by selling the shares in the subsequent patch period. We find that the entire scheme of acquiring the shares by the new promoters and ensuring this free float of shares prior to the resumption of trading on the Stock Exchange platform and using the same for manipulating the price so that the price of the scrip increased multifold which resulted in subsequent sale of shares to benefit from the manipulated price was carried out by the new promoters and connected noticees in connivance with each other. Such scheme was totally fraudulent and violative of Regulation 3 and 4 of PFUTP Regulations. Thus, the Company cannot escape its liability.
Thus, in view of the finding given by the WTM that Santosh Kumar Agarwal was not involved in the day to day affairs of the Company and was not part of the orchestrated scheme to manipulate the price of the scrip, the order of the WTM debarring Santosh Kumar Agarwal for a period of 5 years does not make any sense. In the absence of any reasoning, the debarment order against Santosh Kumar Agarwal is wholly misplaced.
We are of the opinion that the appellants in the first set were guilty of violation of Regulation 3 and 4 of the PFUTP Regulations except the appellant Santosh Kumar Agarwal.
Connection of Subodh Agarwal with the new promoters Manoj Kumar Agarwal and Deepa Mittal is clear and deep rooted. Contention that it was only a historic association is a misnomer. In fact, it was a deep rooted connection going back to several years - various entities and connected noticees were connected to Subodh Agarwal either directly to a common directorship or through off-market transaction or where common shareholders in a Company.
We find that many of these entities / noticees connected through Subodh Agarwal traded during various patch periods and were responsible for a fraudulent scheme in the scrip of the Company.
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2022 (4) TMI 1649
Revision u/s 263 - Deduction u/s 80P - interest earned from investments in banks - HELD THAT:- Appeal admitted on substantial question of law.
Whether Tribunal had erred in holding that the order passed by the AO is neither erroneous nor prejudicial to the interest of Revenue by ignoring the decision of Totgars Cooperative Sale Society Ltd[2010 (2) TMI 3 - SUPREME COURT] wherein it was held that interest earned from investments made in any bank not being cooperative society, is not deductible under section 80P(2)(d) of the Act.
Whether Tribunal had erred in holding that the order of assessment passed by the AO should not be interfered with only because another view is possible without appreciating that the view taken by the AO was unsustainable in law in light of the provisions of section 80P(4) of the Act and reflects non application of mind by the AO.
Whether Tribunal had erred in quashing the revision proceedings u/s 263 of the Income Tax Act by overlooking the fact that in the case of Totgars Cooperative Sale Society (supra) has held that the intention of legislature is clear that cooperative banks are not specie of genus cooperative society, which would entitle to exemption or deduction under the special provisions of chapter VI-A in the form of section 80P of the Act. This finding has also been approved by the Hon'ble High Court of Gujarat in the case Katlary Kariyana Merchant Sahkari Sarafi Mandali Ltd. [2022 (1) TMI 1309 - GUJARAT HIGH COURT]
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2022 (4) TMI 1648
Revocation of Customs Broker License - forfeiture of the security deposit - levy of penalty - Failure to follow the condition mentioned under Regulation 11(a), 11(d), (k) and 11(n) of the CBLR 2013 - respondent has not obtained any job clearance from the exporter and the authorization has been obtained through intermediaries after filing of the shipping bill - HELD THAT:- The Tribunal has held that the petitioner has not obtained the job clearance of export consignment directly through exporter M/s. Panel Pin Manufacturing Company but through series of intermediaries which included manipulation of Red Sanders smuggling. Further the Tribunal has noted that though there was verification of the KYC, the petitioner had not interacted with the exporters and antecedents, including verification of the factory premises of the exporter and the goods contained in the container. Further the Tribunal noted that the goods were stuffed in the presence of the Central Excise Officers and Excise Seals have been found to be intact. Having observed so, the Tribunal goes on to observe that the petitioner was required to be more vigilant since their business was obtained through many middle persons without any acquaintance with the petitioner. Having held so, the Tribunal ultimately in paragraph 11 holds that the revocation of the CHA Licence so granted to the petitioner is disproportionate.
There are no reasons assigned by the Tribunal as to under what circumstances the Tribunal was of the opinion that the revocation of the CHA License was disproportionate qua the violation committed by the petitioner.
Conclusion - The petitioner did not demonstrate a prima facie case for the grant of an interim order to operate the license during the appeal.
The petitioner has not made out any prima facie case for grant of interim order to enable them to operate the licence during the pendency of the appeal filed by the department - Petition dismissed.
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2022 (4) TMI 1647
Challenge judgment and decree passed by the Additional District Court - lending of money or not - deed of sale carry a mandatory presumption under section 34(2)(a) of the Registration Act with regard to its execution and registration or not - deed of assignment was obtained from the plaintiff himself - absence of pleadings or evidence impugning the validity or execution of Exhibit B1 deed of assignment - burden to prove the borrowal of amount - defendant resisted the suit contending that he never lent money to the plaintiff.
HELD THAT:- Apart from the interested testimonies of PWs 1 and 2, the plaintiff and his wife, there is no other convincing evidence or circumstance to enter into a conclusion that an oral agreement in respect of the sale of the property had taken place on 25.8.2004. In Grasim Industries Ltd. v. Agarwal Steel [2009 (10) TMI 952 - SUPREME COURT] the Apex Court held that when a person signs a document, there is a presumption, unless there is proof of force or fraud, that he has read the document properly and understood it and only then he has affixed his signature thereon, otherwise no signature on a document can ever be accepted.
In Prem Singh v. Birbal [2006 (5) TMI 517 - SUPREME COURT] the Apex Court held that there is a presumption that a registered document is validly executed. The registered document, therefore, prima facie would be valid in law. The onus of proof, thus, would be on a person who leads evidence to rebut the presumption.
In Vimal Chand Ghevarchand Jain and Ors. v. Ramakant Eknath Jadoo [2009 (3) TMI 997 - SUPREME COURT] the Apex Court held that a registered deed of sale carries the presumption that the transaction was a genuine one and that if the execution of sale deed is proved, onus is on the defendant to prove that the deed is not executed and it was a sham document.
In the present case, the plaintiff failed to lead cogent evidence to rebut the presumption available to a registered document - In the case on hand, the plaintiff failed to establish evidence on the touchstone of the principles discussed above to establish the existence of an oral contract as pleaded. Apart from the interested testimonies of the plaintiff and his wife, no other convincing evidence is available to show that there was an oral agreement - In the present case, the plaintiff failed to show that he is still in possession of the plaint schedule property. Right of possession over a property is a facet of title. The legal fiction consequent to the execution of Ext. B1 sale deed is that the plaintiff stands dispossessed.
The First Appellate Court misconstrued the evidence and failed to draw necessary presumptions and inferences on the pleadings and evidence. The First Appellate Court lost sight of the settled principle that a decree for specific performance could not be granted based on an oral agreement unless there was cogent evidence to prove the same. The finding of the First Appellate Court that the plaintiff is in possession of the plaint schedule property is contrary to the evidence available. The First Appellate Court was not justified in reversing the decree and judgment of the trial Court. The Court also lost sight of the evidentiary burden on the plaintiff by invoking the proviso under Section 92 of the Evidence Act assailing the execution of Ext. B1. The resultant conclusion is that the judgment and decree passed by the First Appellate Court are liable to be set aside.
Conclusion - i) A registered document carries a presumption of validity, and the burden is on the challenging party to rebut this presumption with cogent evidence. ii) The principle that possession follows title applies unless there is convincing evidence to the contrary. iii) Specific performance based on an oral agreement requires clear and convincing evidence, and interested testimonies alone are insufficient. iv) The burden of proof lies on the party alleging an oral agreement or borrowal to provide evidence supporting their claims.
The Regular Second Appeal is allowed.
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2022 (4) TMI 1646
Addition made in the assessment completed U/s 143(3) r.w.s. 153B(1)(b) - Addition based on rough paper and on the statement of the assessee u/s 132(4) - surrender was obtained from the assessee during the course of search which was retracted late on and got re-affirmed by the department
HELD THAT:- It is a settled law that the presumption whosoever strong may be but it cannot take place of proof and thus the A.O. has acted more on suspicion and doubt than on evidence. It is settled principle of law that suspicion however strong cannot take the place of evidence. In following cases it has been time and again held that suspicion howsoever cannot take place of evidence.
AO has interpreted a dumb document having no legal validity as per his suitability and addition based on this paper deserves to be deleted more particularly when the paper itself contained errors and addition is made merely and solely on the basis of confession without any corroborative evidence. Moreover the said confession made by the assessee was subsequently retracted and since the addition was not supported by any cogent, convincing independent documentary evidence, therefore, considering the totality of facts and circumstances, judicial precedents referred above as well as following the decision of JKD Pearl India Developers Pvt. Ltd.[2020 (10) TMI 976 - ITAT JAIPUR] wherein the present Author of this order was also the Author of that order, therefore, we direct the A.O. to delete the addition so made and confirmed qua this issue.
Addition for various expenses - HELD THAT:- As observed from the above that JDA Expenses were incurred by assessee, which are evident in the copy of registered deed furnished before AO as well as CIT(A) and after including incidental Misc. expenses comes to Rs.6776/- and Rs.5421/-. So far as brokerage expenses are concerned, the same are approximately 3% of the gross sale consideration, which is in accordance with market rates. Further, expenses of Rs.30,000/- were paid to mediator / broker Sh. Sunil Gajaria and assessee had submitted complete address as well as PAN details of the mediator / broker. Accordingly, identity of the payee and genuineness of payment is fully established and expenses were not held to be excessive. Therefore, we direct to delete the same.
Appeal of the assessee is allowed.
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2022 (4) TMI 1645
Rejection of application filed under Section 12A of the I&B Code - application for liquidation of the Corporate Debtor was allowed - Appellant submits that an OTS has been approved from the Financial Creditors and consequent to which Appellant is to file scheme under Section 230 and 232 of the Companies Act, 2013 before the Liquidator - HELD THAT:- There are no reason to enter into various issues raised in this Appeal. The Appellant seeks thirty days’ time to file scheme before the Liquidator as per Section 230 of the Companies Act.
This Appeal is disposed off with liberty to the Appellant to file application under Section 232 of the Companies Act before the Liquidator within thirty days from today. It shall be open for the Liquidator to proceed further in the said scheme/ arrangement in accordance with law.
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2022 (4) TMI 1644
Validity of Reopening of assessment u/s 147 as barred by limitation - non-compliance with statutory formalities u/s 148A - HELD THAT:- This case clearly falls under the amended Act relating to proceedings u/s 147 of the Act under which issuance of notice u/s 148A is mandatory before issuing any notice under section 148 of the amended Act which has not been complied with in this case.
Considering the above facts and circumstances of the case and in view of the order of this Court in the case of Bagaria Properties and Investment Private Limited & Anr. v. Union of India & ORs [2022 (1) TMI 742 - CALCUTTA HIGH COURT] and also in the case of Monoj Jain v. Union of India [2022 (1) TMI 741 - CALCUTTA HIGH COURT] the impugned notice u/s 148 of the Act and all subsequent proceedings are not sustainable in law and the same are quashed.
Quashing of the impugned notice and proceeding will not debar the respondent-authority concerned to issue any fresh notice in future in accordance with law.
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2022 (4) TMI 1643
Assessment u/s 153A - Addition u/s 68 - addition was supposed to be made on the basis that the amount shown has been received by the Assessee towards sale consideration of shares held by the Assessee was in fact received as loans - HELD THAT:- It has been shown to the satisfaction of the ITAT that in the succeeding assessment year i.e. AY 2009-10 the shares against which the sale consideration was received by the Assessee was transferred to the payers of the amount. They had disclosed the transactions in their respective returns. The capital gain earned by the Assessee was offered to tax in the return of income filed for the AY 2009-10.
Revenue was unable to dispute the fact that capital gains offered in the return of income filed by the Assessee was assessed for tax in the AY 2009-10. The search was conducted on 12th December, 2013 but for the AY 2009-10 itself no incriminating materials was found during the course of search. The ITAT has correctly concluded that u/s 153A of the IT Act, additions could be made only on the basis of incriminating materials found in the course of search relevant to the AY concerned.
Once it is found that the Assessee had duly disclosed the receipt of capital gains in the regular books of account and offered capital gains to tax which had also been accepted by the Revenue, there was no occasion to make addition on the basis of unexplained cash credit. No substantial question of law arises for consideration from the impugned order of the ITAT.
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2022 (4) TMI 1642
Special audit u/s. 142(2A) - addition on account of share of assessee in undisclosed income of some syndicates, share in inadmissible expenses incurred by such syndicates and some undisclosed capital invested by the assessee in various syndicates -
Undisclosed income from liquor trade business through Syndicates - HELD THAT:- We find that the Special Auditors appointed u/s. 142(2A) of the Act, have made a very detailed working in which they have determined various inadmissible expenses incurred by such syndicates and have also worked out the assessee's share in profit as well as in inadmissible expenditure incurred by each of the syndicates. Before us, the counsel of the assessee could not establish that the seized material relied upon by the AO was not belonging to the syndicates in which he was clearly stated to be one of the members.
No substance in the assessee's ground that he had not formed any syndicate. We also do not find any merit in the assessee's ground to the effect that corresponding to the quantum of share of profit of the assessee in various syndicates, as determined by the AO, no corresponding asset or expenditure was found. We find that first of all, this assertion itself is factually incorrect and contrary to the assessee's own submissions before us in respect of other grounds of appeals through which it is stated that for explaining the sources of undisclosed investment/expenditure the assessee has claimed that the source is from the share of profit from the said syndicates. Even otherwise, not finding any corresponding asset/expenditure, ipso facto, cannot be a ground for presuming that the assessee had not derived undisclosed income, especially in a circumstance when such undisclosed income is evident from ample of documentary evidences found during the course of search. Decided against assessee.
Undisclosed income from liquor trade business - We find that while computing the income of the assessee from such syndicates, the AO at para (14.11) of her Assessment Order has taken into consideration the assessment year wise aggregate amount of share of profit/(loss) of the assessee from the syndicates and has also taken into consideration the assessee's share in inadmissible expenses found incurred by such syndicates. We find that while making the assessment year wise additions in the assessee's income, the AO has taken the sum of both the figures after giving set-off for share of loss in syndicates for each year. We are of the view that that having given a finding to the effect that the assessee had formed the syndicates and such syndicates had carried out the liquor business as separate entities there was absolutely no justification for the AO to subject the assessee in respect of profit of such syndicates which in the legal phraseology are nothing but Association of Persons/Body of Individuals.
In the instant case, as per the findings given by the AO himself, the share of the assessee as a member of the syndicates (AOPs) was determinate and therefore, the assessee’s case would not fall under the provisions of sub-section (1) to section 167B of the Act. On the other hand, the case of the assessee would fall under the provisions of sub-section (2) to section 167B of the Act. In such a situation, the entire income of the syndicates, of which the assessee was found to be a member, would be chargeable to maximum marginal rate in accordance with clause (i) of subsection (2) to section 167B of the Act in the hands of such syndicates only.
Income of all the syndicates, as determined by the AO, can be assessed in the hands of the respective syndicates only as these syndicates, being AOPs are classified as separate persons and tax entity u/s. 2(31) of the Act, but, in any circumstance, in the present case, any share of profit from such syndicates cannot be added as income chargeable to tax in the hands of any of its members.
We find that, as per the findings given by the ld. CIT(A) as remained uncontroverted by the Revenue, even in respect of some of the syndicates, separate assessments have already been framed by the various assessing officers u/s. 144/153C r.w.s. 153A of the Act and while making assessments in the hands of such syndicates, the amount of undisclosed income earned by these syndicates, have already been determined. It is well known maxim of the law that same income cannot be taxed twice in the multiple hands unless otherwise so warranted by the specific provisions of the Act itself.
AO besides making addition on account of assessee’s having derived share of profit from various syndicates, has also made addition, to the extent of the assessee’s share in such syndicate, qua some alleged inadmissible expenses incurred by such syndicates. We find full substance in the assessee's contention that since none of these inadmissible expenditure was claimed by the assessee himself, and therefore, any disallowance for claim of any such expenses can only be made in the hands of the syndicates which have actually incurred such expenditure.
Additions on account of disallowances of expenses, the income of the syndicates ought to have been computed in accordance with the various provisions of the Act and once such income of the syndicate was computed, for the purpose of section 67A, the resultant share of income of the assessee in the total income of the syndicates was required to be apportioned. Thus, any share of the assessee in the inadmissible expenses of the syndicates ought to have been taken as in the nature of share of profit and that was required to be added under section 67A of the Act, but again, after making such addition, the necessary relief in accordance with the provisions of section 86 ought to have been granted by the AO to the assessee which has not been so done in the instant case.
In view of the above findings, we find no infirmity in the findings given by the ld. CIT(A) in deleting the entire additions made by the AO in the hands of the assessee on account of assessee's share in profit and inadmissible expenses of various syndicates, for various assessment years in the appeal.
Addition on account of undisclosed interest income from capital in M/s. Mahakal Traders - CIT(A) deleted addition - HELD THAT:- The interest income earned by the assessee from such syndicate which is in the form of an AOP/BOI, cannot be charged to tax in the hands of the assessee. We find that while dealing with the Ground No. 1 for A.Y. 2010-11 to A.Y. 2013-14 & A.Y. 2015-16 & Ground No. 2 for A.Y. 2016-17 of the Revenue, we have already discussed the legal position of law that if any AOP is chargeable to tax at the maximum marginal rate, then any income earned by any member from such AOP cannot be charged to tax in the individual hands of the member thereof. In the present case, we find that as per the AO’s own findings, both the M/s. Mahakal Traders, Dhar & M/s. Mahakal Traders, Indore are AOPs which are separate taxable entities and which are chargeable to tax at the maximum marginal rate and therefore, any interest income derived by the assessee from such syndicates cannot be added to the taxable total income of the assessee.
Additions made on account of undisclosed investment in loans and advances on the basis of jottings in seized diaries - CIT(A) deleted addition - HELD THAT:- We find merit in the contention of the assessee that on every occasion the company M/s. Regent Beers and Wines Limited had withdrawn cash of the same amount the same dates, from their bank account maintained with State Bank of India, which is supported by the copies of the bank statements of the above named company. We also find merit in the contention of the assessee that a similar additionwas also made by the same AO in the simultaneous assessment proceedings for A.Y. 2010-11 carried out in the case of M/s. Regent Beers and Wines Ltd. and therefore, there was absolutely no justification for the ld. AO to hold that such transactions were carried out by the assessee in his individual capacity. No infirmity in the Order of the ld. CIT(A) in deleting the addition made by the AO on account of alleged investment in loans and advances by the assessee.
Investment in loans and advances merely on the basis of seized documents which are in the form of diaries - HELD THAT:- Any seized document has to be interpreted in its entirety and a combined full effect of such document is required to be taken into consideration while making the assessment. In our view, making of loans and advances can be subjected to income of an assessee only if the sources of making such loans and advances remain unexplained. However, in the instant case, from the seized diaries and compilation made on the basis of such diaries by the Special Auditors, appointed u/s142(2A) of the Act, the sources of making of loans are becoming visible and the sources are such which can be regarded only as capital receipts in the hands of the assessee and by no stretch of imagination, such sources can be termed to be undisclosed income of the assessee. We find no infirmity in the action of the ld. CIT(A) deleting the additions.
Investments in immovable properties - Addition made on the basis of jottings in seized diaries - HELD THAT:- From the compilation of the personal diaries, it transpires that in such diaries, the very sources of making unrecorded/unaccounted investment in immovable properties have been shown to be out of unsecured loans taken by the assessee from some other persons as per the details compiled by the Special Auditors in Annexure-1 of Sub-schedule 5. In our considered view, any seized document has to be interpreted in its entirety and a combined full effect of such document is required to be taken into consideration while making the assessment. In our view, making of unrecorded investment can be subjected to income of an assessee only if the sources of making such investments remain unexplained. However, in the instant case, from the seized diaries and compilation made on the basis of such diaries by the Special Auditors, appointed under s.142(2A) of the Act, the sources of making investments in immovable properties are becoming visible and the sources are such which can be regarded only as capital receipts in the hands of the assessee and by no stretch of imagination, such sources can be termed to be undisclosed income of the assessee. We find no infirmity in the action of the ld. CIT(A) in deleting the additions.
Unexplained investment in purchase of plot - The provisions of s. 69, 69A and 69B etc. contemplate the investments the sources whereof remained unexplained and it does not contemplate deeming any income on the sole basis of recording or non-recording of any investment in the books of account. Although, in the instant case, the payments made by the assessee for purchase of the land, over and above that stated in the registered sale deeds remained unrecorded in the regular books of account, but, such fact alone cannot be a basis for making the addition if the assessee is in a position to demonstrate the sources of making such investments and in respect of such sources of investments, the assessing officer has already made additions. In our considered view, even if the income from the syndicates remained exempted in the hands of the assesee because of the operation of the law, but, at any rate, the credit for such income deserves to be given to the assesseee for explaining the sources of other investments. Thus, on the theory of telescoping for which the assessee is legally entitled to, we find no merit in the action of the ld. CIT(A) in making the addition.
Undisclosed expenditure in purchase of jewelleries - additions deleted by the ld. CIT(A) - HELD THAT:- Most vital fact which we noted from the seized document is that such estimate is bearing the date 21/01/2012 which falls during the financial year 2011-12 relevant to A.Y. 2012-13 and therefore, at any rate, in our considered opinion, it could not have been presumed that the assessee made any actual purchase against the jewelleries mentioned in such estimate during the financial year 2012-13 relevant to the assessment year 2013-14 under appeal. In nutshell, the ld. AO has made the subject addition in inappropriate assessment year i.e. in A.Y. 2013-14 instead of correct A.Y. 2012-13 and therefore, on this count alone, in our considered view, no addition was warranted in the assessee’s income on account of unexplained expenditure in jewelleries - no infirmity in the action of the ld. CIT(A) in deleting the said addition. Resultantly, the Ground of the Revenue dismissed.
Addition on the basis of seized/impounded documents - We are in agreement with the findings given by the ld. CIT(A) that as per the settled law, the initial onus lies upon the assessing officer that the assessee had made any investment or had incurred any expenditure and once this onus is discharged with any positive material on record, then only, the assessee can be subjected to explain the sources of the alleged investment or expenditure. An assessee cannot be supposed to discharge the negative burden.
AO of the impugned Order, has disregarded the explanation of the assessee with a finding that the assessee could not disprove the purchase of the jewellery with any positive evidence. We further find that in the loose paper containing the details of Rs.1,22,58,148/-, even the date has not been found mentioned. We also find merit in the contention of the assessee that during the course of the search, no physical jewelleries of the description and weight noted on such estimates were found from any of the premises of the assessee. We find that the findings given by the ld. CIT(A) to the effect that during the course of the search, no seizure of any jewellery was made from the possession of the assessee could not be rebutted by the CIT(DR) and therefore, the contention of the assessee that such loose papers contain only estimates and quotations for the jewelleries and no actual transaction against such estimates had actually taken place has substantial merit. Thus, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition.
As during the course of the search, the assessee was not found to be in possession of any undisclosed jewellery. In view of such facts and circumstances, we do not find any infirmity in the action of the ld. CIT(A) in further granting a relief of Rs. 68,75,000/- to the assessee out of the total additions for A.Y. 2015-16 made by the AO at Rs. 2,22,56,148/- on account of undisclosed jewellery which were solely based on the jottings made in some seized diaries.
Investment in purchase of land - As from the audited financial statements of the assessee we find that in the details of bank accounts, the account of the assessee with Punjab National Bank is also getting reflected. Thus, we find sufficient merit in the contention of the assessee that all the payments towards purchase consideration aggregating to Rs. 20,00,000/- was made by the assessee in three trenches through account payee cheques only which were duly recorded in the audited books of account of the assessee. Thus, we find no infirmity in the action of the ld. CIT(A) in deleting the addition of Rs. 10,00,000/- made by the AO in the assessee’s income on account of unexplained investment in purchase of land at Lalitpur for A.Y. 2013-14.
Undisclosed interest received from a partnership firm - We find that such partnership firm has not claimed payment of any interest on the outstanding balances of partners’ capital and thus, has not claimed any deduction u/s. 40(b) of the Act. We find merit in the contention of the assessee that as per the explicit proviso to clause (v) of section 28 of the Act, where any interest, salary, bonus, commission or remuneration which has not been allowed to the partnership firm u/s 40(b), the same shall not be subjected to tax in the hands of any partner, in their individual capacities. However, we find that in the present case, the AO, except relying upon the subject loose paper, could not bring any adverse material on record to establish receipt of interest income by the assessee from the partnership firm. It was further observed that even during the course of remand proceedings, the AO failed to controvert the evidences furnished by the assessee. Thus, we do not find any infirmity in the action of the ld. CIT(A) in deleting the subject additions.
Undisclosed expenditure on the occasion of son’s marriage - From the relevant abstract of the regular cash book of the assessee maintained by him in his regular course of liquor business, we find that as on 05/02/2015, in the regular cash book receipt by way of cash withdrawals from UCO Bank has been shown and on the same date, the account of the assessee has been debited for the same amount showing the withdrawals made by the assessee from his capital account with his proprietorship concern. Again on 08/02/2015, from the copy of the abstract of cash book we find that again the credit for the aforesaid sum has been given to the assessee upon his re-deposition of cash in the proprietorship concern. We find that neither the AO in his remand report, nor the ld. CIT(DR) could controvert the trueness of such entries made in the regular books of account of the assessee.
Maintaining the addition to the extent of Rs. 76,32,770/- by the ld. CIT(A) on account of marriage expenses - The provisions of s. 69, 69A, 69B and s. 69C contemplate the investments or the expenditure the sources whereof remained unexplained and it does not contemplate deeming any income on the sole basis of recording or non-recording of any expenditure or investment in the books of account. Although, in the instant case, certain payments made by the assessee for incurrence of marriage expenditure remained unrecorded in his regular books of accounts, but, such fact alone cannot be a basis for making the addition if the assessee is in a position to demonstrate the sources of incurring such expenditure and in respect of such sources of expenditure, the assessing officer has already made additions. In our considered view, although the income from the syndicates remained exempted in the hands of the assesee because of the operation of the law, but, at any rate, the credit for such income deserves to be given to the assesseee for explaining the sources of other investments or expenditure. Thus, on the theory of telescoping for which the assessee is legally entitled to, we find no merit in the action of the ld. CIT(A) in sustaining the addition to the extent of 76,32,770/- in A.Y. 2015-16, towards the unexplained marriage expenses. Accordingly, such additions are also directed to be deleted.
Unexplained cash found during the course of search - The claim of the assessee regarding availability of the cash balance of Rs. 14,46,530/- as per his regular cash book cannot be doubted. In such circumstances, the cash amount of Rs. 14,46,530/- cannot be regarded as the unexplained money of the assessee. Thus, we find no infirmity in the action of the ld. CIT(A) in deleting the addition of Rs. 14,46,530/- made by the AO in the assessee’s income on account of unexplained cash found and seized.
Unexplained or unaccounted investment in purchase of shares of ADPL - The addition having been made by the AO in a wrong year, is not sustainable in the eyes of the law. Accordingly, we are inclined to hold that during the previous year relevant to assessment year 2016-17, the assessee had not made any unexplained or unaccounted investment in purchase of shares of ADPL and therefore, no addition of any amount was warranted in the assessee’s income for A.Y. 2016-17 on this count. Accordingly, in our considered view, the ld. CIT(A) was not justified in confirming addition even to the extent of Rs. 71,00,000/- in the income of the assessee for A.Y. 2016-17 out of the total addition of Rs. 3,05,00,000/- made by the AO on this count.
Undisclosed income by way of commission from some Geda Ji against sale of share in Jhokanbagh site - AO could not bring on record evidencing transfer of any portion of property situated at Jokhanbag which could have been either in the form of agreement to sale coupled with possession or a sale deed. We are in agreement with the findings of the ld. CIT(A) that even if it is presumed that the assessee was in receipt of a sum of Rs.11,00,000/- against release of 2% share in the land at Jokhanbag, the same would only partake character of an advance unless and until it is proved by any positive material on record that against such receipt, any transfer of property as contemplated u/s 45 read with section 2(47) had taken place by the assessee in favour of Mr. Geda or anyone else. In these circumstances, in absence of any corroborative material on record, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition of Rs. 11,00,000/- from the income of the assessee for A.Y. 2016-17 on this count.
Unexplained cash found during the course of search in bank locker - The sources for the cash found in the lockers of the assessee could not be the regular cash balance available with the assessee. However, we find force in the contention of the assessee that sources of such cash can also be considered as explained out of the accumulated share of profit of the assessee in various syndicates which has been determined by the AO herself. We find that there would remain sizeable amount of funds in the hands of the assessee even after giving benefit of telescoping on other grounds adjudicated by us in the preceding paras and therefore, on the theory of telescoping, we are inclined to hold that the sources of cash found in the lockers of the family members of the assessee were out of the explained sources only and therefore, no addition on this count was warranted. Accordingly, the Ground of the Department is hereby Dismissed.
Trading additions in the business income of the assessee without first rejecting the regular books of account u/s. 145(3) - AO has not disturbed the trading results shown by the assessee in his books of accounts which were containing the records only in respect of the liquor business carried out by the assessee in his individual capacity. We find that the AO has made addition in the income of the assessee on a different ground i.e. the assessee's share of profit in various syndicates. Since, the addition has been made by way of discovering a new source of income by the assessee, without disturbing the results shown by the assessee in his regular books of account, there was absolutely no occasion for the AO to reject the regular books by invoking the provisions of s. 145(3).
Undisclosed warehouse profit from Syndicate M/s. Mahakal Traders - We find absolutely no infirmity in the action of the ld. CIT(A) in confirming the addition amounting to Rs. 4,25,000/- made by the AO in the assessee’s income for A.Y. 2010-11 on the basis of one document seized from the premises of the assessee himself. We find that in such document, the capital account of the assessee has been credited with some warehouse profit and in our considered view, such warehouse profit derived by the assessee is not exempted u/s. 86 of the Act.
Unexplained payment of commission to achieve turnover - Upon overall consideration of the entire material placed on record, we do not find any infirmity in the action of the ld. CIT(A) in confirming the addition to the extent of Rs. 2,36,000/- in the income of the assessee for A.Y. 2010-11 on account of payment of commission for achieving turnover for some company. We find that neither before the lower authorities nor before us, the assessee could give any explanation as to the circumstance in which the document seized was found in his possession. In absence of any explanation by the assessee, in our considered view, the AO was justified in making the addition in the assessee’s income on account of unexplained payment of commission.
Unexplained expenditure in the nature of illegal gratification - We find that the subject paper was found and seized from the premises related to the assessee and from which the payment of Rs. 5,00,000/- is clearly discernible. We find that in respect of such payment, the assessee could not explain the source and therefore, we find no infirmity in the action of the ld. CIT(A) in confirming the aforesaid addition.
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2022 (4) TMI 1641
Maintainability of petition - alternative remedy of appeal present or not - Import of branded goods in the name of fictitious entities - Misdeclaration and undervaluation - rejection of request for cross examination of the witness - petition dismissed on the ground that there is no acceptable explanation given by the appellant for not having resorted to the alternate remedy of filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal - import of such imitation stones on monetary consideration - Levy of penalty - whether order is violative of Article 21 of the Constitution of India? - violation of the principles of personal hearing (natural justice) or not -
As decided by HC [2021 (3) TMI 439 - MADRAS HIGH COURT] request made by the appellant to cross examine few of the co-noticees, who were also involved in the transaction was rightly denied by the Adjudicating Authority and no prejudice has been caused to the appellant on the said ground - reasons assigned by the Adjudicating Authority to deny cross examination, taking note of the factual situation, is well founded. That apart, the other co-noticees have not retracted their statements rendered by them u/s 108 of the Act, which is binding
HELD THAT:- We see no reason to interfere. Special Leave Petitions are dismissed.
Pending applications, if any, shall stand disposed of.
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2022 (4) TMI 1640
Maintainability of appeal - it is submitted that the company went to liquidation as the NCLT passed the resolution plan in favour of some other company M/s. SVG Fashions Private Limited. - HELD THAT:- The appeal become infructuous and disposed accordingly.
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2022 (4) TMI 1639
Seeking grant of bail - recovery of contraband - Opium - discrepancy in the weight of the samples sent for forensic analysis - HELD THAT:- The recovered contraband is heavy in quantity. There is compliance of the mandatory provision of N.D.P.S. Act. The presence of applicants far away from their usual place of residence further casts shadow on his defence. The sample has been taken before the concerned Magistrate, which negates the theory of any kind of adulteration. There is nothing on record to suggest that there is any animosity of the accused to the officials of the N.C.B. The Standing Order No. 1/88 has been complied with. The call details further corroborate the prosecution story.
Minor discrepancy in the weight of the sample sent at the Forensic Laboratory cannot shake the roots of the prosecution case.
Considering the facts and circumstances of the case, submissions advanced by learned counsel for the parties, nature of offence, evidence on record, pending investigation and considering the complicity of accused, severity of punishment, at this stage, without commenting any opinion on the merits of the case, this Court is not inclined to release the applicants on bail - bail application rejected.
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2022 (4) TMI 1638
Income deemed to accrue or arise in India - 'royalty' or 'fee for technical services' - India- Netherlands DTAA - taxability of data transmission charges received by the assessee is a recurring issue between the parties from assessment year 2000-01 onwards - HELD THAT:- It is a common point between the parties that the issue is squarely covered by the decision of the Tribunal and the Hon'ble jurisdictional High Court in assessee’s own case in preceding assessment years. We find, the dispute relating to taxability of data transmission charges received by the assessee is a recurring issue between the parties from assessment year 2000-01 onwards. However, not only the Tribunal but the Hon'ble jurisdictional High Court under identical facts and circumstances have held that the amount received by the assessee towards data transmission charges is neither royalty nor FTS under the India Netherlands DTAA.
Tribunal has held that the amount received by the assessee towards data transmission charges is neither in the nature of royalty nor FTS.
We hold that the amount received by the assessee towards data transmission charges, being not in the nature of royalty and FTS, is not taxable in India. Accordingly, we delete the addition. Decided in favour of assessee.
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2022 (4) TMI 1637
Refund of accumulated balance amount of credit on education cess, secondary and higher education cess and krishi kalyan cess the cess - case of appellant is that refund of credit of cess cannot be denied merely on the ground that such credit, which could not be utilized prior to GST regime, would stand lapsed - HELD THAT:- It is not in dispute that prior to 01.03.2015 cess was leviable on manufactured goods, in addition to excise duty and the appellant had availed credit under the provisions of the Credit Rules on cess paid on procurement of goods and services. It is also not in dispute that by a notification dated 01.03.2015, levy of cess was exempted. The closing balance of credit of cess as on 28.02.2015, therefore, could not be utilized by the appellant and it was carried forward by him in the central excise returns.
The Division Bench in Emami Cement [2022 (3) TMI 1254 - CESTAT NEW DELHI], after placing reliance upon the decision of the Tribunal in Slovak India Trading which decision was subsequently affirmed by the Karnataka High Court and the Supreme Court as also Division Bench decisions of the Tribunal in Bharat Heavy Electricals, Kirloskar Toyota, Nichiplast India as also the judgment of the Punjab and Haryana High Court in Shree Krishna Paper Mills, held that the appellant was entitled to claim refund of the balance amount of credit of cess. The Division Bench also held that the notification dated 07.12.2015, on which reliance had been placed by the Department, was contrary to the decisions of the High Court and the Tribunal and, therefore, would not come to the aid of the Revenue. The Division Bench also held that CENVAT credit was a vested right - the facts of this appeal are similar to the facts of Emami Cement.
The order dated 25.03.2019 passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside - appeal allowed.
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2022 (4) TMI 1636
Legality and validity of the order of provisional attachment of its bank account - HELD THAT:- This writ application is disposed off observing that the impugned order passed by the Commissioner, CGST, Gandhinagar in the Form GST DRC – 22 dated 02.11.2020 cannot be said to be in force or operation as on date as it has outlived its statutory life of one year. In such circumstances, the IDFC First Bank, Rakhiyal Branch, Ahmedabad, shall permit the writ applicant to operate its bank account.
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2022 (4) TMI 1635
Quashing the Impugned Order and letter related to reassessment proceedings due to lack of merit in the reasons for reopening - HELD THAT:- Since the letter itself says that the Tax Evasion Petition in this case was also closed and the information was general in nature and devoid of any merit and there fore, nonactionable, the entire basis of the reasons recorded for reopening collapses.
Petition disposed off.
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2022 (4) TMI 1634
Non-service of notice of arbitral proceedings - time period for passing the award had expired and no ground exists for extension of time under Section 28 of the Act - obligations of all the Underwriters stood discharged as the issue was fully subscribed, and it was not even kept open for the entire period - computation of damages and award of interest.
HELD THAT:- The settled legal position is that a party cannot be made responsible for indirect or remote loss that may have been caused to the claimant as a result of breach on the part of the Respondent/Defendant. In the opinion of this Court, the Underwriters could not have been made responsible for the entire loss suffered by the Plaintiff. The allegations and the history of these litigations shows that there was an interference by SEBI after the public issue for whatever reason, which led to withdrawal of the subscriptions by the initial subscribers. The losses and confusion that prevailed due to the letter issued by SEBI directing the Plaintiff to give investors the option to withdraw from the public issue and the withdrawal of subscriptions thereafter cannot be the sole responsibility of the Underwriters. The Plaintiff also appears to have contributed by its own conduct in the loss suffered by it, as is evident from the facts on record, though no criminal culpability may have been found by the investigating authorities. Moreover, the Ld. Arbitrator ought to have considered if the Plaintiff made any bona fide attempt to mitigate its losses.
Based on the facts and circumstances that have emerged, the question that would arise is what is the reasonable compensation or damages to be awarded against the Underwriters. This Court is of the opinion that a large number of Underwriters have already settled their disputes with the Plaintiff, even during pendency of arbitral proceedings. After passing of the Awards, several parties have settled. The Plaintiff has to clearly shoulder a substantial part of the blame for the losses which it may have suffered. The liability to pay compensation/damages qua the Underwriters ought to thus be reduced to a reasonable amount i.e., 1/4th of the losses per share as computed by the ld. Arbitrator i.e., Rs. 20/- per FCD/share. Further, the award of 18% interest p.a. by the Ld. Arbitrator is highly onerous and unsustainable, especially considering the prevalent market conditions. The said rate is also liable to be reduced to a reasonable percentage.
In the facts and circumstances of the present case, while upholding the responsibility of the Underwriters to discharge their underwriting obligations, this Court holds that only reasonable damages which arose in the natural course of things or were in the direct contemplation of the parties could have been awarded by the Ld. Arbitrator for the failure of the Underwriters to discharge their obligations under the Agreement. Thus, applying the principles of computation of damages as per settled law as also taking the account the settlements that have been entered into by the Plaintiff with similarly placed underwriters in the interest of justice, the damages awarded qua the Defendant are modified.
Award of Interest - HELD THAT:- The Underwriters cannot be held fully responsible for the delay in appointment of arbitrator or for the period when the arbitral proceedings of the present proceedings have remained pending. Accordingly, the amount awarded above as damages, shall be paid along with interest @7% p.a. from the date of pronouncement of the award i.e., 23rd May, 2012 till today. If the entire awarded amount is paid within a period of 8 weeks, no further interest would be liable to be paid. However, in case of non-payment, simple interest on the entire awarded sum [i.e., principal amount + the interest @ 7% per annum from the date of award till today] would be liable to be paid @ 4.5% per annum. The costs of proceedings as awarded by the ld. Arbitrator are upheld.
The suit and the objections under Section 16 of the Arbitration Act, 1940 are disposed of.
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