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Showing 1 to 20 of 1468 Records
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2021 (7) TMI 1472
Enforceable contract between the government and the appellant or not - the letter of allotment was not properly stamped or registered to assume the character of an agreement for sale - whether this court in the exercise of its writ jurisdiction should entertain this matter or it should be relegated to a civil court or civil forum? - it was held by High Court that The unilateral decision to alter the contract terms from freehold to leasehold was arbitrary, unreasonable, and illegal. It was also held that a legitimate expectation had been created by the letter of allotment and the acceptance of consideration, which could not be unilaterally altered without legislative or valid administrative action.
HELD THAT:- SLP dismissed.
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2021 (7) TMI 1471
Estimation of income - bogus purchases - CIT(A) partly confirmed the addition on account of bogus purchases @ 12.5% - HELD THAT:- We note that in this case the net profit of the assessee returned during the year was 1.44% whereas the GP was 6.25%.
We are not in agreement with the conclusion of Ld. CIT(A) on the application of GP rate of 12.5% as the assessee has already returned a GP of 6.25% since the applicable VAT is 4% and if a reasonable margin 2% is added to the VAT rate and GP rate declared is reduced, then it comes to less than 2%.
Thus, it would be reasonable if a rate of 2% is applied on the bogus purchases. Accordingly we modify the order of Ld. CIT(A) and direct the AO to apply a rate of 2% of the bogus purchases.
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2021 (7) TMI 1470
Doctrine of merger - Withdrawal of the Sugar Industry Promotion Policy, 2004 by the State Government of Uttar Pradesh and the subsequent denial of benefits to the petitioners who had acted upon the policy - breach of principle of Promissory Estoppel, Natural Justice and Legitimate Expectation - It was held by High Court that 'The petitioners are entitled for consideration of all the benefits in the form of exemptions/ remission/reimbursements as per the Sugar Industry Promotion Policy-2004 and various Notifications issued thereunder from time to time for the entire period of the validity of the Policy.'
HELD THAT:- List the appeals and the writ petitions in the first week of October, 2021.
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2021 (7) TMI 1469
Refusal of pre-arrest bail - offence punishable under Sections 120-B/420/409 of the IPC read with Section 66 of the I.T. Act and Sections 4/5/6 of Prize Chits and Money Circulation (Banning) Act - it was held by High Court that 'The requirement of physical custody for bail applications under Section 439 is reaffirmed, emphasizing the need for physical presence and submission to the court's jurisdiction.'
HELD THAT:- Issue notice returnable on 18.08.2021.
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2021 (7) TMI 1468
Borrower's failure to adhere to the One Time Settlement (OTS) terms justifies the bank's withdrawal of the OTS offer - validity of the bank's actions in rescinding the OTS offer and proceeding with the auction of the mortgaged properties - doctrine of promissory estoppel.
Legal position as to OTS Scheme - HELD THAT:- The loan transactions entered into between the Bank and borrower are essentially a matter of contract, is undisputable; even then, the extant RBI Guidelines under which the OTS Schemes have been evolved, regulate the repayment of loans as per the terms agreed; the Public Sector Banks being the instrumentalities of 'State' under Article 12 of the Constitution, their actions/inactions even when filled with contractual elements, are liable to suffer a restrictive judicial scrutiny under Articles 226 and 227, depending upon the facts and circumstances of each case, is also true.
Foundational facts emerging from record - HELD THAT:- The borrower vide letter dated 13.03.2020 had sought for elongation of stipulated period of payment up to 31.05.2020; the bank vide letter dated 30.05.2020 rescinded the OTS facility, the agreed amount not reaching its hands in terms of OTS. The borrower vide representation dated 26.06.2020 requested the bank to withdraw the aforesaid Rescinding Letter dated 30.05.2020 stating that minimum 45 days were required for assignment of debt and that he would pay interest on the delayed payment, as well; the bank declined and went ahead with the coercive acts of recovery since the conduct of the borrower did not generate confidence.
Recovery of debts - HELD THAT:- The OTS offers have been made by the borrower thrice; he was accorded consent by the Bank to the assignment of loan to the company in question subject to the rider that the timeline for payment in terms of OTS would not be altered; the loan transaction essentially being a matter of contract, the OTS- like-arrangement is only a novatio and a new arrangement is brought about by the bargain of parties namely the lender, the borrower and the surety, done across the table; that being the position, ordinarily, the Courts cannot alter the terms of contract even when it has statutory elements; the time within which the remittance of the amount has to be made is an essential term of OTS, disentitles the defaulting borrower from invoking the writ jurisdiction.
Locus standi of surety to maintain appeal - HELD THAT:- It is not that the borrower was not aware of surety's representation dated 12.02.2019 in which he had stated inter aha about the subject mortgaged property being capable of fetching the auction price much higher than the sums stated in the OTS offers; after all the surety has also a stake in the loan transaction and he cannot escape the liability; that being the position, the principal borrower in all fairness ought to have arraigned him as a respondent to the writ petition; that having not been done, he is not justified in opposing surety's request for the grant of leave to file the writ appeals; added to this, the borrower did not avail the opportunity of revising his OTS offer; therefore, we granted the leave as sought for and heard the appeals on merits.
Locus standi of auction purchaser - HELD THAT:- The learned single Judge vide ad interim order dated 24.03.2021 had, in a sense, permitted auctioning of the property by restraining the confirmation of contemplated auction sale; auction purchaser had also sought for his impleadment in the writ petition; the e-auction was held on 08.04.2021 (presumably being unaware of the disposal of the writ petition on 06.04.2021) and the highest bid of Rs. 15,00,52,000/- of the appellant in Writ Appeal No. 100103/2021 came to be accepted; he has also paid Rs. 78 lakh on 05.04.2021 being the pre-deposit for participation in the auction; he has also remitted Rs. 2,97,13,000/- on 09.04.2021; that apart, he has now come forward with a very high offer of Rs. 25,20,99,999/-; this is much higher than the revised OTS offer of the borrower i.e., Rs. 15,20,00,000/-; the borrower despite giving the same opportunity as was given to the appellants herein, declined to improve his offer figure; when the public money is involved, a Writ Court has to scrutinize the things with objectivity and ensure that no loss of such money takes place. Therefore, leave is granted for maintaining the appeal.
Loan transaction - breach of OTS - HELD THAT:- The equity and fairness required of a Public Sector Banks cannot be carried too far and to an unrealistic extent of disabling or delaying the very recovery of the public money which they have lent; while not insisting upon the borrower to honour the OTS commitment undertaken by him, the Banks alone cannot be shackled hand and foot by invoking the doctrine of promissory estoppel - a Writ Court has to assume a realistic role of a trustee in ensuring that the public money is not lost in the conundrums of constitutional contentions; Courts have to have a pragmatic approach when matters touching economics are brought before them for adjudication.
Suspicious conduct of bank officials - HELD THAT:- Strangely the mortgaged property was auctioned on 08.04.2021; the highest bid of Rs. 150,052,000/- of the appellant auction purchaser came to be accepted; the very same buyer has revised the bid to Rs. 252,099,999/- before us; even the surety has come up with an offer of Rs. 23 crore; the OTS deal struck between the bank and the borrower in a small sum of Rs. 150,052,000/- raises a strong suspicion as to there being some 'shady deal' with the connivance of authorities of the bank; this needs to be investigated into by the Reserve Bank; matter merits attention of the Comptroller and Auditor General of India, as well.
Conclusion - i) Judicial intervention in banking matters was deemed limited to cases of statutory violations or manifest unfairness. ii) The lender bank shall accept the revised offer of the appellant auction-purchaser in a sum of Rs. 25,20,99,999/- only; he shall remit the remainder of the said amount within a period of six weeks failing which, the amount which he has already deposited shall stand adjusted to the credit of the principal borrower. iii) The court ordered an investigation into potential misconduct by bank officials, reflecting concerns over the handling of the OTS and auction processes.
Appeal allowed in part.
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2021 (7) TMI 1467
Refusal of pre-arrest bail - offence punishable under Sections 120-B/420/409 of the IPC read with Section 66 of the I.T. Act and Sections 4/5/6 of Prize Chits and Money Circulation (Banning) Act - HELD THAT:- In the case of Sundeep Kumar Bafna [2015 (8) TMI 724 - SUPREME COURT] the Apex Court placing in the case of Niranjan Singh [1980 (3) TMI 258 - SUPREME COURT] have held that the accused can also surrender in Court of Sessions or High Court and then seek bail under Section 439 of Cr.P.C. The petitioner in this case has not surrendered to the custody by remaining physically present and filing a memo with regard to surrender, his presence through V.C. from a remote location, but it is submitted by the learned counsel for the petitioner that the case being taken up through video conferencing, the appearance of the accused through video conferencing may be considered as constructive custody of this Court under Section 439 of Cr.P.C. and his prayer for bail may be considered.
Conclusion - The requirement of physical custody for bail applications under Section 439 is reaffirmed, emphasizing the need for physical presence and submission to the court's jurisdiction.
The BLAPL stands dismissed being not maintainable.
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2021 (7) TMI 1466
Denial of exemption claimed u/s 10B - whether the other income shown by the assessee in its eligible undertaking is entitled for the exemption under section 10B? - HELD THAT:- The provisions of subsection 1 of section 10B of the Act provides that a deduction will be available to a 100% EOU for the profit derived from the export of articles or things or computer software for a period of 10 years. Thus the profit and gains derived from the export activities by an eligible undertaking as discussed above is eligible for deduction under section 10B of the Act.
Under the above provision, what has been referred is the profit of the eligible undertaking which implies that all the income pertaining to such eligible undertaking will be taken into consideration while working out the deduction.
Now coming to the case on hand, there is no ambiguity to the fact that the other income as discussed above belongs to the eligible undertaking which was offered as business income in the income tax return by the assessee. Accordingly we hold that all the incomes shown by the assessee under the head other income post EOU period are eligible for deduction under section 10B of the Act.
We direct the AO to allow the exemption to the assessee with respect to DEPB, Duty Drawback and DEPB rate difference income in the manner as discussed above. Hence the ground of appeal of the assessee is allowed and the ground of appeal of the Revenue is dismissed.
Nature of expenses - expenses paid to SBI Capital Markets Ltd for the study of the capital market - HELD THAT:- The onus lies upon the assessee to satisfy the conditions imposed under section 37(1) of the Act. However the ld. AR before us has not demonstrated based on the documentary evidence the purpose for which such expenditure has been incurred. On perusal of the order of the AO, we note that such expenditure has been incurred for study of capital market in connection with IPO. Therefore, in our considered view the same cannot be allowed as deduction by treating the same as revenue expenses under the provisions of section 37(1) of the Act.
Whether the impugned expenditure pertains to the previous year 2006-07 as alleged by CIT (A)? - Admittedly, the expenditure was incurred in the earlier year but the same was claimed as deduction in the year under consideration. However, there is no loss to the revenue in a situation, if law permits, to allow the deduction in the year under consideration as there is no change in the rate of tax applicable on the company in the year under consideration viz a viz the earlier year. Therefore, on this count, the deduction of the impugned expenditure cannot be denied as held by the learned CIT (A). But, this finding of the learned CIT (A) becomes irrelevant as we have denied the claim of the assessee for the deduction under section 37(1) of the Act.
Whether such expenditure is eligible for deduction under section 35D? - We hold that the assessee is eligible for deduction of the impugned expenditure as per the provisions specified under section 35D of the Act. Accordingly, the alternate ground of appeal of the assessee is allowed.
Addition of provision for the diminution in the value of investments - whether such investment was made by the assessee in the undertaking eligible for deduction u/s 10B? - HELD THAT:- Such loss with respect to investments in mutual fund on account of the diminution in its value has been shown in the profit and loss account of the eligible unit. This fact was also not doubted by the authorities below - DR at the time of hearing has also not advanced any argument contrary to the arguments advanced by the learned AR. Thus we can draw an inference that such loss pertains to the eligible unit - direct the AO to enhance the amount of deduction under section 10B of the Act by the amount.
Assessee has claimed double deduction with respect to the other income being Duty Drawback - HELD THAT:- The profit of the eligible undertaking has been computed by taking the turnover of the eligible undertaking. From this turnover there were various deduction made in form 56 G. Such deductions include Freight and insurance on export sale, trading export sales, indirect expenses, loss on export trading etc.
This eligible undertaking has shown the other income separately. In other words the assessee has not computed the deduction under section 10B of the Act with respect to Duty Drawback income while computing profit on export turnover. Accordingly, the assessee has calculated separately the deduction available with respect to such Duty Drawback income. These facts have been verified from the form 56 G placed in the paper book as discussed above.
Authorities below have misunderstood the detail filed by the assessee and wrongly drew an inference against the assessee by holding that the assessee has claimed double deduction with respect to duty drawback income. On this count, we allow the ground of appeal of the assessee.
Allocation of the expenses of the sister concern - AR before us prayed to provide one more opportunity to the assessee to justify its stand that the expenses incurred by the sister concern are not attributable to the eligible undertaking - HELD THAT:- Accordingly in the interest of justice and fair play we are inclined to remit the issue to the file of the AO for fresh adjudication.
MAT - addition to the book profit computed u/s 115JB on account of provision for diminution in the value of assets - HELD THAT:- There was no provision created on the side of liability in the balance sheet of the assessee.
Accordingly, it seems that the assessee has actually adjusted such loss on account of diminution in the value of assets against the investments. Hence, the principles laid down in the case of Vodafone Essar Gujarat Ltd.. [2017 (8) TMI 451 - GUJARAT HIGH COURT] are squarely applicable to the facts of the case on hand. Accordingly we direct the AO to delete the addition made by him while determining the books profit under the provisions of section 115JB.
Addition u/s 14A r.w.r. 8D without recording dissatisfaction about its claim - disallowances on account of interest and administrative expenses - HELD THAT:- As own fund of the assessee exceeds the amount of investment. Therefore there cannot be any disallowance of interest expense. We direct the AO to delete the addition made by him on account of interest expenses.
Addition on account of administrative expenses - We direct the AO to limit the disallowance of the administrative and interest expenses, if any, then it should be lower of exempted income or the disallowance made under section 14A r.w.r. 8D of Rules of Income Tax Rules. Accordingly, we confirm the disallowance made by the AO which was subsequently confirmed by the learned CIT (A) towards the administrative expenses. Thus the grounds of appeal raised by the assessee is partly allowed.
Correct head of income - treating the rental income as the income from other sources and thereby disallowing the deduction claimed under section 24 - HELD THAT:- What we find from the fact of case is that it was open land which was out let out not the building and rental income received for the letting out of land not shades or building. Thus in our humble understanding, the impugned rent cannot be treated as income from building or shades for the reason that what was let out is an open land not the building or shades. See GOWARDHAN DAS AND SONS [2006 (9) TMI 134 - PUNJAB AND HARYANA HIGH COURT] wherein held what is covered by the expression 'appurtenant' is the land which is necessary for enjoyment of the building and not the land only - Decided against assessee.
MAT addition for disallowance u/s 14A - We hold that the disallowances made under the provisions of Sec. 14A r.w.r. 8D of the IT Rules, cannot be applied to the provision of section 115JB of the Act as per M/S. JAYSHREE TEA & INDUSTRIES LTD. [2014 (11) TMI 1169 - CALCUTTA HIGH COURT]. But the disallowance needs to be made with respect to the exempted income in terms of the provisions of clause (f) to section 115JB of the Act while determining the book profit.
How to determine the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently? - Since there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently, therefore our action for restoring back the issue to the file of AO would unnecessarily cause further litigation. Thus we limit the disallowance on an ad-hoc basis @ 1 % of the exempted income as per the clause (f) to Explanation-1 of Sec. 115JB of the Act. Thus the ground of appeal of the assessee is partly allowed.
Disallowance of expenses namely advertisement, consultancy, stationary and travelling out of claim made u/s 35D - HELD THAT:- The deduction u/s 35D was not allowed to the assessee with respect to the expenditures which can be broadly categorised as under:
i. lack of supporting evidence in respect of stationary and travelling expenses.
ii. IPO and consultancy expenses were incurred without deducting the TDS.
Statutory and travelling expenses, we find that there was no documentary evidence furnished by the assessee in support of his claim. Therefore, we do not find any reason to interfere in the order of CIT (A).
Thus, we deny the deduction of stationary and travelling expenses under the provisions of section 35D of the Act.
Penalty u/s 271(1)(c) - income from letting out the land is not chargeable to tax under the head income from House Property and impugned income is taxable under the head income from other sources - HELD THAT:- assessee’s explanation that there was a shed constructed by the tenant on the leased land and on the basis of such shed, the assessee under the bona fide belief concluded that the lease rental will be taxed as income from house property. This explanation of the assessee has not been controverted by the Revenue. Further all the materials facts relating to the claim of deduction on lease rental have been disclosed by the assessee in the return of income. Thus in our considered view the claim made by the was based on genuine difference of opinion related to taxability of the rental income which cannot be made to subject to penalty u/s 271(1)(c) .
TP adjustment on account of corporate guarantee provided by the assessee to its AE’s - Internation transaction or not? - HELD THAT:- Since in the case on hand, the guarantee is not having "bearing on profits, income, losses or assets," therefore, respectfully following the same we are also of the opinion that such guarantee issued by the assessee is not covered under the definition of section 92B of the Act.
We also note that admittedly the assessee has charged guarantee fee from its AE in the immediate previous assessment year for providing very same corporate guarantee which was written off in the current year. The assessee in this regard furnished that there were no cost involved in such corporate guarantee extended to its AE. Thus they mutually decided to waive off the guarantee fee and decided not to charge fee in future also.
Thus what inferred is this that the revenue in one previous year has accepted the claim of the assessee but making an addition in current year which is against the principles of consistency. Therefore there no effect on the income of the assessee. Accordingly, we direct the TPO/AO to delete the addition made by him.
Disallowance on account of professional fees - AO found that the assessee has incurred the expenses in connection with the share subscription, shareholders agreement and convertible bond subscription agreement, thus such expenses were in the nature of capital - HELD THAT:- on perusal of the order of the learned CIT (A), we find that the learned CIT (A) has given very clear-cut finding that the assessee has not incurred such expenses wholly and exclusively for the purpose of its business.
TDS u/s 195 - Addition u/s 40(a)(ia) on account of non-deduction of tax on export commission - HELD THAT:- In this case, the non-residents agents have rendered their services outside India in connection with procurement of sale. All the agents have overseas offices and they were not having any permanent establishment in India. At the time hearing learned DR has not brought any material on record suggesting that the non-resident agents are having any permanent establishment in India or services were provided within India. In absence of such finding it is held that the commission income earned by the foreign agent cannot be deemed to be accrue or arise in India. Regarding the applicability of section 195 of the Act, we observe that once the income is not taxable, there is no liability of deduction of tax, therefore, it was not applicable for the assessee to deduct tax. Therefore, there was no violation of provision of section 195.
Addition on account of diversion of fund u/s 36(1)(iii) - HELD THAT:- We hold that there cannot be any disallowance of interest expenses. Accordingly the grounds of appeal raised by the Revenue is dismissed.
Late payment of employee’s contribution towards EPF and ESI decided against assessee as relying on GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT]
Upward adjustment of interest free loan given to AE - HELD THAT:- TPO/AO cannot disregard any apparent transaction and substitute it by re-characterizing the said transaction without any material or exceptional circumstances that the assessee has tried to conceal the real transaction. Investment made in shares or applying for the shares cannot be given different colour so as to expand the scope of transfer pricing adjustment by re-characterizing it as interest free loan. Thus, we are unable to uphold the contention of the Revenue that share application money pending allotment should be re-characterized as loan till the period it is allotted after a reasonable time. Accordingly, we do not find any reason to interfere in the finding of the learned CIT (A), thus the ground of appeal raised by the Revenue is dismissed.
TDS u/s 195 - Disallowances u/s 40(a)(ia) - non deduction of TDS u/s 194C - CIT (A) in light of new fact that the amount was paid to non resident assessee confirmed the addtion by holding that assessee failed to comply with the provision of section 195 (2) - HELD THAT:- The income earned by the non-resident payee cannot be deemed to be accrue or arise in India. Regarding applicability of section 195 of the Act, we observe that once the income is not taxable in India, there is no liability of deduction of tax. Therefore, it was not applicable for the assessee to deduct tax, therefore, there was no violation of provisions of section 195 of the Act.
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2021 (7) TMI 1465
Estimation of income - bogus purchases - CIT(A) confirmed Addition estimating G.P rate at 8% - HELD THAT:- Profit margin estimated by the authorities below are on higher side. We deem it appropriate to restore this issue back to the file of AO to decided the same afresh in line with the decision of Mohommad Haji Adam & Co. [2019 (2) TMI 1632 - BOMBAY HIGH COURT]. Needless to say that the Assessing Officer shall grant reasonable opportunity of hearing to the assessee before re-adjudicating the issue in accordance with law. Appeal by the assessee is partly allowed for statistical purpose.
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2021 (7) TMI 1464
Addition u/s 56(2)(viib) - valuation report submitted by the assessee was found to have an error in the valuation method, leading to the incorrect valuation of shares - consideration received by such issuing Company in excess of the FMV, to the extent it exceeds the face value of such shall be liable to tax - HELD THAT:- We notice that the additional evidence furnished by the assessee before the AO is in the nature of Corrigendum issued by the Valuer, who was constrained to issue the same as there was an error in the original valuation report. The corrigendum issued same shall form part of original valuation report.
In our view, the same should not be treated as additional evidence, as observed by Ld CIT(A). Hence, in our view, there is no reason to reject the corrigendum. Accordingly, we admit the corrigendum furnished by the assessee before the Ld CIT(A), since the same has been issued to correct the error in arriving at the fair market value of shares issued by the assessee. Accordingly, the original report and corrigendum shall constitute full report and the same has to be examined by the AO. Accordingly, we set aside the order passed by CIT (A) and restore the same for examination of the AO with the direction to take into account full report.
Appeal filed by the assessee is treated as allowed for statistical purposes.
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2021 (7) TMI 1463
Validity of reopening of assessment proceedings - non considering the objections filed by the petitioner against the reasons recorded for reopening - HELD THAT:- The Coordinate Bench, while issuing Notice on 16.4.2021, had granted ad-interim relief directing the respondent No.1 not to proceed further with the reassessment proceedings without dealing with the objections filed by the petitioner.
This Court [2021 (6) TMI 1177 - GUJARAT HIGH COURT] had directed the learned Standing Counsel Mrs.Mauna Bhatt appearing for the respondent No.1 to take specific instruction as to whether the objections filed by the petitioner against the impugned Notice have been dealt with by the concerned respondent or not.
Today, as respondent has stated that the objections in question filed by the petitioner have not been dealt with by the respondent and they are pending under consideration.
Present petition is required to be disposed of by directing the respondents to take into consideration the objections filed by the petitioner before proceeding further with the reassessment proceedings and accordingly the same is directed.
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2021 (7) TMI 1462
Non-compliance with order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 by Tahsildar - HELD THAT:- Whether due to the pandemic or otherwise, several requests have been pending over the last couple of years and, as is evident from this case, even when orders are issued on such requests under Section 14 of the Act, the officials downstream attach little or no importance to the same. A level of awareness must be created, so that revenue officials and police officials understand the scope and importance of such provision and the directions issued by the authorities under Section 14 thereof.
It is also possible in this case that because of the bifurcation or trifurcation of the districts, the Tahsildar or the relevant police officials may not have given much importance to this matter. However, the Tahsildar has to ensure that the assistance sought, and as directed in the order dated April 3, 2019, is made available to the petitioner herein, with police assistance as indicated. If the Tahsildar, Vandalur is also discharging the duties of the Tahsildar, Chengalpattu, such official should render the requisite assistance.
Petition disposed off.
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2021 (7) TMI 1461
Maintainability of writ application - present writ application was filed more than two years after the impugned order was passed, yet, there is neither an application for condonation of delay nor any explanation for such delay in filing the writ application - HELD THAT:- The Supreme Court has made it clear in a series of judgments, including the recent decision in The State of Madhya Pradesh v. Bherulal [2020 (10) TMI 1231 - SUPREME COURT], that there have to be proper and convincing reasons for the delay in the state authorities filing appeals or petitions.
The Supreme Court has recently in a series of matters reiterated that the explanation usually offered by the State and its entities for the delay on account of administrative exigencies should not be accepted unless they are shown to be justified.
The writ petition is accordingly dismissed on the ground of laches.
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2021 (7) TMI 1460
Belated filling of Miscellaneous Application with a delay of 1279 days - HELD THAT:- We find that there is no provision in Section 254(2) of the Act conferring power on the Tribunal to condone the delay. All the cases relied upon by the ld. AR were rendered in the context of main appellate proceedings and not in the context of Miscellaneous Application proceedings.
Hence, they cannot be made applicable to the present Miscellaneous Application pending before us. In the absence of any statutory provision in the Act for condonation of delay in filing of Miscellaneous Application, we are not inclined to condone the delay in filing of this Miscellaneous Application by the assessee.
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2021 (7) TMI 1459
Entitlement to lay a claim over the value of coal rejects which were generated during the processing of raw coal and claim that value as a set off against the money payable to the plaintiffs - Determination of sums due to plaintiffs for washed coal supplied - HELD THAT:- The KPCL was aware that processing of raw coal by washing would result in coal rejects and despite being aware of this fact, the Agreement did not vest any rights over the rejects in KPCL. In fact, the only stipulation in the contract was that coal rejects generated during the process of washing raw coal would be disposed of in a manner which would satisfy the environmental regulations.
The KPCL had stipulated a term regarding disposal of coal rejects only for the purpose of ensuring compliance with environmental regulations. KPCL was aware that if the coal rejects generated during the processing of raw coal was disposed off in a manner contrary to environmental regulations, as a principal buyer, it could probably be liable as it was the end user and therefore, it was to safeguard themselves of any liability the above mentioned clauses were stipulated in the Agreement - if a purchaser intends to purchase a finished product from a person, the by products generated by that person who had secured and processed the raw material would essentially be of that person. To put it differently, the waste generated from processing of raw material cannot be said to be the property of purchaser of finished product.
It is to be kept in mind that KPCL, in the instant case, had specifically stipulated that they would be buying only washed coal at a pre-determined price and they were not under an obligation to take care of coal rejects which were generated during the processing of raw coal. This generation of coal rejects during the processing of raw coal cannot enure to the benefit of KPCL and they cannot claim the value of coal rejects - the judgment of the Commercial Court holding that KPCL cannot have a claim over the coal rejects was perfectly justified and therefore, the finding of the Commercial Court affirmed.
The entitlement of the plaintiffs to secure the raw coal from a specific colliery on the basis of the linkage of the plaintiff cannot be construed as KPCL purchasing the raw coal. So long as the plaintiffs purchased the raw coal by the paying the requisite price to WCL, KPCL cannot be permitted to contend that they were the owners of the Raw Coal.
The decrees of the Commercial Court only insofar as it relates to interest shall stand modified and plaintiffs would be entitled to the following sums as determined by the Commercial Court along with interest at 12.5% p.a. instead of 18% p.a.
The decrees are modified only in relation to rate of interest and the interest awarded by the Commercial Court is reduced from 18% to 12.5% - the appeals are allowed in part.
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2021 (7) TMI 1458
Seeking enlargement on bail - Offence under Sections 147, 148, 332, 352, 353, 323, 504, 506 and 307 of I.P.C., read with Section 3(2) 5 of Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, Section 3/4 of Medical Protection Act, and Section 7 Criminal Law Amendment Act - HELD THAT:- Considering nature of accusation, severity of punishment in case of conviction and nature of supporting evidence, reasonable apprehension of tampering with the witness and prima facie case as well as party from the co-accused, who has already been granted bail, but, without expressing any opinion on merit of the case, a case for grant of bail, during trial, is made out.
Let the applicant, Sonu Yadav, involved be released on bail on furnishing a personal bond and two sureties each in the like amount to the satisfaction of court concerned, and subject to fulfilment of conditions imposed - bail application allowed.
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2021 (7) TMI 1457
Maintainability of the Writ Petition - private civil dispute - relationship between the petitioner and the 4th respondent is entirely governed by contractual and commercial agreements or not - no public interest is involved.
When the parties to the dispute are governed by Private Agreements and the 4th respondent is admittedly not a State or Instrumentality of the State and whether the public law remedy can be resorted to in the facts and circumstances pleaded by the petitioner company?
HELD THAT:- What is challenged in the writ petition is a communication dated 30.04.2021 issued by the 4th respondent, a private Company against the petitioner which is a private Company invoking certain clauses in terms of restructuring agreement of loan dated 26.07.2018(MRA) between the contesting parties.
As far as the maintainability of the writ against a private person or private legal entity is concerned, the legal position is no more res integra. There are numerous judgments of the Hon'ble Supreme Court and various High Courts holding that the issuance of writ cannot be denied merely because it is sought to be issued against a private person or private entity. Therefore, this Court does not wish to open up any fresh vista on the rudimentary understanding of the progressive expansion of public law jurisdiction in matters where the Court finds interplay of private interest and public duty. It is axiomatic that writ would lie against private person or private entity in certain circumstances scripted in various decisions of the Hon'ble Supreme Court and High Courts from time to time.
The benefit of moratorium as envisaged in Reserve Bank of India Circulars is not available to the petitioner at all is the case of the 4th respondent. It was further argued that the grant of benefit of the moratorium in this case would not arise even otherwise, as the defaults in discharge of the loan occurred several years before the pandemic crisis which led to the Master Restructuring Agreement in 2018 and thereafter also, there had been defaults and even presently, the defaults had occasioned after August, 2020 i.e., beyond the permissible period of moratorium as envisaged in the Circulars issued by the Reserve Bank of India. The defaults of the petitioner initially cover the month of October & November, 2020 and the dues pertaining to those months had been settled only in March and April 2021 and from December 2020, the repayments are outstanding as on date. Therefore, the question of extending the benefit of moratorium to the petitioner did not arise at all.
The bedrock of the triangular relationship, as between the 1st petitioner and 1st respondent on one hand and the 4th respondent on the other is indisputably a private and commercial consideration with no shred of public element involved in discharge of their mutual obligation and rights among them. The facts narrated would unequivocally demonstrate that the petitioner has been extended loans to the tune of several hundred crores by various Nationalised Banks since 2006 when first concessional agreement was signed on 25.01.2006 and the subsequent agreement on 06.11.2006 between the 1st respondent and the initial lenders, namely consortium of nationalised/private Institutions and in terms of which, the repayments were scheduled and the functioning of the 1st respondent had been governed and monitored by the lending institutions i.e., by initial lenders through the 3rd respondent Indian bank as their Agent.
In a contractual relationship purely governed by commercial consideration, enforcing the terms of contract/agreement by one party as against the other could be subjected to judicial scrutiny under writ jurisdiction of this Court is a knotty question and the answers are not be found on any definite legal principles or defined contours of factual circumstances.
When the very applicability of the Reserve Bank of India circular is being seriously questioned by the 4th respondent, the interpretation of the contents of the circular dated 27.03.2020 and the subsequent clarification issued by the RBI to the petitioner call for adjudication of factual controversies as between the 4th respondent and the petitioner. In that process, this Court inevitably would have to traverse and delve into the areas of factual conflicts entirely governed by contractual relationship in order to render findings as to what is deployment of funds, the definition of lenders as stated in the clarification letter dated 16.06.2020, the terms of MRA dated 26.07.2018 etc. - even assuming the Circulars of RBI need to be implemented across the spectrum, regardless of the nature of defaults by the defaulting party, merely because the 4th respondent has not complied with the circulars, can that failure alone provide a door way to the petitioner to invoke the extraordinary jurisdiction of this Court in the realm of public law remedy? The answer may have to be in the negative. It cannot be in dispute that the RBI circular is regulatory in nature for ensuring monetary stability across the country. It is again not in dispute that every financial institution is bound to follow the directives of the Reserve Bank of India issued from time to time for maintaining fiscal discipline.
The very entitlement of the benefit of moratorium is being questioned seriously and this Court is also prima facie of the view that there appears to be substantial force in the submission made on behalf of the 4th respondent in this regard. Therefore, the applicability of Reserve Bank of India circular itself being an unsure case of the petitioner, the question of maintaining the writ petition on that plank would have to necessarily fail.
The examination of the issue of maintainability of the writ petition ought to be from the stand point of whose action under challenge and whose interest, it seeks to unsettle and in the process of any collateral effect of the impugned action cannot be the basis or reason to hold that the writ is maintainable - In exercise of writ jurisdiction, this Court would certainly not get involved in the commercial disputes entirely arising from the private relationship driven by commercial consideration and issue any command as that would amount to injudicious intrusion and invasive transgression into the defined areas of conflict governed by mutual rights, liabilities and obligations. If the doors of public law are to be thrown open for matters like the present one, it would only lead to opening the pandora's box and all the private disputes would find a back door entry and have recourse to writ jurisdiction as a easier option for serving private ends. Such scenario would eventually lead to dilution of the essence of the writ jurisdiction namely, serving public interest.
The writ petition is not maintainable and hence, the same is dismissed.
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2021 (7) TMI 1456
Validity of Arbitral Award - change in law that entitled the Licensee to invoke Article 14.3 of the Agreement - conversion of contract from a royalty payment module to a revenue-sharing module - Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- There was a law when the Agreement was entered into between the parties, which provided royalty as a pass-through and that the said law has been changed for the first time in 2003 and subsequently again changed in 2005, is a finding based on 'no evidence'. Had the Arbitral Tribunal perused the tariff orders of 1999 and 2002, it would have found that in the 1999 tariff order TAMP has specifically observed that its approval of the tariff should not be construed as its implicit approval of royalty-related issue and the 2002 tariff order specifically states that royalty was not permitted to be factored in the cost while determining tariff. The Arbitral Tribunal has totally failed to take into consideration this aspect of the matter.
The intention of TPT is apparent from its various communications and its stand before the Arbitral Tribunal, that it was not agreeable for amendment of the Agreement from 'royalty payment method' to 'revenue-sharing method' - The 'royalty payment method' has been totally substituted by the Arbitral Tribunal, with the 'revenue-sharing method'. It is thus clear, that the Award has created a new contract for the parties by unilateral intention of SICAL as against the intention of TPT.
Appeal dismissed.
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2021 (7) TMI 1455
Refund of the SAD - rejection of claims in respect of the imports through Chennai Customs - rejection of claims on the ground that the claims are time barred - HELD THAT:- The rejection of the claims on the ground of limitation is clearly unacceptable for the reasons that the Commissioner (Appeals) has set out the correct position of law in this regard.
The Delhi High Court in the case of SUN PHARMACEUTICAL INDUSTRIES LTD. VERSUS UNION OF INDIA [2016 (8) TMI 1515 - DELHI HIGH COURT] has held that there would be no limitation applicable for the filing of refund applications and the 2018 circular issued by the Board also supports this position.
The orders of the Commissioner dated 02.11.2018 have attained finality, the Revenue acceding to the position of law stated and applied therein. The impugned orders rejecting the refund applications on the bar of limitation fail, and are set aside. The matter is restored to the file of the respondent for consideration on merits and shall be disposed, after hearing the petitioner, within a period of eight (8) weeks from today.
Petition allowed.
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2021 (7) TMI 1454
Stay of demand - predeposit of atleast 20% of disputed tax demand - assessee makes elaborate submissions on the proviso to Section 254(2A) to justify her claim that the payment of at least 20% of the disputed tax demands is not a condition precedent for the grant of stay - TP Adjustment - ALP adjustment on account of assignment of the call or put options - HELD THAT:- We may state that on the face of it, while many of the facets of the main issue, i.e. ALP adjustment on account of assignment of the call or put options, raised in this appeal, so far as the ALP adjustment in respect of options rights are concerned, seem to be covered against by a decision of the coordinate bench, in assessee’s own case for the assessment year 2012-13- [2018 (1) TMI 1302 - ITAT AHMEDABAD] which was authored by one of us (i.e. the Vice President), there are many issues raised in the appeal which are prima facie worth serious consideration and the assessee thus has an arguable case in appeal. We have also noted that almost 98% of the impugned demand is in respect of this ALP adjustment.
We have also taken note of learned counsel’s submission that the assessee has already provided a corporate guarantee by its ultimate parent company, i.e. Vodafone International Holdings BV, for an amount of ₹ 3,538.48 crores for the assessment year 2008-09 and this guarantee is yet to be returned by the income tax department and that this guarantee adequately covers the amount disputed in the appeal. However, when we pointed out that the guarantee is specifically for the assessment year 2008-09 and so far as that assessment year is concerned, as things stand now, the matter is resolved in favour of the assessee by Hon’ble jurisdictional High Court, learned counsel submits that as the matter is pending before Hon’ble Supreme Court, the guarantee is very much alive and, being in possession of the income tax authorities anyway, it can very well be enforced by the income tax authorities.
As for the issue being raised that there cannot be a substantive addition in this year as the original substantive addition was made in the assessment year 2008-09, which even though decided in favour of the assessee by Hon’ble Bombay High Court, is now being pursued in appeal by the income tax authorities before Hon’ble Supreme Court, all the subsequent years can only be treated as protective, and the collection of the tax levied on protective basis must therefore be kept in abeyance, we are unable to see merits in this plea either. When an income is added on a substantive basis in one year and on a protective basis in the other year, the year in which protective addition is made becomes the year of substantive assessment the moment the original substantive addition does not meet judicial approval. In any event, the triggers for taxation in the subsequent years are different. The impugned ALP adjustment, therefore, cannot be treated as merely on the protective basis, and, for this reason, the collection of disputed demands cannot be deferred till the Hon’ble Supreme Court decides the matter for the assessment year 2008-09. All these factors taken together, in our considered view, this is not a case deserving a blanket stay by the Tribunal.
On a careful consideration of all these factors, as also bearing in mind the entirety of the case, we deem it fit and proper to grant a stay on collection of the impugned tax and interest demands on the condition that (i) the assessee will pay ₹ 230 crores, which works out to approximately 20% of the disputed tax demand, within 30 days from today; (ii) the assessee will furnish a corporate guarantee from an associate company, which has unencumbered assets in India in excess of the balance disputed demands, i.e. ₹ 900 crores; and (iii) the assessee will fully cooperate in expeditious disposal of the appeal in question, as also other appeals which are tagged and clubbed with this appeal, and in case of any lapses on the part of the assessee in this regard, this stay shall stand vacated forthwith. This order shall remain in force for six months from today or till further orders- whichever is earlier.
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2021 (7) TMI 1453
Double deduction of excise duty on closing stock - Claim made once in profit and loss and account and further deduction in computation of total income - substantial question of law or fact? - HELD THAT:- An identical question was framed for consideration of this Court [2019 (6) TMI 1723 - CALCUTTA HIGH COURT] rejected the appeal at the admission stage opining that the question referred to above is not a substantial question of law.
Further in ITC LIMITED [2019 (11) TMI 1825 - CALCUTTA HIGH COURT] the identical question of law was framed along with other questions of law. The appeal was admitted by a coordinate Bench by an order on the other questions of law but not on the question of law which has been framed in the present appeal.
In view of the aforesaid, we are unable to admit this appeal.
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