TMI Tax Updates - e-Newsletter
January 7, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI SMS

• Job Work - levy of GST on the value of by-products ie, broken rice, bran and husk retained by the Job worker for milling of the paddy, set aside - HC

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Articles

• Rule 86B of CGST Rules- Mysterious Puzzle
• SUSPENSION OF GST REGISTRATION
• GST on Cryptocurrency

News

• Invoice Furnishing Facility (IFF) for Taxpayers under QRMP Scheme

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• Shri Piyush Goyal describes Quality & Productivity as two very important legs on which the future of Indian industry will stand

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• Finance Minister Smt. Nirmala Sitharaman chairs review meeting of the National Infrastructure Pipeline

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• Government of India & NDB sign two loan agreements for USD 646 million for upgrading State Highway Network and District Road Network in Andhra Pradesh

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• World of Coriander Webinar held to Accelerate Quality Production & Export of Coriander

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• Madhya Pradesh and Andhra Pradesh rewarded for completing three out of four reforms

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Notifications

Customs

• 01/2021 - dated 6-1-2021 - ADD
  Seeks to further amend notification No. 2/2016-Customs (ADD) dated 28th Jan, 2016 to extend the levy of Anti-Dumping duty on Melamine originating in or exported from China PR, up to and inclusive of 28th Feb, 2021

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GST - States

• FTX.56/2017/Pt-I/483 - dated 31-10-2020 - Assam SGST
  Seeks to extend the due date for filing FORM GSTR-4 for financial year 2019-2020 to 31.10.2020

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• 74/2020- State Tax - dated 4-1-2021 - Delhi SGST
  Prescribe the due date for furnishing FORM GSTR-1 for the quarters October, 2020 to December, 2020 and January, 2021 to March, 2021 for registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year

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• 57/2020- State Tax - dated 4-1-2021 - Delhi SGST
  Amendment in Notification No. 76/2018– State Tax, dated the 3rd September, 2019

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• 36/2019- State Tax - dated 4-1-2021 - Delhi SGST
  Seeks to amendment in Notification No. 22/2019- State Tax, dated the 20th August, 2020

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• F A 3-59/2020/1/V(83) - dated 30-12-2020 - Madhya Pradesh SGST
  Class of persons under proviso to section 39(1) - Option to furnish a return for every quarter

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• F A 3-58/2020/1/V(84) - dated 30-12-2020 - Madhya Pradesh SGST
  Special procedure for making payment of 35% as tax liability in first two month - in case of registered persons who have opted to furnish a return for every quarter or part thereof

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• F A 3-57/2020/1/V(82) - dated 30-12-2020 - Madhya Pradesh SGST
  Seeks to bring into force section 7 Madhya Pradesh Goods and Services Tax (Amendment) Act, 2020

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• F A 3-50/2020/1/V(79) - dated 30-12-2020 - Madhya Pradesh SGST
  Seeks to bring into force section 11 Madhya Pradesh Goods and Services Tax (Amendment) Act, 2020

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• F A 3-49/2020/1/V(78) - dated 30-12-2020 - Madhya Pradesh SGST
  Seeks to amend Notification No. F-A 3-49-2017-1-V (68) dt. 03.07.2017

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Highlights / Catch Notes

GST

• Job Work - Consideration for Levy of GST - as a compensation/exchange for the same, the respondent No. 4 allows the petitioner to retain the broken rice, bran and husk obtained in the course of milling of the paddy. - The assessment order, so far as it relates to the levy of GST on the value of by-products i.e., broken rice, bran and husk treating them as part of the consideration paid to the petitioner for milling of the paddy, is set aside - HC
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Income Tax

• Reopening of assessment u/s 147 - addition u/s 68 - The law regarding reopening of assessment is well-settled. The reliance placed upon the findings of the earlier assessment proceedings is misplaced. If the assumption of jurisdiction is held to be valid, the Appellant cannot place undue credence on the earlier assessment proceedings. Once an assessment is reopened, the initial order for assessment ceases to be operative and the proceedings start afresh. - HC
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• Non filling of appeal electronically within the period of limitation - Taking into consideration the Circular issued by CBDT, which in our opinion, appears to be a one time measure, the substantive right of appeal should not be denied to the assessees on hand on a technical ground. However, we make it clear that this observation cannot be taken advantage by the assessees, as of now, when the procedure has been in vogue ever since the year 2016 and stood the test of time and in all probabilities, as of now, all teaching problems would have been solved. - HC
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• Set off of loss - We uphold the plea of the assessee that so far as set off of loss returned by the assessee in the assessment year 2014-15 is concerned, the same cannot be declined by the Assessing Officer in the assessment yea₹ 2016-17 and 2017-18, if otherwise admissible, only for the reason that the assessment for the assessment year 2014-15 is in progress - AT
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• Method of accounting - Valuation of closing stock - Addition of CENVAT Credit receivable - We observe that inclusive method of accounting has not altered the resultant profits and a revenue neutral exercise over a period of time. - additions deleted - AT
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• TP Adjustment - applicability of Section 144C(13) - As provided in the Section 144C(13) of the Act, the final order of the Assessing Officer should be in conformity with the directions given by the DRP. In the present case, while working out the ALP adjustment, he has not followed the direction of the DRP, consequently, the assessment order is bad in law - AT
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• Deduction of expenditure representing TDS amount as deducted but not deposited following the Cash Basis of accounting - The amount of tax deducted at source is always considered as the sum paid by the assessee on behalf of the recipient of the income. - Therefore, it cannot be said that the above sum has not been paid by the assessee even while following the cash system of accounting. - deduction of expenditure allowed - AT
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Customs

• 100% EOU - DTA Clearance - The mistake or lapse on the part of the appellant is that they have not repaid the duty foregone on the imported raw materials at the time of clearance of duty-free final goods in the DTA. The proper course of action, in such violations, is to recovery duty along with interest. Duty has been paid along with interest on being pointed out - confiscation and imposition of penalty are not warranted in the instant case. - AT
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Service Tax

• Leviability of service tax - clearing and forwarding agent service - although the appellant had entered into the consignment agency agreement with TSL this agreement was never acted upon by the parties. The appellant also did not receive any amount from TSL as and by way of consignment agent or towards providing any consignment agency service under the said consignment agency agreement. No evidence to the contrary is available from either the show cause notices or the impugned orders. - AT
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Central Excise

• CENVAT Credit - input services - The nomenclature and the classification of services is secondary. Just because the appellants could not classify the service availed under a particular head, it does not take away the substantial right of the appellants to avail the credit if it is otherwise permissible under the rules. As we have seen above that the definition of input service, even after the amendment carried out in 2011, is an all-encompassing definition. - AT
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VAT

• Where whole of the turnover has escaped assessment on account of not passing an assessment order, the provisions of Section 29(1) of the Act, 2008 can be invoked by the Assessing Authority and the authorisation under sub-section (7) can be granted by the competent authority. It is not incumbent upon the Assessing Authority to make the assessment first and then only to proceed under Section 29(1) for bringing to tax the turnover not assessed. - HC
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Case Laws:

• GST

• 2021 (1) TMI 175
  Job Work - Consideration for Levy of GST - value of broken rice, bran and husk obtained by the petitioner on milling of the paddy of the respondent No. 4 - milling charges - compensation/exchange for the own rice supplied by the petitioner to the respondent No. 4 to make up the shortfall in the yield - by-products were left to the petitioner as compensation to replenish the shortfall of the rice to make 67% of yield on milling - According to Revenue, not only the milling charges @ ₹ 15/-per quintal but also the by-products received by the petitioner constitute the consideration, whereas, the contention of the petitioner is that by-products were just left by 4th respondent with the petitioner as they were not useful to it, for, their disposal was not economically viable. HELD THAT:- It is pertinent to mention here that in similar circumstances, in the case of FOOD CORPORATION OF INDIA VERSUS STATE OF AP [ 1997 (4) TMI 483 - ANDHRA PRADESH HIGH COURT] , a Division Bench of the High Court of Andhra Pradesh held that when the terms between the parties are under an agreement, those terms are sacrosanct and cannot be explained otherwise by adducing oral evidence. The facts in that case briefly are that the FCI entered into agreements with different millers to whom it supplied paddy for the purpose of milling and paid hire charges and milling charges. As per the milling agreement, the FCI agreed to give the by-products such as broken rice, husk and bran to the millers. The Assessing Authority added the value of the by-products to the turnover of the FCI for the purpose of computation of Sales Tax, treating such by-products to have been sold by the FCI to the millers. The contention of the FCI was that it just allowed the millers to treat the by-products as their property but there was no sale between them and it did not receive any remuneration in that regard and therefore same cannot be added to its turnover - The Division Bench observed There is nothing to show that the transfer of property in the goods or the by-products to be by way of sale, but only indicates that the FCI does not concern or bother itself for the broken rice, etc., for which it has no use and does not want to be burdened with the clause would not lead to the proof of there having been a sale. The transfer of property in the goods might take place even when there is no sale, say where there is a voluntary transfer or gifting away of the goods in question. In the case on hand, the Assessment Order was passed 29-10-2018 and as per Section 107 of GST Act, an appeal shall be filed within three (3) months from the date of communication of the order. The Writ petition is filed on 17-12-2018 i.e., well within the period of limitation for filing appeal. Having regard to the dictum laid in Glaxo Smith's case (2 supra), this Court can either entertain the writ petition or refer the petitioner to Appellate authority. Since the impugned order was passed having no regard to the law laid down in the case of Food Corporation of India v. State of A.P, the writ was entertained. The objection raised by learned counsel for the 4th respondent that in view of the arbitration clause, the writ petition is not maintainable, has no teeth. It should be noted that there are no disputes between the petitioner and the 4th respondent with regard to the implementation of the terms of the agreement. On the other hand, the dispute is between the Revenue and the petitioner as to whether or not the by-products form part of the consideration. Since such a dispute cannot be referred to and resolved by the Arbitrator, the Writ Petition is very much maintainable. The impugned Assessment Order passed by the 1st respondent in so far as it relates to the levy of GST on the value of by-products i.e., broken rice, bran and husk treating them as part of the consideration paid to the petitioner for milling of the paddy, is set aside - Petition allowed.

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• 2021 (1) TMI 174
  Profiteering - supplies of Snacks (HSN Code 21069099) - allegation that the benefit of GST rate reduction to his recipients not passed on by way of commensurate reduction in price - contravention of section 171 of CGST Act - penalty - HELD THAT:- It has been revealed that the Respondent has wrongly charged GST @ 5% on his unregistered brand Dev Snacks HSN Code 21069099 from his buyers w.e.f. 27.11.2017 to 31.12.2017 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017 - It is also revealed from the perusal of the CGST Act and the Rules framed under it that no penalty had been prescribed for violation of the provisions of Section 171 (1) of the above Act, therefore, the Respondent was issued show cause notice to state why penalty should not be imposed on him for violation of the above provisions as per Section 122 (1) (i) of the above Act as he had apparently issued incorrect or false invoices while charging excess consideration and GST from the buyers. However, from the perusal of Section 122 (1) (i) of the CGST Act, 2017, it is clear that the violation of the provisions of Section 171 (1) is not covered under Section 122 (1) (i) of the CGST Act, 2017 as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the penalty prescribed under Section 122 cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act. Since, no penalty provisions were in existence between the period w.e.f. 27.11.2017 to 31.12.2017 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) can not be imposed on the Respondent retrospectively. Accordingly, the notice dated 11.03.2019 issued to the Respondent for imposition of penalty under Section 122 (1) (i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.

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• 2021 (1) TMI 173
  Profiteering - supplies of HP 678 LOS24AA Combo, Pack Ink Advantage Cartridges (Black Tricolors) BOOUHG8BFI - allegation that the benefit of reduction in the rate of tax of GST not passed on by way of commensurate reduction in price - Contravention of section 171 of CGST Act - Penalty - HELD THAT:- It has been revealed that the Respondent has not passed on the benefit of reduction in GST rate from 28% to 18% on the above products w.e.f. 15.11.2017 to 31.07.2018 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017. It is also revealed from the perusal of the CGST Act and the Rules framed under it that no penalty had been prescribed for violation of the provisions of Section 171 (1) of the above Act, therefore, the Respondent was issued show cause notice to state why penalty should not be imposed on him for violation of the above provisions as per Section 122 (1) (i) of the above Act as he had apparently issued incorrect or false invoices while charging excess consideration and GST from the buyers. However, from the perusal of Section 122 (1) (i) of the CGST Act, 2017, it is clear that the violation of the provisions of Section 171 (1) is not covered under Section 122 (1) (i) of the CGST Act, 2017 as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the penalty prescribed under Section 122 cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act. Since, no penalty provisions were in existence between the period w.e.f. 15.11.2017 to 31.07.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) can not be imposed on the Respondent retrospectively. Accordingly, the notice dated 11.03,2019 issued to the Respondent for imposition of penalty under Section 122 (1) (i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.

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• Income Tax

• 2021 (1) TMI 172
  Reopening of assessment u/s 147 - addition u/s 68 - whether the provisions of Section 151 of the Act have been complied with in the instant case? - HELD THAT:- AO had specific information about cash deposits, supported by statement of witnesses which confirmed that the donors were bogus. These facts disclose a vital link and nexus between the information received by the AO and the reason to believe for reopening the assessment, which fulfilled the threshold required for assuming jurisdiction by the AO in order to reopen the assessment. There was, thus, some tangible material with the AO to form a prima facie opinion that the income of the Appellant had indeed escaped assessment, thereby justifying the action under Section 147. There is no perversity in the reasoning given by the Tribunal, based on findings of fact which would give rise to the questions of law numbered (i) and (ii), as noted in para 11 above. The law regarding reopening of assessment is well-settled. The reliance placed upon the findings of the earlier assessment proceedings is misplaced. If the assumption of jurisdiction is held to be valid, the Appellant cannot place undue credence on the earlier assessment proceedings. Once an assessment is reopened, the initial order for assessment ceases to be operative and the proceedings start afresh. The Appellant s contention that since the AO had originally accepted the donations to be genuine, he is precluded from treating them to be bogus and making additions, is untenable. Tribunal has noted that though the Assessee had initially submitted the confirmation of donation at the time of original assessment, however during investigation by the CBI, some of the donors have confessed that they have not given any such donation. Under interrogation of the donors it was unearthed that the donation detail submitted by the Assessee in the original assessment proceedings was false. The genuineness of the donors could not be established. This case invited deeper scrutiny owing to the discovery of facts during CBI investigation that adversely impinged the findings determined in the earlier round of assessment. However, the Appellant failed to discharge the onus of proof cast upon it. No attempt was made to produce credible material to corroborate the transactions or to explain the contradictory evidence that it was confronted with. Appellant also never took any steps to examine the witnesses and as a result, on the basis of the material on record, the tax authorities concluded that the genuineness, creditworthiness remained unsubstantiated. In wake of this factual position, the donations were treated as bogus, justifying the additions. Therefore, the third question of law, premised on findings that are purely based on fact calls for no interference. No question of law, much less any substantial question of law arises for our consideration.

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• 2021 (1) TMI 171
  Non filling of appeal electronically - Appeal filed manually - Whether appeal cannot be treated as non-est in the eyes of law as appeal was not filed electronically as prescribed under Rule 45 of the Income Tax Rules, 1962? - HELD THAT:- In the case on hand, admittedly, the assessee filed the appeal in Form No.35 in the office of the CIT(A) on 25.4.2016 well within the period of limitation. There were two options available to the office of the CIT(A), firstly, to refuse to accept the manual filing of the appeal citing Rule 45 of the Rules. The second option was to receive the appeal and then return the same to the assessee with a covering note stating that the relevant Rule mandates e-filing of appeal with effect from 01.3.2016. Unfortunately, the office of the CIT(A) did not exercise any one of these two options. Therefore, we can safely hold that the assessee was led to believe that their appeal was accepted by the office of the CIT(A). Assessee was made known that the manual appeal filed in Form 35 would not be entertained only when the notice was issued by the CIT(A) dated 13.12.2018 and that too, after a period of three years. The contents of the show cause notice clearly show that in so far as e-filing of the appeals is concerned, the office of the CIT(A)/ jurisdictional CIT(A) was not aware as to whether the assessee filed any appeal electronically or not. This is precisely the reason as to why in the show cause notice, the assessee was informed to bring to the notice of the office of the CIT(A) as to whether they filed any appeal or not. Thus, it appears that at the relevant point of time, the process of integration was not put in place. When it is not disputed that there were several technical issues in e-filing of the appeals coupled with the fact that several assessees or their authorized representatives were not well acquainted with the procedure for e-filing of the appeals, the benefit can be given in favour of the assessee especially when the right of appeal being a statutory right and valuable right and it should not be denied on technicalities.

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• 2021 (1) TMI 170
  Non filling of appeal electronically within the period of limitation - prayer made by the assessee to reckoned the date of filing as on date on which the appeal was actually filed - HELD THAT:- Taking into consideration the Circular issued by CBDT, which in our opinion, appears to be a one time measure, the substantive right of appeal should not be denied to the assessees on hand on a technical ground. However, we make it clear that this observation cannot be taken advantage by the assessees, as of now, when the procedure has been in vogue ever since the year 2016 and stood the test of time and in all probabilities, as of now, all teaching problems would have been solved. Therefore, bearing in mind the fact situation in the year 2016, we are of the view that the appeals need not have been rejected by the CITA on the ground that they were not e-filed within the period of limitation.

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• 2021 (1) TMI 169
  Condonation of delay - Whether the ITAT is legally justified in rejecting application for condonation of delay of 92 days in filing appeal under section 253 ? - HELD THAT:- On 13th May, 2019, this Court had directed the appellant to place on record the application for condonation of delay filed before the ITAT. Despite several adjournments and lapse of nineteen months, the said application for condonation of delay has not been filed. As appellant, states that he has made repeated efforts, by writing as many as eight communications to the Assessing Officer as well as to the ITO Headquarters, to place on record the application for condonation of delay. He states that he is being repeatedly told that they are working on the same. This Court is of the view that despite observations by the ITAT against the Assessing Officer, nothing has changed at the ground level as the application for condonation of delay filed before the Tribunal has not been placed on record till date. Accordingly, the present appeal is dismissed in default and on account of non-prosecution.

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• 2021 (1) TMI 168
  Deduction u/s 10A in respect of provisions written back towards link charges and annual day expenses and the said claim was not derived by an undertaking from the export of article or thing or computer software - HELD THAT:- This issue is covered by the decision of this Court in M/s. California Software Co. Ltd . [ 2020 (2) TMI 1234 - MADRAS HIGH COURT ] wherein took a view that the income brought to tax under Section 41 of the Act by reversal of the entry with regard to the stock option given to the employees is also in the nature of 'export income' and therefore, the Assessee is entitled to exemption / deduction under Section 10-A / 10-B of the Act and the view taken by the learned Tribunal is not sustainable. Foreign Exchange Fluctuation Gain - HELD THAT:- This issue is covered by the decision in CIT v. M/s. Pentasoft Technologies Ltd. [ 2010 (7) TMI 75 - MADRAS HIGH COURT ] the assessee does not determine the exchange value of the Indian Rupee. It has to be remembered but for the fact that the assessee is an expot house, there was no question of earning any foreign exchange. Therefore, when the fluctuation in foreign exchange rate was solely relatable to the export business of the assessee and the higher Rupee value was earned by virtue of such exports carried out by the assessee, there is no reason why the benefit of Section 10(A) should not be allowed to the assessee. Foreign Currency Expenditure and Communication Charges - HELD THAT:- The same are covered by a decision of this Court in CIT v. M/s. Zylog Systems Limited [ 2020 (3) TMI 181 - MADRAS HIGH COURT ] wherein, it was held that such expenditure incurred by the Assessee in foreign currency will also be includible in the definition of 'export turnover' for the purpose of computing deduction under Section 10B of the Act. Set off of brought forward losses before allowing tax holiday deduction is covered by the decision in CIT v. M/s. Yokogawa India Ltd. [ 2016 (12) TMI 881 - SUPREME COURT ] - From a reading of the relevant provisions of Section 10A it is more than clear to us that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the assessee. Though Section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. Revenue appeal dismissed.

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• 2021 (1) TMI 167
  Eligibility for exemption under section 10AA - Whether assessee is engaged in manufacturing activity? - Whether the Appellate Tribunal has erred in holding that the SEZ Act, 2005 override the Income Tax Act ignoring that the taxation of such SEZs is decided wholly and solely by Income-tax Act and that SEZ Act does not have any bearing on the same? - HELD THAT:- The essence of manufacture is the change of one object to another for the purpose of making it marketable. As held by the Supreme Court in India Cine Agencies ( 2008 (11) TMI 15 - SUPREME COURT ) that the essential point is that, in manufacture, something is brought into existence which is different from that which originally existed, in the sense that the thing produced is, by itself, a commercially different commodity, whereas in the case of processing, it is not necessary to produce a commercially different article. It is the cumulative effect of the various processes, to which, the raw material is subjected to that the manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. We are not inclined to admit this tax appeal on the first two proposed questions of law. This appeal stands dismissed so far as the question Nos.2(A) and (B) are concerned. However, we clarify that Question No.2(A) also raises the issue with regard to the trading activities of the assessee. Although both the authorities below have held in favour of the assessee on this ground, yet we do not propose to go into the question of trading activities and keep this question open for being considered in any other appropriate case. Disallowance u/s 14A - sufficiency of own funds - HELD THAT:- Substantial question of law in view of the decision of this High Court in the case of Commissioner of Income Tax-I vs. UTI Bank Ltd. [ 2013 (8) TMI 238 - GUJARAT HIGH COURT] . The ratio of this decision is that if there are sufficient interest free funds to meet the tax free investments, they are presumed to be made from the interest free funds and not the loaned fund and no disallowance can be made under Section 14A. Tax appeal is admitted on the following two substantial questions of law; (C) Whether the Appellate Tribunal has erred in law in holding that the assessee is eligible for deduction with respect to income on account of currency fluctuation, interest income and that it is entitled to deduction under Section 10AA? (D) Whether the Appellate Tribunal has erred in law and in holding that the assessee's claim of loss shall increase the deduction under Section 10AA by ignoring that the documentary evidences have not been furnished and that assessee's eligibility under Section 10AA has been challenged?

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• 2021 (1) TMI 166
  Rectification u/s 254 - disallowance made u/s.40(a)(ia) - HELD THAT:- We find that this Tribunal while disposing off the appeal for A.Y.2009-10 [ 2020 (9) TMI 1100 - ITAT MUMBAI] had rejected the contentions of the assessee and upheld the disallowance made u/s.40(a)(ia) of the Act. But we find that a contrary view has already been taken by this Tribunal in the case of Mahindra and Mahindra [ 2020 (6) TMI 564 - ITAT MUMBAI ] - Non-following of the said order constitute mistake apparent on record within the meaning of Section 254(2). We direct the ld. AO to delete the disallowance u/s.40(a)(ia) of the Act. Accordingly, the grounds taken by the assessee in this regard are allowed.

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• 2021 (1) TMI 165
  Rectification u/s 254 - profitability of speculation activity and non-speculation activity - HELD THAT:- It is required to determine the profitability of speculation activity separately and non-speculation activity separately. Admittedly, this was not done by the assessee at all while filing the return of income. This was sought to be done by the AO in a different fashion which admittedly resulted in absurdity, and the same was rectified by this Tribunal by making a rational apportionment of expenditure between speculation and non-speculation activity. Merely because the assessee has maintained a consolidated profit and loss account for all the activities put together thereby making the AO not to deduce the profitability of speculation activity and non-speculation activity independently, the same would not become sacrosanct. Hence, the decision relied upon by the ld. AR at the time of hearing before us on Rajasthan State Warehousing Corporation [ 2000 (2) TMI 5 - SUPREME COURT] cannot be made applicable at all in the facts and circumstances of the instant case. Hence, the ground No.1 raised in Miscellaneous Application deserves to be dismissed. Business carried out by the assessee comprise of purchase and sale of shares of other companies was considered as a speculative transaction and the same falls within the Exception provided in Explanation to Section 73 only with effect from 01/04/2015 which has been held to be prospective in operation by the Hon ble Supreme Court in the case of Snowtex Investment Ltd., vs. PCIT [ 2019 (5) TMI 1165 - SUPREME COURT .] - Hence, upto A.Y.2015-16, the activity carried out by the assessee on purchase and sale of shares comprising of both speculative and non-speculative nature would have to be determined independently and hence, the profitability of each claim needs to be separately worked out which has been done by this Tribunal in fair and rational manner. Accordingly, the ground No.2 raised by the assessee in the Miscellaneous Application deserves to be dismissed. AR had made an alternative plea on without prejudice basis that even if apportionment of expenditure need to be carried out, depreciation shall not form part of said apportionment as same is not an expenditure but only an allowance. In this regard, we find that depreciation is granted to the assessee for usage of the assets by the assessee for its business purposes. There is no evidence furnished by the assessee as to what part of the assets on which depreciation was claimed were used for speculation activity and non-speculation activity. Ultimately, this Tribunal had only taken the total expenditure debited in the P L Account including the depreciation for the purpose of apportionment of expenses attributable to speculation and non-speculation activity. It is not the case of the assessee that the depreciation claimed on assets were never used for speculation activity carried out by the assessee. Accordingly, the argument that depreciation is only an allowance and not an expenditure holds no water and deserves to be dismissed in the facts of the instant case. Hence, alternative ground No.3 raised by the assessee in the Miscellaneous Application deserves to be dismissed. Mistakes pointed out by the assessee in the Miscellaneous Application does not fall under the ambit of mistake apparent from record within the meaning of Section 254(2) of the Act. All the issues pointed out therein are debatable issues and would only amount to review of the decision already taken by this Tribunal, which is not permissible under proceedings u/s.254(2) of the Act.

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• 2021 (1) TMI 164
  Ex-parte order of CIT-A - Short deduction of tds - services of testing and commissioning availed from BHEL - TDS u/s 194J or 194I - CIT (A) dismissed the appeal of the assessee - HELD THAT:- From the perusal of the order of the CIT(A), it can be seen that the order of the CIT(A) is ex-parte order and the CIT(A) has not decided the matter on merit. Considering the totality of the facts of the case and interest of justice, we deem it proper to restore the issue to the file of the CIT(A) with the direction to grant one final opportunity to the assessee to represent his case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the CIT(A) and present its case failing which the CIT(A) is at liberty to decide the issue as per law on merit.

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• 2021 (1) TMI 163
  Set off of loss - collection of demand raised by declining the set off and imposition of penalties for non-payment of such demands - denying the assessee set off of loss against the income of subsequent years, even during the period when the loss returned by him remains intact, he is being visited with the consequences of denial of a claim even when the claim is yet to denied- fully or partially - HELD THAT:- As the things as on now, the assessment proceedings for the assessment year 2014-15 are not yet finalized, and, therefore, any determination of tax liability, on the assumption that the claim of loss in the said income tax return is untenable in law, is certainly uncalled for, and, at the minimum, premature. This is, however, precisely what the Assessing Officer ends up doing when he declines the set off of the loss, as claimed by the assessee, in the income tax return for the assessment year 2014-15. In our considered view, therefore, the set off of the loss claimed by the assessee, at this stage, cannot indeed be declined. Refund becoming due to the assessee even as a related assessment , having crucial bearing on the refund, is in progress. When one carefully looks at the scheme of Section 240, the apprehensions seem to be perhaps ill conceived. In the present case, the coordinate bench decision, by virtue of which the assessment under section 143(3) was remanded to the Assessing Officer, was passed on 4th October 2019, whereas the related income tax returns for the present assessment years were filed by the assessee much before that date. The refunds, if any due to the assessee, have thus become due as a result of the appellate order dated 4th October 2019 and, to borrow the words of section 240, by the order aforesaid, an assessment is set aside or cancelled and an order of fresh assessment is directed to be made . A view is indeed possible that even though the assessment set aside and directed to made afresh may be of an year other than the assessment year in which the refund has arisen, refund will become due only on such fresh assessment being made. There does, therefore, seem to be a prima facie valid school of thought that in such a situation, as in the present case, refund of taxes for the present assessment years must wait the finalization of the assessment for the assessment year 2014-15 because of which the refund may arise. Viewed thus, the apprehension of the learned Departmental Representative, therefore, does not seem valid. In any case, the remanded assessment is to be finalized, as learned Departmental Representative himself accepts, within less than three months from today, and, therefore, this situation of uncertainty is too transitory and too short by any standard. As soon as the remanded assessment is finalized, any variations in the assessed loss/income will have to be taken into account by suitably amending these set off claims in these years as well. We uphold the plea of the assessee that so far as set off of loss returned by the assessee in the assessment year 2014-15 is concerned, the same cannot be declined by the Assessing Officer in the assessment yea₹ 2016-17 and 2017-18, if otherwise admissible, only for the reason that the assessment for the assessment year 2014-15 is in progress. We direct the Assessing Officer to allow, for the time being, the claim for set off of loss brought forward, in the light of the above observations.

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• 2021 (1) TMI 162
  Method of accounting - Valuation of closing stock - Addition of CENVAT Credit receivable - unutilized Modvat Credit was required to be included in the closing stock of raw material and work in progress - valuation method prescribed under Section 145A - HELD THAT:- Assessee is following the exclusive method of accounting consistently for years together where the purchase of capital goods as well as raw materials, stores and spares etc. and services availed/procured is recorded and charged off to Profit and Loss Account which are net of duties/taxes for which CENVAT credit is available to the assessee. CENVAT Credit receivable is being shown as an asset in the Balance Sheet and will be adjusted against excise duty liabilities as and when the same is utilized. Further that in the exclusive method of accounting, no deduction is being claimed in respect of the duties, taxes paid on purchase of material as the same was recorded as an asset in CENVAT Credit receivable account rather than being charged as an expense in the Profit and Loss Account. Whereas in the inclusive method of accounting deduction is claimed in respect of duties, taxes paid on purchase of material by treating the same as part of the purchase cost. The assessee also submitted that the method of accounting/treatment as aforesaid has been consistently followed by it over the years. We find that the assessee has also relied upon the guidance note on tax audit issued by the ICAI in support of his explanation as rendered before the authorities below. The assessee has also illustrated its contention of the revenue being neutral irrespective of the method of accounting being followed by placing the statement showing effect of both the method of accounting exclusive and inclusive as available at Page 13 of the Paper Book filed before us which we have already perused and in our considered opinion the same is acceptable. As relying on M/S. AMBUJA INTERMEDIATES LTD. [ 2018 (2) TMI 1631 - ITAT AHMEDABAD] we find no merit in such addition made by the AO and further enhancement thereof by Ld. CIT(A) when the unutilized CENVAT credit only represents the availability of excise credit at the disposal of the assessee at the end of the year eligible to be set off against future liability and, therefore, the unutilized CENVAT credit cannot be adopted for the purposes of valuation of inventories in exercise of Section 145A of the Act where the effect is revenue neutral. We observe that inclusive method of accounting has not altered the resultant profits and a revenue neutral exercise over a period of time. We, therefore, with the above observation delete the addition made by the authorities below.

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• 2021 (1) TMI 161
  Disallowances incurred towards job-work/labour work expenses - HELD THAT:- The assessee has filed the relevant documentary evidences to support its claim. The plea of the assessee that without the RCC work for block numbers A to E of the project, the building construction work cannot be completed and building cannot be sold, appears to be quite compelling to support the factum of rendering of jobwork/ labour work. It is not the case of altogether non-compliance of the notice under s.133(6) of the Act. The Assessing Officer himself has made an averment to the effect that partial/incomplete reply was received from the contractor. However, it is not known as to on what aspects, reply was not adequately received. Thus, in totality of the circumstances, the assessee, in our view, has proved overall bonafides of the expenses actually incurred in relation to construction of project. Given the evidences placed, the Assessing Officer could not have drawn an inference against the assessee in wholesale. The action of the Revenue Authorities is accordingly set aside and the additions made in question is directed to be deleted. Penalty u/s 271(1)(c) automatically gets obliterated. The penalty imposed under s.271(1)(c) of the Act thus stands deleted. Appeal of assessee allowed.

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• 2021 (1) TMI 160
  TP Adjustment - comparable selection - HELD THAT:- Assessee is providing software development services to its AE which includes developing software, configuration, testing activity. It also deputes its engineers on need basis for providing IT support. Though the assessee has entered into various types of international transactions with its AEs, we are concerned with Software development activity only, since the TPO has made transfer pricing adjustment in respect of software development services only, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Computation of Deduction u/s 10A - Exclusion of expenses incurred in foreign currency from both export turnover and total turnover - HELD THAT:- As decided in case of HCL Technologies Ltd [ 2018 (5) TMI 357 - SUPREME COURT] when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well.

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• 2021 (1) TMI 159
  Addition being long term capital gains arrived at after recomputing Fair Market Value (FMV) of sale consideration being sale of shares - HELD THAT:- As relying on SHRI. RAJ ARJUN MENDA 2020 (2) TMI 1406 - ITAT BANGALORE] we hold that the CIT(A) is justified in holding that the sale consideration disclosed in the sale purchase agreement ought to be adopted for calculating the long term capital gains in the case of transfer of shares. It would be relevant to mention that Sec.50CA inserted w.e.f. 01.04.2018, would not have application to the instant case, since we are dealing with assessment year 2012-2013. In other words, Sec.50CA of the I.T.Act inserted w.e.f. 01.04.2018 clearly indicates prior to 01.04.2018, there was no provision under the I.T.Act authorizing the A.O. to refer for valuation of shares for the purpose of calculating capital gains. Set off of brought forward capital loss against the capital gain reported for the year in appeal - HELD THAT:- Since we have decided the issue for assessment year 2012-2013 in favour of the assessee, we hold that the assessee is entitled to set of capital loss. It is ordered accordingly.

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• 2021 (1) TMI 158
  Denial of deduction u/s. 54F - long term capital gain - HELD THAT:- Exemption u/s. 54F, we are of the opinion that the assessee has to place necessary evidence in support of the same since the order of the CIT(Appeals) is cryptic on the issue. We therefore direct the assessee to place necessary evidence before the AO and the AO shall examine the issue, whether the assessee is entitled for additional deduction u/s. 54F with regard to long term capital gain. Exemption u/s. 54B - no revised return filed by the assessee - HELD THAT:- We find that the reason for rejection by the CITA is that assessee has not filed revised return of income before the AO. The assessee relied on the order of Tribunal in the case of Rakesh Singh v. ACIT [ 2012 (11) TMI 503 - ITAT BANGALORE] wherein it was held that the first appellate authority could entertain new claim of assessee, though there is no revised return filed by the assessee before the AO. Whether the assessee is entitled for exemption u/s. 54B or not, should have been examined by the CIT(Appeals). However, he rejected the claim of capital gain on the reason that the assessee has not filed revised return of income by placing reliance on the judgment of Hon ble Supreme Court in the case of Goetze (India) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] In our opinion, this judgment is applicable with regard to claim before the AO, and not before the first appellate authority or the appellate Tribunal. Even if there is no revised return, the assessee can claim exemption before the appellate authorities. It being so, we set aside the order of the CIT(Appeals) on this issue and remand the same to the AO with a direction to consider the claim of assessee u/s. 54B of the Act and decision afresh on merits. The assessee shall place necessary evidence in respect of the claim of deduction u/s. 54B of the Act and the same shall be examined by the AO on merits in accordance with law - Appeal of the assessee is partly allowed for statistical purposes.

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• 2021 (1) TMI 157
  Exemption u/s 11 - denial of registration u/s. 12AA - Survey proceedings - objects of trust were to establish educational institutions for providing training in professional, technical, information technology, medical and general education from nursery to degree classes and also higher education - HELD THAT:- The Hon'ble Karnataka High Court in the case of Garden City Educational Trust [ 2009 (7) TMI 832 - KARNATAKA HIGH COURT] has taken a view that grant of registration will not by itself confer benefits of exemption u/s. 11 and 12 of the Act to a trust and that so long as the activities are charitable in nature and if there is no evidence to show that the activities of the trust are not being carried out genuinely, then the registration has to be granted - CIT(E) seems to have taken recourse to the provisions of section 12AA(4) of the Act which was inserted by the Finance Act of 2014 w.e.f. 01.10.2014. We find that those provisions are applicable only when the CIT(E) seeks to cancel the registration already granted to a trust. Those provisions cannot be made applicable for grant of registration u/s. 12AA of the Act. None of the findings given in the survey report can justify the refusal of grant of registration to the assessee and the reasons given by the assessee in this regard are found to be acceptable. The CIT(E) has fallen into an error in concluding that the assessee did not adhere to the directions of the Tribunal and provide the necessary clarification. As assessee has also given clarification on other aspects, which will have a bearing on the grant of registration u/s. 12A of the Act. In the impugned order, the CIT(E) has neither dealt with those contentions nor has he found those contentions to be not correct, thus we are of the view that the assessee should be given the benefit of registration u/s.12AA - Appeal of assessee allowed.

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• 2021 (1) TMI 156
  TP Adjustment - applicability of Section 144C(13) - DRP included Evoke Technologies Limited in the list of comparables and similarly the DRP excluded ICRA Techno Analytics Limited from the list of comparables - HELD THAT:- ALP adjustment made by the TPO has been changed on account of these two directions of DRP, however, the Assessing Officer retained the original Transfer Pricing Adjustment in the final assessment order as made in the draft assessment order. Being so, we are not in a position to uphold the order of the Assessing Officer on this count. As provided in the Section 144C(13) of the Act, the final order of the Assessing Officer should be in conformity with the directions given by the DRP. In the present case, while working out the ALP adjustment, he has not followed the direction of the DRP, consequently, the assessment order is bad in law as held by co-ordinate Bench in the case cited above. Accordingly, the assessment framed in this case is quashed and set aside. However we make it clear that, this order would not, in any way, stop the revenue from taking such steps as are available to it in law and the assessee also from contesting the action of the revenue in accordance with the law, if it so desires.

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• 2021 (1) TMI 155
  Characterization of income - Interest Income - Income from Other Sources or Business Income declared by the assessee - assessee is a share broker and investor - Assessing Officer in scrutiny assessment proceedings recharacterised the nature of interest income of the assessee as Income from Other Sources - HELD THAT:- This issue of assessee declaring interest income from money lending business under the head Business Income and Assessing Officer disputing the same holding the interest income under the head Income from Other Sources is recurring in the past couple of assessment years. In assessment year 2011-12I [ 2018 (5) TMI 40 - ITAT MUMBAI] identical issue had come up before the Tribunal in an appeal by the Revenue and Tribunal decided the issue in favour of assessee - CIT(A) accepted the contentions of the assessee and held that interest income earned by the assessee is to be taxed under the head Business Income . The Revenue has accepted the same and has not filed any appeal before the Tribunal. This fact has not been controverted by the ld. Departmental Representative. Thus, in the facts of the case and the decision of Tribunal in assessee s own case for assessment year 2011-12, the appeal of assessee is accepted.

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• 2021 (1) TMI 154
  Exemption on account of Industrial Promotion Assistance (IPA) by treating the same to be capital in nature - HELD THAT:- The solitary issue involved in the appeal of the revenue thus is squarely covered in favour of the assessee by the orders of this Tribunal passed in assessee s own case for the AYs. 2008-09 and 2009-10 [ 2017 (9) TMI 1167 - ITAT KOLKATA] and respectfully following the same, we uphold the impugned order of the Ld. CIT(A) directing the AO to allow the claim of the assessee for exemption on account of Industrial Promotion Assistance (IPA) by treating the same to be capital in nature.

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• 2021 (1) TMI 153
  Deduction of expenditure representing TDS amount as deducted but not deposited following the Cash Basis of accounting - the assessee had shown statutory liability on account of TDS payable - AO disallowed the same on the ground that TDS part of the amount was not paid before the end of the financial year and therefore, he added it back to the income of the assessee - HELD THAT:- As decided in own case [ 2019 (9) TMI 1317 - ITAT DELHI] according to the income tax act itself the above amount of tax deducted at source is deemed to have been received by the recipient of the income. Thus, it cannot be said that the assessee has not paid the amount of tax deducted at source to the recipient of the income from whose payments the tax have been deducted. Tax deduction at source is a liability cast upon the assessee to deduct the sum from the recipient of such income. In fact the moment assessee deducts the tax at source from the sums paid to the other person it becomes the liability of the assessee who can be held to be an assessee in default for the above sum as well as liable to pay interest and penalty also. The amount of tax deducted at source is always considered as the sum paid by the assessee on behalf of the recipient of the income. Therefore, it cannot be said that the above sum has not been paid by the assessee even while following the cash system of accounting. - Decided in favour of assessee.

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• Customs

• 2021 (1) TMI 152
  Exemption to goods imported by EOUs from payment of Customs Duty - benefit of N/N. 52/2003-Cus dated 31.3.2003 - full exemption to goods procured by EOUs from DTA units from payment of Central Excise Duty - benefit of N/N. 22/03-CE dated 31.03.2003 - import of raw materials like fuses, resistors, gold wire, etc. for manufacture of electronic goods such as hybrid micro circuits, resistors, etc - Violation of condition of notifications or not - further allegation is that the Appellant did not have permission for DTA Clearances - main contention of the appellant appears to be that finished goods were taxable and Central Excise Duty was to be demanded on finished goods and not the Customs duty foregone on inputs imported by them - Confiscation - redemption fine - penalty. Whether the appellants are liable to pay duty on the raw materials which have been used in the manufacture of final products which have been cleared without payment of duty in DTA? HELD THAT:- The appellants have cleared hybrid micro circuits to M/s. ISRO at Nil rate of duty claiming exemption under Notification No.21/2002-Cus. dated 1.3.2002 and have cleared crystal oscillators and crystals to M/s. BEL under Notification No.39/1996. In both cases, Customs duty is Nil and CVD is exempt subject to the condition that the importer produces the required certificates from Department of Space or the competent authority. The adjudicating authority has given a clear finding that the appellants have produced the required certificates. These facts are not under dispute. As per the Notification, the Customs duty forgone on inputs required to be repaid by the importer under the two conditions: (i) if the finished goods are not excisable and (ii) the finished goods, if imported are liable to Nil rate of Customs duty under First Schedule as well as the additional duty (CVD) under Section 3 of Customs Act, 1962. Now, it requires to be seen whether the final goods cleared by the appellant to M/s. BEL and ISRO fulfill the above conditions. The appellants have cleared hybrid micro circuits to M/s. ISRO at Nil rate of duty under Notification No.21/2002-Cus. dated 01.03.2002 and have cleared crystal oscillators and crystals to M/s. BEL under Notification No.39/1996. In both cases, Customs duty is Nil and CVD is exempt - the finished goods supplied by the appellants to M/s. BEL and ISRO are exempt from payment of customs duty as well as additional customs duty. Therefore, in terms of proviso to Para 3 of the Notification No.52/2003 and the CBEC Circular No.54/2004-Cus. dated 13.10.2004 the appellants are required to pay the duty foregone, on the inputs imported duty-free. There is no confusion in the wordings of either the notification or circular. The appellants argument that revenue should have demanded Central Excise Duty has no relevance as it is found that customs duty foregone at the time of import of raw material by the appellants was correctly demanded and confirmed. Similarly, it is found that the argument of the appellate authority that the appellants did not have the permission from the competent authority to clear the goods on DTA is not based on facts. It is found that the original authority has confirmed the fact of necessary permission being obtained. Imposition of redemption fine and penalty - HELD THAT:- The goods have been cleared after due filing of documents before the authorities. The goods have been cleared well before the issuance of show-cause notice. Goods were not physically available for confiscation - this Bench in the case of COMMISSIONER OF CUS., BANGALORE VERSUS MICROSOFT INDIA (R D) PVT. LTD. [ 2014 (6) TMI 19 - CESTAT BANGALORE] held that in case of STPI units, confiscation and penalty are not sustainable as the goods were imported after necessary approvals by STPI - in the instant case too, the import of raw material, on which duty was demanded, was allowed by the customs authorities. We find that the show-cause notice seeks to invoke the provisions of warehousing saying that the imported bonded goods have been removed without payment of duty. The mistake or lapse on the part of the appellant is that they have not repaid the duty foregone on the imported raw materials at the time of clearance of duty-free final goods in the DTA. The proper course of action, in such violations, is to recovery duty along with interest. Duty has been paid along with interest on being pointed out - confiscation and imposition of penalty are not warranted in the instant case. The appeal is partly allowed by setting aside confiscation, redemption fine and penalty.

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• 2021 (1) TMI 151
  Refund/release of Sale proceeds along with interest - seized Betel Nuts, which were released, were sold during the pendency of the appeal - HELD THAT:- The Tribunal directed the Revenue to handover the sale proceeds of the goods along with interest to the appellant as per provisions of law. Learned Advocate has submitted that the sale proceeds have been handed over. He further brings to my notice that Deputy Commissioner, Lucknow has passed an order dated 05 March, 2020 to refund the sale proceeds but refusing to pay the interest. On being questioned, he fairly agrees that the said order of the Deputy Commissioner is an appealable order and he will file an appeal thereagainst. However, as regards the release of pre-deposit and trucks, he submits that appropriate directions be issued. Inasmuch as the Tribunal directed the Revenue to pay the interest as per the provisions of law and the Deputy Commissioner has passed an appealable order not paying interest, the appellant is at liberty to challenge the same before the appropriate authority. However, as regards the refund of the pre-deposit and release of the trucks, it is directed that the Revenue to do the same within a period of one month from today and report compliance within a month thereafter.

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• Corporate Laws

• 2021 (1) TMI 150
  Approval of Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 921 of 2020 is made absolute. The Petitioner Companies to lodge a copy of this Order and the Scheme duly authenticated by the Joint Registrarof this Tribunal, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable within 60 days from the date of receipt of the Order, if any - The Petitioner Companies to pay costs of ₹ 25,000/- each to the Regional Director, Western Region, Mumbai and the Transferor Company in the Consolidated Company Petition No. 921 of 2020 to pay costs of ₹ 25,000/- to the Official Liquidator, High Court, Bombay. The cost to be paid within four weeks from the date of receipt of the Order. The Appointed Date is 14st August, 2019.

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• 2021 (1) TMI 148
  Dissolution of company - Oppression and Mismanagement - Sections 241 and 242 of the Companies Act, 2013 - HELD THAT:- On hearing the counsel for the Applicant as well as the Regional Director and having perused the pleadings and the documents attached, we are satisfied and of the considered view that the dissolution of IIPL USA is the best option for resolution of IIPL USA in the given scenario and the same needs to be approved and recorded. The proposal to file Application(s) for initiating the dissolution process of IIPL USA in accordance with the laws of the USA is taken on record - Application allowed.

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• 2021 (1) TMI 147
  Approval of amalgamation scheme - Transfer and vesting of the Passenger Vehicles Undertaking of the Applicant Company 1 to the Applicant Company 2 as a going concern on a slump sale basis - reduction of Securities Premium Account - HELD THAT:- The Applicant Company 1, pursuant to Section 230(5) of the Companies Act, 2013 read with Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, is directed to serve the notice of various meetings - Applicant Companies shall obtain consent from State Government of Maharashtra and State Government of Gujarat for transfer of Incentives and Concessions availed by Applicant Company No.1 till now will also be available to Applicant Company No.2 post implementation of this Scheme. The Applicant Companies shall file proof of compliance electronically to report to this Tribunal that all the directions including issue of notices and publication of advertisement have been duly complied with.

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• 2021 (1) TMI 146
  Approval of Scheme of Amalgamation - Sections 230, 232 other applicable Provisions of the Companies Act, 2013, R/w Companies (Compromises, Arrangements Amalgamation) Rules, 2016 - prayer for dispensation with various meetings - HELD THAT:- The reports of the Regional Director, MCA, the ROC as well as the comments offered by the Official Liquidator, the reply filed by the Petitioners and the relevant provisions contained in the Companies Act, 2013 and other related Acts and Rules. In his report, the Regional Director, MCA, Government of India has concluded that the Scheme appears to be fair, reasonable and not detrimental against the Members or Creditors or contrary to public policy and the same can be approved. The Scheme will enable the management of both entities to consolidate their business and the same can be carried on more conveniently and advantageously with greater focus and attention, by simplifying the corporate structure. On a consideration of the facts of the case, it can be concluded that the procedure specified in sub-sections (1) and (2) of section 232 of the Companies Act, 2013 has been complied with, and hence the Scheme of Amalgamation, as approved by the Boards of both the Transferor Company and the Transferee Company, is hereby sanctioned - The Scheme of Amalgamation, as contained in the present Petition, is hereby sanctioned and the Appointed Date shall be 01st April, 2019. Application allowed.

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• Insolvency & Bankruptcy

• 2021 (1) TMI 149
  Maintainability of application - initiation of CIRP - Corporate Debtor committed default in making payment of its dues - existence of debt or dispute or not - period from 1st January, 2019 to 31st March, 2019 - HELD THAT:- There is no reply from the side of the Corporate Debtor despite of intimation of the date of hearing by the Petitioner, the Corporate Debtor failed to appear, despite service of notice, as such the bench decided to hear the matter ex-parte and posted the matter for final hearing. The Petitioner also produced the Ledger Account of the Corporate Debtor for the period 01.04.2019 to 24.10.2019 wherein it was shown that a sum of ₹ 49,41,663/- is due from the Corporate Debtor. The assurance of the Corporate Debtor to pay the said outstanding dues amounts to admission of its liability. The Corporate Debtor were in breach of terms and conditions of contract in not complying with the 90 days notice period as required under the Subscription form and also defaulted the payment terms and therefore there is a clear liability of payment of monies dues under the several invoices raised by the petitioner. The corporate Debtor having availed the services, failed to pay the monies due under the invoices. This bench hereby prohibits the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, decree or other in any court of law; transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.

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• 2021 (1) TMI 145
  Liquidation of Corporate Debtor - extension of CIRP period beyond the 330 days period was declined - Section 33(1) of IBC, 2016 - HELD THAT:- Section 33(1) of IBC, 2016 contemplates that this Tribunal can pass an order of Liquidation of the Corporate Debtor if the maximum period permitted for the completion of the CIRP is over - Admittedly, in the present case, the extension of CIRP period beyond the 330 days period was declined and not granted by this Tribunal and as such by operation of Section 33(1)(a) of IBC, 2016, the Corporate Debtor is necessarily required to be ordered for liquidation as stipulated under 33(1)(b)(i) of IBC, 2016. During the course of submissions, it was brought to the knowledge of this Tribunal that the promoters have submitted a Resolution plan and till such time the Resolution plan is considered this Tribunal should abstain from passing an order of Liquidation - However in the present case, it is to be noted that the 330 days period of CIRP has already expired and the CoC in its 6th meeting held on 27.02.2020 has unanimously resolved to liquidate the Corporate Debtor. Further, even during the Liquidation process, subject to Section 29A of the IBC, 2016 and as per Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016, a 90 day time period is provided to submit a Scheme as contemplated under Section 230 of the Companies Act, 2013, and if the Promoter / Director of the Corporate Debtor is otherwise found eligible can very well submit a Scheme for the revival of the Corporate Debtor. The Liquidation of Corporate Debtor is ordered - Liquidator shall strictly act in accordance with the provisions of IBC, 2016 and the attendant Rules and regulations including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended upto date enjoined upon him - application disposed off.

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• 2021 (1) TMI 144
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Since the Instant Company Petition is at admission stage, and the Parties are willing to settle the issue in question, we are inclined to dispose of the Company Petition by directing the Parties to settle the issue, as proposed, by granting liberty to the Petitioner to file fresh Company Petition case, in case, the Respondent failed to settle the issue in question. Petition disposed off.

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• 2021 (1) TMI 143
  Seeking exclusion of 102 days of the CIRP period for the purpose of calculating 180 days - Section 60(5) read with Rule 11 and Regulation 40C of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Hon'ble National Company Law Appellate Tribunal in IN RE : SUO MOTO [ 2020 (6) TMI 495 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that the period of lockdown ordered by the Central Government and the State Governments including the period as may be extended either in whole or part of the country, where the registered office of the Corporate Debtor may be located, shall be excluded for the purpose of counting of the period for 'Resolution Process under Section 12 of the Insolvency and Bankruptcy Code, 2016, in all cases where 'Corporate Insolvency Resolution Process' has been initiated and pending before any Bench of the National Company Law Tribunal or in Appeal before this Appellate Tribunal. The Insolvency and Bankruptcy Board of India, inserted Regulation 40C to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, vide notification dated 29.03.2020 held that Notwithstanding the time-lines contained in these regulations, but subject to the provisions in the Code, the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process. The Insolvency and Bankruptcy Board of India, vide notification dated 20.04.2020, inserted Regulation 47 A to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and the said regulation states that Subject to the provisions of the Code, the period of lockdown imposed by the Central Government in the wake of Covid-19 outbreak shall not be counted for the purpose of computation of the timeline for any task that could not be completed due to such lockdown, in relation to any liquidation process. Accordingly, the period of lockdown w.e.f. 25.03.2020 to 31.07.2020 is excluded from the calculation of 180 days which was originally expiring on 25.08.2020 - Application disposed off.

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• 2021 (1) TMI 142
  Exclusion of the time period in relation to CIRP - inherent powers of this Tribunal under Rule 11 of NCLT Rules, 2016 - HELD THAT:- Taking into consideration the decision of the Hon'ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT] as well as the Hon'ble NCLAT rendered in IN RE : SUO MOTO [ 2020 (6) TMI 495 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] following the matter of QUINN LOGISTICS INDIA PVT. LTD. VERSUS MACK SOFT TECH PVT. LTD., MOHD. SABIR PARVEZ AND MR. M.L. JAIN, (RESOLUTION PROFESSIONAL) [ 2018 (6) TMI 904 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] in relation to the exclusion of the time period in relation to CIRP analogy being adopted in the implementation of the Resolution Plan, this Tribunal allows the Application by excluding the time period from 15.03.2020 to 30.06.2020 for the purpose of implementing the Resolution Plan. Application allowed.

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• 2021 (1) TMI 141
  Preferential Transactions - direction to related parties to pay sums in respect of benefits received - Transactions Defrauding Creditors or not - fraudulent and/or wrongful trading has been done or not - contributions to the assets of the Corporate Debtor - HELD THAT:- Section 43 of the I B Code deals with 'Preferential transactions and relevant time'. To be made clear a transaction will not come as a preferential transaction, if such transaction was made in the ordinary course of the business or financial affairs of the corporate debtor or the transferee. The applicant has given details of summary of transactions in tabular form in the application. One transaction under challenge is under section 43 of the I B Code on the ground that it is a preferential transaction in respect of ₹ 10 lacs. According to the Liquidator an amount of ₹ 10 lacs was taken from Smt. Yerra Padmaja during the financial year 2016-17 and the same was repaid. The contention of the Liquidator is that this is an unsecured loan, which was given preference over secured loans. Therefore, this transaction is in the nature of preferential transaction and this transaction is to be declared as preferential transaction. The respondents have given details regarding this transaction. The case of the respondents is that this money was borrowed from Smt. Yerra Padmaja in order to meet urgent needs of the company, viz. to pay the fee to the Arbitrators on 22.07.2016 and for other urgent payments. This amount was credited into Corporation Bank account on the very same day. The respondents have given details in their reply at pages 22 to 24. The details furnished by the respondents were already stated in the Counter, which are discussed supra. Therefore, there is no need to reiterate the explanation given by the respondents. The amount was borrowed in connection with payment to the Arbitrators, who are dealing with an issue in the matter of Vishwa-BVSR JV Vs. Ministry of External Affairs, wherein the claim involved was ₹ 258.23 crores in three projects/packages. Ledger copies of three Arbitrators were also enclosed as ANNEXURE-2 COLLY. The said amount was repaid to Smt. Yerra Padmaja on 06.08.2016. Therefore, this cannot be treated as a preferential transaction. The next contention of the Liquidator is that the respondents while in the management of the corporate debtor had written off an amount of ₹ 3.78 crores pertaining to Security Deposits, such as, Security Deposit (Works), VAT Deposit against assessment, Electricity Deposit, Excise Duty Deposit and other deposits. The case of the Liquidator is that this writing off is a pre-meditated move to keep the assets of the corporate debtor beyond the reach of any persons, who is entitled to make a claim against it. Hence the transaction is intended to defraud the creditors, which is to be annulled under section 49 of the I B Code - As far as these transactions are concerned the respondents have given a detailed reply commencing from pages 24 to 54 of their counter. The respondents narrated the circumstances under which Security Deposits and other deposits were written off. It is not necessary to reproduce the detailed explanation given by the respondents with regard to writing off the Security Deposits and other deposits. The deposits traced back to the year 2005. These were the deposits made in 2005 in some cases. We are very much convinced with regard to the detailed explanation given by the respondents as to why Security Deposits relating to various projects were written off from time to time. The contention of the Liquidator is that these amounts were written off with a view to defraud the creditors. We are unable to agree with the opinion taken by the Liquidators that these are the transactions intended to defraud the creditors. The company was expected to write off these deposits in the circumstances stated by the respondents. We do not find any fraud involved in writing off the deposits in relation to various projects from time to time. The respondents have given detailed explanation with regard to Security Deposit in respect of various projects. The explanation given by the respondents that projects were complete, therefore, the Security Deposits were invariably to be written off. The respondents also gave detailed explanation as to why the corporate debtor has written off the VAT Deposits and further reasons are given for writing off Electricity Deposits, Road Restoration Deposits and Rent Deposits. We do not find any ground to consider these transactions involving writing off the deposits as fraudulent transactions intended to defeat the interest of the creditors. The last contention of the learned counsel for the Liquidator is that there was writing off an amount of ₹ 10 lacs on the ground that there were cash thefts at three sites - HELD THAT:- The employee involved in not handing over the money was the Project Manager. However, the Project Manager offered to adjust the amount against his salary, but no amount was due to him towards salary. Therefore, this amount was written off. Similarly, as regards the amount of ₹ 78,039/- concerning Agar Electrical site the respondents stated that the amount was stolen and an FIR was lodged. Copy of the FIR is also not available; the same copy is available in the records of the corporate debtor. The applicant can obtain a copy of the FIR from the records of the corporate debtor. This is the explanation given by the respondents. We are unable to agree with the view taken by the Liquidator that this is a fraudulent transaction liable to be annulled under section 66 of the I B Code. So considering the detailed explanation the application deserves no consideration and it is liable to be dismissed. Application dismissed.

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• Service Tax

• 2021 (1) TMI 140
  Leviability of service tax - clearing and forwarding agent service - consignment agency services alleged to have been rendered by the appellant to Tata Steel Limited - HELD THAT:- The appellant s activities were limited to conversion of the raw materials supplied by TSL into finished goods and to send the said finished goods of TSL to the clearing and forwarding agent/consignment agent, appointed by the appellant and TSL jointly, who were situated at various parts of the country - it is also found that although the appellant had entered into the consignment agency agreement with TSL this agreement was never acted upon by the parties. The appellant also did not receive any amount from TSL as and by way of consignment agent or towards providing any consignment agency service under the said consignment agency agreement. No evidence to the contrary is available from either the show cause notices or the impugned orders. Exactly same issue decided in the case of COMMR. OF CENTRAL EXCISE SERVICE TAX, RANCHI VERSUS M/S TINPLATE COMPANY OF INDIA LTD. [ 2018 (7) TMI 1373 - CESTAT KOLKATA] where it was held that It is seen that the Assessee paid the duty on the Invoice value and the Revenue had not disputed the fact that the assessee cleared the converted goods on payment of Central Excise duty - In as much the facts of the instant appeals and those involved and considered in the order are the same and involves the same parties, we are in agreement with the appellant s submission that the said order is also applicable to the instant appeals. In the instant appeals, it is also found from the records that the Department has not disputed the fact that the appellant had cleared the converted goods on payment of central excise duty and that the charges for freight is included in the invoice value - the impugned order not sustainable. Appeal allowed - decided in favor of appellant.

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• 2021 (1) TMI 139
  Refund of unutilised CENVAT Credit - refund denied for non-submission of requisitioned documents - opportunity of being heard also not given - violation of principles of natural justice - HELD THAT:- Refund has been denied for non-submission of requisitioned documents which the appellant submitted before the Ld. Commissioner (Appeals) which has not been considered in the impugned order. With regard to the dispute raised by the original authority for denial of refund on ground of classification, I do not agree with the reasons assigned by the said authorities inasmuch as when the repair and maintenance service per se is not excluded for the purpose of availing credit, refund should not be denied on the ground that the service provider should not have classified the same under the category of Renting of Immovable Property services. Further, while denying refund, the lower authorities have not stated the reasons as to why such credit is not available. In any case, it is a settled position that the entitlement of credit should not be denied when the assessee is pursuing refund of credit claimed in returns. In the instant case, there is no dispute that service tax of which refund has been claimed, has not been deposited with the Revenue. Since the appellant has submitted necessary confirmations from the service provider duly supported with CA certificate, it would be unjust to deny the refund. Since the case pertains to grant of refund and that the original order has been passed ex-parte, it is considered fit and proper to remand the matter to the original authority, who would provide reasonable opportunity to the appellant to submit the desired documents and decide the claim - appeal allowed by way of remand.

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• Central Excise

• 2021 (1) TMI 138
  CENVAT Credit - input services - Advisory services - Activities relating to business - Legal service - whether the services availed by the appellants from M/s. Singhi Advisors Pvt. Ltd. Mumbai would amount to input services to be eligible for credit? - HELD THAT:- Rule 2(l) of Cenvat Credit Rules, 2004 has two parts, one the substantive part and the other the inclusive part. Commissioner finds that the services covered under the inclusive part of the definition of input service or services are which are rendered prior to the commencement of the manufacturing activity (such as, services for modernization, renovation or repairs of the factory) as well as services rendered after the manufacture of final products (such as advertisement, sales promotion, market research etc.) and includes services received such as accounting, auditing, financing etc. In other words, the definition of input services covers not only services, which are directly or indirectly used in or in relation to the manufacture of final products but also includes various services used in relation to the manufacture of final products, be it prior to the manufacture of final products or after manufacture of final products. Having found so, the Commissioner follows his finding by making averment that if the service is not integrally connected with the manufacture of final products, the service would not qualify to be an input service under Rule 2(l) of CCR, 2004. The said service, availed by the appellants from M/s. Singhi Advisors, Mumbai, is in relation to their business (therefore cannot be considered to be provided in or in relation to the manufacture of final products) and therefore, is excluded from substantive definition. The appellants claimed that the service availed was legal service‟ and therefore, covered by the inclusive part of the definition of input service and hence, credit is admissible - the learned commissioner rejected the appellants‟ claim that the service availed by them from M/s. Singhi Advisors is in the nature of legal services. The learned Commissioner though correctly analysed the provisions of the CCR 2004, comes to a conclusion that the service availed by the appellants is in relation to business activities rather than manufacture of final products. The nomenclature and the classification of services is secondary. Just because the appellants could not classify the service availed under a particular head, it does not take away the substantial right of the appellants to avail the credit if it is otherwise permissible under the rules. As we have seen above that the definition of input service, even after the amendment carried out in 2011, is an allencompassing definition. Input service is defined to be any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal. The intent of the appellant as seen from the correspondence available on record is not to wind up the company. The intent was very clear to sell or transfer the business, obviously the manufacturing activity, to any person or company who would manage the manufacturing activity i.e., to produce and sell the goods. Therefore, in a wider perspective the efforts of the appellants were in the direction of continuation of manufacture of final products and their removal from the factory. Therefore, the services availed by the appellants are covered by the substantive definition of input service as enshrined in Rule 2(l) of CCR, 2004. The inclusive definition gives certain illustrations and explains and expands the scope of the definition given in the substantive portion of the definition. It is incorrect and legally not tenable to say that if the service is not covered in the inclusive definition, credit of the same is not admissible. The scheme of Central Excise or Service Tax is indirect in nature. The admissibility of credit, the dutiability of final products is not altered depending on the owner of the activity of manufacture or service as the case may be - In the instant case, the services availed by the appellants were in relation to continuation of the manufacturing activity and thus, cannot be held to be for an independent business of the appellants which has no connection with the impugned manufacturing activity - the services availed by the appellants, from M/s. Singhi Advisors, Mumbai are squarely covered by the definition of input service. The definition of input service is wide and that the appellants are in their right to avail the impugned credit. We also find that the appellants have submitted that the said credit was not allowed to be transferred to the new unit in terms of Rule 10 of CCR 2004; they have not utilised the credit and even then, the department has issued demand notice for payment back of credit which is not legally sustainable - imposition of penalty was also not tenable. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2021 (1) TMI 137
  Restraint on respondent from initiating any assessment/ reassessment proceedings against the petitioner - Section 29(7) of the U.P. VAT Act, 2008 read with Section 9(4) of the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 - extended period of limitation - HELD THAT:- Relying upon a full bench judgment in the case of M/s Harbilas Prabhu Dayal Vs. Commissioner of Sales Tax, [ 1979 (2) TMI 176 - ALLAHABAD HIGH COURT ] this court held that hence proceedings are remanded by the appellate authority, the entire matter is at large. In the background of these facts and the legal position, this court held in para-27, which has been relied by the petitioner in the present case; that reassessment proceedings can only take place when there is an assessment order. Since no assessment order was passed by the Assessing Authority pursuant to the remand order and the entire matter was at large before him, therefore, it was held by this court that there is no question of initiating reassessment proceedings. Thus, the aforesaid judgment in the case of Catalysts [ 2014 (8) TMI 922 - ALLAHABAD HIGH COURT ] is distinguishable on the facts of the present case. Perusal of sub-section (7) of Section 29 of the Act, 2008 leaves no manner of doubt that it empowers the Commissioner to grant authorisation and also empowers the Assessing Authority to make assessment or reassessment within a period of eight years after expiry of assessment year to which such assessment or reassessment relates. Sub-section (1) of Section 29 empowers the Assessing Authority to make assessment or reassessment where he has reason to believe that whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof. Thus, where whole of the turnover has escaped assessment on account of not passing an assessment order, the provisions of Section 29(1) of the Act, 2008 can be invoked by the Assessing Authority and the authorisation under sub-section (7) can be granted by the competent authority. It is not incumbent upon the Assessing Authority to make the assessment first and then only to proceed under Section 29(1) for bringing to tax the turnover not assessed. Petition dismissed - decided against petitioner.

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• 2021 (1) TMI 136
  Rejection of rectification application - additional time even after completion of assessment - petitioner prayed for a period of three months in the Section 84 applications to file the declaration forms - Section 84 of Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The conclusion of the authority to the effect that more than sufficient time has been granted to the petitioner to file the Forms and thus the request for additional time is not liable to be granted, is correct. The learned counsel for the petitioner would submit even at this juncture that the requisite forms are unavailable and thus I find no infirmity in the conclusion of the Officer to the fact that additional time is not liable to be granted. The impugned order to this extent, is confirmed. However, the alternate prayer raised by the petitioner has been omitted to be considered though noted expressly in the impugned order. To this extent the impugned order is incomplete. The petitioner will thus appear before the Assessing officer on Friday the 4th of December, 2020 at 10.30 a.m. and put forth its argument in regard to the alternate prayer. No further notice need be issued in this regard. After hearing the petitioner, orders shall be passed on the alternate prayer raised, within a period of two weeks from date of personal hearing i.e. on or before 18.12.2020. Petition disposed off.

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• Indian Laws

• 2021 (1) TMI 135
  Grant of Anticipatory Bail - Dishonor of Cheque - false and concocted agreement for sale - fraudulent sale of land - Sale deed not executed nor earnest money returned - HELD THAT:- Considering the fact that the petitioner - Som Parkash was granted the interim bail but has failed to join the investigation, there are no ground to extend the concession of interim bail to the petitioner - Som Parkash. Though the undertaking given by the petitioner - Som Parkash is not binding on his son Dharmender, however, considering the allegations in the FIR, which are directly against Dharmender who on behalf of his father has accepted the money from the complainant and thereafter, handed over the possession of the property but later on in a calculated move to cheat the complainant not only the possession was forcibly taken back but the cheques were given knowingly that the same will be dishonoured, there are no ground to grant the concession of anticipatory bail to the petitioner - Dharmender, as well. Petition dismissed.

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• 2021 (1) TMI 134
  Seeking forfeiture/surrender of illegally acquired property - petitioner claims that he is a bonafide purchaser, for valuable and adequate consideration, of the said property - further case of petitioner is that the impugned order were passed without any notice to the petitioner and without affording him any opportunity to be heard - principles of natural justice - Section 68-U of the Narcotic Drugs and Psychotropic Substances Act, 1985 - HELD THAT:- There is no dispute that the petitioner is a bonafide purchaser and had purchased the said property for a valuable consideration. It is also averred in the present petition, which is not traversed by the respondent, that the petitioner had availed of a loan from HDFC for purchasing the said property and a No Objection Certificate stating that the said property was not subject to any encumbrance or liability had been issued by Sinchan Cooperative Housing Society for the purpose of availing the said loan - The petitioner has been holding the said property since 1996 and it is not disputed that no notice of any proceedings in respect of the said property had been issued to the petitioner. There is no real controversy in respect of the essential facts that are necessary to address the challenge to the impugned orders. Admittedly, the said property had been purchased by Sh. Anand Kumar Bagla prior to issuance of notice under Section 68-H(1) of the NDPS Act. After securing a legal opinion, the Director, NCB had, by a letter dated 06.01.1994, duly informed that the said property had been incorrectly frozen and that the order had been passed inadvertently. The Competent Authority had also accepted that the said property had been transferred to Smt. Krishna Devi Bagla and Sh. Anand Kumar Bagla in good faith and prior to passing the freezing orders under the NDPS Act - In the given circumstances, the Competent Authority was required to consider the same before passing any fresh order of forfeiture. Although the said order of forfeiture was required to be passed by 31.07.1993, the impugned orders were passed almost twenty-seven years thereafter and that too without considering that it had been duly accepted by the Competent Authority that the said property is to excluded from the proceedings. The order passed by the Competent Authority under Section 68I of the NDPS Act to the extent that it forfeits the said property under Section 68-I of the NDPS Act, is without jurisdiction. Mr. Kishore had also contended that an appeal under Section 68-O of the NDPS Act would not be available to the petitioner since the petitioner was not a person to whom the provisions of Chapter V-A of the NDPS Act are applicable - The said contention is, plainly, unmerited. A plain reading of the opening sentence of Section 68-O of the NDPS Act clearly indicates that any person aggrieved by an order of Competent Authority, inter alia, passed under Section 68-I can file an appeal. However, considering that there is no controversy as to the essential facts and it is conceded that it was accepted that the said property was liable to be excluded from the schedule of the properties of the affected person/his relatives or associates, this Court does not consider it apposite to relegate the petitioner to exhausting his statutory remedy. More so as the order passed by the Competent Authority to the extent that it seeks to forfeit the said property and requires its surrender, is without jurisdiction. The impugned orders to the extent that the purport to declare the said property as forfeited to the Central Government and demands it s surrender, are set aside - petition allowed.

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• 2021 (1) TMI 133
  Dishonor of Cheque - initiation of proceedings under section 138 of Negotiable Instruments Act - prayer for compounding of offence - parties have amicably settled the matter inter se them and entire compensation amount paid - HELD THAT:- Since both the parties have resolved to settle their dispute amicably interse them and entire compensation amount awarded by the learned trial Court stands paid to the petitioner, this Court sees no impediment in accepting the prayer for compounding the offence while exercising power under section 147 of the Negotiable Instruments Act - Hon'ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [ 2010 (5) TMI 380 - SUPREME COURT] , has categorically held that Court, while exercising power under Section 147 of the Act, can proceed to compound the offence even after recording of conviction by the courts below. The instant matter is ordered to be compounded and judgments passed by learned Courts below are quashed and set-aside. The petitioner-accused is acquitted of the charge framed against her under Section 138 of the Act. The bail bonds of the accused are ordered to be discharged. Petition disposed off.

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