TMI Tax Updates - e-Newsletter
December 23, 2021

Case Laws in this Newsletter:

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

Articles

1. Whether Form GSTR-3B is a return or not under the CGST Law

   By: Bimal jain

2. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

3. TOP 10 FAQ’S ON LLP AFFAIRS & Latest Extension

   By: CSLalit Rajput

News

1. Finance Minister Smt. Nirmala Sitharaman concludes pre-Budget meetings for forthcoming Union Budget 2022-23

2. More than 25,000 compliances reduced by centre so far in its bid to promote Ease of Living and Ease of Doing Business

3. Minutes of the Monetary Policy Committee Meeting, December 6 to 8, 2021 [Under Section 45ZL of the Reserve Bank of India Act, 1934]

4. Cabinet approves Memorandum of Understanding between Institute of Chartered Accountants of India (ICAI) and The Polish Chamber of Statutory Auditors (PIBR)

5. Cabinet approves Memorandum of Understanding between Competition Commission of India and Competition Commission of Mauritius

6. Services Sector

7. Challenges in e-Commerce

8. Global Shortage of Containers

9. Toy Manufacturers

10. National Retail Policy

11. Make In India

Notifications

Customs

1. 75/2021 - dated 21-12-2021 - ADD

Seeks to impose Anti-dumping Duty on Imports of Hydrofluorocarbon (HFC) component R-32 from China PR

2. 74/2021 - dated 21-12-2021 - ADD

Seeks to levy anti-dumpnig duty on imports of 'Silicone Sealant' originating in or exported from China PR for a period of five years.

GST

3. 39/2021 - dated 21-12-2021 - CGST

Seeks to notify 01.01.2022 as the date on which provisions of section 108, 109 and 113 to 122 of the Finance Act, 2021 shall come into force.

4. 38/2021 - dated 21-12-2021 - CGST

Seeks to bring sub-rule (2) and sub-rule (3), clause (i) of sub-rule (6) and sub-rule (7) of rule 2 of the CGST (Eighth Amendment) Rules, 2021 into force w.e.f. 01.01.2022.

GST - States

5. F.1-11 (91)-TAX/GST/2021 (PART) - dated 18-12-2021 - Tripura SGST

Seeks to exempt taxpayers having AATO upto ₹ 2 crores from the requirement of furnishing annual return for FY 2020-21

6. F.1-11 (91)-TAX/GST/2021 (PART) - dated 18-12-2021 - Tripura SGST

Seeks to notify section 4 and 5 of the TSGST (Fourth Amendment) Act, 2021 w.e.f. 01.08.2021

7. F.1-11 (91)-TAX/GST/2021 (PART) - dated 18-12-2021 - Tripura SGST

Seeks to appoint 01.06.2021 as the day from which the provisions of section 6 of TSGST (Fourth Amendment) Act, 2021, relating to amendment of section 50

8. 17/2021-State Tax (Rate) - dated 2-12-2021 - Tripura SGST

Amendment in Notification No. 17/2017-State Tax (Rate) dated the 29th June 2017

9. 16/2021-State Tax (Rate) - dated 2-12-2021 - Tripura SGST

Seeks to amend Notification No. 12/2017- State Tax (Rare), dated the 29th June 20l7

10. 15/2021-State Tax (Rate) - dated 2-12-2021 - Tripura SGST

Amendment in Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017

Circulars / Instructions / Orders

VAT - Delhi

1. F. No.5(4)Misc./L&J/2018-2019/2340-45 - dated 17-12-2021

Clarification on limitation period for Remand Back Cases U/s 34(2) of DVAT Act 2004

SEBI

2. SEBI/HO/DDHS/DDHS_Div2/P/CIR/2021/697 - dated 22-12-2021

Extension of facility for conducting annual meeting and other meetings of unitholders of REITs and InvITs through Video Conferencing (VC) or through Other Audio-Visual means (OAVM)

3. SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/698 - dated 22-12-2021

Restoration of relaxed timelines w.r.t. validity of observation letter pertaining to Mutual Funds

Highlights / Catch Notes

GST

• Court Suggests Bail for Petitioner Accused of Tax Evasion via Fake Firms and Transactions to Claim GST Refunds.

  Case-Laws - HC : Seeking grant of Regular Bail - evasion of the State Tax to the Govt., by floating bogus firms and showing fake billings and transactions in order to draw the refund of the GST payment - No useful purpose would be served by keeping the petitioner behind the bars. - HC
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• Court Denies Anticipatory Bail Over Alleged Illegal Tax Credits Involving Non-Existent Companies; Verification Confirms Firms Absent.

  Case-Laws - HC : Grant of anticipatory bail - illegal tax credit availed by the applicant - fake companies - there is substance in the contention of the learned counsel for the revenue, particularly in the verification reports stating that the five firms with whom the applicant has dealt with are not physically in existence. - No case for grant of bail is made out - HC
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Income Tax

• High Court Requires Detailed Review of Penalty Validity u/s 271 Due to Errors in Penalty Notice.

  Case-Laws - HC : Penalty u/s 271 - assessment under section 153C has been completed on the figures disclosed by it in the return filed under section 153C -Whether Tribunal was justified in law in invalidating the penalty proceedings on mere mistake in the penalty notice? - More thorough exercise is required to be done by the Tribunal on the issue with regard to the levy of penalty which was sustained by the CIT[A] on the ground whether the additional income offered by the assessee in the return filed pursuant to notice under section 153C could be taken to be not voluntary and whether it could be treated imposition of penalty. Similarly, with regard to the validity of the notice also needs to be considered after taking note of the factual position. - HC
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• Assessee Allowed to Challenge Jurisdiction on Penalty Due to Flawed Notice u/s 271(1)(c) of Income Tax Act.

  Case-Laws - HC : Penalty levied u/s 271(1)(c) - We are of the view that assessee should not be shut out from raising the jurisdictional issue. The Tribunal on going through the record and in particular, the show-cause notice dated 29th December, 2010 has recorded a finding of fact that the irrelevant portions of the show-cause notice has not been struck off and thus prejudiced the assessee from putting forth an effective objection - HC
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• Interest Deduction on Borrowed Funds for Strategic Investments Upheld u/s 36(1)(iii) of Income Tax Act.

  Case-Laws - AT : Disallowance u/s.14A in respect of strategic investments made by the assessee - In any case, the undisputed fact is that the borrowed funds has been utilized by the assessee for making investment in the group company which is made in the ordinary course of business and hence, once the borrowed funds are utilized for the purpose of business, the interest paid thereon would be squarely allowable as deduction u/s.36(1)(iii) of the Act. - AT
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• Section 69A Income Tax Case: Assessee's Claim on Unexplained Money Accepted, Admissions Not Always Conclusive Evidence.

  Case-Laws - AT : Addition u/s 69A - unexplained money - The fact that the Assessee disowned the entries in one AY and claimed that it is part of receipts disclosed in another AY cannot be the basis to reject the claim of the Assessee. Admissions are good piece of evidence but are not conclusive. The person making the admission is entitled to show that admission is incorrect or was made under erroneous belief or owing to other circumstances. The circumstances of the present case clearly demonstrate the correctness of the plea raised by the Assessee - AT
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Customs

• Petitioners Granted Immunity u/r 5 After Payment; Criticized for Delays; Can Seek Further Legal Remedies.

  Case-Laws - HC : Immunity from prosecution subject to payment of compounding amount as prescribed under Rule 5 in terms of grant of order under Rule 4(3) of the said Rules - the Petitioners have been guilty of gross delay and laches in not abiding by and adhering to the mandate of law. - It shall be open to the Petitioners to pursue any other remedy available to the Petitioners including the application to the Settlement Commission in accordance with law. Needless to state that if the Petitioner(s) have voluntarily paid any amount during the period of investigation as stated, the Petitioners shall be entitled to a set off for the said amount. - HC
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• Court Rules No Evidence of Smuggling for Betel Nuts; Revenue Fails to Prove Foreign Origin Claim.

  Case-Laws - AT : Smuggling - Betel Nuts of foreign origin - The conclusion arrived at as regards the foreign origin of the said goods and the smuggled nature by the adjudicating authority is based on surmises and conjectures. The goods were seized far away from the international border in the interior of North Bengal from trucks/warehouses. It is an undisputed fact that betel nuts are sold in the adjoining State of Assam, Monipur as well as the said North District of West Bengal and their adjacent area. In such circumstances, in the absence of any evidence to the contrary disclosed it has to be concluded that the Revenue has been unable to establish the smuggled nature of the seized goods and thus discharged the burden of proof cast upon the Revenue in this respect. - AT
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• Refund Claim for Special Additional Duty Rejected; Timing Rules u/s 3(6) of Customs Tariff Act Clarified.

  Case-Laws - AT : Refund claim of Special Additional Duty (SAD), which is in lieu of sales tax - rejection on the ground of time limitation - the expression “so far as may be” used in the sub-section (6) of Section 3 of CTA, has to be followed to the extent possible. Merely because Section 27 of the Customs Act provides for a period of limitation for filing refund claim, it cannot be held that even for the purposes of claiming refund in terms of the Notification, the same limitation has to be applied. - AT
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Indian Laws

• Section 143A of Negotiable Instruments Act: Court's discretion on interim compensation for dishonored cheques, not mandatory.

  Case-Laws - HC : Dishonor of Cheque - grant of interim compensation - It becomes apparent that the provision of Section 143A of the NI Act, 1881 has essentially to be held to be “directory’ and cannot be termed to be “mandatory’ to the effect that the Trial Court has mandatorily to award the interim compensation under Section 143A of the NI Act, 1881 in all proceedings tried under Section 138 of the NI Act, 1881 on the mere invocation thereof by a complainant and thereby order in terms of Section 143A(2) thereof, the interim compensation to the tune of 20% of the amount of the cheque invoked. - HC
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• Bijapur Court Has Jurisdiction in Cheque Dishonor Cases Under Amended Section 142(2) of NI Act 2015.

  Case-Laws - HC : Dishonor of cheque - jurisdiction - where a cheque is delivered for collection at any branch of the bank of payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account. When such amendment was brought in 2015 and inserted section 142(2) of the NI Act, the very contention of the petitioner that the Bijapur Court is not having jurisdiction to try the complaint filed for the offence under section 138 of NI Act, cannot be accepted. - HC
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• Court Finds Petitioner Guilty u/s 138 for Issuing Cheque for Legally Enforceable Debt Without Rebuttal Evidence.

  Case-Laws - HC : Dishonor of Cheque - legally enforceable debt or not - In the absence of any rebuttal proof the initial presumption that was taken in favour of the respondent will become the conclusive proof. Since it is not proved by the petitioner that the cheque in question has been issued by way of security, the Courts below held that the petitioner has issued the cheque only for a legally enforceable debt and he is guilty for the offence under Section 138 of Negotiable Instruments Act. - HC
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• U.P. RERA orders refunds with interest for allottees u/s 31; ongoing projects must register u/s 3.

  Case-Laws - SC : U.P. RERA - Refund of the investment made along with interest to allottees under Section 31 of of The Real Estate(Regulation and Development) Act, 2016 and The Uttar Pradesh Real Estate(Regulation and Development) Rules, 2016 - From the scheme of the Act 2016, its application is retroactive in character and it can safely be observed that the projects already completed or to which the completion certificate has been granted are not under its fold and therefore, vested or accrued rights, if any, in no manner are affected. At the same time, it will apply after getting the on­going projects and future projects registered under Section 3 to prospectively follow the mandate of the Act 2016 - SC
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IBC

• CIRP Case Decides BSE Listing Fees Are Not Operational Debts; SEBI Can Enforce Recovery Under Its Act.

  Case-Laws - AT : Initiation of CIRP - Operational Creditors or not - listing fee and its arrears levied by the BSE - The submission of the learned Counsel for the Appellant that there is no method for recovery of dues provided by the SEBI, cannot be accepted as SEBI is empowered to punish the defaulters for the recovery of regulatory dues. There are ample provisions for recovering under the SEBI Act and the circulars issued by the SEBI from time to time. - Adjudicating Authority did not commit any error in rejecting the Application under Section 9 filed by the Appellant - AT
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• Insufficient votes stall resolution plan approval; CoC to consider liquidation or revised plans for 66% vote.

  Case-Laws - AT : Approval of Resolution Plan - voting share was not sufficient enough to get any plan approved - There are only two option available as on date, first to direct the Adjudicating Authority to take up the Application filed by the Resolution Professional for passing an order for liquidation and second to make a last effort to see as to whether any of the four plans could get the requisite number of votes i.e. 66% vote. The Resolution Process having gone such a long way, it should be brought to its logical end. We record out approval to the CoC decision dated 07.10.2021 to approach all the four Resolution Applicants. Much time having lapsed, we are of the view that before the Application filed by the Resolution Professional praying for liquidation is taken by the Adjudicating Authority, we may give one more opportunity to all the four Resolution Applicants to submit their revised plan and thereafter the CoC may deliberate and vote on all the four plans. - AT
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• Authority's Discretion Valid in Hearing Homebuyers' Objections Before Admitting Pre-Packaged Insolvency Process, No Prohibition Exists.

  Case-Laws - AT : Jurisdiction - rights of Adjudicating Authority to hear Objectors/ Interveners, before admission of the Application - The Scheme under Chapter III-A and the Regulations 2021 do not contain any express provision either prohibiting the Adjudicating Authority from hearing any of the objectors or interveners prior to the admission of pre-packaged insolvency resolution process application or providing for giving notice or hearing to the interveners or objectors. The objectors who had filed applications were all Homebuyers who have purchased one or more units in the Real Estate Projects of the Appellant - No error has been committed by the Adjudicating Authority in giving opportunity to the objectors to file their objections - AT
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• Bank Not Secured Creditor in Insolvency Despite Tripartite Agreement with Homebuyers and Corporate Debtor.

  Case-Laws - AT : Tripartite agreement - financial creditors or not - Bank has released housing loans to some of the allottees who have purchased Flats/units in the Project floated by the ‘Corporate Debtor’ - Presence of a mere tri-partite Agreement does not change the character of the amount borrowed by the Home Buyer vis-a-vis the Bank and vis-a-vis the ‘Corporate Debtor’. Viewed from any angle, the Appellant cannot be included as a ‘Secured Financial Creditor’ in this case and hence, there are no reasons to interfere with the well-reasoned Order of the Adjudicating Authority. - AT
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• Failure to Pay Annual Listing Fees is a Regulatory Due, Not Operational Debt, Under IBC Section 9.

  Case-Laws - AT : Right to apply under Section 9 of IBC - Regulatory Dues versus Operational Debt’ - failure to pay requisite Annual Listing fees (“ALF”) on or before the 30th day of April, every year. - Period of limitation - Listing Fees comes under the ambit of ‘Regulatory dues’ which SEBI is entitled to recover. The Respondent being an entitly registered under SEBI, is under an obligation to follow the Regulations prescribed by SEBI for recovery of its dues. The dues so said are not ‘Operational Dues’ but ‘Regulatory Dues’. The Insolvency Law Committee suggests that Regulatory Dues are not to be recovered under ‘Operational Debt’. - No interference is required - AT
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Central Excise

• Pre-deposit requirement of 7.5% for appealing penalties is reasonable and aligns with statutory rights.

  Case-Laws - HC : Requirement of pre-deposit of 7.5% of the penalty imposed - The requirement for 7.5% pre-deposit of the penalty demanded cannot be said to be exorbitant or onerous, more so when it is well settled that when a statute confers a right of appeal, while granting the right, the legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions. - HC
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• Court Rules No Evidence of Clandestine Goods Removal; Duty Demand in Show Cause Notice Deemed Unsustainable.

  Case-Laws - AT : Clandestine manufacture and removal - shortage of finished goods or not - There was no clandestine removal of goods against the seized Gate Passes, which are also not provided to Appellants to clarify this aspect further. Charge of clandestine removal without payment of duty is not proved. Duty demand in Show Cause Notice dated 18.12.2019 and confirmed by Order-in-Original dated 04.12.2020 is also not sustainable. - AT
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• Appellant Entitled to CENVAT Credit and Refund for Service Tax Paid in 2018 Under Reverse Charge Mechanism Per CGST Act Sections 142(6) & 143(3.

  Case-Laws - AT : CENVAT Credit - Import of services - Service tax under RCM after audit objections - Neither there is any case of issue of supplementary invoices nor there is any case of fraud, collusion, mis-statement, etc. Under such facts and circumstances, it is held that the appellant is entitled to cenvat credit of service tax paid under reverse charge mechanism in October, 2018. Further, the appellant is entitled to refund of this amount in terms of Section 142(6) read with 143(3) of the CGST Act. - AT
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VAT

• Court Rules No Entry Tax on MMV Hydraulic Mobile Crane Import Due to Exemption Under Proviso (b) to Section 3(1.

  Case-Laws - HC : Levy of Entry Tax - The vehicle was first registered in the year 1994 in the Union Territory of Pondicherry. It was imported into the State by the petitioner only during October, 1998. Therefore, the purchase by the petitioner was beyond the period of 15/18 months after its registration. It was not necessary for the petitioner to have a prior registration of the vehicles in his own name in the Union Territory of Pondicherry to claim exemption under proviso (b) to Section 3(1) of the Act. There is no scope to levy entry tax on the petitioner under proviso (b) to Section 3(1) of the Act on the imported “MMV Hydraulic Mobile Crane” purchased from a seller in Union Territory of Pondicherry. - HC
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Case Laws:

• GST

• 2021 (12) TMI 950
  Seeking grant of Regular Bail - evasion of the State Tax to the Govt., by floating bogus firms and showing fake billings and transactions in order to draw the refund of the GST payment - Sections 69, 132(1), a, b and c of the Punjab Goods and Service Act, 2017 - HELD THAT:- In the present case, the matter already stands investigated qua the petitioner. Moreover, the petitioner has been in custody since 09.02.2021. Trial of the case would take time to conclude. No useful purpose would be served by keeping the petitioner behind the bars. Thus, the present petition is allowed and the petitioner is ordered to be on regular bail on execution of adequate personal/surety bonds amounting to Rs. 5 lakh to the satisfaction of concerned trial Court/Duty Magistrate - Decided in favor of petitioner.

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• 2021 (12) TMI 949
  Seeking directions to the respondents restraining them from taking action pursuant to the impugned Circular dated 6 th October, 2021 without following the due process of law - HELD THAT:- Mr.Singla, learned counsel for respondents no.2 and 3, states that this Court has no territorial jurisdiction to entertain the present writ petition. Since this Court has already issued notice in the main writ petition as well in stay application, this Court is of the view that the present application serves no purpose. The present application is dismissed.

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• 2021 (12) TMI 948
  Grant of anticipatory bail - illegal tax credit availed by the applicant - fake companies - HELD THAT:- Mr. Merchant is justified in claiming that the companies with whom the applicant has dealt with and from whom he has availed tax input credit, were granted registration certificate. He could also be justified in claiming that the documents relating to such transactions in availing input tax credits are available with the department - However, during the inquiry in the State of Karnataka, so also in Bombay, it revealed that the five firms with whom the applicant has dealt with and has availed input cash credit are not physically in existence as was found on physical verification. As such, it can be noticed that even if the applicant claimed to have transactions with the companies, custodial interrogation is necessary so as to find out who was operating such fake companies and further investigation as to the whether such fake firms are in operation - there is substance in the contention of the learned counsel for the revenue, particularly in the verification reports stating that the five firms with whom the applicant has dealt with are not physically in existence. No case for grant of bail is made out - Application rejected.

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• 2021 (12) TMI 947
  Seeking grant of Regular bail - availment and utilization of fake input tax credit - non filing of challan / complaint against the applicant - applicability of Chapter XII Cr.P.C. - HELD THAT:- Taking note of the fact that the allegations against the applicant/accused are serious in nature ; applicant is involved into the heinous economic offence of utilizing the fake ITC causing loss to the government exchequer; additionally investigation is at crucial stage ; number of persons involved into the present case including the brother of the present applicant are absconding and evading the process of law, therefore, bail cannot be granted at this juncture to the applicant/accused. Application dismissed.

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• Income Tax

• 2021 (12) TMI 946
  Penalty u/s 271 - assessment under section 153C has been completed on the figures disclosed by it in the return filed under section 153C -Whether Tribunal was justified in law in invalidating the penalty proceedings on mere mistake in the penalty notice? - HELD THAT:- AO stated that the mere fact that the assessee has correctly quantified its concealed income, which has been accepted by the department, has no co-relation with the fact that the assessee has not concealed its income. Further, during the course of search, incriminating documents were found which revealed that the assessee was having concealed income and when the assessee was confronted with the same he had no other alternative but to admit that he had indeed concealed the particulars of income and he in the due course of time came out with a correct calculation of his undisclosed income. Thus, the assessee having not disclosed the income in the return of income filed under section 139[1] but has shown the same in the return in response to the notice under section 153C cannot be said to be voluntary. With regard to the alleged defect in the notice issued under section 274 of the Act, either on the ground that the relevant portions have not been clearly indicated or that satisfaction of the Assessing Officer has not been properly made was not canvassed before the CIT[A]. This contention appears to have been canvassed for the first time before the Tribunal. It may be true that the Tribunal being the last fact finding forum in the hierarchy is entitled to examine an issue qua the assumption of jurisdiction of the authority to initiate proceedings as it may be argued by the assessee that the said issue goes to the root of the matter. Be that as it may, if the Tribunal proposes to undertake such an exercise then it should do so after hearing the assessee and the Revenue also and the reasons of its satisfaction for accepting the case of the assessee should be clearly spelt out. More thorough exercise is required to be done by the Tribunal on the issue with regard to the levy of penalty which was sustained by the CIT[A] on the ground whether the additional income offered by the assessee in the return filed pursuant to notice under section 153C could be taken to be not voluntary and whether it could be treated imposition of penalty. Similarly, with regard to the validity of the notice also needs to be considered after taking note of the factual position. For the above reasons, the appeal is allowed and the order passed by the Tribunal is set aside and the matter is remanded to the Tribunal for fresh consideration .

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• 2021 (12) TMI 945
  Penalty levied u/s 271(1)(c) - whether penalty is being levied for concealment or for furnishing of inaccurate particulars of income, the penalty levied consequent to the impugned notice was without jurisdiction and liable to be quashed? - HELD THAT:- The assessee cannot be non-suited from raising such a contention that too before a Tribunal, even assuming it is for the first time. This is so because the Tribunal is the last forum which will decide the factual issue. Therefore, assessee cannot be prevented from raising such a contention. We say so because in the case on hand, the assessee is an individual. It may be true that there are other decisions of the various High Courts which have refused to entertain such a ground at the appeal stage, namely the penalty notice was defective. But those decisions are distinguishable on facts and in most of the cases assessee like a big corporate house having a large legal team to advise and therefore, the question of inadvertence can never be pleaded by the assessee. In contrast to the same, the present case in which the assessee before us is an individual. We are of the view that assessee should not be shut out from raising the jurisdictional issue. The Tribunal on going through the record and in particular, the show-cause notice dated 29th December, 2010 has recorded a finding of fact that the irrelevant portions of the show-cause notice has not been struck off and thus prejudiced the assessee from putting forth an effective objection. The Tribunal also rightly took note of the decision in CIT ANR V. MANJUNATHA COTTON AND GINNING FACTORY, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Thus, we find there is no error in the decision of the Tribunal nor the decision making process for us to interfere with the said order. Accordingly, appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.

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• 2021 (12) TMI 944
  Assessment u/s 144C - HELD THAT:- In view of the CBDT Circular dated 30.04.2021, the objections filed by the petitioner before the DRP were clearly within the time. The same has now been heard on merit by the DRP. Therefore, keeping in view of the scheme of Section 144C of the Act we set aside the Impugned Final Assessment Order dated 30.06.2021, directing the respondent to act in accordance with the procedure stipulated in Section 144C.

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• 2021 (12) TMI 943
  Deduction u/s 80IA - claim denied as assessee was not engaged in the process of manufacture, but only assembling the parts procured from others - ITAT allowed the claim - HELD THAT:- As decided in ELGI ULTRA INDUSTRIES LIMITED [ 2012 (8) TMI 809 - MADRAS HIGH COURT] assessee himself is not personally engaged in the manufacture, would not disentitle the assessee from claiming the relief as one engaged in manufacturing activity, for, so long as the assessee exercises control in the work entrusted to job workers, the assessee would be entitled to the relief under Section 80IA of the Act. Being a deduction provision, taking note of the present day outsourcing of various activities, we need to give a meaningful expression to assessee engaged in the manufacturing process , to hold that so long as the effective involvement of the assessee is there in the form of quality control or supply of material and dyes for the manufacture of parts of the grinders or machinery, even in the case of assembling done through job work, the assessee would be entitled to have the benefit under Section 80IA of the Act. In the circumstances, guided by the decision of RAMALINGAM [ 1994 (11) TMI 14 - MADRAS HIGH COURT] we hereby rejecting the Revenue s appeal, thereby, confirming the order of the Tribunal. Addition of bad debts written off - conditions laid down under section 36(1)(vii) read with section 36(2) were not satisfied by the assessee - claim for deduction was disallowed by the assessing officer on the ground that the debts have been taken over from the sister concerns voluntarily only as a measure of support to it and knowing fully well that the same was irrecoverable and hence, the same was liable to be denied - ITAT allowed the claim - HELD THAT:- Tribunal taking note of the position that the Memorandum and Articles of Association permitted the assessee to carry on the business of money lending and the transactions in question have been held to be in the realm of business activity. When there is no dispute raised on the aforesaid factual position, this court finds no reason to differ with the view taken by the Tribunal. In view of the same, the second substantial question of law is also answered in favour of the assessee and against the Revenue.

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• 2021 (12) TMI 942
  Rectification of mistake u/s 154 - Delayed Employees contribution to the Employee Provident Fund and Employee State Insurance Fund - addition u/s 2(24)(x) r/w s. 36(1)(va) - scope of amendment - HELD THAT:- In the Tribunals decision in Nikhil Mohine [ 2021 (11) TMI 927 - ITAT JABALPUR] while confirming the Explanations under reference to be explanatory of the law, even as signified by the clear, unambiguous language employed therein, are yet stated to be prospective inasmuch as they are applicable assessment year 2021-22 onwards. Lastly, no decision by Hon ble jurisdictional High Court in the matter has been either cited before me, or found, which, where so, would, irrespective of the view expressed therein, hold for the relevant years, being prior to the year of applicability of the Explanations under reference. No adjustment, in view of the conflicting judicial opinion could, accordingly, be made to the returned income u/s. 143(1)/154, which sections admit only issues on which there could be conceivably no two views, rampant, irrespective of merits thereof, in the instant case, which aspect, as explained therein, has been given cognizance to in making the provision applicable not retrospectively. The assessee, accordingly, succeeds in his challenge to the impugned adjustments, which are held as bad in law and directed for deletion. Explanations themselves had been proposed as prospective amendments, as stated in the Notes on the Clauses to, and the Memorandum explaining the Provisions of, the Finance Bill, 2021, with a view to, as explained, settle the controversy arising due to the contrary view expressed by some High Courts, for which reference may be made to para 5.4 of the Tribunal s order (also refer paras 3.1 3.2 above). There is, accordingly, no question of the same being given a retrospective effect. There is, in view of the foregoing, no question of the said Explanations being read as retrospective, so as to apply for the relevant year, sustaining the impugned additions, which therefore fail. This is, however, subject to any decision/s by the Hon ble jurisdictional High Court, which would, where so, hold, even justifying a rectification u/s. 154/254(2), even where rendered after the date of the order sought to be rectified - See SAURASHTRA KUTCH STOCK EXCHANGE LTD [ 2008 (9) TMI 11 - SUPREME COURT] and SMT. ARUNA LUTHRA. [ 2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT] No such decision has been found, or otherwise pointed out by the parties, as was the case before the Tribunal in Nikhil Mohine (supra). Any such decision, even if discovered later, may operate to amend this order, or the order giving appeal effect thereto, to bring it in conformity or agreement with the said decision/s, of course, after allowing a fair opportunity of hearing to the assessee. The impugned additions, therefore, could not have been made under the given facts and circumstances of the case, and are directed for deletion. Assessee appeal allowed.

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• 2021 (12) TMI 941
  Disallowance of expenses out of salary, Staff Welfare and Bonus etc. - entire addition has been made purely on the basis of conjectures and surmises - HELD THAT:- CIT(A) erred in sustaining the disallowance on the ground that expenses so claimed are excessive and abnormal without adverting to the evidences field in support of the claim. Even the A.O also made disallowance without assigning any reason as to how the expenses claimed are excessive and unreasonable. Revenue has not brought any adverse material on record except saying that the expenses are unreasonable. Therefore, such a casual approach by the authorities below cannot be affirmed. No disallowance is permissible under the law purely on the basis of guess work. There has to be some finding with regard to evidences filed by the assessee. Therefore, having regard to the facts of the present case the decision of the authorities below cannot be sustained. I, therefore, direct the A.O to delete the addition. The ground of assessee s appeal is allowed.

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• 2021 (12) TMI 940
  Late remittance of employees contribution to PF and ESI under the respective Acts - Scope of amendments - HELD THAT:- On identical facts, the Bangalore Bench of the Tribunal in the case of M/s. Shakuntala Agarbathi Company [ 2021 (10) TMI 1196 - ITAT BANGALORE] by following the dictum laid down by the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] had held that the assessee would be entitled to deduction of employees contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s 139(1) - ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. As the amended provisions of section 43B as well as 36(1)(va) of the I.T.Act are not applicable for the assessment years under consideration. By following the binding decision of the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT (supra), the employees contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the I.T.Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee

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• 2021 (12) TMI 939
  Delayed payment of employees contribution to PF and ESI paid after the due dates prescribed in the relevant Statutes but before the due date of filing of return under section 139(1) - HELD THAT:- As the issue involved in the present appeal as well as the material facts relevant thereto are similar to the case of Lumino Industries Limited [ 2021 (11) TMI 926 - ITAT KOLKATA] respectfully follow the decision rendered by the Tribunal in the said case and delete the disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of delayed payment of employees contribution towards PF and ESI. - Decided in favour of assessee.

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• 2021 (12) TMI 938
  Employees share of contribution to ESI to the extent not paid on or before the due date as mentioned in Sec 36(1)(va) - HELD THAT:- The Hon ble Karnataka High Court in the case of Essae Teraoka Pvt. Ltd., [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] has taken the view that employee s contribution under section 36(1)(va) of the Act would also be covered under section 43B of the Act and therefore if the share of the employee s share of contribution is made on or before due date for furnishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, the issue is covered by the decision of the Hon ble Karnataka High Court. In this case there is no dispute that the assessee made payment of the Employees share of PF/ESI on or before the due date for filing return of income for AY 2017-18 u/s.139(1) of the Act. Whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also? - We find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so - tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1.4.2021. We are therefore of the view that the impugned additions made under section 36(1)(va) of the Act, deserves to be deleted.- Decided in favour of assessee.

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• 2021 (12) TMI 937
  Determining total income of the assessee - survey under section 133A - evidentiary value of statement made at the time of survey - assessee did not maintain any books of accounts - addition based on declaration made at the time of survey - HELD THAT:- The statement alone without substantiating material cannot be the basis to make any addition but in the present case, the circumstances under which the statement was made and declaration of income at the time of survey have also to be seen viz., the assessee admitted receiving receipts from producers in cash which are not recorded in the books of accounts, evidence found in the course of survey showing that the assessee had made cash payments for construction of house which are not appearing in the books of account and admission of the assessee that he earned income which was not disclosed in the books of accounts. The period after 17.8.2011 is concerned, the proportionate income declared by the assessee would be 198 days/ 365 days x 15,35,527/-, which would be a sum of Rs. 8,32,970/- (approx.). In my view it would be just and appropriate and fair to assess the total income of the assessee at a sum of Rs. 18.77 lacs + Rs. 8,32,970, i.e., at a sum of Rs. 27,09,970 Rs. 1,13,347 being Chapter VI A deduction, i.e., a sum of Rs. 25,96,623/- as against the total income returned of Rs. 14,22,180/-. - Decided partly in favour of assessee.

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• 2021 (12) TMI 936
  TP Adjustment - ALP of international transactions with its AE - reclassification of the assessee s business profile from contract marketing service provider to a full-fledged technical/business support service provider - HELD THAT:- The entire international transaction of the assessee was based on the agreement dated 8.8.1994 with its AE i.e. Parametric Holdings Inc. Parametric India is engaged in marketing and support services in India on behalf of its AE. On this basis, the international transactions have taken place - TPO in the impugned assessment order observed that the services provided by the taxpayer to the AE are in the nature of marketing support services. However, while making the TP adjustment, he changed the business profile of the assessee recorded of the TP order. Contrary to this, he reclassified the assessee s business profile from contract marketing service provider to a full-fledged technical/business support service provider only on the reason that the assessee has not furnished proper bifurcation of employees involved in the two activities. In our opinion, this cannot be a reason to reclassify the business profile of the assessee. The engineers could have been appointed to carry out some work in the field of marketing services. There is no prohibition on this count. The assessee is not disentitled to appoint engineers for carrying out the marketing services with regard to international transactions to its AE. Since judicial discipline requires consistency in its proceedings from year to year, the business profile of the assessee cannot be changed from year to year wherein the all the international transactions of the assessee are based on the same agreement dated 8.8.1994 with its AE. Being so, in our opinion, it is appropriate to vacate the findings of the revenue authorities on this count and allow the grounds taken by the assessee. Accordingly this ground is allowed.

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• 2021 (12) TMI 935
  Revision u/s 263 - Profit on unaccounted sales - estimation of the gross profit at 0.7% without ascertaining profit from unaccounted purchases and unaccounted sales is erroneous and prejudicial to the interests of revenue - As per CIT A.O. should have ascertained the profit by considering unaccounted purchases and unaccounted sales noted down in the seized materials and that the A.O. has made the addition without making any enquiry or verification regarding the source of unaccounted purchases - HELD THAT:- We notice that it is nobody s case that the cash payment represents unaccounted purchases as presumed by Ld PCIT. In that case, the AO could not have computed gross profit on the basis of entries noted in the seized materials. Under these set of facts, one of the courses of action available with the AO is to estimate profit from the unaccounted sales. Since the assessee could not have sold materials without purchasing them, only profit element may be assessed. Thus, the AO has estimated the income and assessed the same in the hands of the assessee in all the three years. Thus, we notice that the AO has adopted one of the possible views in this matter. As held by Hon ble Supreme Court in the case of Malabar Industrial Company (supra), if the AO has taken one of the possible views, then the same would not make the assessment order prejudicial to the interests of revenue. PCIT has held the assessment orders to be erroneous for the reason that the AO should have estimated income from unaccounted sales at a higher figure, thus it is case where Ld PCIT is having a different view on the manner of estimation of income from unaccounted sales. As held by Hon ble Bombay High Court in the case of Gabriel India Ltd (supra), the view so entertained by Ld PCIT would not give him power u/s 263 of the Act to initiate revision proceedings, since the view of the AO cannot be termed as erroneous. We are of the view that the impugned assessment orders cannot be termed as erroneous and prejudicial to the interests of revenue. Accordingly, Ld PCIT was not justified in invoking revision proceedings in all the three years under consideration - Decided in favour of assessee.

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• 2021 (12) TMI 934
  Estimation of income - Bogus purchases - HELD THAT:- As in the case of Pankaj K. Chaudhary [ 2021 (10) TMI 653 - ITAT SURAT] we restrict the disallowance @ 6% of impugned purchases.

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• 2021 (12) TMI 933
  Addition u/s 68 - unexplained sundry creditors - outstanding balance at the year end appearing against two related party as being unexplained - HELD THAT:- Allegation of the AO that the financial statement of the sundry creditors do not support the creditworthiness, is not based on proper appreciation of the facts more so for the reason that the sundry creditors had purchased goods during the year under consideration from different parties and out of those goods purchased it had made sale to the assessee which was as per general business practice - allegation of the AO that M/s. Mandal Superfine Garments Pvt. Ltd. and M/s. Vikas Superfine Garments Pvt. Ltd. do not have creditworthiness to enter into large transaction of sale and purchase is factually incorrect - also noted that the transactions of purchases made by the assessee from its sister concern was at Arm s Length Price and no adverse finding has been brought on record by the AO and the AO has never doubted the purchases made by assessee from those associated concern. Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason the interfere with the order of CIT(A) and thus the Ground of Revenue is dismissed. Disallowance u/s 37(1) - assessee had claimed interest on Government dues - interest charged by the DGFT for the period upto 10.07.2014 - case of the Revenue that the interest paid by the assessee is penal in nature and therefore Explanation to Section 37 of the Act gets triggered and therefore the amount is not allowable - HELD THAT:- CIT(A) while deciding the issue in favour of the assessee has given a finding that Deputy DGFT vide letter dated 24.04.2013 had asked the assessee to refund the incentive received earlier along with interest and the letter nowhere mentioned that assessee had committed any offence under Foreign Trade Regulation. CIT(A) while deleting the addition ahd also placed reliance on the decision rendered by Hon ble Delhi High Court in the case of Enchante Jewellery Ltd. [ 2012 (12) TMI 169 - DELHI HIGH COURT] Before us, no material has been placed by Revenue to point out that interest paid by the assessee was on account of any act of assessee which is prohibited by law. Revenue has not placed any material on record to demonstrate that the payment is hit by Explanation 37 of the Act. Before us, Revenue has also not placed any contrary binding decision in its support not has pointed any fallacy in the findings of CIT(A). In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.

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• 2021 (12) TMI 932
  Claim of section 54F deduction - CIT(A) directing the Assessing Officer to consider residential flats received as consideration as part of reinvestment for the purpose of Section 54F, when the assessee received multiple flats located on different floors separated by different blocks of a gated community / apartment complex - HELD THAT:- This tribunal s recent common order in Revenue s appeals in CIT Vs. Vittal Krishna, Conjeevaram [ 2013 (8) TMI 757 - ITAT HYDERABAD] , CIT Vs. Syed Ali Adil [ 2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT] , CIT Vs. Anand Basappa [ 2008 (10) TMI 99 - KARNATAKA HIGH COURT] , CIT Vs. Gita Duggal [ 2013 (3) TMI 101 - DELHI HIGH COURT] , Arun K. Thiagarajn Vs. CIT [ 2020 (6) TMI 513 - KARNATAKA HIGH COURT] , CIT Vs. Gumanmal Jain [ 2017 (3) TMI 394 - MADRAS HIGH COURT] , Tilokchand and Sons [ 2019 (4) TMI 713 - MADRAS HIGH COURT] to uphold the latter s claim of section 54F deduction involving other family members. - Decided against revenue.

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• 2021 (12) TMI 931
  Rectification of mistake - invoking section 154 rectification thereby seeking to recompute section 234B interest - HELD THAT:-Whether the learned lower authorities would invoke section 154 rectification in such an instance, in our considered opinion, goes in assessee s favour and against the department. Hon ble apex court s landmark decision in T.S. Balram Vs M/s. Volkart Brothers [ 1971 (8) TMI 3 - SUPREME COURT] has settled the law that a mistake apparent on record must be an obvious and patent one than something which could be established by a long drawn process of reasoning involving more than one opinions. The factual position is no different before us wherein the assessee s case all along has sought to treat the cash seized as self-assessment and not advance tax covered u/s 132B Explanation 2 of the Act. We accordingly hold that the learned lower authorities have erred in law in invoking section 154 jurisdiction in the very terms as per strict interpretation of principles invoked in Commissioner of Customs Vs. Dilip Kumar[ 2018 (7) TMI 1826 - SUPREME COURT] - Decided in favour of assessee.

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• 2021 (12) TMI 930
  Gross revenue chargeable to tax u/s 44BB - whether service tax is includable in the gross revenue for computing profits under presumptive provisions of section 44BB or not ? - HELD THAT:- The issue of excludability of service tax in the gross receipts is squarely covered by the judgment in the case of Mitchell Drilling International Pty Limited [ 2015 (10) TMI 259 - DELHI HIGH COURT] wherein the Hon ble Delhi High Court has held that service tax being statutory levy should not form part of gross receipts as per provisions of section 44BB. Hon ble High Court of Uttarakhand in the case of DIT International Taxation Vs M/s Schlumberger Asia Services Ltd [ 1972 (10) TMI 4 - SUPREME COURT] held that the amount reimbursed to the assessee (service provider) by the ONGC (service recipient), representing the service tax paid earlier by the assessee to the Government of India, would not form part of the aggregate amount referred to in clauses (a) and (b) of sub-section(2) of Section 44BB of the Act. The Hon ble Court is clearly spelt that even otherwise, it is not every amount paid on account of provision of services and facilities which must be deemed to be the income of the assessee u/s 44BB . It is only such amounts, which are paid to the assessee on account of the services and facilities provided by them, in the prospecting for or extraction or production of mineral oils, which alone must be deemed to be the income of the assessee. Respectfully following the ratio of the judgment as laid down by the Hon ble Delhi High Court and Hon ble Uttarakhand High Court M/s Schlumberger Asia Services Ltd. [ 2019 (4) TMI 1177 - UTTARAKHAND HIGH COURT] we hold that the service tax receipts do not form part of receipts for computation of income in the section 44BB of the Income Tax Act. - Decided against revenue.

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• 2021 (12) TMI 929
  Eligibility of deduction u/s 80P(2)(a)(i) - Receipt of interest income from non-members - HELD THAT:- It is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the State Bank of India is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i) of the Act. Thus, there remains no ambiguity that income received by the assessee from non-members is not eligible for deduction under section 80P(2)(a)(i) - the profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. In view of the above, we do not find any merits in the argument advanced by the learned counsel for the assessee. Determine the income which is not eligible for deduction under section 80P(2)(a)(i) - Assessee is not maintaining any separate books of accounts qua the income from nonmembers as discussed above. The income on the deposits from the non-members has been treated as income from other sources but the gross income cannot be excluded from the deduction available to the assessee under the provisions of section 80P(2)(a)(i) of the Act. It is the net interest income on the deposits from the non-members which needs to be excluded from the amount of deduction claimed under section 80P(2)(a)(i) of the Act and the same should be brought to tax under the head income from other sources under the provisions of section 56 of the Act. To determine, the net income from the non-members, amount of expenses incurred in generating such interest income should be allowed as deduction from the gross income of interest in pursuance to the provisions of section 57 - The above provisions require to deduct the expenses from the income which have been incurred wholly and exclusively for the purpose of earning such income Thus we direct the AO to work out the interest income from the non-members after deducting the corresponding expenses incurred by the assessee in generating the interest income. To our understanding such expenses have to be brought on record by the assessee based on cogent materials. Furthermore, if the assessee has made deposits in the banks out of the money borrowed from the members, then the corresponding interest cost borne by the assessee should be allowed as deduction.

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• 2021 (12) TMI 928
  Disallowance u/s.14A in respect of strategic investments made by the assessee - CIT(A) applied the provisions of Section 36(1)(iii) of the Act and held that since investments were made out of borrowed funds by the assessee company, the interest paid on borrowings would be disallowed u/s.36(1)(iii) - HELD THAT:- CIT(A) is bound to adjudicate only that issue which is before him and not consider a new source of income which is disallowance of interest u/s.36(1)(iii) of the Act as it is not the subject matter of the appeal before him. In any case, in the absence of exempt income derived by the assessee during the year, the disallowance made by the ld. AO u/s.14A of the Act has been deleted by the ld. CIT(A). The matter ends there. CIT(A) could not have looked into a new source of income i.e. disallowance of interest u/s.36(1)(iii) of the Act. We also find that from the perusal of the entire CIT(A) s order, there is not even a whisper about proposal to enhance the assessment by issuing proper enhancement notice to the assessee in terms of Section 251 of the Act. In any case, the undisputed fact is that the borrowed funds has been utilized by the assessee for making investment in the group company which is made in the ordinary course of business and hence, once the borrowed funds are utilized for the purpose of business, the interest paid thereon would be squarely allowable as deduction u/s.36(1)(iii) of the Act. The law is very well settled on this issue by series of judicial pronouncements including various decisions of the Hon ble Supreme Court - we direct the ld. AO to delete the disallowance of interest u/s.36(1)(iii) - Appeal of the assessee is allowed.

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• 2021 (12) TMI 927
  Revision u/s 263 by CIT - Assessments passed u/s.201(1) and 201(1A) in incorrect name of assessee - Name of the assessee has been mentioned inadvertently as - M/s Vodafone South Limited (VSL - Hyd) instead of mentioning the name of the assessee as M/s.Vodafone Mobile Services Limited. - HELD THAT:- PCIT s detailed discussion in issue before us has itself acknowledged that the Assessing Officer had passed the necessary corrigendum dt.22-01-2018 rectifying the name of the assessee-company from M/s.Vodafone South Ltd., (VSL-Hyd) to M/s.Vodafone Mobile Services Limited. There could hardly be any dispute that such corrigendum forming part of the PCIT s discussion in para 2.2 dates back to the main orders as on 27-02-2017 only. This tribunal s common order in assessee s corresponding quantum appeals [ 2018 (5) TMI 2104 - ITAT HYDERABAD] has rejected the assessee s corresponding pleas as well. Once learned PCIT s revision directions in view of the issue, treat the alleged error committed by the Assessing Officer in incorporating the foregoing name to be only clerical and rectifiable in nature we fail to understand in this clinching factual backdrop as to how the impugned assessment/order(s) passed by the Assessing Officer could be erroneous ones, causing prejudice to the interest of Revenue; simultaneously as held in Malabar Industrial Co. Vs. CIT[ 2000 (2) TMI 10 - SUPREME COURT] - PCIT has nowhere concluded that the Assessing Officer s orders in issue attract assumption of Section 263 revision jurisdiction in the given facts after the assessing authority had issued corrigendum and the same involved only a clerical mistake; as the case may be (supra). We thus conclude that the PCIT herein has erred in law and facts in invoking his Section 263 revision jurisdiction - Decided in favour of assessee.

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• 2021 (12) TMI 926
  Validity of assessment u/s 153C - seized assets/documents belonging to a person other than a searched person - relevant date for applying the provisions of Section 153A - HELD THAT:- AO has considered six assessment years from 2005-06 to 2010-11 for assessment under section 153C of the Act corresponding to search period in the case of M/s SDS Group of Companies, i.e., six assessment years corresponding to the previous years immediately prior to the previous year in which search was conducted. Whereas, the Hon ble Delhi High Court in the case of RRJ Securities Ltd. [ 2015 (11) TMI 19 - DELHI HIGH COURT] held that wherever seized documents belonging to third-party have been found during the course of the search, then for assessment u/s 153C of the Act has to be taken for six assessment years corresponding to the previous years prior to the previous year in which such seized material/document along with satisfaction note of the Assessing Officer of the search person are received by the Assessing Officer of the assessee. In the case of the assessee, relevant seized document belonging to the assessee along with satisfaction note of the Assessing Officer of the searched person, have been received on 05/04/2013 and therefore assessment proceedings u/s 153C should have been initiated only from assessment year 2008-09 to assessment year 2013-14. Thus, assessment year under consideration was not to be completed u/s 153C of the Act. In our considered opinion, there is no error in the order of the Ld. CIT(A) in following the binding precedent of the jurisdictional High Court. Profit earned from sale of land transaction - development agreement between the assessee company and another associated company M/s Parasvnath Developers Ltd., the assessee purchased certain lands at Jodhpur in the assessment year 2006-07, which were subsequently developed and sold by M/s Parasvnath Developers Ltd. - HELD THAT:- We find that the Assessing Officer has not disputed the fact that M/s Parasvnath Developers Ltd. has declared profit in their books of account on sale of the land developed by them under the development agreement with the assessee, though the land remained registered in the name of the assessee. This profit declared has been assessed in substantive capacity in the case of M/s Parasvnath Developers Ltd. The Assessing Officer has simultaneously assessed income in the hands of the assessee for profit on the sale of the same land and that too on substantive basis in the case of the assessee also. In our opinion, this action of the Assessing Officer of assessing same income on substantive basis in the hands of two assessess is not justified. If the income in the hands of M/S Parasvnath Developers has been accepted by the Department, assessing again the same income in the hands of the assessee, amounts to taxing same income twice. Further, the Assessing Officer has failed to bring on record any evidence that said developed land has been sold by the assessee. In view of the above facts and circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute, and accordingly, uphold the same. The grounds raised by the Revenue are, accordingly, dismissed.

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• 2021 (12) TMI 925
  Eligibility of deduction u/s 80P(2)(a)(i) - Receipt of interest income from non-members - HELD THAT:- It is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the State Bank of India is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i) of the Act. Thus, there remains no ambiguity that income received by the assessee on the money deposited with the bank is not eligible for deduction under section 80P(2)(a)(i). Thus, the profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. In view of the above, we do not find any merits in the argument advanced by the learned counsel for the assessee Deduction under section 80P(2)(c) - The expression profits and gains in clause (c) of sub-section (2) of section 80P of the Act is not confined to Profits and gains of business . Thus, in case of co-operative credit society, income to which benefit of section 80P(2)(a)(i) is not allowed, e.g., rental income, interest income from surplus funds kept in FDs of banks, etc., basic exemption of Rs. 50,000 as provided for in section 80P(2)(c)(ii) must be granted. It also appears that, though the word activity is not defined, yet the investment activity, activity of renting of immovable property, etc., and the consequent income attributable to such activities would be covered under section 80P(2)(c). Hence, we direct the AO to allow the deduction under section 80P(2)(c) of the Act. Thus the ground of appeal of the assessee is allowed.

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• 2021 (12) TMI 924
  Estimation of income - bogus purchases - HELD THAT:- We agree with the view of the lower authorities that there should be an estimation of profit element from these purchases and should be estimated reasonably as the assessee could not conclusively prove that the purchases made are from the parties as claimed, especially in the absence of any confirmations from them. Taking the totality of facts and circumstances, keeping in view the nature of business of the assessee i.e. trader in Ferrous and non-Ferrous Metals, it would be justified if the profit element embedded in those purchases are estimated at 4%. Accordingly, we direct the Assessing Officer to estimate the profit element from the non- genuine purchases at 4% for the Assessment Year under consideration Non maintainability of appeal as filled manually - Mandation of appeal filled electronically - HELD THAT:- An identical issue had come up before the Coordinate Bench in the case of All India Federation of Tax Practitioners v. ITO[ 2018 (6) TMI 1171 - ITAT MUMBAI] and the Tribunal held that non-filing of appeal in the electronic form is only a procedural defect which can be cured and the Tribunal restored the appeal back to the file of the Ld.CIT(A) for disposal on merits and the assessee was directed to file appeal in electronic form within ten days on receipt of order. Similar view has been taken by the Coordinate Bench in the various decisions. Following the above decisions, this appeal is restored to the file of the Ld.CIT(A) and assessee is directed to e-file the aforesaid appeal within a period of Fifteen (15) days from the date of receipt of this order, consequent to which delay in e-filing shall stand condoned and the Ld.CIT(A) shall dispose off the appeal on merits. Needless to say that the Ld.CIT(A) shall give adequate opportunity of being heard to the assessee.

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• 2021 (12) TMI 923
  Estimation of income - Bogus purchases - estimation of gross profit at 12.5% - HELD THAT:- As relying in assessee s ow case [ 2021 (12) TMI 52 - ITAT MUMBAI] we direct the Assessing Officer to estimate the Gross Profit element from tainted purchases at 1% as against 12.5% estimated by the Ld.CIT(A). Accordingly, the grounds raised by the assessee are partly allowed.

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• 2021 (12) TMI 922
  Deemed dividend addition u/s 2(22)(e) - ICD given to the assessee-company in which the shareholders have substantial interest and thus, the ICD given by the JP Iscon was treated as deemed dividend in the hands of the assessee - HELD THAT:- We find that the fact that the assessee is not a shareholder in the lender-company, which is first and foremost condition for application of section 2(22)(e) of the Act, has been duly considered. Further that, the transaction is not in the nature of advance or loan, but simply an ICD and the appellant had further provided for the interest expenditure on the said deposits borrowed, and the fact of deducting necessary TDS was considered. Factum of paying back of said ICD along with interest during the financial year 2008-09 by the assessee to the lender-company which was brought to the notice of the ld.CIT(A), has duly been considered. The judgment on this aspect passed by the Special Bench, ITAT Mumbai Benches in the case of ACIT Vs. Bhaumik Colours P.Ltd. [ 2008 (11) TMI 273 - ITAT BOMBAY-E ] and the judgment of jurisdictional High Court in the matter of CIT Vs. Daisy Packers P.Ltd.[ 2015 (7) TMI 253 - GUJARAT HIGH COURT] as have been relied upon by the ld.AR before us, have also been duly considered by the ld.CIT(A). In fact, the judgment passed by the Hon ble Delhi High Court in the case of Anitech P.Ltd. [ 2011 (5) TMI 325 - DELHI HIGH COURT] was also taken into consideration while deleting the addition. On perused the judgments passed by different judicial forums as relied upon by the Ld. AR. The ratio laid down therein is that, in a case, in which an amount is received from a person, other than the shareholder, provision of section 2(22)(e) of the Act cannot indeed be invoked. In the instant case, the appellant company was not a registered shareholder of the lender-company viz. JP Iscon Ltd. from which the assessee-company has obtained ICD during the year under consideration, and therefore, the addition made by the Ld. AO by invoking provisions of section 2(22)(e) of the Act, has rightly been deleted by the ld.CIT(A) without any ambiguity so as to warrant interference. Hence, appeal preferred by the Revenue is found to be devoid of any merit and thus stands dismissed.

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• 2021 (12) TMI 921
  Initiation of assessment proceedings u/s. 147 r.w.s. 148 - according to the assessee ought to have been initiated u/s. 153C - whether the details of seized material found during the course of search were belonging to assessee so as to issue notice u/s. 153C of the Act.? - HELD THAT:- In the present case, it is not possible for the AO to assume jurisdiction u/s. 153C of the Act since the pre-requisite is that any money, bullion, jewellery or other valuable article or things or books of account or documents seized or requisitioned belong or belongs to a person other than the person in whose case search is conducted u/s. 132 of the Act. Therefore, initiation of section 153 of the Act for framing assessment u/s. 153C r.w.s. 143(3) of the Act is not satisfied. The only way to frame assessment is by way of issue of notice u/s. 148 invoking the provisions of section 147 of the Act which was rightly exercised by the present AO. Accordingly, we do not find any infirmity in the action of the AO for issuing notice u/s. 148 - this ground of the assessee is dismissed and the reopening of assessment is confirmed. Addition u/s 69A - unexplained money - In course of search of PDP certain Compact Discs(CD) were found which contained data pertaining to unaccounted receipts and payments by PDP - seized document AK/PDP/06 and DTTE which was owned up by PDP and CHDC and determined income arising out of the same and taxed the same - Assessee reiterated his stand that the Assessee was only acting as liaison and the ledger was an imprest account where sums were spent on behalf of PDP and CHDC and Assessee has no interest whatsoever except as agent of PDP - HELD THAT:- SC in the case of CHDC that the entries arising from DTTE were offered to tax by the peak credit method. This has been accepted by the CIT(A). The CIT(A) has however gone on the premise that expenditure of PDP or CHDC would be income in the hands of the Assessee. This is contrary to the claim of PDP that the Assessee was acting as liaison for and on behalf of the Assessee that the ledger account was imprest account meaning thereby that whatever is found in the ledger is entries of PDP and CHDC and the Assessee has no interest whatsoever in respect of the sums reflected in the ledger account. It is undisputed that the entire entries in DTTE were considered in the proceedings before SC in determining the income of PDP and CHDC. Therefore the claim of the Assessee ought to have been accepted by the CIT(A). Even before the AO the Assessee has taken a stand regarding the entries in the ledger account being subject matter of proceedings before SC by PDP and CHDC. The fact that the Assessee disowned the entries in one AY and claimed that it is part of receipts disclosed in another AY cannot be the basis to reject the claim of the Assessee. Admissions are good piece of evidence but are not conclusive. The person making the admission is entitled to show that admission is incorrect or was made under erroneous belief or owing to other circumstances. The circumstances of the present case clearly demonstrate the correctness of the plea raised by the Assessee. We therefore direct that the addition made in this regard deserves to be deleted and is hereby deleted. AY 2007-08 - Addition made in the hands of the Assessee cannot be sustained. It is clear from perusal of the ledger account based on which the addition has been made is in the name of D.N. Associates. Though the description in the relevant entries for a sum of Rs. 86 lacs has reference to Anand Nadig i.e., the Assessee, it cannot be attributed to the Assessee in his individual capacity. The Assessee is partner of D.N. Associates and if at all any addition is to be made it can be only in the hands of the firm. D.N. Associates had declared additional income of Rs. 3.64 Crores in AY 2007-08 and Rs. 50 lacs in AY 2008-09 thus total sum of Rs. 4.14 crores were offered in the return of income of D.N. Associates. With regard to the remaining sum of Rs. 86 lacs, there is no mention in the order of Assessment for AY 2007-08 in the case of D.N. Associates, a copy of which is placed at page-162 to 164 of the Assessee s paper book. The Assessee has disowned the transaction in his individual capacity to the extent of Rs. 86 lacs even before the AO. In such circumstances, the addition made is unsustainable and hence the same is directed to be deleted.

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• 2021 (12) TMI 920
  Reopening of assessment u/s 147 - assessee has made transactions in commodities exchange during the impugned assessment year and had not filed its return of income - assessee neither responded to the notice issued under section 148 nor responded to the notice issued under section 142(1) therefore, the A.O. estimated the profit @ 0.5% and added an amount to the total income of the assessee under section 69 - As submission of Assessee that no reasonable opportunity was given to the assessee to explain the source of margin money and notice was never served on the assessee from the side of the A.O. for which there was no compliance and the A.O. had passed the order under section 144- HELD THAT:- In the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issue to the file of A.O. with a direction to give one more opportunity to the assessee to substantiate its case and decide the issue as per fact and Law. The assessee is also hereby directed to appear before the A.O. and substantiate its case without seeking any adjournment under any pretext, failing which, the A.O. is at liberty to pass appropriate order as per Law. The grounds raised by the assessee are accordingly allowed for statistical purposes.

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• 2021 (12) TMI 891
  Assessment u/s 144C - reference to the Dispute Resolution Panel (DRP) - Petitioner s case is that Section 144C (2) requires assessee to choose to file reference before the Dispute Resolution Panel (DRP) to file such objection before DRP within 30 days from the receipt of Draft Assessment Order - HELD THAT:- The section enquires assessee to file a copy of the reference with the Assessing Officer within the time limit prescribed. Section 144C (4) of the Act requires Assessing Officer to pass a final order within one month from the end of the month in which the period of filing of objections before DRP and AO expires. According to petitioner though Section 144C of the Act requires petitioner to communicate the reference filed it before the DRP to the AO, petitioner was under a reasonable belief that, with the assessments being faceless and completely electronic, the reference filed by it would automatically communicated to Respondent No.2 by Respondent No.5 which is the DRP. Unfortunately, petitioner s belief was not correct and the Assessing Officer not being aware of petitioner having filed reference before DRP, after expiry of prescribed period of 30 days proceeded to pass the Assessment Order dated 28th June, 2021 which is impugned in this petition. The reference before DRP is still pending. It is also not disputed that petitioner had filed to directly communicate the reference to DRP to the Assessing Officer. We have considered the petition, reply, rejoinder, sur-rejoinder and sur-sur-rejoinder and also heard Mr. S. Sriram and Mr. Suresh Kumar. Since petitioner had already filed a reference raising his objections to the DRP and Section 144C (4) of the Act requires the Assessing Officer to pass the final order including the view expressed by the DRP, we will be justified in setting aside the order of the Assessing Officer dated 28th June, 2021 which is impugned in this petition. We would also observe that the AO cannot be faulted for passing the impugned order. At the same time, the Assessing Officer will also have benefit of considering the views of DRP while passing a fresh Assessment Order.

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• Customs

• 2021 (12) TMI 919
  Valuation of imported goods - redetermination of declared assessable value - demand of differential duty and penalty - immunity from prosecution subject to payment of compounding amount as prescribed under Rule 5 in terms of grant of order under Rule 4(3) of the said Rules - Petitioners having been given several opportunities and the Petitioners choosing not to attend the hearings on the pretext of approaching the Settlement Commission and praying for adjournments clearly shows the malafide on the part of the Petitioners - violation of the principles of natural justice. HELD THAT:- It shall be open to the Petitioners to file the appropriate Application under the provisions of Section 137(3) of the Customs Act, 1962 read with the Customs (Compounding of Offences) Rules, 2005 before the jurisdictional Chief Commissioner of Customs, if so advised in accordance with law for compounding of the offences. If such an Application is made, the same shall be dealt with on its own merits and in accordance with law. The intimation dated 29/10/2021 is received by the Petitioners on 16.11.2021 as informed to us across the bar. According to the Petitioners, this intimation is dated 29.10.2021. The intimation gives to the Petitioners time of 30 days from the receipt of the intimation for making the Application under the above provisions. The time of 30 days has also expired on15.12.2021. Thus, it can be seen that the Petitioners have been guilty of gross delay and laches in not abiding by and adhering to the mandate of law. It shall be open to the Petitioners to pursue any other remedy available to the Petitioners including the application to the Settlement Commission in accordance with law. Needless to state that if the Petitioner(s) have voluntarily paid any amount during the period of investigation as stated, the Petitioners shall be entitled to a set off for the said amount. Petition dismissed.

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• 2021 (12) TMI 918
  Smuggling - Betel Nuts of foreign origin - goods notified under Section 123 of the Customs Act - adverse presumption against the appellants could be made about the said goods being smuggled or being of a foreign origin? - retraction of statements - HELD THAT:- In the case of COMMR. OF CUS. (PREV.), WB., KOLKATA VERSUS SUDHIR SAHA, [ 2004 (7) TMI 95 - HIGH COURT AT CALCUTTA] , the Division Bench of the Calcutta High Court while holding that betel nuts not being a notified goods under Section 123 of the Customs Act, 1962, further held that the burden to prove the smuggled nature of the said goods was on the Department and the same could not be shifted to person from whom such goods were seized - The facts of the instant case are also similar. Herein also the alleged confessional statements were retracted at the earliest opportunity by the concerned persons. Consequently, the burden of proof to establish smuggled nature of the seized goods was on the Department which it has completely failed to discharge. The conclusion arrived at as regards the foreign origin of the said goods and the smuggled nature by the adjudicating authority is based on surmises and conjectures. The goods were seized far away from the international border in the interior of North Bengal from trucks/warehouses. It is an undisputed fact that betel nuts are sold in the adjoining State of Assam, Monipur as well as the said North District of West Bengal and their adjacent area. In such circumstances, in the absence of any evidence to the contrary disclosed it has to be concluded that the Revenue has been unable to establish the smuggled nature of the seized goods and thus discharged the burden of proof cast upon the Revenue in this respect. In the instant case, it is found that documents on record show that the said goods were purchased from the local markets and/or haat and/or mandi located in Jalpaiguri district of West Bengal; the sale/purchase of agricultural produce, such as Betel Nuts, are regulated by the respective District Regulated Market Committees and their sub-Divisional Offices in terms of the West Bengal Agricultural Produce Marketing (Regulation) Act, 1972 - In the instant case from copies of the receipts on record evidencing the market fee paid by the appellant it is evident that the seized consignments of the said goods had been purchased on payment of such cess under the APM Regulation Act. In the instant case, there is no discussion on the retraction of statements made on oath by the Appellants. Moreover in the present case the witnesses who implicated the Appellant were not produced for cross-examination, inspite of specific request made on behalf of the Appellant - the Department has failed to establish that the said goods are smuggled goods. The documents produced by the said Appellant are in his favour. Therefore Md. Tashin Shah is to be regarded as owner of the said goods. The said goods are thus required to be returned to the said Appellant, Md. Tashin Shah - Appeal allowed - decided in favor of appellant.

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• 2021 (12) TMI 917
  Refund claim of Special Additional Duty (SAD), which is in lieu of sales tax - rejection on the ground of time limitation - HELD THAT:- The facts are not in dispute and admittedly, the appellant importer has filed refund claim after more than one year or may be by few days more from the date of payment of SAD. The condition of limitation was not a part of the original notification. It was only with the introduction of Circular No. 6/2008-Cus. and subsequent amending Notification No.93/2008 dated 01.08.2008, the department started insisting on the limitation period (of one year) as prescribed, with effect from 1.8.2008, became applicable. The Hon ble High Court in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [ 2014 (4) TMI 870 - DELHI HIGH COURT] has clearly held that the expression so far as may be used in the sub-section (6) of Section 3 of CTA, has to be followed to the extent possible. Merely because Section 27 of the Customs Act provides for a period of limitation for filing refund claim, it cannot be held that even for the purposes of claiming refund in terms of the Notification, the same limitation has to be applied. The Hon ble Delhi High Court has also held that in the matters which deal with substantive rights, such as imposition of penalties and other provisions, that adversely affect statutory rights, the parent enactment must clearly impose such obligations; subordinate legislation or Rules cannot prevail, or be made in such case. The appeal filed by the appellant is allowed - decided in favor of appellant.

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• 2021 (12) TMI 916
  Duty Drawback - export of organic ginger slices - reward under Merchandise Export from India Scheme (MEIS) - benefit of Notification No. 94/96-Cus. dated 16.12.1996 - HELD THAT:- Admittedly, in the facts and circumstances of the case, the appellant had availed duty drawback as well as the MEIS. Duty drawback is specified in the Column 2 of the table in Notification No. 94/96-Cus. Accordingly, the appellant is entitled to the benefit of this Notification. The appeal is allowed and the impugned order is set aside - decided in favor of appellant.

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• 2021 (12) TMI 915
  Smuggling - gold bars / coins with foreign marking - gold bars with Indian marking - silver weighing 200 gms - Indian currency - burden to prove licit possession - absolute confiscation - penalty - HELD THAT:- The goods, to the extent evidenced as legally possessed, were not proceeded against and absolute confiscation was restricted on such goods that were not so established. There are no evidence that the first appellate authority had been intimated during the hearing that further documentation would be made available. Nevertheless, one set of documents is claimed by Learned Counsel for the appellant to have also been placed before the first appellate authority. In the light of the claim that licit possession of the remaining goods can be established on the basis of these documents, it would be only be appropriate for these to be scrutinized. The impugned order is set aside and matter remanded back to the original authority for further disposition of the seized goods and Indian currency in accordance with the provisions of law - appeal allowed by way of remand.

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• Insolvency & Bankruptcy

• 2021 (12) TMI 914
  Initiation of CIRP - Operational Creditors or not - listing fee and its arrears levied by the BSE - The learned Adjudicating Authority after considering the submissions of the parties and after referring to Report of the Insolvency Law Committee, rejected the Application under Section 9 holding that dues of regulatory fee cannot be termed as an operational debt - HELD THAT:- The Insolvency and Bankruptcy Code, 2016 was published in the Gazette of India on 28th May, 2016. After working the Insolvency and Bankruptcy Code, 2016, the law which consolidate and amend the laws related to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets and working of the Code was keenly watched by all stakeholders, the Government setup a Insolvency Law Committee, to make recommendations to the Government on issues arising from the implementation of the Insolvency and Bankruptcy Code, 2016 as well as on the recommendations received from various stakeholders. A Committee under the Chairmanship of Shri Injeti Srinivas examined the working of the Code and made recommendations proposing amendment to the Code. With regard to Section 5 (8), i.e. financial debt , there was lot of debate and several stakeholders recommended to the Committee to make suitable amendment to protect the rights of home buyers - When the Insolvency Law Committee has categorically in the Report, as extracted above, held that regulatory dues need not be included in the definition of operational debt , the said opinion of experts, cannot be brushed aside. The recommendations given by Insolvency Law Committee Report is in line with the object of the Code. In event, it is held that all kind of dues including regulatory dues , the insolvency resolution process can be triggered, then the entire purpose of the object of the IB Code will be lost and insolvency proceedings will turn into recovery proceedings for the dues of creditors, which is not the object of the IB Code. The submission of the learned Counsel for the Appellant that there is no method for recovery of dues provided by the SEBI, cannot be accepted as SEBI is empowered to punish the defaulters for the recovery of regulatory dues. There are ample provisions for recovering under the SEBI Act and the circulars issued by the SEBI from time to time. Adjudicating Authority did not commit any error in rejecting the Application under Section 9 filed by the Appellant - appeal dismissed.

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• 2021 (12) TMI 913
  Seeking condonation of delay of 102 days in filing the instant Appeal - HELD THAT:- The Appellants had the knowledge of the impugned order passed by Ld. Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata in I.A. (IB) No. 601/KB/2020 in C.P. (IB) No. 1635/KB/2018 from the email dated 17.08.2020 sent by the Resolution Professional of Suraj Fabrics Industries Limited (Respondent) way back of 17.08.2020 (Annexure R/2 at page 10 of the Reply Affidavit filed by Respondent) and the instant Appeal has been filed on 03.08.2021 and no sufficient explanation for condonation of delay have been made out in the instant Appeal. Application dismissed.

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• 2021 (12) TMI 912
  Approval of Resolution Plan - opportunity to revise the plan not provided - declination of possibility of any upward revision in Appellant s offer - HELD THAT:- A perusal of the minutes clearly indicate that both the Resolution Applicants were given multiple opportunities to submit their revised Plans. The submission of the Appellant that he was not given opportunity to revise the Plan after receipt of 2nd Plan of Respondent No.3, is without any substance and against the record. The Plans of both the Resolution Applicants were deliberated by the CoC in several meetings and both the Resolution Applicants were requested to enhance the value of their Plans. Final Plans were received by the Resolution Professional from both the Resolution Applicants before 19.09.2020 and thereafter, it was put to vote. By 100% vote of CoC, the Plan of Respondent No.3 was accepted and Plan of Appellant was rejected. The Adjudicating Authority in the impugned judgment has returned a finding that Resolution Plan approved by the Committee of Creditors is as per provisions of Section 30(2)(a) to 30(2) sub-section (e) and also complies the provisions of Regulation 38 and 39. The Resolution Plan dated 09.09.2020 along with all addendums dated 19.09.2020 as approved by the CoC, was rightly approved by the Adjudicating Authority by the impugned judgment. Appeal dismissed.

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• 2021 (12) TMI 911
  Approval of Resolution Plan - voting share was not sufficient enough to get any plan approved - HELD THAT:- The object of CIRP is Resolution of the Corporate Debtor. 330 days including the extensions granted by the Adjudicating Authority was coming to an end on 09.03.2021. The Adjudicating Authority noticing that object of CIRP is Resolution of the Corporate Debtor had directed for consideration of all the four plans who have permitted to give revised plan - The matter has been pending before Adjudicating Authority after the last round of voting due to Applications filed by Standard Chartered Bank and Experion to exclude Alchemist Asset Reconstruction Company Ltd. from voting. Liquidator also filed an Application No. 1367 of 2021 praying for liquidation in view of the fact that no Resolution Plan having received requisite number of votes which Application was deferred by the Adjudicating Authority by its order dated 01.10.2021. The Adjudicating Authority on 01.10.2021 has directed for consideration of two plans which were pending. In subsequent order dated 25.11.2021, direction was passed for voting on two plans which received 64.64% votes. The above order was passed by the Adjudicating Authority since it was not posted with the fact that two Prospective Resolution Applicants namely- Sattva and M3M has withdrawn their Bid Bond Guarantee on 07.05.2021 and 09.07.2021, respectively - although there were four plans which came for consideration before the CoC but no one could achieve requisite number of votes i.e. 66% vote. In the CIRP of the Corporate Debtor, serious efforts were made for Resolution of Insolvency. 54 meetings of the CoC have been conducted so far but unfortunately no plan could receive requisite number of votes to get approval. In the present case, although 330 days have elapsed but present is a case where as per direction of the Adjudicating Authority only re-voting has to be conducted to find out as to whether any Resolution Plan could get requisite number of votes failing which liquidation order is to be passed for which Application has already been submitted by the Resolution Professional which is pending consideration before the Adjudicating Authority and the Adjudicating Authority has deferred the consideration of liquidation Application only due to the fact that it had directed for fresh voting. There are only two option available as on date, first to direct the Adjudicating Authority to take up the Application filed by the Resolution Professional for passing an order for liquidation and second to make a last effort to see as to whether any of the four plans could get the requisite number of votes i.e. 66% vote. The Resolution Process having gone such a long way, it should be brought to its logical end. We record out approval to the CoC decision dated 07.10.2021 to approach all the four Resolution Applicants. Much time having lapsed, we are of the view that before the Application filed by the Resolution Professional praying for liquidation is taken by the Adjudicating Authority, we may give one more opportunity to all the four Resolution Applicants to submit their revised plan and thereafter the CoC may deliberate and vote on all the four plans. All four Resolution Applicants may submit their revised plan within 15 days from date of this order - The Resolution Applicants i.e. Sattva and M3M and any other who have withdrawn their BBG may submit their BBG along with revised plan, if they so intend, within a period of 15 days - Appeal disposed off.

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• 2021 (12) TMI 910
  Jurisdiction - rights of Adjudicating Authority to hear Objectors/ Interveners, before admission of the Application, while considering Application of pre-packaged insolvency under Section 54C of the I B Code - HELD THAT:- Section 54C (1) provides that where a Corporate Debtor meets the requirements of Section 54A, a corporate applicant may file an application with the Adjudicating Authority for initiating pre-packaged insolvency resolution process. The requirements having been provided under Section 54A, a Corporate Debtor has to meet them to enable to initiate the process. One of the relevant provisions in this regard is Section 54C (3) which mandates that the Corporate Debtor shall obtain an approval from its Financial Creditors, not being its related parties, representing not less than sixty-six percent. in value of the financial debt due to such creditors, for the filing of an Application. Regulation 14 under the heading Initiation of Process deals with the manner in which approvals by Financial Creditors have to be obtained. The Scheme under Chapter III-A and the Regulations 2021 do not contain any express provision either prohibiting the Adjudicating Authority from hearing any of the objectors or interveners prior to the admission of pre-packaged insolvency resolution process application or providing for giving notice or hearing to the interveners or objectors. The objectors who had filed applications were all Homebuyers who have purchased one or more units in the Real Estate Projects of the Appellant - The legislative intent which is clear by Section 424 (1) is that the Tribunal while disposing of any proceeding before it shall not be bound by procedure laid down by Code of Civil Procedure but shall be guided by the principle of natural justice and subject to the other provisions of this Act or Code 2016 and any of the Rules made thereunder. Further, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure. The statutory scheme delineated by Chapter III-A of I B Code as well as the Regulations, 2021 as observed above does not indicate any prohibition on the Adjudicating Authority to hear any objector or intervener before admitting an Application of pre-packaged insolvency resolution process. No error has been committed by the Adjudicating Authority in giving opportunity to the objectors to file their objections. The Appellant has also been given opportunity to file his rejoinder and reply to the objections, hence he cannot claim that any prejudice is cause to him only because objectors have been given time to file objection. The objectors who have appeared before the Adjudicating Authority have huge stakes since they are all homebuyers/ allottees and have paid substantial amount to the Appellant running in lakhs and crores. No error has been committed by the Adjudicating Authority in granting time to objectors to file their objections within a week - Appeal dismissed.

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• 2021 (12) TMI 909
  Condonation of delay in filing appeal - there was 89 days delay in filing the Instant Appeal - Section 14 of the Limitation Act, 1963 - HELD THAT:- The Appellant had knowledge that the Appeal lies under Section 61 of the I BC and further the Impugned Order was passed on 13.12.2019 and the Appellate Tribunal was open as per Calendar year 2019. So, they were having sufficient time to file this Appeal before this Tribunal and there is no merit in the I.A. No. 1590 of 2020. The Appeal is dismissed without costs.

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• 2021 (12) TMI 908
  Tripartite agreement - financial creditors or not - whether the Appellant/M/s. Axis Bank can be considered as a Financial Creditor on account of its having sanctioned and released housing loans to some of the allottees who have purchased Flats/units in the Project floated by the Corporate Debtor ? - HELD THAT:- It is clear from the principle laid down by the Hon ble Supreme Court in Pioneer Urban Land Infrastructure Ltd. Anr. [ 2019 (8) TMI 532 - SUPREME COURT ] that it is the Home Buyer who should be considered as Financial Creditors of the Corporate Debtor whether he has self financed his flat or has exercised his choice of taking a loan from the Bank - admittedly, as per Section 77 of the Companies Act, 2013 every security interest has to be registered with the Registrar within 30 days of its creation and admittedly no charge has been created against any of the property of the Corporate Debtor in favour of the Appellant. A perusal of the documents shows that none of the Home Buyers appeared in any of the proceedings before the DRT whereby the recovery certificates were obtained - a mere Permission to Mortgage is of no relevance in the absence of not having registered a charge under Section 77 of the Companies Act, 2013. It can be seen from the material on record that Axis Bank had rendered financial assistance for the purpose of booking units in the Project floated by the Corporate Debtor and had a tie-up with the Corporate Debtor for procuring business from the Home Allottees. The Home Loan Agreements in these cases were made individually by the Borrowers. As per standing instructions, the money in the account of the Home Allottees was disbursed automatically to the Corporate Debtor - The Home Loan Agreement read with the Demand Letters and the Allotment Letter clearly specify that when there is a default on behalf of the Home Allottee a penalty interest would have to be paid by the allottee to the Bank. Therefore, the default aspect is to be seen vis-a-vis the Home Allottee and the Appellant Bank only. It is contended by the Respondent that though the Allotment Letter shows that the payments were construction linked, the Bank released the entire amount prior to completion of construction. It is definitely not the scope and objective of the Code to include Banks/Financial Institutions which have advanced loans to Home Buyers to be considered as Financial Creditors and included in the CoC, specifically in the light of the fact the liability to repay the Home Loan is on the individual Home Buyers. This would defeat the very spirit and objective of the Code aiming at Resolution and maximisation of the assets of the Corporate Debtor . Presence of a mere tri-partite Agreement does not change the character of the amount borrowed by the Home Buyer vis-a-vis the Bank and vis-a-vis the Corporate Debtor . Viewed from any angle, the Appellant cannot be included as a Secured Financial Creditor in this case and hence, there are no reasons to interfere with the well-reasoned Order of the Adjudicating Authority. This Appeal fails and is accordingly dismissed.

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• 2021 (12) TMI 907
  Right to apply under Section 9 of IBC - Regulatory Dues versus Operational Debt - failure to pay requisite Annual Listing fees ( ALF ) on or before the 30th day of April, every year. - Period of limitation - it is apparent that the Respondent s continuous default is not merely restricted to the initial date of default but on every subsequent occasion when the Respondent was obliged to make payments but failed to pat ALF - HELD THAT:- Ld. Adjudicating Authority has rightly come to the conclusion that the agreement so filed cannot be relied upon, as the same is not a valid agreement in the eye of law, so Learned Counsel for the Appellant relied on an order passed by this Appellate Tribunal in B.S.E. LTD. VERSUS NEO CORP INTERNATIONAL LTD. [ 2019 (4) TMI 2032 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI] is not applicable in this matter. Listing Fees comes under the ambit of Regulatory dues which SEBI is entitled to recover. The Respondent being an entitly registered under SEBI, is under an obligation to follow the Regulations prescribed by SEBI for recovery of its dues. The dues so said are not Operational Dues but Regulatory Dues . The Insolvency Law Committee suggests that Regulatory Dues are not to be recovered under Operational Debt . Appeal dismissed.

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• 2021 (12) TMI 906
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Operational Creditor has enclosed the copy of the Bank Statement indicating that the advance money had been paid in part, of which was adjusted against the goods received from the Corporate Debtor and for the remaining amount, the Corporate Debtor has failed to refund - This is a clear cut case, in which the Corporate Debtor should have either supplied goods or refunded the amount or at least replied to the notice under section 8 of the Act raising any pre-existing dispute if they had any but they have missed the golden opportunity by not replying to the notice under section 8 of the IBC. The Operational Creditor has a good case. In this petition also the Corporate Debtor has not either appeared or opted to file any reply through its authorised representative. So on both these counts, the Corporate Debtor has failed to defend itself - there is no hesitation in accepting and admitting the petition and order initiation of CIRP against the Corporate Debtor in this matter. Application admitted - moratorium declared.

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• Central Excise

• 2021 (12) TMI 905
  Maintainability of petition - requirement of pre-deposit of 7.5% of the penalty imposed - violation of Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- The petitioners were getting the job of manufacturing/ fabrication of steel done on job work basis from MEPL. MEPL would use self-procured items/inputs as well as items/inputs received free of cost from the petitioners to manufacture excisable goods. It is alleged that MEPL was manufacturing excisable goods on job work basis for the petitioners and discharging duty liability as per the contracted price between it and the petitioners, however, the petitioners were issuing commercial invoices to their ultimate costumers for the same excisable goods at higher price as compared to the contracted price. There is nothing on record to indicate that the duty liability of Rs. 45,29,528/- claimed by the petitioners is accepted by the respondents. The petitioners proceed on the footing that the petitioners supplied goods having duty liability as claimed by them and therefore, penalty is excessive. To arrive at the conclusion that the petitioners supplied goods having the duty liability as contended by them obviously necessitates a fact finding exercise. The requirement for 7.5% pre-deposit of the penalty demanded cannot be said to be exorbitant or onerous, more so when it is well settled that when a statute confers a right of appeal, while granting the right, the legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions. There are no reason to entertain the present writ petitions in view of the availability of the alternative statutory remedy of appeal - petition dismissed.

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• 2021 (12) TMI 904
  Fixation of special rate of value addition of Central Excise duty - direction to respondents to treat the applications filed by the petitioner in time and to consider the same on merit - HELD THAT:- The Court finds that in the case of M/S JYOTHY LABS LTD. (ERSTWHILE JYOTHY LABORATORIES LTD.) VERSUS UNION OF INDIA AND 2 ORS., PRINCIPAL COMMISSIONER CGST COMMISSIONERATE, ASSTT. COMMISSIONER OF GST AND CENTRAL EXCISE [ 2021 (8) TMI 726 - GAUHATI HIGH COURT] , this Court had categorically held that the requirement of requesting for fixation of a special rate in respect of value addition to the manufactured goods had arisen only after the final judgment of the Supreme Court of India on 22.04.2020. It is seen that by virtue of orders passed by the Supreme Court of India in IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [ 2020 (5) TMI 418 - SC ORDER ] arising out of the said case, the period of limitation, whether condonable or not stood extended from 15.03.2020 till 02.10.2021 and it was further provided in para-II of the order dated 23.09.2021 in M.A. No. 665/2021 as follows II. In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply. Issue notice returnable on 10.01.2022. Extra copies of the writ petition be served on the learned CGC as well as on the learned Standing counsel for the respondent nos. 2 and 3 - List on 10.01.2022.

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• 2021 (12) TMI 903
  Reversal of CENVAT Credit - exempt services or not - input services attributed to LPG manufactured and cleared under PDS under exemption and amount which was paid /reversed is eligible for refund to the respondent - HELD THAT:- The identical issue only for the different period i.e. April 2015- March 2016 came up before this Tribunal and this Tribunal in C.C.E. S.T. -RAJKOT VERSUS RELIANCE INDUSTRIES LIMITED [ 2021 (10) TMI 529 - CESTAT AHMEDABAD ] dismissed the appeals filed by the revenue holding that respondents is not required to pay any amount under Rule 6(3) in respect of LPG cleared under exemption under PDS. Therefore, the amount paid by the respondent was liable to be refunded to them. The issue in the above case and the case in hand is absolutely identical and the only difference is of period. Therefore, following the above order, the appeals filed by the revenue are not sustainable. Appeal dismissed - decided against Revenue.

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• 2021 (12) TMI 902
  Clandestine manufacture and removal - shortage of finished goods or not - relied upon documents for demand not provided, despite written requests - Witnesses neither examined during adjudication nor cross-examination allowed in terms of Section 9D of the Central Excise Act 1944 - time limitation - reconciliation of alleged clearances against GP - discharge of heavy burden to prove their case (by Revenue) - violation of principles of natural justice - HELD THAT:- Both the Authorities could have finally decided the case appropriately as the fact finding authorities on ascertaining the facts and circumstances of the case and appreciation of the evidences on critical analysis of records correctly in order to come to rational inference and conclusion whether Appellants had indulged in the alleged clandestine manufacture and/or clandestine removal of the goods. Accordingly, since the case has reached in this Tribunal, it would also be appropriate to finally decide the case in this Tribunal as the final fact finding authority in the facts and law. Appellant has contended that Copies of relied upon documents seized on 03.05.2017 have not been provided despite oral and written requests made by Appellant from the date of seizure for such documents. Appellant has also submitted copies of their letters dated 06.09.2018, 10.04.2019, 02.02.2019 and 25.10.2019 in the Company s Appeal at page Nos. 79 to 83. There is no denial of this fact of non supply of relied upon documents by the Revenue. There was no clandestine removal of goods against the seized Gate Passes, which are also not provided to Appellants to clarify this aspect further. Charge of clandestine removal without payment of duty is not proved. Duty demand in Show Cause Notice dated 18.12.2019 and confirmed by Order-in-Original dated 04.12.2020 is also not sustainable. The duty demand of Rs. 8,89,640/-based on 61 Gate Passes (GP), in absence of positive corroborative evidences, is also not sustainable under the facts and circumstances of this particular case against the Appellants. Shortage of finished Decorative Laminates - HELD THAT:- In absence of any such corroborative clinching, positive evidences of excess procurement and use of required Raw materials, packing materials and confirmation from buyers of receipt of such clandestinely removed goods, receipt of sale proceeds etc, and without proper verification of stock of finished goods, the case of clandestine removal is also not proved for demand of Rs. 1,85,994/- - duty demand of Rs. 1,85,994/-is also not sustainable on facts in this case. Cross-examination of witnesses - HELD THAT:- Original Adjudicating authority has neither examined nor allowed cross-examination of witnesses whose statements are recorded in investigation and relied upon in this case. These are the only evidence relied upon to confirm the demands in facts of this case. It is settled position in law including the decision of the Hon ble Supreme Court in case of ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [ 2015 (10) TMI 442 - SUPREME COURT] , that when cross examination of the witnesses is not allowed u/s 9D of Central Excise Act 1944, then, those statements should not be relied upon for fastening the duty/tax liabilities. Hence, cross examination of the witness was mandatory to arrive at correct fact finding in the interest of justice in the facts of this case. There is no other material placed on record by Revenue to justify excise duty demands. Therefore, the duty demand is also not sustainable on this legal ground as well. Thus, disputed excise duty demands of total Rs, 10,75,634/- (Rs. 1,85,994/- + Rs. 8,89,640/-), deserves to be set aside - When the duty demand is not sustained, consequential demands of interest and imposition of penalties on both the Appellants would not survive and the same are set aside - appeal allowed - decided in favor of appellant.

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• 2021 (12) TMI 901
  CENVAT Credit - Import of services - Service tax under RCM after audit objections - import of raw material and paid the price for the same by way of Cost + Insurance + Freight (CIF) - appellant received the goods and has shown the receipt in their books of accounts and also other records when the goods are received during the period - HELD THAT:- Neither there is any case of issue of supplementary invoices nor there is any case of fraud, collusion, mis-statement, etc. Under such facts and circumstances, it is held that the appellant is entitled to cenvat credit of service tax of Rs. 1,00,003/- paid under reverse charge mechanism in October, 2018. Further, the appellant is entitled to refund of this amount in terms of Section 142(6) read with 143(3) of the CGST Act. The appellant is entitled to refund of Rs. 1,00,003/-. The Adjudicating Authority is directed to pay the refund within a period of 45 days from the date of receipt of this order alongwith interest as per Section 11BB of the Central Excise Act - Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2021 (12) TMI 900
  Levy of Entry Tax - purchase of MMV Hydraulic Mobile Crane - Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 - HELD THAT:- On facts of the present case and a collecting, a reading of the documents filed indicates that the imported Escorts Crane was registered as a motor vehicle before the Pondicherry Regional Transport Authority. It was registered as MMV Hydraulic Mobile Crane and was registered as PY 01 C 9412 on 21.11.1994. It was initially purchased by CRANE OPERATORS and later sold to one Mr.Shanmugam of M/s.Balagi Agencies and thereafter it was purchased by the petitioner on 03.10.1998. A reading of the proviso (b) to Section 3(1) of the Act makes it clear that no tax shall be levied and collected, if the owner of such vehicle applies for the assignment of new registration mark in Tamil Nadu after a period of 15 or 18 months from the date of its registration, as the case may be, as per proviso (a) (b) to Section 3(1) of the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990. The vehicle was first registered in the year 1994 in the Union Territory of Pondicherry. It was imported into the State by the petitioner only during October, 1998. Therefore, the purchase by the petitioner was beyond the period of 15/18 months after its registration. It was not necessary for the petitioner to have a prior registration of the vehicles in his own name in the Union Territory of Pondicherry to claim exemption under proviso (b) to Section 3(1) of the Act. There is no scope to levy entry tax on the petitioner under proviso (b) to Section 3(1) of the Act on the imported MMV Hydraulic Mobile Crane purchased from a seller in Union Territory of Pondicherry. Petition allowed.

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• 2021 (12) TMI 899
  Rectification of mistake - remedial measure by which the inadvertent and bonafide error can be corrected - Seeking to amend the tax period of the challan - tax period to be reflected as for the 2nd quarter of 2016-17 instead of 2nd quarter of 2015-16 - HELD THAT:- Imposition of penalty is called for where the assessee fails to furnish returns by the due date, which is not the position in the present case. Admittedly, Petitioner has deposited the requisite tax for the relevant quarter of the assessment period but has inadvertently mentioned the wrong period in the challan and therefore, cannot be, saddled with the liability of penalty. The issue can be resolved by issuing a writ of mandamus to the Respondent to treat and read the period 01.08.2015 to 31.08.2015 mentioned in the challan dated 29.09.2016, bearing No. 0510133290920160000156, issued by the HDFC Bank Ltd., as 01.08.2016 to 31.08.2016 . This will obviate the lengthy and complicated procedure of applying for refund and deposit on the part of the Petitioner and will also save him from any penalty under the Tax Statute. The Respondent is directed to read the period 01.08.2015 to 31.08.2015 mentioned in the challan dated 29.09.2016, bearing No. 0510133290920160000156, issued by the HDFC Bank Ltd., as 01.08.2016 to 31.08.2016 - the Respondent is directed to accept the returns for the 2nd quarter of 2016-2017 - petition allowed.

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• Indian Laws

• 2021 (12) TMI 898
  Dishonor of Cheque - grant of interim compensation - proof of a document or admissibility of a document in evidence which is tendered along with a list of documents or along with an affidavit in lieu of examination-in-chief - HELD THAT:- The verdict of the Hon ble High Court of Punjab Haryana in JOGINDER SINGH VERSUS ANURAG MALIK [ 2015 (2) TMI 1366 - PUNJAB AND HARYANA HIGH COURT] , in relation to proceedings under Section 138 of the NI Act, 1881 observes categorically to the effect that in case the petitioner who was facing proceedings under Section 138 of the NI Act, 1881 in case of a dishonoured cheque seeks to establish some documents, it would be open to the petitioner to avail the benefit of the provisions of Section 294(3) of the Cr.P.C., 1973. It becomes apparent that the provision of Section 143A of the NI Act, 1881 has essentially to be held to be directory and cannot be termed to be mandatory to the effect that the Trial Court has mandatorily to award the interim compensation under Section 143A of the NI Act, 1881 in all proceedings tried under Section 138 of the NI Act, 1881 on the mere invocation thereof by a complainant and thereby order in terms of Section 143A(2) thereof, the interim compensation to the tune of 20% of the amount of the cheque invoked. 52. The applicability of Section 294 of the Cr.P.C., 1973 has been made essential in all proceedings in criminal trials and undoubtedly, the proceedings under Section 138 of the NI Act, 1881 are termed to be quasi criminal in nature. The observations of the learned Trial Court to the effect that even if it be assumed that the provisions of Section 143A of the NI Act, 1881 is discretionary in nature, the Court is still clothed with the powers to grant interim compensation to the complainant after providing sufficient reasons, it is essential to observe that the award of interim compensation in terms of Section 143A of the NI Act, 1881 has to be after providing sufficient reasons and whilst taking the same into account, the determination of interim compensation directed to be paid by the petitioners herein to the extent of the maximum of 20% of the cheque amount to the complainants without even considering the submissions that have been sought to be raised by the petitioners in relation to bank statements of the complainant and without resorting to the provisions of Section 294 of the Cr.P.C., 1973 cannot be held to be within the contours of Section 143A of the NI Act, 1881 to be with sufficient reasons - there are no inherent powers conferred on a criminal court of a Magistrate dehors enabling provisions of a statute. Matter remanded back to the learned Trial Court to dispose of the application under Section 143A of the NI Act, 1881 filed by the complainants of the said complaint cases seeking interim compensation from the accused after invocation of Section 294 of the Cr.P.C., 1973 - Application disposed off.

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• 2021 (12) TMI 897
  Dishonor of cheque - insufficiency of funds - complaint filed having no jurisdiction to try the case as contended by the revisional petitioner - revisional jurisdiction with regard to legality and correctness of the judgment of respective courts. Whether the Court in which the complaint is filed is having no jurisdiction to try the case as contended by the revisional petitioner? - HELD THAT:- The proviso of section 142(2) is very clear that offence under section 138 shall be inquired into and tried only by a Court within whose local jurisdiction, a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated and also explanation is clear that where a cheque is delivered for collection at any branch of the bank of payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account. When such amendment was brought in 2015 and inserted section 142(2) of the NI Act, the very contention of the petitioner that the Bijapur Court is not having jurisdiction to try the complaint filed for the offence under section 138 of NI Act, cannot be accepted. P.W.1 also categorically given admission that cheque was presented at Bijapur Axis Bank and also endorsement was given by the bank of the petitioner in respect of Axis Bank in terms of Ex. P.2. It is suggested that he has falsely deposed that cheque is presented at Axis Bank and the same was categorically denied. Hence, having taken note of all these materials available on record, the very contention of the petitioner cannot be accepted - answered in negative. Whether the Courts below have committed an error in convicting and sentencing the petitioner herein and it requires revisional jurisdiction with regard to legality and correctness of the judgment of respective courts? - HELD THAT:- Regarding exercising of revisional power by the Court is concerned, the same is also limited, the Court has to exercise revisional power only if the judgment of conviction and sentence which is affirmed by the appellate Court is not in conformity with the legality and correctness of the judgment and both the orders suffer from illegality and correctness of the order, only then the Court can exercise revisional jurisdiction - once signed cheque is delivered, the contention of the accused cannot be accepted and he has to rebut the case of the complainant. In the case on hand, the accused has not rebutted the evidence of complainant by leading any defence evidence. No doubt, the accused cross examined the witness P.W.1 to rebut his evidence by way of cross-examination of P.W.1 and the same is also not done with regard to transaction is concerned and the counsel mainly has concentrated with regard to jurisdiction while cross-examining P.W.1. - there are no reason to exercise revisional jurisdiction and hence, there are no merit in the revision petition. The revision petition is dismissed.

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• 2021 (12) TMI 896
  Dishonor of Cheque - legally enforceable debt or not - rebuttal presumption or not - Section 139 of the Negotiable Instrument Act - HELD THAT:- It is observed by the Courts below that the complainant has admitted in his evidence that he filed a complaint against Pandurangan for the offence under Sec. 138 of N.I. Act and subsequently his father discharged the said loan. Under such circumstances the natural human conduct would be to get back all the filled or unfilled cheques issued to the respondent. If the petitioner claims that the impugned cheque is the one given by his father, some steps ought to have been taken to recover the cheque immediately after his father discharged the loan. Since no such materials produced before the Court, the trial Court was not able to accept the contention of the petitioner that the cheque was issued by the father of the petitioner only by way of security. In the absence of any rebuttal proof the initial presumption that was taken in favour of the respondent will become the conclusive proof. Since it is not proved by the petitioner that the cheque in question has been issued by way of security, the Courts below held that the petitioner has issued the cheque only for a legally enforceable debt and he is guilty for the offence under Section 138 of Negotiable Instruments Act. The Criminal Revision Case stands dismissed.

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• 2021 (12) TMI 895
  Dishonor of Cheque - failure to prove the debt - Acquittal of respondent from the charges framed under Section 138 of the Negotiable Instrument Act - HELD THAT:- The trial Court has rightly arrived to the conclusion that the complainant has failed to prove the debt of the complaint. This Court also confirm the said conclusion drawn by the trial Court that the transactions between the complainant and the accused are not clear and the complainant has also failed to produce the evidence about source of money. The judgment of acquittal passed by the trial Court is not perverse, illegal and improper and the same does not call for any interference - Petition dismissed.

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• 2021 (12) TMI 894
  Dishonor of Cheque - insufficiency of funds - compounding of offences - section 147 of NI Act - HELD THAT:- Since entire amount of compensation awarded by the court below has been paid or agreed to be paid by the petitioner to the complainant, this Court sees no impediment in accepting the prayer made on behalf of the petitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon ble Apex Court in Damodar S. Prabhu V. Sayed Babalal H. [ 2010 (5) TMI 380 - SUPREME COURT ], wherein it has been categorically held that court, while exercising power under Section 147 of the Act, can proceed to compound the offence even after recording of conviction by the courts below. Present matter is ordered to be compounded and impugned judgments of conviction and sentence dated 19.2.2014 and 16/30.12.2011, passed by the courts below are quashed and set-aside and the petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act - Petition disposed off.

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• 2021 (12) TMI 893
  Dishonor of Cheque - insufficiency of funds - discharge of legally enforceable liability or cheque issued as security - rebuttal of presumption u/s 118 and 139 of NI Act - HELD THAT:- Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, or any debt or other liability. Similarly, Section 118 of the Act provides that unless contrary is proved , that the holder of the cheque received the cheque in discharge, in whole or in part, of a debt or liability. True, it is that to rebut aforesaid presumption accused can always raise probable defence either by leading some positive evidence or by referring to the material, if any adduced on record by the complainant. But in the case at hand, accused has miserably failed to raise probable defence much less sufficient to rebut the presumption applicable in favour of the complainant under Section 118 and 139 of the Act. This Court sees no reason to interfere with the well reasoned judgments passed by the courts below, which otherwise appear to be based upon the correct appreciation of evidence and as such, same need to be upheld. Moreover, this Court has a very limited jurisdiction under Section 397 of the Cr.PC, to re-appreciate the evidence, especially, in view of the concurrent findings of fact and law recorded by the courts below. Since after having carefully examined the evidence in the present case, this Court is unable to find any error of law as well as fact, if any, committed by the courts below while passing impugned judgments, and as such, there is no occasion, whatsoever, to exercise the revisional power - this court is convinced and satisfied that complainant has successfully proved by leading cogent and convincing evidence that he advanced Rs. 1.50 Lakh to the accused, who with a view to discharge his lawful liability, issued cheque in question, but the same came to be dishonored on account of insufficient funds in his account. Since despite issuance of legal notice, accused failed to make good the payment , learned court below totality of evidence led on record by the complainant, rightly held accused guilty of having committed offence punishable under S.138 of act and as such, no interference in the impugned judgment/order of conviction and sentence is called for. Moreover, this court, after issuance of notice dated. 14.10.2019, repeatedly granted opportunity to the petitioner/accused to deposit the amount but neither he furnished personal bonds nor deposited amount. Impugned judgment/order of conviction and sentence passed by learned Courts below are upheld - Petition dismissed.

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• 2021 (12) TMI 892
  Refund of the investment made along with interest to allottees under Section 31 of of The Real Estate(Regulation and Development) Act, 2016 and The Uttar Pradesh Real Estate(Regulation and Development) Rules, 2016 - impugned orders came to be passed by the single member of the authority on the complaint instituted at the instance of the home buyers/allottees after hearing the parties with the direction to refund the principal amount along with interest(MCLR + 1%) as prescribed by the State Government under the Act. Whether the Act 2016 is retrospective or retroactive in its operation and what will be its legal consequence if tested on the anvil of the Constitution of India? - HELD THAT:- The clear and unambiguous language of the statute is retroactive in operation and by applying purposive interpretation rule of statutory construction, only one result is possible, i.e., the legislature consciously enacted a retroactive statute to ensure sale of plot, apartment or building, real estate project is done in an efficient and transparent manner so that the interest of consumers in the real estate sector is protected by all means and Sections 13, 18(1) and 19(4) are all beneficial provisions for safeguarding the pecuniary interest of the consumers/allottees. In the given circumstances, if the Act is held prospective then the adjudicatory mechanism under Section 31 would not be available to any of the allottee for an on going project. Thus, it negates the contention of the promoters regarding the contractual terms having an overriding effect over the retrospective applicability of the Act, even on facts of this case - The legislative power to make the law with prospective/retrospective effect is well recognized and it would not be permissible for the appellants/promoters to say that they have any vested right in dealing with the completion of the project by leaving the allottees in lurch, in a helpless and miserable condition that at least may not be acceptable within the four corners of law. From the scheme of the Act 2016, its application is retroactive in character and it can safely be observed that the projects already completed or to which the completion certificate has been granted are not under its fold and therefore, vested or accrued rights, if any, in no manner are affected. At the same time, it will apply after getting the on going projects and future projects registered under Section 3 to prospectively follow the mandate of the Act 2016. Whether the authority has jurisdiction to direct return/refund of the amount to the allottee under Sections 12, 14, 18 and 19 of the Act or the jurisdiction exclusively lies with the adjudicating officer under Section 71 of the Act? - HELD THAT:- The opening words of Section 71(1) of the Act make it clear that the scope and functions of the adjudicating officer are only for adjudging compensation under Sections 12, 14, 18 and 19 of the Act. If the legislative intent was to expand the scope of the powers of the adjudicating officer, then the wording of Section 71(1) ought to have been different. On the contrary, even the opening words of Section 71(2) of the Act make it clear that an application before the adjudicating officer is only for adjudging compensation . Even in Section 71(3) of the Act, it is reiterated that the adjudicating officer may direct to pay such compensation or interest as the case may be as he thinks fit, in accordance with provisions of Sections 12, 14, 18 and 19 of the Act. This has to be seen together with the opening words of Section 72 of the Act, which reads while adjudging the quantum of compensation or interest, as the case may be, under Section 71, the adjudicating officer shall have due regards to the broad parameters to be kept in mind while adjudging compensation to be determined under Section 71 of the Act - If there is any breach or violation of the provisions of Sections 12, 14, 18 and 19 of the Act by the promoter, such a complaint straightaway has to be filed before the regulatory authority. What is being referable to the adjudicating officer is for adjudging compensation, as reflected under Section 71 of the Act and accordingly rules and regulations have been framed by the authority for streamlining the complaints which are made by the aggrieved person either on account of violation of the provisions of Sections 12, 14, 18 and 19 or for adjudging compensation and there appears no question of any inconsistency being made, in the given circumstances, either by the regulatory authority or the adjudicating officer. If the adjudication under Sections 12, 14, 18 and 19 other than compensation as envisaged, if extended to the adjudicating officer as prayed that, may intend to expand the ambit and scope of the powers and functions of the adjudicating officer under Section 71 and that would be against the mandate of the Act 2016. Whether Section 81 of the Act authorizes the authority to delegate its powers to a single member of the authority to hear complaints instituted under Section 31 of the Act? - HELD THAT:- The express provision of delegation of power under the SEBI Act is akin to Section 81 of the Act 2016. This Court observed that if the power has been delegated by the competent authority under the statute, such action, if being exercised by a single member cannot be said to be dehors the provisions of the Act - Section 81 of the Act 2016 empowers the authority, by general or special order in writing, to delegate its powers to any member of the authority, subject to conditions as may be specified in the order, such of the powers and functions under the Act. What has been excluded is the power to make regulations under Section 85, rest of the powers exercised by the authority can always be delegated to any of its members obviously for expeditious disposal of the applications/complaints including complaints filed under Section 31 of the Act and exercise of such power by a general and special order to its members is always permissible under the provisions of the Act. In the instant case, by exercising its power under Section 81 of the Act, the authority, by a special order dated 5th December, 2018 has delegated its power to the single member of the authority to exercise and decide complaints under Section 31 of the Act and that being permissible in law, cannot be said to be de hors the mandate of the Act. At the same time, the power to be exercised by the adjudicating officer who has been appointed by the authority in consultation with the appropriate Government under Section 71 of the Act, such powers are non delegable to any of its members or officers in exercise of power under Section 81 of the Act - In view of the remedial mechanism provided under the scheme of the Act 2016, the power of delegation under Section 81 of the Act by the authority to one of its member for deciding applications/complaints under Section 31 of the Act is not only well defined but expressly permissible and that cannot be said to be dehors the mandate of law. Whether the condition of pre deposit under proviso to Section 43(5) of the Act for entertaining substantive right of appeal is sustainable in law? - HELD THAT:- It is indeed the right of appeal which is a creature of the statute, without a statutory provision, creating such a right the person aggrieved is not entitled to file the appeal. It is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial and quasi judicial litigations and it is always be circumscribed with the conditions of grant. At the given time, it is open for the legislature in its wisdom to enact a law that no appeal shall lie or it may lie on fulfilment of precondition, if any, against the order passed by the Authority in question - the obligation cast upon the promoter of pre deposit under Section 43(5) of the Act, being a class in itself, and the promoters who are in receipt of money which is being claimed by the home buyers/allottees for refund and determined in the first place by the competent authority, if legislature in its wisdom intended to ensure that money once determined by the authority be saved if appeal is to be preferred at the instance of the promoter after due compliance of pre deposit as envisaged under Section 43(5) of the Act, in no circumstance can be said to be onerous as prayed for or in violation of Articles 14 or 19(1)(g) of the Constitution of India. Whether the authority has power to issue recovery certificate for recovery of the principal amount under Section 40(1) of the Act? - HELD THAT:- It is settled principle of law that if the plain interpretation does not fulfil the mandate and object of the Act, this Court has to interpret the law in consonance with the spirit and purpose of the statute. There is indeed a visible inconsistency in the powers of the authority regarding refund of the amount received by the promoter and the provision of law in Section 18 and the text of the provision by which such refund can be referred under Section 40(1). While harmonising the construction of the scheme of the Act with the right of recovery as mandated in Section 40(1) of the Act keeping in mind the intention of the legislature to provide for a speedy recovery of the amount invested by the allottee along with the interest incurred thereon is self explanatory. However, if Section 40(1) is strictly construed and it is understood to mean that only penalty and interest on the principal amount are recoverable as arrears of land revenue, it would defeat the basic purpose of the Act. Taking into consideration the scheme of the Act what is to be returned to the allottee is his own life savings with interest on computed/quantified by the authority becomes recoverable and such arrear becomes enforceable in law. There appears some ambiguity in Section 40(1) of the Act that in our view, by harmonising the provision with the purpose of the Act, is given effect to the provisions is allowed to operate rather running either of them redundant, noticing purport of the legislature and the abovestated principle into consideration, it is made clear that the amount which has been determined and refundable to the allottees/home buyers either by the authority or the adjudicating officer in terms of the order is recoverable within the ambit of Section 40(1) of the Act. The upshot of the discussion is that we find no error in the judgment impugned in the instant appeals - appeal disposed off.

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