TMI Tax Updates - e-Newsletter
November 30, 2021

Case Laws in this Newsletter:

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

Articles

1. TERMINATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Gross GST Collection in FY 2021-22 shows increasing trend

2. Government approves strategic disinvestment of Central Electronics Ltd.

3. 17,130 Implementing Agencies are registered with MCA21 registry

4. PMJDY accounts surge to 43.85 crore with deposit balance of ₹ 1,48,069 crore

5. Regional Rural Banks surpass prescribed lending target to Small & Marginal Farmers & SCs/STs during 2018 to 2021

6. DRI busts iPhone smuggling Racket

Notifications

DGFT

1. 45/2015-20 - dated 29-11-2021 - FTP

Amendment in Export Policy of Agar Oil and Agarwood Chips and Powder obtained from artificially propagated source and insertion of policy conditions

2. 44/2015-2020 - dated 29-11-2021 - FTP

Export Policy of Fertilisers — Updation in List of Manufactures/Units of NP/NPK Fertilizers

GST - States

3. G.O.Ms.No.334 - dated 25-11-2021 - Andhra Pradesh SGST

EXEMPTION OF APGST ON SPECIFIED MEDICINES USED IN COVID-19 UPTO 31st DECEMBER 2021

4. G.O.Ms.No.333 - dated 25-11-2021 - Andhra Pradesh SGST

EXTENSION OF TIMELINES FOR FILING OF APPLICATION FOR REVOCATION OF CANCELLATION OF REGISTRATION TO 30.09.2021, WHERE DUE DATE FOR FILING SUCH APPLICATION FALLS BETWEEN 01.03.2020 TO 31.08.2021, IN CASES WHERE REGISTRATION HAS BEEN CANCELED UNDER CLAUSE (B) OR CLAUSE (C) OF SECTION 29(2) OF THE ANDHRA PRADESH GOODS AND SERVICES TAX ACT, 2017

5. 88/2020- State Tax - dated 26-11-2021 - Delhi SGST

Amendment in Notification No. 13/2020 – State Tax, dated the 31st March, 2021

6. 55/2020- State Tax - dated 26-11-2021 - Delhi SGST

Amendment in Notification No. 35/2020- State Tax, dated the 24th March, 2021

7. 01/2021– State Tax - dated 26-11-2021 - Delhi SGST

Delhi Goods and Services Tax (First Amendment) Rules, 2021.

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/CFD/DIL1/CIR/P/2021/0000000665 - dated 23-11-2021

Master Circular on (i) Scheme of Arrangement by Listed Entities and (ii) Relaxation under Sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957

GST - States

2. TRADE CIRCULAR No. 22/2021 - dated 3-11-2021

Clarification in respect of refund of tax specified in section 77(1) of the WBGST Act and section 19(1) of the IGST Act.

3. TRADE CIRCULAR No. 23/2021 - dated 3-11-2021

Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021 at Lucknow.

Highlights / Catch Notes

GST

• High Court Rules in Favor of Petitioner on Late CGST Refund Claim, Citing Supreme Court Order on "Relevant Date" Interpretation.

  Case-Laws - HC : Relevant date for claiming refund under CGST Act - claim filed beyond the two years period - interpretation of the expression 'relevant date' qua CGST - The refund applications made on 19.04.2021 need to be entertained and the order of Hon'ble Supreme Court clearly enures to the benefit of the writ petitioner in the case on hand. To that extent, the impugned orders are wrong. - HC
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Income Tax

• Court Rules Agricultural Income Tax Not Deductible u/s 43B for Business Income; 1991 Act Argument Rejected.

  Case-Laws - HC : Deduction u/s 43B - Agricultural Income Tax - Main fault under any law for the time being in force means tax payable by the assessee for earning the income for which the computation is carried out. The agricultural income tax paid for the apportioned agricultural income cannot overlap into the business income as tax payable by the assessee for earning business income. No reported judgment on this aspect of the matter is brought to our notice. Therefore from a plain and literal meaning of applicable clause, we are of the view that the argument that the tax paid under Act 1991, ensures for deduction is unsustainable and accordingly rejected. - HC
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• Commission Income Not Added as Unexplained Cash Credits u/s 68 Due to TDS and Confirmed Arrangements.

  Case-Laws - AT : Addition u/s 68 - addition of commission income as “un-explained cash credits” - We decline the Revenue’s instant last adjustment as well since not only all the impugned commission payments have been subjected to TDS by the concerned payer but also it has come on record that latter; on its own, had very well confirmed before the Assessing Officer qua sales & marketing arrangement with the taxpayer - AT
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• Assessee's Loss Claim Denied Due to Lack of Evidence; Deductions Must Be Explicit in Income Tax Act.

  Case-Laws - AT : Provision for anticipated losses - wherever exemption or deductions are called for, the same has been provided explicitly in the provision of the Income Tax Act. Even, the provision for warranty, liquidated damages have been allowed taking into consideration the matching principle of revenue accounting. In the instant case, we further find that no cogent evidences have been furnished by the assessee as to how this loss has been arrived at. - AT
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• Dispute Over Deduction Eligibility for Interest Income Tied to Industrial Park Operations u/s 80IA(4)(iii.

  Case-Laws - AT : Disallowance of deduction claimed u/s. 80IA(4)(iii) in respect of profit derived from "Industrial Park Salarpuria Softzone - The deposits interest from BESCOM which was clarified by the Ld. AR of the assessee that without deposit of money, electric connection and un-interrupted supply of electricity could not be given by the BESCOM, therefore, for smooth operation and maintenance of the parks uninterrupted electricity is the necessity and, therefore, the interest income in this way is having nexus with the maintenance and the operation of the park and have direct nexus with the income (interest) which is a plausible view of Ld. CIT(A) - AT
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Customs

• Tribunal Rules No Evidence Against Exporter in Red Sanders Smuggling Case; No Legal Questions Arise.

  Case-Laws - HC : Smuggling - Red Sanders - Contraband item - The final fact-finding authority, namely, the Tribunal has re-examined the factual position and returned a finding based on documents that there is no evidence produced by the appellant department to fix the respondent/exporter with an attempt to export Red Sanders Wooden Logs - no question of law much less substantial question of law arisen for consideration in this appeal. - HC
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• Penalty Under Customs Act Section 112 Deemed Unjustifiable Due to Lack of Evidence in Gold and Silver Import Case.

  Case-Laws - AT : Levy of penalty u/s 112 of Customs Act - illicit import of Gold and silver - misdeclaration of goods - The Revenue, having alleged one Salman as the mastermind, has not bothered to place anything on record, which has left innumerable doubts and questions unanswered, like the above. Penalty, therefore, cannot be imposed on surmises, assumptions and presumptions and there is not even any circumstantial evidence brought on record against these appellants, to justify penalty under ‘Section 112’. - AT
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• Imported LED Goods Reclassified as Christmas Tree Lighting; Not Subject to Confiscation u/ss 111(d) or 111(m).

  Case-Laws - AT : Misclassification and misdeclaration of imported goods - 12 mm Pixel LED - prohibited goods - they were classifiable as Lighting sets of a kind used for Christmas trees 94053000. - the description in the Bill of Entry can, at best, be termed incomplete or vague and cannot be called wrong. What were imported were the LEDs though they were in strands. - The impugned goods are not liable for confiscation under section 111(d) or 111(m). The provisions related to redemption become, consequently, irrelevant. - AT
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• LCD Import Classification Challenged; Chapter 85 Classification Disputed, Heading 90138010 Deemed Appropriate.

  Case-Laws - AT : Classification of imported goods - Liquid Crystal Device (LCD) - The observations made by the Deputy Commissioner for holding the classification under chapter 85 do not flow from any evidence or literature but is based on his opinion. Just because the PCB is attached to the LCD, will make the LCD a part solely for use in car audio/ video assembly, is the observation made. LCD is only the display device to display the parameters intended to be displayed. It can be used with hundred of devices for displaying the parameters. - the goods imported would be correctly classifiable under heading 90138010 - AT
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IBC

• Court Approves Resolution Plan; Waiver of Pre-Deposit and Interest for Statutory Dues to be Resolved by Govt Departments.

  Case-Laws - AT : Approval of Resolution Plan - seeking the protection to the Joint Resolution Appellants with regard to waiver of requirement of pre-deposit, waiver of interest etc. in reference to statutory dues. - These are issues to be decided by the respective government department and appropriate application may be moved before them - here is no illegality committed by the Ld. Adjudicating Authority while passing the impugned order - AT
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Central Excise

• CENVAT Credit Case: Bill of Entry as Original Duty Document; Challans Valid for Additional Duty Credit Claims.

  Case-Laws - AT : CENVAT Credit - supplementary invoices/document on which credit taken - In the instance case the original duty paying document is bill of entry and the challans are the documents on the strength of which additional duty has been paid. Thus, even going by the logic given by the Commissioner in the impugned order there is no bar on availing credit on the strength of challans - AT
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VAT

• Court Denies Petitioner's Property Relief Under Article 226; Jurisdiction Limited to Suitable Cases.

  Case-Laws - HC : Attachment of property of petitioner - Undisputedly, the impugned notice was issued on 30.01.2006. - the petitioner herself, made a mention that by paying the balance sale consideration, she got the property registered in her name on 15.02.2006. - the relief sought for cannot be granted invoking the jurisdiction of this Court under Article 226 of the Constitution of India which should be exercised only in appropriate and befitting cases - HC
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Case Laws:

• GST

• 2021 (11) TMI 981
  Legal right of the petitioner on account of the Taxes being shared and borne by the petitioner on post enactment goods and Service Tax Act, 2017 - Infringement of Goods and Service Tax Act, 2017 - restitution of benefit of GST to the petitioner along with interest within a stipulated period in respect of work in which the estimate was prepared under the VAT law - direction to opposite party not to prepare fresh schedule of rates considering rapidly change of rate and price and calculate the differential amount of GST on the contract in which estimate was prepared under VAT - HELD THAT:- On perusal of the judgment delivered by this Court in M/S. HARISH CHANDRA MAJHI VERSUS STATE OF ODISHA OTHERS [ 2021 (6) TMI 381 - ORISSA HIGH COURT] , the Court finds that the Court has dealt with a large number of grounds which are more or less similar to the points urged in the present petition. The Court is not satisfied that any new ground has been made out requiring the Court to revisit its judgment in Harish Chandra Majhi. Consequently, the Court is not inclined to interfere in the impugned petition. Petition dismissed.

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• 2021 (11) TMI 980
  Seeking release of monetary compensation/reward - Release of lorries and trucks - HELD THAT:- The writ petition cannot be treated to be a frivolous litigation. The issue as to whether the appellant can be recognized as an informant or not under the relevant circulars issued by the Central Board of Excise Customs (C.B.E.C.), what is required to be first seen is whether there has been any illegal imports of the betel nuts from the neighbouring countries into the State of West Bengal. The court can take judicial notice of the fact that the Customs Department and the Central Excise Department very often initiate action based on special intelligence. The show cause notice also states that information was gathered by specific intelligence either by the DRI or the DGFT or other investigating agencies. Therefore, there is no requirement for the Customs and Excise to disclose the source of information based on which investigation was undertaken. Therefore, the court fails to understand as to why effective action was not taken by the Customs Department pursuant to the representations made by the appellant. The writ petition needs to be heard and decided on merits for which affidavits are required from the concerned respondent viz. Customs Authorities. That apart, the appellant is required to implead the SGST authority as well as the State Government as party respondent so that the matter can be examined from the angle as to whether the SGST authority would have jurisdiction or domain over the said goods and whether they would be entitled to levy tax and penalty. The writ petition is restored to the file and number of the learned Single Bench to be heard and decided on merits after affidavits are filed by the respondents - The appeal is, thus, allowed. The order passed in the writ petition is set aside.

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• 2021 (11) TMI 979
  Validity of summons issued - primary contention of learned counsel is that in response to the first summon served, the petitioner had submitted that it would require two weeks to appear with all the material but without giving any breathing time, further summons were being issued - HELD THAT:- This petition is disposed of with a direction that in case the petitioner appears before the officer concerned on 29.11.2021, he may file reply and make submissions both on law and merits and the officer concerned would decide the same by passing a speaking order, in accordance with law. Application disposed off.

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• 2021 (11) TMI 978
  Seeking grant of anticipatory bail - lower amount of GST paid to Government - manipulation of GST returns - forged challans and returns - HELD THAT:- The allegations in the FIR are primarily against Harish Kumar Rampal, who was the Chartered Accountant and it was his duty to file the requisite GST returns and also the fact that the petitioner is only involved in the case as there is a transfer of some amount and also the fact that as per the petitioner, the amount of Rs. 21 lakhs out of the said Rs. 31 lakhs has already been returned to Pooja Sablok and the balance amount of Rs. 10 lakhs has already been deposited with the trial Court, regarding which there is no objection in case the said amount is deposited with the GST Authorities and also the fact that the petitioner has joined the investigation, the present petition for grant of anticipatory bail is allowed and interim order dated 12.08.2021 is made absolute. It is however, clarified that the payment of the amount of Rs. 10 lakhs is without prejudice to the rights of the petitioner as well as the complainant, as by virtue of the said payment, neither the petitioner has admitted her guilt in the matter nor the complainant has fully and finally settled the matter with the petitioner so as to entitle her to file petition for quashing of the FIR solely on the basis of compromise. Application disposed off.

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• 2021 (11) TMI 977
  Maintainability of petition - availability of alternative remedy of appeal - prayer was made that since the time for filing the statutory appeal is going to expire by the end of the month, since the petitioner was bonafide in approaching this Court, it may be permitted to prefer the appeal by 10.12.2021 - section 107 of CGST Act - HELD THAT:- This Writ Petition is disposed of with liberty to move an appeal under Section 107 of the Act. If the same is done by 10.12.2021, in accordance with law, the Appellate Authority shall consider the matter on merits after giving opportunity of hearing to the petitioner, and pass orders thereupon expeditiously. The original certified copy of the order be returned by Registry to learned counsel for the petitioner under due acknowledgement of the advocate on record for the petitioner by 26.11.2021 - Petition disposed off.

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• 2021 (11) TMI 976
  Rejection of technical bid - failure to furnish the GST number, along with the bid - Rule 11 of the Central Goods and Services Tax (CGST) Rules, 2017 - HELD THAT:- A bare perusal of the tender document (Annexure P-1) indicates that petitioner was required to upload the scanned copy of PAN Number and GST Number, duly signed and stamped. Concededly, the petitioner did not furnish the abovesaid documents. In such circumstances, the authorities cannot be faulted with in rejecting the technical bid submitted by the petitioner. On the other hand, admittedly, respondent No.2 had submitted the GST number, along with other necessary documents vide Annexure P-11. As regards contention raised by learned counsel for the petitioner with respect to Rule 11 of the CGST Rules, the said contention is noticed only to be rejected, in view of the fact that the petitioner has not challenged the condition requiring furnishing of GST number. Once the petitioner had accepted all the terms and conditions of the tender and was well aware of the mandatory requirement of furnishing the GST number, now she cannot be permitted to say that she was not required to do so. In such a situation, it can be safely concluded that the authorities have rightly rejected her technical bid, being non-compliant. On the other hand, respondent No.2 had furnished the GST number and was the only tenderer remaining in the fray, and therefore, declared as technically compliant. From a bare perusal of the tender document, it is crystal clear that requirement of experience is not mandatory. Further, condition No.2 of the tender document envisages that preference would be given to those tenderers, who had, at least, one year experience in running the shops of identical in nature. Once possession of experience is not mandatory, non-submission of experience certificate by respondent No.2 does not disentitle him - as stated by respondent No.1 in its return, respondent No.2 has not been extended any benefit of experience under this clause. But, in fact, he has been allotted tender, for he fulfilled all the mandatory requirements of the tender document, and was the sole tenderer remaining in the fray. The only and the inevitable conclusion that could be reached is that the petition being bereft of merit is required to be dismissed - petition dismissed.

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• 2021 (11) TMI 975
  Validity of grievance ticket - reopening of the grievance ticket - opportunity to revise Form Tran 1 electronically - transitional credit u/s 140(1) of CGST Act, 17 - Section 140 of CGST Act, 17 and Rule 117 of CGST Rules - HELD THAT:- Though the allegations and counter allegations have been made as regards uploading or non-uploading, ability to upload and inability to upload, the fact remains that, what is sought to be uploaded are relating to transactions which occurred prior to 27.12.2017 which are evidenced by records including transactions carried out through normal banking channels. It is these transactions which have already occurred prior to the introduction of GST regime which are sought to be filed by uploading the Form in Tran- 1. More so because there is a new procedure which has been prescribed and new methodology which has been adopted for the assessment etc., an assessee cannot be deprived of any input credit that he may be entitled to only on account of non-uploading of a particular form. What is sought for by the assessee herein is for an opportunity to upload Tran 1 form containing the details of the transaction conducted by the Assessee prior to 27.12.2017, the filing of the form by itself would not entitle the assessee for any particular credit input or otherwise, the same would always be subject to scrutiny by the authority and if there are any false information found in the information which is uploaded by way of the above forms, the authorities have necessary powers under the Act to deal with the same. A certiorari is issued, the closure of the grievance ticket raised by the petitioner vide Annexure-H is quashed. A mandamus is issued directing the respondent authorities to open the portal to enable the petitioner to upload the necessary forms, if the portal cannot be opened to permit the assesse to file hard copies of the said form and act thereon. The writ petition is partially allowed.

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• 2021 (11) TMI 974
  Seeking withdrawal of petition - Reversal of input tax credit - seeking declaration that the reversal is done under force and coercion on the date of search conducted at residential premises of the director and made under the signature of the director who is not authorized for the same - reversal of refund of Input Tax Credit - seeking restraint from coercing the Petitioner to make any payment without issuing notice under Section 74(1) of the Central Goods and Services Tax Act, 2017 - seeking direction in the nature of mandamus to the Respondents to provide copy of panchnama with regard to search which was conducted at the office premises of the Petitioner - seeking direction in the nature of mandamus to the Respondents to provide the DSC / digital signatures of the directors of the Petitioner - seeking direction in the nature of mandamus to the Respondents to provide the copies of documents that have been seized under the provisions of Section 67(5) of the Central Goods and Services Tax Act, 2017. HELD THAT:- This Court is of the view that if Mr. Tarun Jain has not joined the investigation, the respondents are at liberty to take action in accordance with law - The statement made by learned counsel for petitioner is accepted by this Court petitioner is held bound by the same and accordingly, the present petition is dismissed as withdrawn.

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• 2021 (11) TMI 973
  Relevant date for claiming refund under CGST Act - interpretation of the expression relevant date qua CGST (Amendment) Act 2018 - period June of 2018 and August of 2018 - Rule 92 of CGST Rules and Section 54(8) (b) of C-GST Act - HELD THAT:- The refund applications made on 19.04.2021 need to be entertained and the order of Hon ble Supreme Court clearly enures to the benefit of the writ petitioner in the case on hand. To that extent, the impugned orders are wrong. Matter sent back to the respondent for considering the refund application de novo and make an order inter alia in accordance with Rule 92 of said Rules and Section 54 (8) (b) of CGST Act - petition disposed off.

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• 2021 (11) TMI 972
  Cancellation of registration of petitioner - time limitation for filing appeal - appeal has been filed within the prescribed time- limit or not - appeal filed against the order for cancellation of Registration to be decided are proper, or not - section 107 of CGST Act - HELD THAT:- Though the delay in filing the appeal is condonable only for a further period of one month provided that the appellant was prevented by sufficient cause from presenting the appeal is shown and the delay of more than one month is not condonable under the provisions of sub section (4) of Section 107 of the Central Goods and Service Tax Act, 2017. It is also found that the appellant has not submitted any ground for not filing of appeal within the stipulated period. Whereas in the grounds of appeal the appellant has contended that he is facing financial crunch due to Covid-19. Keeping view of the directions of the Apex Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2021 (11) TMI 387 - SC ORDER] wherein it has been directed that for computation of period of limitation of appeal, the period from 15.03.2020 to 02.10.2021 shall stand excluded and balance period of limitation remaining as on 15.03.2021 if any, shall become available with effect from 03.10.2021. The instant appeal has been filed by the appellant on 28.09.2021 against the impugned order dated 14.11.2019 by delay of more than one month from the normal period prescribed under Section 107(1) of the Central Goods and Service Tax Act, 2017. Though the delay in filing the appeal is condonable only for a further period of one month provided that the appellant was prevented by sufficient cause from presenting the appeal is shown and the delay of more than one month is not condonable under the provisions of sub section (4) of Section 107 of the Central Goods and Service Tax Act, 2017. The appellant has filed this appeal beyond the prescribed period that too after expiry of further one month s period in terms of sub section (4) of Section 107 of the Central Goods and Service Tax Act, 2017 which could be condoned by the undersigned - it is clear that the appellate authority has no power to allow an appeal which is filed beyond the prescribed period. Since the appeal is filed after expiry of the prescribed period of three months and a further period of one month which may be condoned by the undersigned, the appeal deserves to be rejected on the grounds of limitation - Appeal dismissed.

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• Income Tax

• 2021 (11) TMI 971
  Revision u/s 263 by CIT - Allowability of provision and contingencies on account of arrear payment due to wage revision - whether Tribunal was justified in law or in fact in holding that the assessing officer had made due enquiries on the assessment of deduction on account of arrear payment which are payable consequent to wage revision and that it was an ascertained liability and was liable to be allowed as deduction? - HELD THAT:- Tribunal on facts came to the conclusion that the action of the assessing officer in allowing the claim of the assessee for deduction cannot be said to be erroneous as it was a possible view which the assessing officer has taken and merely because the CIT does not agree with the view expressed by the assessing officer, he could not invoke his jurisdiction under Section 263 of the Act. On facts, we have found that there is nothing to interfere with the order passed by the Tribunal. Appearing for the respondent/assessee places reliance on a decision in the case of Commissioner of Income Tax, Ward-3, Tirunelveli versus Smt. Padmavathi [ 2020 (10) TMI 425 - MADRAS HIGH COURT] as held that the Commissioner while invoking his power under Section 263 faults the assessing officer on the ground that he did not make proper enquiry and in the absence of any clarity as to why in the opinion of the Commissioner the enquiry was not proper, invocation of power under Section 263 was not justified. In our considered view, the said decision will apply with full force to the case on hand. We say so because the Tribunal on examining the facts found that there was no error in the manner in which the assessment was completed and no fault can be attributed to the assessing officer as to how the enquiry was conducted. Thus, we find that the order passed by the Tribunal does not call for any interference. In the result, the appeal fails and the same stands dismissed and the substantial question of law is answered against the Revenue.

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• 2021 (11) TMI 970
  Deduction u/s 43B - AO rejected deduction claimed on the ground that the assessee has paid tax under Act 1991 on the whole of its income, whereas a part of income alone is amenable to Agricultural Income Tax Ac t - obligation of assessee to file separate returns under Central Act and Act 1991 - HELD THAT:- Assessee is under obligation to file returns under both the enactments. Agricultural income is excluded from the scope of Section 10(1) of Central Act. Therefore agricultural income does not form part of computation under Section 14 of the Act, 1991. Further, the deduction is envisaged for the purpose of ascertaining the net income of the assessee under different heads. The agricultural income is excluded and appering into admissible tax, a deduction would again be inconsistent with Sections 10,14 and 43B of the Act. Clause-B of Section 43B deals with the tax payable by the assessee. Main fault under any law for the time being in force means tax payable by the assessee for earning the income for which the computation is carried out. The agricultural income tax paid for the apportioned agricultural income cannot overlap into the business income as tax payable by the assessee for earning business income. No reported judgment on this aspect of the matter is brought to our notice. Therefore from a plain and literal meaning of applicable clause, we are of the view that the argument that the tax paid under Act 1991, ensures for deduction is unsustainable and accordingly rejected. Revenue has accepted the return of the assessee for the preceding assessment years and the departure now in the subject assessment years is illegal - The judgment relied on by the revenue [ 2012 (1) TMI 410 - KERALA HIGH COURT ] provides a complete answer in this behalf and by following the ratio of the Apex Court in Gangadharan s case [ 2008 (7) TMI 10 - SUPREME COURT ], the said objection of the assessee is also rejected. For the above reasons and discussion, we are of the view that the gist of the questions framed by the assessee is canvassed in the manner referred to above and we have, after taking note of the liability under respective enactments are satisfied that the Tribunal has recorded a valid, legal and correct finding on the claim of assessee for deduction of agricultural tax paid under Act 1991 as not available. Questions in the instant appeals are answered against the assessee and in favour of revenue.

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• 2021 (11) TMI 969
  Suppressed turnover - DR submitted that the assessee s authorised person had duly admitted the impugned suppressed turnover in the search statement - HELD THAT:- No such admission from the assessee s side since all its authorised persons had done was to estimate the corresponding power sector consumption trends than anything else. Be that as it may, the CBDT s twin circulars dt.10-03- 2003 and 18-12-2014 have made it clear that such admissions or confessional statements made during the course of a search or survey; as the case may be, do not hold any significance in absence of contemporaneous supportive evidence. We conclude in all these facts that both the lower authorities have erred in law and on facts in making the impugned identical addition of suppressed turnover in lead AY.2010-11 and varying sums in all remaining assessment years. The same stands deleted in all appeals. Disallowance u/s 40A(3) - HELD THAT:- We notice that the assessee appears to have made trip-wise payments only than those involving the transport invoices on whole-sum basis. This is also not the Revenue s case that all of these invoices are well beyond the specified limit of the cash payment in the relevant previous year. We therefore hold that the impugned addition based on mere search statement which goes against the record, is not sustainable. The same is directed to the deleted in all the appeals. Addition u/s 68 - addition of commission income as un-explained cash credits - HELD THAT:- There is hardly any dispute that the assessee had claimed to have received the impugned sum(s) from Mumbai based company M/s.Benzo Chem Industries Pvt. Ltd., through banking channels along with corresponding TDS deduction as well. Learned lower authorities hold that the same is in the nature of accommodation entry only since the corresponding entity(ies) had not supported its explanation of having arranged the marketing and sales for the payer entity. Learned departmental representative sought to clarify that the assessee s authorised person s statement could not throw light on the place(s) of these entity(ies) as well. We decline the Revenue s instant last adjustment as well since not only all the impugned commission payments have been subjected to TDS by the concerned payer M/s.Benzo Chem Industries Pvt. Ltd. but also it has come on record that latter; on its own, had very well confirmed before the Assessing Officer qua sales marketing arrangement with the taxpayer vide letter dt.24-11-2015. We further make it clear that the Assessing Officer herein did not undertake any further confirmation from the payer s side since he has adopted the above stated technical reasoning to treat the assessee s commission income as un-explained cash credits . We therefore hold that the same deserves to be deleted.

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• 2021 (11) TMI 968
  Computation of capital gains on sale of property - long term capital or short term capital asset - Period of holding of asset - whether the holding period of the asset should be reckoned from the date of registration of the property or from the date of allotment of the property for the purpose of deciding whether the asset transferred is a long term capital asset or a short term capital asset? - HELD THAT:- We find that this issue is no longer res integra in view of the decision PCIT vs. Vembu Vaidyanathan [ 2019 (1) TMI 1361 - BOMBAY HIGH COURT] wherein it was held that, date of allotment would be relevant date for the purpose of determining the holding period of capital asset. It was also held that date of allotment so made shall be the relevant date for the purpose of capital gain tax as date of acquisition - as also noted that the allottee gets title to the property on the issue of allotment letter and payment of instalments was only a follow-up action and taking delivery of the possession is only a formality - asset has been held by the assessee for more than three years as computed from the date of allotment and accordingly, the asset transferred would be a long term capital asset thereby resulting in long term capital gains in the instant case. Assessee would also be eligible for benefit of indexation. Having held that the asset transferred is a long term capital asset, the next question that arises for our consideration is whether the indexation benefit for cost of acquisition should be allowed to the assessee, based on the payments made in instalments and applying the cost inflation index in the relevant year of payment. We find that assessee itself had claimed indexation benefit by applying the cost inflation index in the year of payment of instalments. Hence, there is no dispute that arises in this regard. We direct the ld. AO to accept long term capital gains returned by the assessee on sale of this flat and delete the addition made on account of capital gains made in this regard. Treatment of repairs and renovation expenses incurred by the assessee on the leased premises - HELD THAT:- From the perusal of each of those bills which are in great detail, the assessee had identified the specific items which are giving enduring benefit to the assessee and accordingly, had capitalized the same in the books of accounts and claimed depreciation accordingly, both under the companies Act as well as under the Income Tax Act. In respect of items where no enduring benefit is available, the assessee had duly charged off as revenue expenditure. No infirmity in the action of the assessee on treating the said expenditure as revenue expenditure. CIT(A) had categorically given a finding that none of the expenditure entails any structural change or extension or improvement of the building. This finding has not been controverted by the ld. DR before us. CIT(A) ought not to have treated the said expenditure as capital in nature - expenditure incurred should be allowed as revenue expenditure. Reliance on the case of CIT vs. Talathi and Panthaky Associated (P) Ltd., [ 2012 (2) TMI 82 - BOMBAY HIGH COURT] wherein it was held that cost of repairs / reconstruction of tenanted premises is revenue in nature and allowable as deduction. Respectfully following the aforesaid decision, the ground No.iii raised by the assessee is allowed. Disallowance of foreign travel expenditure @20% of total expenditure on an adhoc basis - As pleaded by the assessee before the ld. CIT(A) that the Managing Director had incurred various expenses during his foreign travel which is meant for business purposes and had incurred various expenses on behalf of the company - HELD THAT:- We find that the entire foreign travel expenses of the employees of the assessee company have been duly allowed in full by the ld. AO. Admittedly, the Managing Director of the assessee company is also an employee of the company and hence, he cannot be treated in a different manner with that of the other employees with regard to allowability of foreign travel expenditure for business purposes. Accordingly, we direct the ld. AO to allow the entire foreign travel expenditure and delete disallowance made on an adhoc basis - Decided in favour of assessee.

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• 2021 (11) TMI 967
  TP Adjustment - markup of 4% and 5% has been disallowed by the TPO and accordingly enhanced the income of the assessee - main argument of the ld. AR was that these transactions are benchmarked by using TNMM and furnished that TP documentation whereas the TPO did not follow any prescribed method and the entire markup is disallowed without giving any reasons - HELD THAT:- The observation of the revenue that the parent company gets benefited by better synergies, scale of economy, better coordination and reporting cannot be accepted. While the assessee avails supervision services from its AEs and pays markup charges, it also provides such services to the AEs for their third party contracts and receives markup charges. The pricing basis and the results arising from the same have been accepted by the TPO. Disallowing the mark-up on receipt of services while in-principle accepting the provision of similar services rendered having similar intent and basis of pricing cannot be valid ground to disallow the markup. It is not out of contest to note that no such disallowance has been made on the markup in the case of the assessee AY 2007-08 to 2012-13 and AY 2015-16. Hence, keeping in view, the entire facts and circumstances, the contention of the revenue that the AE invariably derives some benefit and hence no markup should be charged, cannot be accepted. Provision for warranty disallowance - assessee contended that the issue of warranty is a recurring provision made in the past several years - DRP for both the years in question directed the AO to modify the disallowance after verifying the provisions made in the earlier years, its actual utilization and writing back of unutilized provision for taxation - HELD THAT:- Since, the provision for warranties has been made @ 3% and the unutilized portion has been reversed at a regular intervals from year to year, the appellant has been consistently following the policy of making provision for warranty as per the terms of the contract, the ITAT for AY 2008-09, AY 2010-11, AY 2011-12, AY 2012-13 AY 2013-14 has allowed provision for warranty, the provision made during AY 2014-15 is on same basis as in earlier years is hereby allowed. Allowability of provision for liquidated damages - HELD THAT:- Since, the provision for liquidated damages has been made regularly and allowed in P L account and since the unutilized portion has been reversed at a regular intervals from year to year, since, the ITAT for AY 2008-09, AY 2010-11, AY 2011-12, AY 2012-13 AY 2013-14 has allowed provision for liquidated damages, the provision made during AY 2014-15 is on same basis as in earlier years is hereby allowed. Provision for anticipated losses - HELD THAT:- The primary goal of financial accounting is to provide useful information to management, shareholders, creditors, and others properly interested; the major responsibility of the accountant is to protect these parties from being misled. The primary goal of the income tax system, in contrast, is the equitable collection of revenue, the major responsibility of the state is to protect the public finance. Hence, any presumptive equivalency between tax and financial accounting would be unacceptable. There are other reasons why taxation might deviate from accounting concepts of income. While the most obvious purpose of taxation is to finance public expenditure, the extent and magnitude of taxation in modern economies also makes it a powerful instrument of government economic and social policy in its own right. While it is true that some taxation measures might be introduced to improve economic decision making, others are implemented for very different reasons. The concept of tax expenditures ably describes the situation that those provisions of the income tax containing special exemptions, deductions and other tax benefits were really methods of providing benefits by deviating from the system of profits derived following accounting standards. Thus, we find that wherever exemption or deductions are called for, the same has been provided explicitly in the provision of the Income Tax Act. Even, the provision for warranty, liquidated damages have been allowed taking into consideration the matching principle of revenue accounting. In the instant case, we further find that no cogent evidences have been furnished by the assessee as to how this loss has been arrived at. Charging of interest u/s 234A - HELD THAT:- We hereby direct the AO to verify the date of filing of return by the assessee with regard to the timeline extended for the instant year and charge interest accordingly.

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• 2021 (11) TMI 966
  Disallowance of deduction claimed u/s. 80IA(4)(iii) in respect of profit derived from Industrial Park Salarpuria Softzone - assessee failed to furnish CBDT notification in accordance with Industrial Park Scheme, 2020 which is mandatory for claim of deduction u/s. 80-IA(4)(iii) - CIT-A deleted the addition - HELD THAT:- CIT(A) has given a finding of fact that all the items claimed under the head Miscellaneous Income have a direct nexus with the business of the assessee namely operation and maintenance of the three (3) eligible industrial parks. CIT(A) has noted that in the facts of the case the profits and gains from sale of scrap and the interest income constitutes income from business and citing the decision in Sanjeeb Lal [ 2014 (7) TMI 99 - SUPREME COURT] was of the opinion that purposive interpretation is required to be made while adjudicating such claims. We find that since the scraps or waste materials which were left behind by the occupants when they shift from the Park were getting accumulated in the parks and removal of the same was necessary to keep the Park clean tidy which activity is the task of assessee i.e. operation maintenance of the Park, so the income which was generated from the sale of scrap/waste material (non-reusable) and interest from BESCOM have nexus with the maintenance and operation of the industrial parks. The deposits interest from BESCOM which was clarified by the Ld. AR of the assessee that without deposit of money, electric connection and un-interrupted supply of electricity could not be given by the BESCOM, therefore, for smooth operation and maintenance of the parks uninterrupted electricity is the necessity and, therefore, the interest income in this way is having nexus with the maintenance and the operation of the park and have direct nexus with the income (interest) which is a plausible view of Ld. CIT(A), which we do not want to interfere because in earlier years subsequent years, such a disallowance was made by the AO. Therefore, applying the Rule of consistency we uphold the action of Ld. CIT(A) and we dismiss the ground of Revenue. Addition as rental income earned in the three industrial parks - profit derived from Industrial Parks Salarpuria Softzone was treated as non-eligible income to qualify for deduction u/s. 80IA(4)(iii) - CIT-A deleted the addition - HELD THAT:- CIT(A) found that the income derived from letting out of such KIOSKS/STALLS and the resultant benefit in the hands of the assessee was for providing better services to the occupants of the industrial parks and, therefore, was an extended portion of the business activity of operating and maintenance of the industrial parks. The Ld. CIT(A) noted that the said KIOSKS/STALLS were given on rent so that the persons working in various companies operating from the industrial parks to get coffee, tea and refreshment as well. Moreover, the Ld. CIT(A) has taken note of the CBDT Circular No. 16 of 2016 which clarifies that the lease rent from letting out buildings/developed space along with other amenities in the industrial park (SEZ) need to be treated as business income As brought to our notice that the AO in earlier years had allowed the claim of the assessee in respect of this rental income by treating it as business income and allowed the claim u/s. 80IA(4)(iii) of the Act. In the light of the CBDT circular (supra) and taking note of the fact that in earlier years and subsequent years the lease rent income from letting off of kiosks/stalls to be treated as business income and since in earlier years and subsequent years this claim was not disallowed and for the first time this disallowance is made, so by applying the Rule of consistency, the disallowance was not warranted since there is no change in facts or law. Therefore, the action of Ld. CIT(A) is confirmed. Therefore, we confirm the order of the Ld. CIT(A) and dismiss this ground of revenue s appeal. Undisclosed 26AS receipt - reconciliation statement furnished by the assessee is not backed by credible evidence - CIT-A deleted the addition - HELD THAT:- CIT(A) after going through the facts and the reconciliation filed as well as after going through the complete list of parties (who deducted TDS on reimbursement along with the amount of reimbursement) has made a factual finding that there is no difference which warrants any addition on this count. In the light of the aforesaid discussion we are of the opinion that the AO erred in making the addition merely on the basis of the data in 26AS and the Ld. CIT(A) after perusal of the reconciliation and other documents filed has rightly deleted the addition which does not require any interference from our part and, therefore, we confirm the order of the Ld. CIT(A) on this issue. Therefore, this ground of appeal of revenue is dismissed. Addition on account of sundry balances written off debited in the Audited P L Account - assessee has failed to furnish any document in this regard despite providing several opportunities of being heard to the assessee - CIT-A deleted the addition - HELD THAT:- We note that the amount in question includes sundry debtor as well as loans and advances. The loans and advances are not allowable u/s. 36(v)(iii) of the Act. Break-up of the amount in question, which has been written off has not been given. Therefore, the allowability of the loans/advances written off by the assessee have to be examined by the AO. According to the Ld. AR, even if the advances are not allowable u/s. 36(v)(iii) of the Act still it is allowable as business expenditure u/s. 28 of the Act. Be that as it may, on this issue the order of the Ld. CIT(A) is set aside and this issue is remitted back to the file of the AO for examining whether the advances/loans which were written off can be treated as business loss which he may decide in accordance to law after giving opportunity of being heard to the assessee.

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• 2021 (11) TMI 965
  Penalty levied u/s. 271(1)(c) - defective notice u/s 274 - assessee stated that the penalty order is bad in law as penalty proceedings were initiated and penalty was levied without specifying the exact limb of section u/s.271(1)(c) - HELD THAT:- On a perusal of the notice issued u/s. 274 r.w.s. 271(1)(c) of the Act we observe that the Assessing Officer has not specified any limb for which the notice was issued i.e., either for concealment of particulars of income or for furnishing inaccurate particulars of such income. Assessing Officer did not strike off irrelevant limb in the notice and specifying the charge for which notice was issued. Case of MR. MOHD. FARHAN A. SHAIKH [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] squarely applies to the facts of the assessee s case as the notice u/s. 274 r.w.s. 271(1)(c) of the Act was issued mechanically in a printed format without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notice was issued. Thus, respectfully following the said decision we hold that the penalty order passed u/s. 271(1)(c) of the Act by the Assessing Officer is bad in law and accordingly the penalty order passed u/s. 271(1)(c) of the Act is quashed - Decided in favour of assessee.

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• 2021 (11) TMI 964
  Validity of assessment order u/s 153A - Period of limitation - HELD THAT:- Admittedly in the present case, the AO has framed the assessment final order on 29.11.2017 which is time barred in the light of the provisions of section 153B of the Act . As such the assessment order should have been passed on or before 31-12-2016 and without referring to the provisions of section 144C of the Act. Thus the impugned assessment order is unsustainable and void-ab-initio. As we have held the order of the assessment as invalid and unsustainable in law, we do not find any reason to adjudicate the issue raised by the assessee on merit. Moreover, the ld. AR at the time of hearing has also not advanced any argument on merit, accordingly we dismiss such issues raised on merits.

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• Customs

• 2021 (11) TMI 963
  Smuggling - Red Sanders - Contraband item - omission and dereliction committed on the part of the said Respondent during the time of the export of the said consignment - seal of the Respondent has been tampered with during the inspection of the goods - scope of place of removal as per provisions of Section 4(1)(c) of the Central Excise Act, 1944 - CBEC Circular No.999/6/2015-CX dated February 28, 2015 - HELD THAT:- The entire matter is fully factual and no question of law much less substantial question of law arises for consideration. We support such conclusion with the following reasons. As pointed out in the show cause notice dated 15th March, 2013 issued by the DRI, copy of which has been placed before us by the learned Counsel for the respondent/exporter, it is found that there is no specific allegation against the respondent/company connecting them with the attempt to export Red Sanders Wooden Logs which are prohibited item. The appellant department proceeded against the respondent by assuming that the respondent should be held responsible for the contraband being stuffed inside the container. This aspect of the matter was considered by the Tribunal and it referred to various documents more particularly the Panchanama dated 19.09.2012 in which it has been specifically stated that the seal number as mentioned on the export documents was found securely fixed on the said container, intact and untampered. Thereafter, the container was opened in the presence of all concerned as mentioned in the Panchanama. Thus, at the earliest point of time, there was nothing to connect the respondent company with the presence of the contraband inside the container which was admittedly sealed in the factory premises by the jurisdiction Central Excise Officer. Further, statement under Section 108 of the Act was recorded and the Superintendent of the Central Excise who had examined the goods had in no uncertain terms stated and confirmed his signature appearing in the ARE-1 and that it was genuine. The adjudicating authority in the order in original dated 23rd February, 2015 fixed the responsibility on the respondent/exporter based on presumption and assumption and admittedly the appellant department were unable to produce any record to connect the respondent with the presence of the contraband which was found inside the container with the seal intact at the time when the container was taken for examination. Furthermore, the Tribunal took note of Section 13 of the Multimodal Transportation of Goods Act, 1993 whereunder the multimodal transport operator has been fixed with the responsibility of the cargo for any loss/damage or delay in delivery of consignment etc. If the multimodal transporter has to wriggle out of the obligation cast under the Act, then in terms of the first two proviso to Section 13(1) the multimodal transporter operator has to prove that no fault or neglect on his part or that of his servants or agents and he has not contributed to such loss, damage or delay. The final fact-finding authority, namely, the Tribunal has re-examined the factual position and returned a finding based on documents that there is no evidence produced by the appellant department to fix the respondent/exporter with an attempt to export Red Sanders Wooden Logs - no question of law much less substantial question of law arisen for consideration in this appeal. Appeal dismissed.

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• 2021 (11) TMI 962
  Levy of penalty u/s 112 of Customs Act - illicit import of Gold and silver - misdeclaration of goods - no valid permit / licence / documents for the licit import of goods - Courier Imports and Exports (Clearance) Amendment Regulations, 1998 - HELD THAT:- Apparently, nothing is placed on record as to any investigation on the role of one Salman to link his alleged smuggling activities with the appellants, to establish their connivance in smuggling gold into India through courier - Nothing is placed on record as to how the appellants are treated as importers, to fit in under the mischief of Section 112 of the Customs Act, 1962, like the prior agreements, contracts, etc., to justify the penalty under Section 112 ibid. Section 112 ibid. has two limbs: either (a) or (b); no specific averment is made as to the role of the appellants to justify the levy of penalty. The two limbs under the above Section are specific and hence, the Revenue has to invariably specify the guilt as to whether the same is under (a) or (b). The Revenue, having alleged one Salman as the mastermind, has not bothered to place anything on record, which has left innumerable doubts and questions unanswered, like the above. Penalty, therefore, cannot be imposed on surmises, assumptions and presumptions and there is not even any circumstantial evidence brought on record against these appellants, to justify penalty under Section 112 . The one and only allegation against these appellants is that they knew one Salman, the alleged mastermind. They have not even bothered to make proper investigation, and not even of the courier agency who is responsible for couriering the parcel without proper verification, at its end - the penalty levied under Section 112 of the Customs Act, 1962 is arbitrary and unjustifiable. Appeal allowed - decided in favor of appellant.

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• 2021 (11) TMI 961
  Suspension of Customs Broker License - smuggling of gold - case of the Department is that the G-Card Holder of the appellant has accepted his role in the smuggling of the gold - HELD THAT:- The role of the appellants themselves has not been clearly established so as to necessitate the suspension of Customs Broker License. Learned Authorized Representative for the Department submits that the matter is still under examination and Enquiry by the Department. It is found that under the circumstances, the suspension of the license of the appellant is not warranted. Moreover, in the instant case, it has been reported that the SCN under CBLR has been issued. On completion of the enquiries and examination, the Department is free to take suitable action. The suspension of the license is not required. Therefore, the said suspension requires to be set aside - Appeal allowed - decided in favor of appellant.

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• 2021 (11) TMI 960
  Misclassification and misdeclaration of imported goods - 12 mm Pixel LED - prohibited goods - to be classified under 85411000 or under 94053000? - benefit of exemption notification no. 24/2005 (S.No. 23) - HELD THAT:- It is found strange that having concluded that there is no heading for light fittings of LED under Chapter 85, the learned Commissioner (Appeals) concludes that they are excluded from Chapter 94 by virtue of Chapter note 1(f) which states that lighting fittings covered by Chapter 85 are excluded from Chapter 94. If the lighting fittings in question are not covered by Chapter 85, evidently, they are not excluded by virtue of Chapter note 1(f) of Chapter 94. Having come to this contradictory conclusion, the learned Commissioner (Appeals) held that the lower authority should not have applied Rule 2(a) because Rule 1 provides an answer. As is evident from the learned Commissioner (Appeals) findings itself Rule 1 does not answer the question because Chapter note 1(f) to Chapter 94 which the learned Commissioner relied upon only excludes lighting fittings falling under Chapter 85 and the learned commissioner finds that there is no heading for lighting fittings of LEDs in Chapter 85. Nature of the goods that are imported - HELD THAT:- Although they were declared as LEDs, on examination, they were found to be not individual LEDs but strands of 50 LEDs each. Such strands of LEDs are used for decoration, etc. but one needs to attach the adapters and connectors to the strings of LEDs. There were no adapters in the consignment and therefore, they were incomplete. Learned adjudicating authority has correctly applied Rule 2(a) to conclude that they were classifiable as Lighting sets of a kind used for Christmas trees 94053000. The classification of the goods by the Commissioner (Appeals) needs to be set aside and the classification by the original authority needs to be restored. Exemption notification no. 24/2005-Cus (S.No. 23) - HELD THAT:- Evidently, goods falling under heading 8541 are exempted and not goods falling under 94053000. Since it is held that the goods in question are classifiable under 94053000, the benefit of this exemption notification does not apply. Confiscation of goods - imposition of penalty - HELD THAT:- It is evident that Section 10 deals with the functions of the Bureau of Indian Standards and clause (p) mandates it to perform any other functions as may be prescribed. Similarly, Rule 13 deals with the functions of the bureau. Neither Section 10 nor Rule 13 authorise the imposition of any controls over imports as has been done in the CRO 2012. In fact, neither the Bureau of Indian Standards Act, 1986 itself nor the Bureau of Indian Standard Rules, 1987 have any provision to regulate imports or to impose restrictions on imports. Therefore, it is doubtful whether any restrictions on imports imposed under the CRO issued under the BIS Act, 1986 can be considered as restriction on imports under any other law for the time being in force. Section 111(d) must be read with the CRO read with Section 10 (1) (p) of the BIS Act and Rule 13 (fa) of the BIS Rules and neither the section nor the Rule nor the parent Act provide for restricting imports or laying down standards for imports. The CRO imposed restrictions not under the law but beyond it. In the present case, the importer declared the imported goods as LEDs and on examination they were found to be LEDs in strands of 50 each. The importer claimed a classification and consequentially the benefit of an exemption notification in its self-assessment while the officer re-assessing the goods classified them under a different heading and consequently found that the exemption notification was not available. The learned Commissioner (Appeals) agreed with the importer and we have, in this order, found that the decision of the Commissioner (Appeals) was not correct - the description in the Bill of Entry can, at best, be termed incomplete or vague and cannot be called wrong. What were imported were the LEDs though they were in strands. The impugned goods are not liable for confiscation under section 111(d) or 111(m). The provisions related to redemption become, consequently, irrelevant. Further, no penalty can be imposed under section 112 - Appeal allowed in part.

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• 2021 (11) TMI 959
  Non-imposition of redemption fine - redemption fine not imposed on the ground that the goods were not available for confiscation - HELD THAT:- As regards Revenue s contention that since the appellant had executed Bond under the Advance License Scheme, the goods shall be treated as released under Bond, therefore, the redemption fine could have been imposed, it is found that the Bond was executed exclusively for compliance of the condition of Exemption Notification No. 149/95-Cus. Bond was not executed for provisional release of the goods. It is undisputed fact that the goods were never seized nor released provisionally against execution of specific provisional release Bond. Therefore, it cannot be said that the goods were provisionally released against specific Bond. From the judgment of the Hon ble Supreme Court in WESTON COMPONENTS LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [ 2000 (1) TMI 45 - SC ORDER] , it is clear that the goods were seized and subsequently released provisionally on an application made by the assessee and on execution of bond, therefore, the goods were provisionally released against specific bond for provisional release. However, in the present case, the goods were neither seized nor released provisionally on execution of provisional release bond. Therefore, the fact of the case in Weston Components is entirely different from the fact of the present case. Hence, ratio of Weston Components case shall not apply in the present case. There are no merit in the Revenue s appeal - appeal dismissed.

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• 2021 (11) TMI 958
  Classification of imported goods - Liquid Crystal Device - classified under Customs Tariff Heading No 90138010 or under Customs Tariff Heading 85229000? - benefit of N/N. 24/2020-Cus Serial No 29 - HELD THAT:- There is nothing available on record to show that the imported goods are solely meant for use as part of the car audio/ video assembly. Not even the literature relied upon states so. As per the submissions made by the revenue also the literature describes the imported goods as LCD Module . The term is wide enough and cannot be limited to mean the part of car audio/ video assembly. The observations made by the Deputy Commissioner for holding the classification under chapter 85 do not flow from any evidence or literature but is based on his opinion. Just because the PCB is attached to the LCD, will make the LCD a part solely for use in car audio/ video assembly, is the observation made. LCD is only the display device to display the parameters intended to be displayed. It can be used with hundred of devices for displaying the parameters. The issue is squarely covered by the said decision of Hon ble Apex Court in M/S. SECURE METERS LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [ 2015 (5) TMI 241 - SUPREME COURT] , and the goods imported would be correctly classifiable under heading 90138010 as claimed by the Appellants. Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2021 (11) TMI 957
  Seeking declaration, mandatory perpetual injunction against the appellants - forfeiture of right to receive equity shares in respect of Secured Zero Fully Convertible Debentures (FCD) - HELD THAT:- The submissions made that the jurisdiction to deal with the subject matter of the suits lay with the Company Law Board under the provisions of Section 111A of the Act, apparently have no substance. In a case where the Company refuses to register transfer / transmission of shares or debentures, the transferee could appeal to the then Company Law Board. However, the provision does not deal with a case of forfeiture of either shares or debentures and as such, the power in this regard lies only with the civil courts - As the jurisdiction under Section 111A of the Act has been consistently held to be limited to transfer and transmission of shares / debentures, challenge laid to forfeiture cannot obviously be entertained by the Company Law Board as determined by the Bombay High Court and the Company Law Board itself and as such, the plea raised pertaining to lack of jurisdiction of the civil courts apparently has no substance. As provisions of Section 122 of the Act provide for specific performance of contract to subscribe for debentures and the same can be enforced by a decree, the same necessarily means that the action pertaining to the allotment or forfeiture of debentures can be questioned before the civil courts - the applications were filed under Order VI, Rule 17 CPC and not under Order I, Rule 10 CPC, therefore, as it was not a case of impleading a new party and the applications were only to bring the cause title of the suits in consonance of the present status of the defendant Company as such, the plea in this regard also has no substance. The attempt to question the validity of orders passed under Order IX, Rule 7 CPC, has been noticed only to be rejected as the appellant had the opportunity to question the validity of the orders during pendency of the first appeals by filing cross-objections in the appeals filed by the respondents-plaintiffs, however, no such attempt was made either by filing cross-objections or by raising issue in this regard during course of hearing in the appeals and as such, the said orders having attained finality, cannot be made subject matter of challenge in the present second appeals - Appeal dismissed.

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• 2021 (11) TMI 956
  Sanction of Composite Scheme of Amalgamation and Arrangement - Sections 230 to 232 read with Section 66 of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

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• 2021 (11) TMI 955
  Sanction of Scheme of Amalgamation - Section 230 read with Section 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not violative to any provisions of law, nor is contrary to public interest. Since all requisite compliance has been fulfilled, the scheme is sanctioned - application allowed.

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• 2021 (11) TMI 954
  Seeking restoration of name of the company in the register maintained by the respondent/Registrar of Companies - section 252 of the Companies Act, 2013 - HELD THAT:- The applicant is seeking restoration of its name in the register as maintained by the Registrar of Companies by relying up on the just ground as contemplated under section 252(3) of the Companies Act, 2013. It was submitted by learned counsel for the applicant that the company has no different viable opportunity in the agricultural field of power plant and under the present condition, the applicant wants to continue the same business as well as to establish the ownership of the property with the intent to save the assets of the company. Taking into consideration the provisions of section 252 of the Companies Act, 2013 and more particularly the just ground as envisaged under sub-section (3) of section 252 of the Companies Act, the name of the applicant-company is ordered to be restored in the register maintained by the respondent, subject to the directions imposed. Application allowed.

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• Insolvency & Bankruptcy

• 2021 (11) TMI 953
  Entitlement of fees of Resolution Professional - Respondent was entitle for his fee upto which date? - whether when CoC decided to replace the Interim Resolution professional he ceased to entitle to any fee? - HELD THAT:- The present is not a case where CoC in first meeting resolved to appoint the Interim Resolution Professional as Resolution Professional rather they in the first meeting resolved to replace the Interim Resolution Professional by another Resolution Professional. The present case is covered by Section 22 (3) (b) where CoC decided to replace the Interim Resolution Professional and it had filed an Application before the Adjudicating Authority for appointment of proposed Resolution Professional on 31.07.2018. Sub-section (4) of Section 22 requires that the Adjudicating Authority shall forward the name of the Resolution Professional proposed under clause (b) of sub-section (3) to the Board for its confirmation and shall make such appointment after confirmation by the Board. The most relevant provision is sub-section (5) of Section 22 which empowers the Adjudicating Authority to pass an order for the Interim Resolution Professional to continue to function as the Resolution Professional where the Board does not confirm the name of the proposed Resolution Professional within 10 days. The present case is not a case where Adjudicating Authority has passed any order after 31.07.2018 to continue the Interim Resolution Professional till the confirmation of the Board is received. After 10 days of sending the name of Resolution Professional to Board by the Adjudicating Authority, there being no order of the Adjudicating Authority to continue the Interim Resolution Professional as Resolution Professional, the Interim Resolution Professional has no right to continue to function as the Resolution Professional after such date. Obviously, the claim of the Respondent to continue to function as Resolution Professional till 09.10.2018 cannot be accepted - From the material on record, it does appear that after first meeting of the CoC dated 16.07.2018 when a decision was taken to replace the Interim Resolution Professional, no substantial work has been done. The second meeting was convened by the Interim Resolution Professional on 10.08.2018 which too was objected and no business was transacted in the said meeting also. Thus, effectively the Interim Resolution Professional could function only till 16.07.2018 and, as noted above, legally he could not have continued after 10 days from sending the proposal of new Resolution Professional by Adjudicating Authority as per Section 22 of the Code. This Tribunal passed an interim order on 12.07.2019 subject to condition of payment of Rs. 10 lakh to Respondent No.2 which has been accepted by Respondent. Looking to the sequence of events and actual work conducted by the Respondent, the amount of Rs. 10 lakh is sufficient to cover the fee payable to the Interim Resolution Professional including the cost for Insolvency Resolution Process - the amount paid to Respondent under interim orders sufficiently cover the Insolvency Resolution Process costs and no further payment is required to be made. Appeal allowed.

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• 2021 (11) TMI 952
  Seeking direction against the Resolution Professional to receive the Resolution Plan they proposed to submit and to place the same before the Committee of Creditors for their consideration under Section 30 of I B Code - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The explanation attached to Sub-section (2), of Section 33, of the Insolvency and Bankruptcy Code, empowers the Committee of Creditors to decide to liquidate the Corporate Debtor, any time after its constitution under sub-section (1) of Section 21 and before the confirmation of Resolution Plan, including at any time before the preparation of the Information Memorandum - it cannot be said that the Committee of Creditors has taken steps in haste and was premature, as there was still a possibility for the Resolution of the Corporate Debtor. The learned Counsel for the Appellant argued that the Corporate Insolvency Resolution Process of the Corporate Debtor commenced on 25 July 2080. Thus, the initial 180 days set out under Section 12 of the IBC expired on 24 January 2019. However, even when the CIRP period was not close to over, the Committee of Creditors chose to liquidate it. Since the COC was authorised to exercise its power under the explanation attached to Sub-section (2) of Section 33 of the I B Code, its action cannot be questioned. The Resolution Applicant has no vested right that his Resolution Plan is considered. No challenge can be preferred to the Adjudicating Authority at this stage. The Resolution Professional is only authorised to examine and confirm that the Resolution Plan conforms to the Code provided under Section 30 (2). It is also clarified that the Resolution Professional is required to examine that the Resolution Plan submitted by the various applicants is complete in all respects before submitting it to the Committee of Creditors - In the instant case, the Resolution Professional preferred an Application before the Adjudicating Authority under Section 33 (2) of the Code prays for a liquidation order of the Corporate Debtor. The RP had brought to the notice of the Adjudicating Authority that an amount of about Rs. 21 crores is receiveable to the corporate debtor from two partnership/proprietors firms, i.e. M/s Innovative Enterprises and Innovative Trading Company. They were interested persons for submitting the expression of interest (EOI). These are group entities of the Appellants. On perusal of the Minutes of the COC, it appears that the RP called the COC Meeting on 15 January 2019 wherein the Expression of Interest (EOI) as submitted by the Appellant was placed before the COC members along with the evaluation by the RP After discussion, it was decided by the COC members that the Appellant s do not fulfil the eligibility criteria. Therefore, the COC has reiterated its decision to put the Corporate Debtor into liquidation. However, the COC has rejected the expression of interest submitted by the Appellant s and has not allowed additional time to submit a Resolution Plan. The COC was fully empowered to take such a decision under its commercial wisdom. Under the explanation attached to Sub-section (2) of Section 33 of the I B Code, 2016, the COC, at any stage after its formation and before the approval of the Resolution, was empowered to resolve to liquidate the Corporate Debtor. Application dismissed.

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• 2021 (11) TMI 951
  Approval of Resolution Plan - seeking the protection to the Joint Resolution Appellants with regard to waiver of requirement of pre-deposit, waiver of interest etc. in reference to statutory dues. - Section 30 of I B Code - HELD THAT:- Since the Appellants are successful resolution applicants, the resolution plan was not challenged by them. The judgment passed by the Hon ble Supreme Court reported in 2021 SCC OnLine SC 313 (Ghanashyam Mishra and Sons Vs. Edelweiss Asset Reconstruction Company Limited through the Director Ors.) [2021 (4) TMI 613 - SUPREME COURT] as has been relied by the Learned Counsel for the Appellants is not applicable. This Appellate Tribunal cannot appreciate the ratio of the judgment of Ghanashyam Mishra in this case in much as the Judgment of Ghanashyam Mishra was not cited before the Ld. Adjudicating Authority and further in absence of challenge the Resolution Plan which was approved vide order dated 21.05.2019. The Ld. Adjudicating Authority while approving the Resolution Plan vide order dated 21.05.2019 in para 44 has rightly observed that In the resolution plan, relief and concession has been sought in respect of statutory dues for making payment in instalments, no coercive action, waiver of requirement of pre-deposit for filing appeals, waiver of interest, penal interest or damages. These are issues to be decided by the respective government department and appropriate application may be moved before them . There is no illegality committed by the Ld. Adjudicating Authority while passing the impugned order - Appeal dismissed.

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• 2021 (11) TMI 950
  Seeking revival/restoration/re-initiation of Corporate Insolvency Resolution Process (CIRP) already admitted - seeking to reset the time line or give fresh start to the CIR process under Insolvency Bankruptcy Code, 2016 - HELD THAT:- This adjudicating authority is convinced that there is breach of terms of settlement dated 02.12.2019. Hence, in terms of the order dated 06.12.2019 and order dated 15.03.2021 of the Hon ble NCLAT, this Adjudicating Authority is inclined to revive/re-store the Corporate Insolvency Process of Corporate Debtor/Respondent M/s. Jagtar Singh Sons Hydraulics Private Limited and Interim Resolution Professional, Mr. Piyush Moona is directed to resume his duties as per direction of this adjudicating authority in the order dated 03.09.2019. Admission order against the corporate debtor dated 03.09.2019 is hereby, revived/restored - Application allowed.

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• 2021 (11) TMI 949
  Seeking approval of Resolution Plan - section 30(6), 31 and 60 (5) of the Insolvency and Bankruptcy Code, 2016 (Code) read with Rule 11 of the National Company Law Tribunal - HELD THAT:- The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39 (4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved. The resolution plan is approved - application allowed.

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• 2021 (11) TMI 948
  Seeking liquidation of the corporate debtor - Section 33(1) of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The CIRP of 180 days in the present matter originally estimated for closure on 07.09.2019 but the exclusion period of 150 days was granted by the bench. Further, the extension of 150 days was granted by this bench on 10.12.2019, completing 330 days of CIRP. Because of non-cooperation of the Corporate Debtor and its directors, it is seen from the provisions of IBC, 2016 is to seek the liquidation as provided under the provisions of section 33 of IBC, 2016. Taking into consideration the provisions of law as well as the facts on record, the liquidation of the corporate debtor is ordered and in the circumstances the corporate debtor stands liquidated and the incidence of liquidation to follow, on and from the date of this order in terms of the provisions of IBC, 2016 and more particularly as given in Chapter-III of IBC, 2016 and also in terms of Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017. Application allowed.

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• 2021 (11) TMI 947
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - time limitation - threshold limit for filing appeal - existence of debt and dispute or not - HELD THAT:- In Part-IV of the application, the total amount of default mentioned is of Rs. 3,00,438/- and the date of default are of 17.07.2018 for the site Sector-48, Gurgaon and 04.09.2018 for site Emerald Plaza, Sector-65 Gurgaon. The present application is filed on 11.09.2021, much after the issuance of the notification. Of course, the date of default mentioned in Part-IV of the application, according to the applicant, is prior to the issuance of the notification, i.e. relates to the month of September 2018. Since vide Notification dated 24.03.2020 the minimum threshold for initiation of CIRP as per Section 4 of IBC is Rs. 1 crore, and the defaulted amount as per Part-IV of the application is of only Rs. 3,00,438/-, therefore, the application does not fulfill the minimum threshold limit to trigger the Corporate Insolvency Resolution Process. The present application is not maintainable in terms of Section 4 of IBC. Therefore, it is needless to consider the issue of limitation - Application dismissed.

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• Service Tax

• 2021 (11) TMI 946
  Maintainability of petition - adjustment of pre-deposit - seeking direction to respondent No.2 to consider the pre-deposit amount as per Annexure-D which is a Challan evidencing the payment of tax and to make appropriate demand after adjusting such pre-deposit - HELD THAT:- The record of personal hearing would indicate that pre-deposit of Rs. 32,33,181/- as per the Challan bearing No.01206 dated 25.09.2014 was requested to be considered after necessary clarification. A copy of the said Challan is produced at Annexure-D to the petition. The material on record does indicate that the petitioner has furnished the Challan bearing No.01206 dated 25.09.2014 for a sum of Rs. 32,33,181/- at the time of personal hearing. No doubt, the order of rejection at Annexure-F dated 18.05.2020 states that the declarant upon verification by the Designated Committee did not have any supporting documents and accordingly, the application was rejected, however, considering the material on record, it would be appropriate to direct reconsideration of the petitioner s application and if it were to be so that the pre-deposit as claimed and supported by the Challan relates to the dispute which is the subject-matter of appeal at Annexure-E, the Designated Committee to re-look into the matter and dispose of petitioner s application in Form SVLDRS-1 in accordance with SVLDR Scheme. Taking note that the letter of rejection dated 18.05.2020 at Annexure-F being cryptic and in light of the discussion made above and in light of the documents being submitted at the time of personal hearing, it would be appropriate to direct that the petitioner s application in Form SVLDRS-1 be reconsidered - the letter of rejection at Annexure-F dated 18.05.2020 rejecting the petitioner s application in Form SVLDRS-1 is set aside and the respondent Designated Committee is directed to reconsider the application of the petitioner in Form SVLDRS-1 at Annexure-A as per the SVLDR Scheme keeping in mind the objective of the Scheme in the letter and spirit. Petition disposed off.

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• Central Excise

• 2021 (11) TMI 945
  100% EOU - CENVAT Credit - supplementary invoices/document on which credit taken - duty paid due to closer of advance licenses in which the appellant had failed the fulfilled the export obligation as per undertaking given by them - delay in taking credit - transfer of credit as per Rule 10(3) of the Cenvat Credit Rules, 2004 - HELD THAT:- The impugned order holds that the Cenvat credit cannot be availed on the basis of supplementary invoices issued by a manufacturer or importer in case of additional amount of Excise duty or additional duties leviable under section 3 of the Customs Tariff Act paid become recoverable on the account of non levy or short levy by reason of fraud collusion or any willful mis- statement or suppression of fact etc. There is no charge that in the show cause notice that there was any fraud collusion or any willful mis- statement or suppression of fact on the part of the appellant and therefore the observations made in the impugned order are irrelevant. In fact the impugned order does not even allege that the said duty was recovered on account of fraud collusion etc. Document on the strength of which credit has been taken - HELD THAT:- The impugned order takes note of Rule 9 of Cenvat Credit rules, to hold that challans are not specified documents except in the circumstances when they are supplementary to the original invoice - Rule 9 permits taking of credit on challans, however, the impugned order holds that credit cannot be taken on the strength of all the challans. It holds that only when an additional amount on duty becomes payable that credit can be availed on the strength of the challans. In the instance case the original duty paying document is bill of entry and the challans are the documents on the strength of which additional duty has been paid. Thus, even going by the logic given by the Commissioner in the impugned order there is no bar on availing credit on the strength of challans - there are no merit in this argument of the Commissioner in the impugned order. Delay in taking of credit - HELD THAT:- In the instances case the duties were paid in the year 2008 and 2009 and credit was taken on 30.11.2009. The duty was paid in the year 2008/2009 and credit was availed on 30.11.2009. At the material time there is no time limit specified for taking of credit. In the year 2014 when time limit for availment of credit was specified, a limit of 1 year was given. In these circumstances, there are no merit in this argument of Commissioner also. Transfer of CENVAT Credit - Rule 10 of the Cenvat Credit Rules - HELD THAT:- Rule 9 clearly specified that in case of merger transfer of credit shall be allowed only if the stock of input as such or in process or the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs or capital goods on which the credit has been availed are duly account for to the satisfaction of Deputy Commissioner of Central Excise as a case may be. In the instance case, it is notice that the permission for conversion of DTA unit to EOU unit was initially granted by the Development of Commissioner, KASEZ, thereafter, the Assistance Commissioner of Central Excise and Customs, Div-Vapi granted license on 15.01.2007. However, from the record it is not clear if the exercise of dealing the transfer of stock of inputs as such or in process all the capital goods transferred was done - in the instance case, it is seen that the issue is not covered by the mischief of Rule 10. It is seen that the appellant merged two units in the year 2007. This duty was paid subsequently by the merged unit in the year 2008/2009. Thus, it is not a case falling within the ambit of Rule 10 of the Cenvat Credit Rules and the same is therefore not applicable to the instance case. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2021 (11) TMI 944
  Validity of pre-revision notices issued - writ petitioner-dealer sent detailed replies to the pre-revision notices but the impugned orders have been made without considering the objections - violation of principles of natural justice - HELD THAT:- There is a statutory requirement is to give a reasonable opportunity to show cause and that the opportunity has been so given means the response of the dealer has to necessarily be considered while making a revisional order. It may or it may not have been considered by the first respondent but the impugned orders do not say anything about the objections. In other words, there is nothing in the impugned orders to demonstrate that the replies have been considered much less have they been dealt with - impugned orders are set aside on the short point that the objections of the writ petitioner-dealer being objections/replies to pre-revision notices have not been considered. Petition disposed off.

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• 2021 (11) TMI 943
  Attachment of property of petitioner - seeking to declare the action of respondent No.1 in attaching her property under the guise of the said notice as illegal and arbitrary - Section 25 of the Andhra Pradesh Revenue Recovery Act, 1864 - Whether the petitioner has got the locus standi and whether there exists any cause of action to challenge the notice titled Demand prior to attachment of land dated 30.01.2006 issued by the Deputy Commercial Tax Officer, Khammam? - HELD THAT:- In the case on hand, as per the version of the petitioner herself, the property was got registered in her name in the year 2006. Of course, her version is also that she came into possession of the property through irrevocable General Power of Attorney in the year 2003 and therefore, she got mutated her name in the relevant revenue records. The General Power of Attorney would not confer any title to the property and even if the contention of the petitioner that she got title to the property in the year 2003 has to be believed upon, there may not be any necessity to get the property registered in her name in the year 2006. That itself goes to show that the petitioner became the absolute owner of the property in the year 2006 - the petitioner herself in the written representation submitted to respondent No.2, which forms part of record and which was submitted by the petitioner herself, made a mention that by paying the balance sale consideration, she got the property registered in her name on 15.02.2006. Undisputedly, the impugned notice was issued on 30.01.2006. Thus, by the said date, no cause of action accrued to the petitioner. Even subsequently also, there is no cause of action for the petitioner. Thus, the writ petition is filed by the petitioner without any cause of action. Whether the petitioner has made out a case to grant the relief sought for by invoking the jurisdiction of this Court under Article 226 of the Constitution of India? - HELD THAT:- The law is well settled that in appropriate cases in spite of availability of alternative remedy, the High Court may still exercise its writ jurisdiction where the writ petitioner seeks enforcement of any of the fundamental rights, where there is violation of principles of natural justice or where the orders or proceedings are wholly without jurisdiction or where the vires of any Act is under challenge - In the case on hand, the petitioner seeks the indulgence of this Court to restrain a competent authority from performing his duties which he is bound to perform under the statute. As such, the writ jurisdiction cannot be invoked. This Court concludes that the relief sought for cannot be granted invoking the jurisdiction of this Court under Article 226 of the Constitution of India which should be exercised only in appropriate and befitting cases - Petition dismissed.

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• 2021 (11) TMI 942
  Assessment of escaped turnover - time limitation - it is submitted that the impugned orders are clearly vitiated by limitation as the same are beyond six years from the date of assessment - Section 27 of TNVAT Act - Assessment Years 2011-12 and 2012-13 - HELD THAT:- Learned counsel adverting to the impugned order submits that sufficient opportunity has been given to the writ petitioner and in support of her contention, learned counsel draws the attention of this Court to the tabulation which talks about nature of opportunity given. It appears that opportunity has in fact been given to the writ petitioner, but there are lacunae, which this Court is able to see. They are, the impugned order does not say what transpired on 07.12.2020 and does not even mention the term personal hearing . The other lacuna is, objections, though received on 10.03.2021, have not been considered in the impugned order dated 12.03.2021. Impugned orders are set aside solely on the ground that there is no mention about personal hearing on 07.12.2020 in spite of a specific directive from this Court and the objections of the writ petitioner received on 10.03.2021 have not been considered - Petition disposed off.

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• Indian Laws

• 2021 (11) TMI 941
  Maintainability of suit - suit is barred by Section 34 of the SARFAESI Act, 2002 or not - acquisition of rights under Assignment deed - fraud with respect to the assignment deed - HELD THAT:- The allegations of fraud are made without any particulars and only with a view to get out of the bar under Section 34 of the SARFAESI Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the SARFAESI Act, which is not permissible at all and which cannot be approved. Even otherwise it is required to be noted that it is the case on behalf of the plaintiff appellant herein that in view of the approved resolution plan under IBC and thereafter the original corporate debtor being discharged there shall not be any debt so far as the plaintiff appellant herein is concerned and therefore the assignment deed can be said to be fraudulent . The aforesaid cannot be accepted. In any case, whether there shall be legally enforceable debt so far as the plaintiff appellant herein is concerned even after the approved resolution plan against the corporate debtor still there shall be the liability of the plaintiff and/or the assignee can be said to be secured creditor and/or whether any amount is due and payable by the plaintiff, are all questions which are required to be dealt with and considered by the DRT in the proceedings initiated under the SARFAESI Act. It is required to be noted that as such in the present case the assignee has already initiated the proceedings under Section 13 which can be challenged by the plaintiff appellant herein by way of application under Section 17 of the SARFAESI Act before the DRT on whatever the legally available defences which may be available to it. The suit filed by the plaintiff appellant herein was absolutely not maintainable in view of the bar contained under Section 34 of the SARFAESI Act. Therefore, as such the courts below have not committed any error in rejecting the plaint/dismissing the suit in view of the bar under Section 34 of the SARFAESI Act - Appeal dismissed.

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• 2021 (11) TMI 940
  Dishonor of Cheque - dispute involved in all the three revision petitions has been amicably resolved and the due amounts have been paid to the complainant - compromise has been effected between the parties without any pressure, undue influence or misrepresentation, or not - Section 147 of the Negotiable Instruments Act, 1881 read with Section 320 (6) Cr.P.C. - HELD THAT:- It is apparent that both the contesting parties are ad idem with respect to the fact that the compromise has been effected between the parties without any pressure, threat or undue influence and the terms of the said compromise have been duly complied with. The compromise would go a long way in maintaining the peace and harmony between the parties and thus, a prayer has been made to the Court for compounding the offence in terms of Section 147 of the Negotiable Instruments Act, 1881 read with Section 320 (6) Cr.P.C. Since the offence relating to dishonour of cheque has a compensatory profile and is required to have precedence over punitive mechanism, therefore, the present revision petitions deserve to be allowed. Petition allowed.

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• 2021 (11) TMI 939
  Dishonor of Cheque - rebuttal of presumption - Existence of legally recoverable debt or not - cheque issued as a security cheque or not - Sections 118 and 139 of NI Act, 1881 - HELD THAT:- A joint reading of Sections 118 and 139 of the Act of 1881 would raise a legal presumption in favour of holder of the cheque that the same was received from the drawer in discharge of whole or in part of any legal debt or liability. Although, the said presumption is rebuttable but in the present case, no such fact is even prima facie proved on record to rebut the said presumption. Neither any document with respect to any loan having been taken from the said Babla has been produced nor there is any proof much less in writing, to even remotely show that any such loan was repaid. Both the Courts below have observed that the defence raised by the petitioner seems to be an afterthought inasmuch as once the alleged loan which was taken from Babla was returned, even then nothing in writing had been taken from the said Babla, clarifying that the cheque which was allegedly issued as a security cheque was not traceable and the amount was being returned - the defence sought to be put forth did not inspire confidence of both the Courts below. In the present case, it is not even remotely shown that the cheque in question which has been admittedly signed by the petitioner was issued as a security cheque. There is nothing on record to disbelieve the version of the complainant to the effect that the same was issued in order to discharge the legal enforceable debt of Rs. 1,00,000/- which had been taken by the petitioner from respondent No. 2/complainant. Moreover, even assuming for the sake of argument in case the same was a security cheque, then also, since the amount was due and payment/return of the said amount has not been proved by the petitioner, then the petitioner cannot escape liability on the ground that the cheque in question was a security cheque. The present Criminal Revision is dismissed.

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• 2021 (11) TMI 938
  Suit for mandatory injunction - execution of deed of settlement or gift - rejection of plaint on the ground that the plaint does not have any cause of action - HELD THAT:- The 1st respondent has filed the suit for a direction to the petitioner to convey the suit property to and in favour of children, the respondents 2 3 by executing deed of settlement or gift and direct the Sub Registrar, SRO, Tambaram, 4th respondent herein not to receive and register any document of conveyance or encumbrance or charge pertaining to the suit schedule property and for permanent injunction restraining the petitioner from encumbering or alienating the suit property. From the materials on record, it is seen that it is the contention of the 1st respondent that suit property was purchased for the benefit of the children, the respondents 2 and 3. It is purchased in the name of the petitioner which is a benami transaction. This issue whether the suit property was purchased for the benefits of respondents 2 and 3 by the 1st respondent or the petitioner has purchased the suit property from her own funds can be decided only after conclusion of Trial by appreciating the oral and documentary evidence let in by the petitioner and 1st respondent. The 1st respondent has made averments in the plaint that the petitioner is trying to alienate the suit property to defeat the benefits of respondents 2 and 3 and also stated that the 1st respondent issued notice dated 29.09.2014 to the 4th respondent not to receive and register any document presented by the petitioner. These averments discloses cause of action. It is well settled that while considering the application filed under Order VII Rule 11 C.P.C., the Court has to take into account only the averments in the plaint and documents filed along with the plaint. The averments in the written statement, affidavit filed in support of the application under Order VII Rule 11 or documents relied on by the defendants in the written statement cannot be taken into account at the stage of considering I.A. filed under Order VII Rule 11 C.P.C. This Civil Revision Petition is dismissed.

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• 2021 (11) TMI 937
  Dishonor of Cheque - insufficiency of funds - legal notice came to be issued and the notice was not claimed by the accused - rebuttal of presumption - admissibility of evidences - section 118 of NI Act - HELD THAT:- It is an undisputed fact that cheque belongs to the accused and it bears his signature. This fact is undisputed fact. Though there is an endorsement by the banker that there are material alterations in the cheque that is not substantiated as name was written in English and other figures are in Kannada language. There is no bar under law that cheque should be written in particular language and even if it is written in different languages it is admissible in evidence under Section 118 of NI Act. Apart from that Ex. P15 is a material document which is the petition filed by the petitioner for insolvency and there in paragraph No. 5, the petitioner who is the revision petitioner herein has specifically admitted issuance of cheque to respondent No. 1 there in, who is the respondent herein being the complainant. Hence, issuance of cheque is undisputed. Now the only defence raised is cheque is issued towards legally enforceable debt to the tune of Rs. 50,000/-. But to substantiate this contention the revision petitioner has not entered in to witness box. He has not even bothered to reply to the legal notice issued to him and failed to claim it - Admittedly the Insolvency proceedings filed by the revision petitioner/accused is already dismissed and under these circumstances, he does not have any other remedy but to pay the cheque amount or to face the consequences. Learned counsel for the revision petitioner contends that matter may be remanded to the trial Court to enable the revision petitioner to lead his defence evidence as per his defence. But when an opportunity was given to the revision petitioner before the trial Court, he did not availed that opportunity and even such defence was not raised before the appellate Court also. No other grounds are forthcoming to remand the matter. Considering the facts that cheque has been admitted the presumption in favour of the complainant is required to be drawn which is mandatory under Section 139 of NI Act. The accused has failed to rebut the said presumption. Both the Courts below have appreciated the oral and documentary evidence in detail and hence, the judgment of conviction and order passed by both the Courts below cannot be said to be erroneous, arbitrary or illegal so as to call for any interference by this Court - Petition dismissed.

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• 2021 (11) TMI 936
  Dishonor of Cheque - insufficiency of funds - respondent has submitted that the learned appellate judge was right in dismissing the complaint on the ground that the cheques were not issued by the accused as the complainant failed to establish the issuance of cheques and the features of Negotiable Instruments and he is not entitled for presumption therein - HELD THAT:- There appears to be contradictions in treating the application filed under Section 45 or 43 of the Indian Evidence Act. The trial court has observed in both the cases that application under Section 43 Indian Evidence Act were filed. However, it is stated that the said applications were filed by the accused. Thus, the learned trial judge mis-read the parties who has filed the application under Section 43 of Indian Evidence Act which was in connection with the proof of the signature. The said application came to be allowed by the learned trial judge in both the cases. But the accused has not taken any steps thereafter. Though the application filed by complainant before the trial court was allowed in each case, he failed to prosecute further either in referring the name of the experts or in depositing the commissioner s fee. However, both the complaints came to be allowed in the circumstances and facts of the case by the trial court. However, the appellate court in the appeals finds that the application filed by complainant in both the cases was not followed by him and not complied with the ingredients of the said Section by naming expert or depositing the amount and allowed the appeal by reversing the judgment passed by the learned trial judge and by acquitting the accused. Thus, if the complainant has filed application and the learned trail judge or learned appellate judge ought to have allowed the matter to see the logical end. Even before mentioning the error of the trial court, the appellate court also should have brought to the notice of the parties regarding the lapses. In this connection, both the learned trial court and appellate court have erred in adopting the hasty approach - matters are to be remanded to the trial court with a direction to the complainant to refer the name of the expert and also deposit the commissioner s fee and the required expenditure within 7 days from the first hearing date before the trial court. Petition allowed by way of remand.

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