9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 1039 - HC - Income TaxRecovery proceedings - valid debtor - Held that - M/s. N.K.Industries Ltd. waived its rights under agreement dated 02.09.2011 and subsequent agreement dated 05.01.2013 and also waived execution of the sale deed. In turn, M/s. Banpal Oil Chem Pvt. Ltd agreed to return consideration of ₹ 10.75 crores already paid by M/s. N.K.Industries Ltd. and M/s. N.K.Industries Ltd. withdrew the suit for specific performance from the civil court. We notice that in the earlier portion of this agreement there is a wrong reference to the terms of the agreement dated 09.04.2015. This, however, would not be of any consequence since the latest agreement dated 23.07.2015 is clear in all material terms and essentially brings about an end to the relationship between M/s. N.K.Industries Ltd. and M/s. Banpal Oil Chem Pvt. Ltd. That being the position, the Tax Recovery Officer was not correct in contending that M/s. N.K.Industries Ltd. owed any amount to M/s. Banpal Oil Chem Pvt. Ltd which can be recovered directly for the tax dues of M/s. Banpal Oil Chem Pvt. Ltd. The impugned order dated 10.06.2016 is, therefore, set aside. We make it clear that if the department has any recovery to be made either against M/s. Banpal Oil Chem Pvt. Ltd or M/s. N.K.Industries Ltd., it is always open for them to proceed in accordance with law.
Issues Involved:
Challenge to Tax Recovery Officer's order regarding tax dues payment based on agreements between two companies and subsequent settlement agreements. Analysis: 1. The petitioner, a company, challenged an order by the Tax Recovery Officer regarding tax dues payment. The petitioner had entered into an agreement with another company for the sale of factory premises, leading to disputes and subsequent settlement agreements. 2. Despite a settlement agreement, issues persisted, and the petitioner withheld a balance payment. Eventually, both parties decided to call off the deal, with the petitioner withdrawing a suit for specific performance. The Income Tax department tried to interject by claiming a sum deposited by the petitioner to verify bona fides. 3. The Tax Recovery Officer ordered the petitioner to pay tax dues of the other company, deducting the amount already paid. The department argued they could recover any amount owed by the petitioner to the other company directly under the Income Tax Act. However, a subsequent agreement clarified that the petitioner no longer owed any amount to the other company. 4. The latest agreement stated that the petitioner waived its rights under previous agreements, and the other company agreed to refund the consideration already paid. The Court held that the Tax Recovery Officer's contention that the petitioner owed any amount was incorrect, setting aside the order and allowing the department to proceed with any recovery in accordance with the law. 5. The judgment clarified the legal relationship between the two companies, emphasizing that the petitioner had no outstanding dues to the other company. The Court disposed of the petition, affirming that the department could pursue recovery through legal means if necessary.
|
