Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 17, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Securities / SEBI
Insolvency & Bankruptcy
PMLA
CST, VAT & Sales Tax
Wealth tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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There is no such obligation on the Central Board of Indirect Taxes and Customs (CBITC) and the counsel for the petitioner has not cited any authority holding so, to advise the petitioner on, the authority under which goods in movement are intercepted, detained and/or procedure to be adopted thereafter and the scope of verification of documents etc. The petitioner, if in doubt as to the legal position, instead of seeking legal counsel of its advisors/advocates, cannot turn to respondent No. 2 CBITC to give legal opinion. - HC
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Release of goods - Sale of goods through broker - Broker is not tracable - Purchaser refused to admitting the transaction with the applicant - Let the proceedings with respect to the confiscation proceed further in accordance with law. We are not inclined to interfere at this stage. However, provisional release of goods ordered subject to conditions - HC
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Opening of the GST Common Portal so as to enable the petitioner to claim the benefit of the input credit - A mandamus is issued directing the GST Council to consider the innumerable representations made by the petitioner from time to time in a manner so as to enable the petitioner to claim input tax credit either by permitting the petitioner to upload the form on the web portal or by collecting hard copies and processing the same - HC
Income Tax
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Capital gain - JDA entered - Transfer u/s 2(47) - We are not in agreement with the argument of the learned AR that the transfer took place in the assessment year 2005-2006 and has been rightly brought to tax by the AO in the year 2012-2013, since the assessment in the year 2012-2013 the assessee received duly developed and constructed area into his possession out of his share of constructed area. - AT
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Unexplained investment u/s 69 - cash deposit - the alleged transactions of cash deposits and corresponding entries of cheque issued were not in the nature of any business activity but it was a mere facilitation services being provided by the society to its members and other persons in lieu of service charge at ₹ 100/- per lakh - the addition for the alleged cash deposits should be higher of the two namely peak bank balance during the year or the services charged at ₹ 100 per lakh on the alleged cash deposit during each of the year. - Additions deleted - AT
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Disallowance under Section 40(a)(ia) - provision for expenses under the head ‘repairs and maintenance’ on which tax was not deducted at source - TDS on contingent liability not required to be deducted - Subsequently, as and when the final bills were received/issued, the tax was deducted. - AT
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Bogus purchases - AO’s observation that none of the architects can find out the actual material, steel bars used construction of any building of 2 to 3 years cannot be accepted as the consumption of the material can be well estimated from the drawings and the site books. - Inspector report cannot be given credence as the party was found to be genuine on enquiry. - no addition is warranted - AT
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Adding same income twice - interest income - if interest income is excluded from profit & loss account, the business loss would increase further. However, the same would still be not be allowable since the assessee has not substantiated any expenditure. The interest income has rightly been assessed under the head Income from other sources keeping in view the assessee’s nature of business. - AT
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Unexplained share application money u/s 68 - the ld. CIT (A) has duly satisfied himself as the assessee and the parties could provide documents relating to identity, genuineness and creditworthiness of the amounts received along with confirmations, address, cheque number and PAN. Hence, we decline to interfere with the order of the ld. CIT (A) on this issue. - AT
Customs
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Smuggling - Gold - It is true that the conduct of the appellants was suspicious - But, the Officers did not have a reasonable belief in the first place to assert that the seized primary gold was smuggled gold which is essential to shift the burden on to the accused under Section 123 - the officers of the Department had no reasonable belief that the gold was smuggled and therefore they have not discharged their responsibility of forming reasonable belief under Section 123 without which the burden of proof will not shift to the person from whom the gold is seized. - AT
IBC
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As per Section 19(2) of the IBC, 2016, it is made clear that this Tribunal (NCLT) can direct such personnel or other person to comply with the instructions of the Resolution Professional and to cooperate with him for collection of information and management of the Corporate Debtor. - Tri
SEBI
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Winding up of mutual fund scheme - Procedure and manner of winding up - For the purpose of clause (c) to Regulation 18(15), consent of the unitholders would mean consent by majority of the unitholders who have participated in the poll, and not consent of majority of all the unitholders of the scheme. In view of the findings and reasons stated above, we reject the objections to poll results and hold that the unitholders of the six schemes have given their consent by majority to windup the six schemes. - SC
Case Laws:
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GST
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2021 (2) TMI 628
Seeking direction to the Central Board of Indirect Taxes and Customs (CBITC) to reply to the representation of the petitioner - whether there is any mandate in law on the respondent CBITC to reply to each and every representation made/communication sent to it? - HELD THAT:- The communication dated 17th November, 2020 seeks clarification of Section 168 of the Central Goods and Services Tax Act, 2017 (CGST Act) on issues arising out of interception/detention and seizure/confiscation proceedings under Sections 129 and 130 of the CGST Act by the Karnataka authorities. The communication dated 17 th November, 2020 is in the nature of seeking legal opinion from CBITC. There is no such obligation on the respondent no.2 CBITC and the counsel for the petitioner has not cited any authority holding so, to advise the petitioner on, the authority under which goods in movement are intercepted, detained and/or procedure to be adopted thereafter and the scope of verification of documents etc. The petitioner, if in doubt as to the legal position, instead of seeking legal counsel of its advisors/advocates, cannot turn to respondent No. 2 CBITC to give legal opinion. Though the counsel for the petitioner has no reply but the counsel for the respondent no.6 fairly informs that under Section 30 of the CGST Act, an application for revocation of the cancellation of registration is permitted to be filed. He further states that the respondent no.6 will decide the application dated 3rd November, 2020 of the petitioner in a time bound manner - The petition is disposed of directing the respondent to decide the application dated 3rd November, 2020 of the petitioner under Section 30 of the Act, within four weeks of today.
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2021 (2) TMI 627
Release of goods - Sale of goods through broker - Broker is not tracable - Purchaser refused to admitting the transaction with the applicant - HELD THAT:- The argument of Mr. Sheth is that he is the seller of the goods. He has generated the E-way bill, ultimately, he will have to show the transaction in the assessment proceeding as E-way bill has been generated. Let the proceedings with respect to the confiscation proceed further in accordance with law. We are not inclined to interfere at this stage. However, we are inclined to order provisional release of the goods pending the confiscation proceedings on the condition that the writ applicant shall deposit an amount of ₹ 18 Lakh with the respondent No.2 towards the tax and penalty. For the balance amount towards fine of ₹ 52 Lakh, the writ applicant shall execute a bond to the satisfaction of the respondent No.2 with an undertaking that ultimately, if the goods are held liable to be confiscated, he shall make good the entire payment towards fine in lieu of confiscation. Application disposed off.
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2021 (2) TMI 626
Recovery of outstanding demand - section 107(6) of J.G.S.T. Act, 2017 - part of amount involved in the main writ petition regarding which, petitioner has already preferred an appeal against the adjudication order and made deposit of 10% of the demand - HELD THAT:- Let the matter appear on 17.02.2021 for consideration.
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2021 (2) TMI 619
Levy of interest on delayed payment of tax - Section 50 of the CGST Act - petitioner has contended that without any adjudication process under Section 73 or 74 of the CGST Act, such liability has been imposed - HELD THAT:- The issue herein relating to levy of interest on delayed payment of tax on gross tax liability has been taken care of by the CBIC and respondent authorities have been instructed to impose the same on net tax liability. Therefore, there is no purpose in keeping the writ petition pending. However, liberty is reserved with the petitioner to approach the Court in case respondents chose to realize the interest on the gross tax liability for the subject period. Petition disposed off.
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2021 (2) TMI 618
Seeking directions to respondents to consider the representations made by the petitioner for opening of the GST Common Portal so as to enable the petitioner to claim the benefit of the input credit by uploading Form GST-TRAN-3 declaration - HELD THAT:- On receipt of appropriate certification from the manufacturer, the petitioner tried to upload the form GST TRAN-3 declaration on the web portal of respondents which due to technical error and on account of the respondents not having enabled the said uploading, the petitioner could not upload and/or claim credit. Immediately thereafter the petitioner had raised the said issue with the authorities and requested for necessary action including by submission of hard copy thereof to be considered by the respondents. However, the said representation has not been considered nor any order passed - A perusal of the documents produced would indicate that necessary certificate has been issued by the manufacturer. Once the said certificate has been issued, the petitioner would be entitled to claim input tax credit in relation thereto. It appears that only on account of web portal of respondents not having provided or facilitated for uploading, the petitioner not availed the said input tax credit. A mandamus is issued directing the respondents to consider the innumerable representations made by the petitioner from time to time in a manner so as to enable the petitioner to claim input tax credit either by permitting the petitioner to upload the form on the web portal or by collecting hard copies and processing the same - Petition disposed off.
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Income Tax
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2021 (2) TMI 625
Capital gain - JDA entered - Transfer u/s 2(47) - receipt in the form of super built-up area of commercial space - year of assessment - HELD THAT:- Nothing is brought on record by the assessee to show that there was a development activity in the impugned project during the assessment year 2005-2006 and any cost of construction was incurred by the builder. It is to be inferred that no amount of investment by the developer in the construction activity during the assessment year 2005-2006. Hence, we are of the opinion that transferee was not willing to perform his part of obligations as stipulated in the JDA, in the assessment year 2005-2006 within the meaning as expressed in section 53A of the Transfer of Property Act. As such, the contractual obligation of the developer was not met with in the assessment year 2005- 2006. Being so, the conditions laid down in section 2(47)(v) of the I.T. Act cannot be invoked so as to bring the capital gains into tax in the assessment year 2005-2006 and thus the very foundation of the assessee s case is devoid of merits and not tenable. We are not in agreement with the argument of the learned AR that the transfer took place in the assessment year 2005-2006 and has been rightly brought to tax by the AO in the year 2012-2013, since the assessment in the year 2012-2013 the assessee received duly developed and constructed area into his possession out of his share of constructed area. Thus, the additional ground raised by the assessee is dismissed. Disallowance of non-consideration of commission paid to Bentley Investment while computing cost of acquisition of the property - AO disallowed the commission amount from cost of acquisition on the grounds as the Payment of commission did not add value to the property, the transfer was in the nature of adventure of trade, cost was not incurred within the time limit as prescribed U/s 48(1) and 55(1)(b) of the Act, such expenditure was not indicated in the return of income,such transaction should have reflected as receivable in the books of M/s Bentley and transaction did not suffer TDS and payment was not supported by any agreement - HELD THAT:- Reasons given by the AO for not considering the payment of commission as cost of acquisition is not justified. The party who has received the commission payment confirmed that they have received the commission and payment has been made by cheque. The AO cannot doubt the genuineness of these payments. These payments are inextricably linked to the acquisition of the impugned property and it should be considered as cost of acquisition while determining the capital gain on entering into JDA. Accordingly, we direct the AO to consider the payment of ₹ 1 crore as part of cost of acquisition and thereafter compute the capital gain. This ground of appeal by the assessee is allowed. Determination of sale consideration by adopting guidance value of commercial space in respect of cost of construction of this commercial space to the builder - HELD THAT:- AO not rejected the claim of assessee that the cost of construction claimed by the assessee at ₹ 1,500 per sq.ft. being the cost of construction incurred by the developer. The Assessing Officer only claimed that provisions of section 50C of the Act is applicable at ₹ 2,200 per sq.ft. being the guideline value. Since the Assessing Officer not disputed the cost of construction at ₹ 1,500 per sq.ft. incurred by the developer on constructing the assessee s share of constructed area, we are of the opinion that the Assessing Officer has to consider the cost of construction at ₹ 1,500 per sq.ft. being the cost of construction incurred by the developer towards the constructed area of assessee s share and to determine the capital gains in the assessment year 2012-2013. This view is fortified by the judgment in the case of ITO v. N.S.Nagaraj [ 2014 (12) TMI 888 - ITAT BANGALORE] and Khivraj Motors [ 2015 (8) TMI 468 - KARNATAKA HIGH COURT] wherein held that when the cost of construction is been agreed upon by the parties and such cost of construction being the full value of consideration is not refuted by the Assessing Officer without assigning any valid reasons, then the cost of construction to the developer ought to be accepted as full value of consideration. Applicability of section 50C of the Act for sale of residential flats - HELD THAT:- As decided in MR. PRAKASH CHAND BETHALA [ 2021 (2) TMI 215 - ITAT BANGALORE] has taken place vide Sale Agreement dated 8.3.1993 and full value of consideration for the purpose of computing long term capital gain in the hands of the assessee has to be adopted on the basis of guidance value of this property as on the date of Sale Agreement only, not on the date of Sale Deed dated 9.3.2007. Accordingly we allow the grounds taken by the assessee as there was no applicability of section 50C in the year 2007-08 - Thus we direct the A.O. to consider the guideline value of the impugned residential flats as in the financial years 2006-2007 and 2007- 2008 as the sale agreement are entered in the earlier assessment years and not in the assessment year 2012-2013. Taking the consistent view, we allow the ground of appeal of the assessee. Action of the AO with regard to treatment of interest on fixed deposits which was prematurely closed and interest paid was reversed on premature closure of fixed deposits - HELD THAT:- After hearing both the parties, we are of the opinion that the Assessing Officer has to bring on tax the correct income earned from fixed deposits while going through the bank statements / certificate issued by Vijaya Bank, Hassan Branch in respect of fixed deposit prematurely closed by the assessee. The assessee shall produce bank statements / interest certificate in support of the income earned from the fixed deposit from Vijay Bank. With these observations, we remit the issue to the file of the A.O. for fresh consideration.
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2021 (2) TMI 623
Validity of reopening of assessment - Reasons for reopening of the assessment u/s 147 - addition u/s 40(a)(ia) - EDC paid to HUDA was subject to TDS under Section 194 - HELD THAT:- SLP dismissed.
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2021 (2) TMI 622
Notice u/s 143(2) - period of limitation - defective return filed u/s 139(1) - petitioner having filed the correct return in response to the notice under section 139(9) - notice under sub-section (2) of section 143 issued much beyond the period of limitation - HELD THAT:- SLP dismissed.
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2021 (2) TMI 621
Non filing of E-Appeal - seeking a direction to the respondents to accept manual return of income filed by the petitioner in view of a technical problem in online filing - prayer made is for a direction to respondent No.2 Central Board of Direct Taxes to make suitable amendment in the electronic Income Tax Return (ITR) utility so as to provide an option to the petitioner as to applicability of section 115JC - HELD THAT:- We find that a similar writ petition was moved before this Court by an assessee earlier facing similar difficulty. Of course, in that case the assessee had not filed any representation before the CBDT highlighting his grievance, whereas in the case of the petitioner he has already made a representation but without any fruitful result. In Samir Narain Bhojwani Vs. Deputy Commissioner of Income-tax, Central Circle3(4), Mum [ 2019 (11) TMI 150 - BOMBAY HIGH COURT ] this Court while granting liberty to the petitioner to make a representation to the CBDT further directed that till such time CBDT took a decision on the petitioner's representation, respondents would not act upon the electronically filed return of income so as to initiate any coercive recovery proceedings. Since petitioner has already filed a representation before the CBDT on 21.01.2021 alongwith income tax return in physical form, we direct that pendency of the writ petition would not be a bar to take a decision on the said representation of the petitioner. In the meanwhile, respondents shall not take any coercive action against the petitioner.
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2021 (2) TMI 615
Addition u/s 40(a)(ia) - Non deduction of TDS on processing charges - Whether the Appellate Tribunal was right upholding the order of the CIT(A) allowing relief from disallowance ignoring the fact that the assessee did not establish genuineness of the expenditure claimed to have been paid to M/s. Cham Trading Organization and not making TDS against the payment made for this expenditure and hence, required to be disallowed as per the provisions of section 40(a)(ia) of the Act? - Disallowance of Terminal Handling Charges - Charges were paid to resident transport operators / labour contractors without making TDS against the payment of this expenditure and - CIT-A allowed relief to assessee - Addition u/s 41(1) - cessation of outstanding liabilities - assessee failed to furnish even confirmation from claimed creditors - CIT-A allowed relief to assessee - HELD THAT:- As gone through the order passed by the CIT (Appeals) and the order passed by the Appellate Tribunal. In our opinion, none of the three questions referred to above, as proposed by the Revenue, could be termed as substantial questions of law. All the three questions involve factual aspects, which have been dealt with by both the authorities. i.e. the CIT(Appeals) as well as the Tribunal. Revenue appeal dismissed.
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2021 (2) TMI 614
Exemption u/s 11 - charitable activity u/s 2(15) - activities of the assessee are not in the nature of commerce / trade - Tribunal held that the activities of the assessee are not in the nature of commerce / trade - as per revenue the assessee is involved in widespread commercial activities which is covered under first and second proviso to section 2(15) without considering the merit of the issue - HELD THAT:- All the questions of law referred to above and proposed by the Revenue stand squarely covered by the decision of this Court in the case of Ahmedabad Urban Development Authority vs. ACIT [ 2017 (5) TMI 1468 - GUJARAT HIGH COURT ]
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2021 (2) TMI 613
Penalty u/s 271(1)(c) - deemed dividend addition - HELD THAT:- As quantum addition added by the AO with aid of section 2(22)(e) of the Act on account of deemed dividend was deleted by the ld.CIT(A) in the second round of litigation. Against this order of the ld.CIT(A), the appeal filed by the Revenue was dismissed by the ITAT on the ground that tax effect involved in this appeal was less than ₹ 50 lakhs. Thus the addition for which the assessee is being visited with penalty stands deleted by the ld.CIT(A) and confirmed by the ITAT on the ground that appeal is not maintainable. But one fact is clear that the addition stands deleted by the ld.CIT(A). We find that sub-clause (iii) of section 271(1)(c) provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable him, which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income As quantification of the penalty is depended upon the addition made to the income of the assessee. Since in the present case, basis for visiting the assessee with penalty has been extinguished by deleting addition by the ld.CIT(A) vide order dated 24.7.2018, and the Tribunal has dismissed the appeal of Revenue the impugned penalty has no leg to stand. In other words, there is no room for the Revenue to impose penalty under section 271(1)(c) - Decided in favour of assessee.
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2021 (2) TMI 611
Assessment of trust - Liability of member - Protective addition in the hands of the assessee society - addition for unexplained investment u/s 69 of the Act made by the Ld. A.O for the unexplained cash deposited in the bank account of the society - HELD THAT:- Firstly the action of Ld. CIT(A) deleting the protective addition made in the hands of the society was not justified since the transactions of cash deposits and cheque issuance were carried out through banking account of the registered co-operative society running for last many years ignoring the fact that the society is a separate legal entity having its Permanent Account Number, secondly Ld. CIT(A) erred in confirming the substantive addition in the hands of the President of the society Mr. Manish Kothari who was merely an office bearer appointed by the Board Members of the society providing honourable services and there is no iota of evidence to show the nexus of the alleged transaction carried out through bank account held in the name of the society with any of the office bearer and thirdly as regard to quantum of addition to be confirmed in the hands of the assessee society the same should be higher of the two amounts namely service charge @₹ 100 per lakh (0.1%) of the alleged cash deposited in the bank account or the yearwise peak balance of all the bank accounts of the society . This exercise should be carried out at the end of the Ld. A.O in order to make necessary addition in the hands of th society. In the result common issue raised by the revenue in the case of the assessee society through partly allowed. Unexplained investment u/s 69 - cash deposit in the bank account of the society of which the assessee is holding the post as President - HELD THAT:- As already dealt with this issue and have held that firstly the addition if any to be made for the alleged cash deposits in the bank account of the society are to be made only in the hands of the society and not in the hands of the office bearer namely Shri Manish Kothari since the society is a seperately legal entity having its Permanent Account Number and working under the registered bye laws since last many years. Secondly we have held that the alleged transactions of cash deposits and corresponding entries of cheque issued were not in the nature of any business activity but it was a mere facilitation services being provided by the society to its members and other persons in lieu of service charge at ₹ 100/- per lakh and thirdly the addition for the alleged cash deposits should be higher of the two namely peak bank balance during the year or the services charged at ₹ 100 per lakh on the alleged cash deposit during each of the year. In view of our above findings we hereby hold that all the additions made on substantive basis in the hands of the assessee u/s 69 of the Act for unexplained cash deposits deserves to be deleted. We accordingly order so and delete the impugned addition made by Ld. A.O for unaccounted investment made u/s 69 in the hands of assessee namely Manish Kothari. Addition made on the basis of loose paper found during the course of survey at the assessee s premises - survey conducted at the office premises of the society u/s 133A - HELD THAT:- issues raised by the assessee in the grounds of appeal for Assessment Year 2012-13 to 2015-16 are restored to Ld. CIT(A) for afresh adjudication after affording proper opportunity of being heard to the assessee and directions are also given to the assessee to not to take uncessary adjournments and should file necssary documents in support of its contention with regard to the impugned additions. In the result appeals of the assessee for Assessment Year 2012-13 to 2015-16 are partly allowed for statistical purposes. Loose papers relied to make addition of element of income i.e. brokerage - No addition seems to be called for however in the set aside proceedings Ld. CIT(A) may decide in accordance with law after giving reasonable opportunity of being heard to the assessee to confirm the addition for the relevant assessment year to which the transaction pertains and also decide whether the addition should be made for the amount mentioned in the alleged document or the element of income i.e. brokerage as contended by Ld. Sr. Counsel for the assessee. Addition on account of brokerage/commission - HELD THAT:- We observe that the additions were made on the basis of statement given during the course of survey and Ld. A.O applied brokerage of 3% on the transaction appearing in the loose papers. Assessee has contended that his share of income is hardly 0.67% to 1% as there are three brokers namely one to represents the seller, second who represents the buyer and third the appellant who on behalf of the broker and buyer communicates with the broker of the seller. Though there seems merits in the contention of the Sr. Counsel for the assessee but since we have already set aside the similar issue raised in Ground No.4 for Assessment Year 2008- 09 we deemed it proper to set aside this common issue of computation of brokerage/ commission also to Ld. CIT(A) to decide about the final rate of brokerage to be applied which can range anywhere between 0.67% to 3%.
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2021 (2) TMI 610
Reopening of assessment u/s 147 - addition u/sec. 50C as well as rejection of the assessee's claim for deduction u/sec. 54F - HELD THAT:- AO taken the sale consideration at ₹ 60.00 lakhs as declared by the assessee. Similarly, the AO also allowed deduction u/sec. 54F of the Act. No other addition was made by the AO pursuant to the audit objection raised by the revenue audit party. AO has only brought the information to the notice of the ld. CIT(A) and the CIT(A) has considered the issues and held that there is no case for making the addition u/sec. 50C as well as rejection of the assessee's claim for deduction u/sec. 54F. Since AO has not made any addition, the contention raised by the Department with regard to the SRO value as well as granting of exemption u/sec. 54F was incorrect, since, both of them were not born out of impugned assessment order. Therefore, we agree with the contention of the ld. AR that the appeal is below the prescribed limit of tax under CBDT Circular No. 3/2018 , dated 11/07/2018, and not covered by exceptions, hence, not maintainable. Thus, the appeal filed by the Revenue is dismissed.
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2021 (2) TMI 609
TP Adjustment - MAM selection - it was the revenue who was aggrieved by the directions of DRP in considering CPM as the most appropriate method for determining ALP of the international transaction under trading segment - HELD THAT:- In the present facts the Ld.TPO adopted TNMM as against CPM adopted by assessee with the same set of comparables as considered by assessee for determining the arm s length price of the transaction under trading segment. Admittedly, no difference has been pointed out in facts and circumstances for assessment year under consideration vis-a-vis assessment year 2011-12. Respectfully following the directions of this Tribunal for assessment year 2011-12 in assessee s own case, we direct the Ld.TPO to determined the arm s length price of the transaction under trading segment by using CPM as the most appropriate method and to carry out the exercise of determining the arm s length price of the transaction in accordance with law. Disallowance of provision created for sales/advertisement - DRP upheld the action of the Ld.AO as the liability was not crystallised during the year under consideration - HELD THAT:- DRP referred to the categorical observation in the draft assessment order wherein the said fact has been noted by the Ld.AO. DRP also noted that the said expenses would be allowable only when it is crystallised which falls in the next year. This has not been controverted by any documents/evidences by the Ld.AR even before us. Under such circumstances we do not find any infirmity with the observations of DRP in upholding the action of the Ld.AO.Accordingly this ground raised by assessee stands dismissed. Disallowance of expenditure on advertisement and warranty provision - AR prayed for one more opportunity to be granted to assessee to support its claim - HELD THAT:- We remand this issue to the Ld.AO for assessee to provide necessary documents in support of its claim. The Ld.AO shall verify the details/evidences filed by assessee and consider the claim in accordance with law.
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2021 (2) TMI 608
Disallowance u/ 14A - CIT(A) not granting relief on disallowance under Rule 8D(2)(iii) as relying on SINTEX INDUSTRIES LTD. [ 2017 (5) TMI 1160 - GUJARAT HIGH COURT] - HELD THAT:- It is crystal clear that in the instant case, the AO has not recorded any objective satisfaction as to why the computation mechanism provided in Rule 8D(2) of the Rules would come into operation, having regard to the accounts of the assessee. To follow the reasons as recorded for earlier years, as done by the AO in the impugned assessment year, is definitely not an objective satisfaction. Therefore, following the ratio laid down in the above decisions of GODREJ BOYCE MANUFACTURING COMPANY LIMITED [ 2017 (5) TMI 403 - SUPREME COURT] we set aside the order of the Ld. CIT(A) in respect of disallowance u/s 14A r.w. Rule 8D(2)(iii) and allow the 1st ground of appeal. Disallowance of payment for non-compliance with RBI norms on customer service etc. u/s 37(1) - HELD THAT:- In the instant case, as recorded by the AO the assessee has claimed expenses on account of penalty of ₹ 15,00,000/- imposed by the RBI u/s 47A of the Banking Regulation Act, 1949 and ₹ 94,200/- for non-compliance of guidelines on customer service, guidelines in respect of exchange of coins and small de-nomination notes and mutilated notes. The ratio laid down in the decisions mentioned at para 12 is squarely applicable to the instant case instead of the decision in ANZ Grindlays Bank [ 2003 (8) TMI 174 - ITAT DELHI-A relied on by the Ld. DR. Therefore, we delete the disallowance levied by the AO. Accordingly, the 2nd ground of appeal is allowed. MAT Computation - adding the tax on non-monetary perquisite in computing book profits u/s 115JB - whether amount paid represents employee cost and not tax in the hands of appellant - HELD THAT:- Similar issue arose before the Tribunal in Rashtriya Chemicals Fertilizers Ltd. [ 2018 (3) TMI 1564 - ITAT MUMBAI] . The Tribunal held that taxes borne by the assessee on non-monetary perquisites provided to employees forms part of Employee Benefit cost and akin to Fringe Benefit Tax since they are certainly not below the line items, since the same are expressly disallowed u/s 40(a)(v), the same do not constitute Income Tax for the assessee in terms of Explanation-2 to section 115JB ; therefore, without there being any corresponding amendment in the definition of Income Tax as provided in Explanation-2 to section 115JB, Fringe Benefit Tax was not required to be added back while arriving at Book Profits u/s 115JB of the Act. - we set aside the order of the Ld. CIT(A) and delete the addition made by the AO of tax on non-monetary perquisites provided to the employees to the book profit u/s 115JB of the Act. Thus the 3rd ground of appeal is allowed. Admission of additional ground - Whether amount of education cess and higher secondary education cess is not tax as covered u/s 40(a)(ii) and accordingly allowable as deduction in computing the income from business or profession ? - HELD THAT: -The above additional ground is squarely covered in favour of the assessee by the decision of the Hon ble Bombay High Court in the case of Sesa Goa Ltd. [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] and Chambal Fertilizers Chemicals Ltd. [ 2018 (10) TMI 589 - RAJASTHAN HIGH COURT] . Following the above decisions, we admit and allow the additional ground of appeal filed by the assessee. Disallowance u/s 14A r.w. Rule 8D to earn dividend income in computing book profit u/s 115JB - HELD THAT:- As decided in M/S. BENGAL FINANCE INVESTMENTS PVT. LTD. [ 2015 (2) TMI 1263 - BOMBAY HIGH COURT] an amount disallowed under Section 14A of the Act cannot be added to arrive at book profit for purposes of Section 115JB . Disallowance under Section 40(a)(ia) - provision for expenses under the head repairs and maintenance on which tax was not deducted at source - TDS on contingent liability - CIT(A) deleted the additions and held that bills in respect of the provision for expenses were not received during the year - HELD THAT:- In the present case, the expenditure had already been incurred. The CIT(A) observed that the taxpayer maintained the books of accounts on the mercantile basis and shown the income and expenditure on an accrual basis - provisions which were made on the basis of properly ascertaining the liability was to be allowed under Section 37(1) - taxpayer had only made the provisions in the account but had not credited the same in the accounts of concerned parties and, therefore, the provisions of Section 40(a)(ia) of the Act would not be applicable. The Tribunal upheld the order of the CIT(A). Aggrieved, the tax department filed an appeal before the High Court. The Hon ble Gujarat High Court observed that the tax was not deducted on the aforesaid expenses since the same were a contingent liability and for which bills were not issued. Subsequently, as and when the final bills were received/issued, the tax was deducted. Accordingly, the High Court deleted the disallowance under Section 40(a)(ia) of the Act and upheld the orders of the Tribunal as well as the CIT(A). As relying on SANGHI INFRASTRUCTURE LTD. [ 2018 (7) TMI 2072 - GUJARAT HIGH COURT] we affirm the order of the Ld. CIT(A) and dismiss the 2nd ground of appeal of revenue.
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2021 (2) TMI 606
Bogus purchases - AO has relied on the information collected by the Investigation Wing and no opportunity to cross examine the parties has been afforded - CIT(A) deleted the additions - HELD THAT:- AO has relied on the information collected by the Investigation Wing and no opportunity to cross examine the parties has been afforded which is a violation of principles of natural justice. The assessee has provided copies of purchase bills, weightage bills and architect certificates. The AO has not reasoned that the bills or the certificate of the architects are bogus and wrong on facts. As per accounting standards AS-7, the purchases and working progress have to be reconciled along with architect report. The AO has not rejected the books of accounts and accepted the book profits while making the addition. Assessing Officer s observation that none of the architects can find out the actual material, steel bars used construction of any building of 2 to 3 years cannot be accepted as the consumption of the material can be well estimated from the drawings and the site books. In the case of M/s Suman Enterprises, the statement of Amit Vashisht indicates that the firm has been registered and run by Shri Deepak, no further enquiries have been conducted. Inspector report cannot be given credence as the party was found to be genuine on enquiry. The better way for the AO could be to enquire about the amounts received from the assessee and from such amounts, if any, purchases of material have been made which in turn supplied to the assessee. The non- purchase of material/ non- utilization of the amounts for purchase of material by the suppliers would be an appropriate evidence to disallow this purchases but the same has been wanting. Reliance is placed on the order of Hon ble High Court of Bombay in the case of CIT Vs Nikunj Eximp Pvt. Ltd. [ 2013 (1) TMI 88 - BOMBAY HIGH COURT ] wherein it was held that no addition is warranted based on the fact that the suppliers have not appeared before the AO - we decline to interfere with the order of the ld. CIT (A) in deleting the addition. - Decided in favour of assessee.
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2021 (2) TMI 604
Validity of reopening of assessment - AO has not furnished copy of reasons recorded before completing the assessment u/s 143(3) r.w.s. 147 - HELD THAT:- As fairly well settled that once the assessee complies with the notice issued under section 148 of the Act and seeks reasons for reopening of assessment, the Assessing Officer is duty bound to furnish the reasons of reopening before proceeding further with the assessment. This is for the simple reason of enabling the assessee to raise objections against the validity of reopening of assessment under section 147 - Unless, the aforesaid basic requirement is complied, the assessment has to be declared as invalid. In the facts of the present case, it is patent and obvious that the Assessing Officer has not supplied the reasons for reopening the assessment of the assessee prior to completion of re-assessment - the impugned assessment order having been passed in gross violation of rules of natural justice, has to be declared as invalid and deserves to be set aside. We direct the Assessing Officer to supply the reasons recorded to the assessee for enabling her to raise objection, if any, on the issue of reopening of assessment. Only after meeting the objections of the assessee, the Assessing Officer may proceed to complete the assessment after due opportunity of being heard to the assessee.
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2021 (2) TMI 603
Disallowance of business loss - necessary expenditure to be incurred by the assessee for closed business - HELD THAT:- The assessee is unable to substantiate the expenditure thus claimed in Profit Loss Account with documentary evidences. No new material has been placed before us which would warrant us to deviate from the stand of Ld. CIT(A). The complete onus to substantiate the business expenditure was on assessee and despite being provided with ample opportunities to do the same, the assessee is unable to file the requisite details and documentary evidences. Accordingly, we see no reason to interfere with the impugned order. Ground No.1 stand dismissed. Adding same income twice - interest income - treating business loss as nil (wherein interest income is reflected) and then by considering under the head income from other sources - HELD THAT:- Interest income has been added twice since the interest income was credited to Profit Loss Account while the same has separately been treated as Income from Other Sources. We are of the considered opinion that if interest income is excluded from profit loss account, the business loss would increase further. However, the same would still be not be allowable since the assessee has not substantiated any expenditure. The interest income has rightly been assessed under the head Income from other sources keeping in view the assessee s nature of business. Carry forward of business losses - This ground become infructuous in view of the fact that business losses as computed by the assessee have been held to be not allowable.
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2021 (2) TMI 602
Reopening of assessment - Validity of reasons to be believe - material difference between the reasons extracted in the assessment order and the reasons recorded for reopening the assessment found in the assessment record - HELD THAT:- On perusal of the assessment records, we found that the reasons of reopening of assessment are materially different from the reasons extracted in the assessment order. In our considered view, when an assessment is reopened and reassessment order is framed, the entire quarrel revolves around the reasons recorded for reopening the assessment. Since, there is difference in the reasons recorded for reopening the assessment as found in the assessment records from the reasons extracted in the assessment order, neither the assessee could defend its case properly nor the appellate authorities can adjudicate the matter. In the in the interest of the justice and fair play, we restore this issue to the files of the AO. The AO is directed to frame the assessment as per reasons recorded for reopening the assessment and supply the copy of the same reasons to the assessee, so that the assessee can defend itself. Legal grounds raised by the assessee are allowed for statistical purposes. Addition u/s 68 - We find that the appellant has furnished plethora of evidences which have not been considered by the AO. We find that there is not even a whisper of the evidences filed by the assessee during the course of the reassessment proceedings, neither in the assessment order nor in the order of the First Appellate Authority. Therefore, again in the interest of justice and fair play we restore this issue to the files of the AO. AO is directed to examine and verify all the documentary evidences furnished by the assessee. Ground allowed for statistical purposes.
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2021 (2) TMI 601
Grant of stay - assessee pleaded for extension of stay contending that there was no change in circumstances considering which the stay granted had been extended on 17-06-2020 - that the delay in disposal of appeal was not attributable to the assessee and further considering the prevailing extraordinary adverse circumstances of COVID-19 - HELD THAT:- Since there is no change in facts and circumstances since the grant and extension of stay earlier, with the assessee having complied with the conditions of grant of stay and the delay in disposal of appeal not being attributable to the assessee, and further considering the prevailing adverse situation of Covid pandemic,following which the Hon'ble Delhi Benches of the Tribunal, relying upon the decisions of the Hon'ble Supreme Court [ 2020 (5) TMI 418 - SC ORDER] as well as the order of Hon'ble Delhi High Court in W.P. Urgent [ 2020 (3) TMI 1186 - DELHI HIGH COURT] had granted extension of stay on the request of the applicant, In our view, it will be in fitness of things to extend the stay for a further period of 180 days from the date of this order or till the disposal of the appeals whichever is earlier.
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2021 (2) TMI 600
Order passed by the CIT(A) ex-parte - Order passed by the ld. CIT(A) dismissing the appeal of the assessee for non prosecution without giving proper and sufficient opportunity of being heard - sufficient cause for non compliance to the notices issued by the ld. CIT(A) fixing the appeal for hearing from time to time - HELD THAT:- As per specific provisions contained in sub-section (6) of section 250 of the Act, the ld. CIT(A) was required to dispose of the appeal of assessee by an order in writing stating therein the points for determination, the decision thereon and the reasons for the decision. A perusal of the impugned order passed by the CIT(A) clearly shows that the same does not comply with these mandatory requirements. Even the ld. DR has not disputed this position and submitted the matter may be sent back to the ld. CIT(A) for disposing of the appeal of the assessee afresh on merits after giving proper and sufficient opportunity of being heard. The impugned order passed by the ld. CIT(A) ex-parte dismissing the appeal of the assessee for non prosecution is accordingly set aside and the matter is remitted back to him for disposing of the appeal of assessee afresh on merits in accordance with the law after giving the assessee a proper and sufficient opportunity of being heard. The assessee is also directed to make due compliance before the ld. CIT(A) and extend all the possible cooperation in order to enable the ld. CIT(A) to dispose of the appeal afresh on merits expeditiously. Appeal of assessee is treated as allowed for statistical purposes
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2021 (2) TMI 597
Unexplained share application money u/s 68 - genuineness and creditworthiness of the share capital subscription - search and seizure operation was carried out on the GTM group of companies - HELD THAT:- The assessee has received amounts varying from ₹ 5 lacs to ₹ 67 lac from various periods from 07.12.2005 to 25.02.2006 and an amounts have been refunded from 27.04.2006 to 19.05.2006 of amounts varying from ₹ 5 lacs to 30 lacs to M/s Arha Buildcon Pvt. Ltd. From the record, we also find that M/s Arha Buildcon Pvt. Ltd. has not complied to the summons issued by the Investigation Wing. Regarding the discrete enquiries conducted by the Assessing Officer at the premises, we observe that the assessee has not been given any opportunity to the assessee regarding the discrete enquiries conduced and its outcome. The said lender has been existence for 10 years and assessed to tax. While making the addition, the Assessing Officer mentions that the assessee was not above to provide any details of cheques that was issued by the assessee and how many of these cheques have actually not been presented for payment or whether any real payments were ever made . The statement is factually wrong as the bank statement of the assessee maintained at HDFC Bank clearly shows the amounts received and paid with regard to M/s Arha Buildcon Pvt. Ltd. Hence, in view of the facts are unable to agree with the contentions of the ld. CIT (A). The addition on this account is directed to be deleted. Addition on account of other parties - addition mainly based on the statement of Shri Mahesh Garg - We find that the assessee has not been given opportunity to rebut even the statement of Shri Mahesh Garg by the Assessing Officer. The Assessing Officer has not issued any summons or made any enquiries with regard to any of the parties to prove that the amounts have been in fact rooted through these entities. We have gone through the case laws submitted in judgments relied upon by the revenue. While a valiant attempt have been made by the ld. CIT DR, there has not been any tangible facts to treat these amounts u/s 68 especially when there is no premium involved, the parties have not been inquired into revenue, addition has been made solely on the basis of Shri Mahesh Garg, amounts have refunded at various intervals or adjusted against the bookings, we hold that the action of the Assessing Officer cannot be held to be valid. Appeal of the assessee on this ground is allowed. Regarding the appeal of the revenue, we find that the ld. CIT (A) has duly satisfied himself as the assessee and the parties could provide documents relating to identity, genuineness and creditworthiness of the amounts received along with confirmations, address, cheque number and PAN. Hence, we decline to interfere with the order of the ld. CIT (A) on this issue. Unaccounted income from sale of flats in Cooperative Societies - Documents pertaining to the society have been found with Shri Mohit Vohra and Shri Tushar Kumar, Directors of the company and assessee has a role in management of the group houses societies - HELD THAT:- As confirmed by the society that since there was a rise in the price of steels, cement and bricks, the cost escalation was worked out to be ₹ 44,800/- which was duly approved by the members of the society in the AGM. The society cannot be said a benami concern of Shri Tushar Kumar/GTM since it is a separate legal entity and is a registered society under the Haryana cooperative society Act. The scope of its activities, objectives is governed by its Memorandum and Articles of the association and nothing else The mere fact that some of the documents information pertaining to its members were found at the premises of Mr. Tushar Kumar/GTM did not make it a concern of Mr. Tushar Kumar/GTM. From the above it is clear that the society is an independent legal entity and is not a benami concern of Mr. Tushar Kumar/GTM. Adverting to the evidences as to whether the assessee has received ₹ 4 lacs from each of 48 flats. We do not find any such reference or evidence gathered, collected or investigated by the revenue. The addition made was on theoretical premise on the basis of presumptions. Even the statement recorded from the members of the society did not point to any amount paid to the assessee or the Director in his personal capacity. The society has also clarified that an amount of ₹ 17 lacs each for category A and ₹ 21 lacs for category A1 type. The cost escalation of ₹ 44,800/- has been approved in the AGM. There was absolutely no evidence of payment of ₹ 4 lacs by each flat owner to the assessee. Hence, the addition made by the AO cannot be sustained. The appeal of the revenue on this ground is dismissed. - Decided in favour of assessee.
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Customs
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2021 (2) TMI 617
Smuggling - Jewellery - competency of new officer to sit as a Revisionary Authority - HELD THAT:- There is no representation on behalf of the 2nd respondent. The learned counsel for the 1st respondent is also unable to confirm as to whether the officer who passed the impugned order was incompetent or not. Therefore, without expressing any opinion on the merits of the case, the impugned order is set aside and the case is remitted back to the 2nd respondent to pass a fresh order after hearing the petitioner with a caveat. If the impugned order passed by the 2nd respondent was passed by an officer having appropriate qualification and competency, the 2nd respondent shall pass an order confirming the impugned order in the remand proceedings without any further deliberation - if the 2nd respondent who passed the impugned order had lacked the competency, the case shall be re-heard on merits by the second respondent with a person having competence. Petition allowed.
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2021 (2) TMI 612
Smuggling - Gold - Learned Commissioner did not allow cross examination of Senior DCM rejecting the contention of the appellants that Railway Authorities cannot confirm the travel or non-travel of the passengers - principles of natural justice - Imposition of penalty under sections 112 117 of the Customs Act. Cross examination of the Senior DCM - HELD THAT:- It is a standard practice of the Indian Railways to finalise the status of waitlisted tickets while preparing the chart of passengers before departure of the train which shows whether the tickets of waitlisted passengers are confirmed or otherwise. After the journey begins, the Travelling Ticket Examiner (TTE) checks whether all the passengers had valid tickets and whether all reserved passengers have travelled and this information also goes into their official records. The letter produced by the Senior DCM merely reflects what the official records state and it is not his personal opinion. He did not make any statement regarding the nature of gold or that the passengers travelled with the gold, etc. All that was said in his letter was that the appellants had travelled in the train from Trissur to Vijayawada on the particular date. This was not his statement as an eye witness but a statement based on official records. There is nothing which the appellants can disprove by cross examination of the Senior DCM - the Learned Commissioner was correct in not allowing cross examination of the Senior DCM. Whether the Department had a reasonable belief as required under Section 123? - HELD THAT:- The statements of the apprehended persons revealed involvement of on Shri Om Prakash Khatri director of M/s Panna Gold Impex Ltd. Apprehended persons indicated that these gold bars and pieces were smuggled into India from Kerala and they were to take them to Mumbai to be hand over to Shri Om Prakash Khatri. They also admitted having collected gold from Kerala on earlier occasions to deliver to Shri Om Prakash Khatri. Further, they said that they did not travel by flights to avoid security checking and customs checking. They further described in detail how they reached Kerala and who handed over the gold bars and pieces to them. They further asserted that the markings in the gold have been removed so as to conceal the identity of the smuggled gold and gold was also cut into small pieces and melted. The confiscation of the gold by the adjudicating authority was set aside by the Tribunal and on appeal by the Revenue the Hon ble High Court of Kerala, in the above factual matrix, has over turned the decision of the Tribunal. Therefore, it was not merely the purity of the gold in question but also the statements made during the investigation which formed the basis of the reasonable belief of the officers - In the present case, none of the statements recorded by the Department admit to or even suggest that the gold was smuggled gold. It has also not been brought out in the Show Cause Notice that the purity of the seized gold is such that it could only have been of foreign origin. It is true that the conduct of the appellants was suspicious inasmuch as the gold pieces were being carried in newspapers and a letter was found written to one Shri Vijay in Trissur for requesting the gold tobe handed over to the bearer of the letter. The Officers did not have a reasonable belief in the first place to assert that the seized primary gold was smuggled gold which is essential to shift the burden on to the accused under Section 123 - the officers of the Department had no reasonable belief that the gold was smuggled and therefore they have not discharged their responsibility of forming reasonable belief under Section 123 without which the burden of proof will not shift to the person from whom the gold is seized. The impugned order and show cause notice suffer from this infirmity and therefore the confiscation as well as the penalties need to be set aside. Redemption becomes irrelevant - penalties set aside - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2021 (2) TMI 607
Approval of scheme of amalgamation - Section 230-233 of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding and convening of various meetings issued - various directions regarding issuance of notices with regard to the meeting also issued. Application allowed.
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Securities / SEBI
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2021 (2) TMI 598
Winding up of mutual fund scheme - Procedure and manner of winding up - Consent of the unitholders for winding up of mutual fund schemes - Rights and obligations of the trustees - objections to poll results - SEBI propounds that clause (a) of sub-regulation (2) to Regulation 39 is a standalone provision and the unitholders consent is not required when the trustees upon happening of an event form an opinion that the mutual fund scheme is to be wound up - SEBI (Mutual Funds) Regulations, 1996 framed by the Securities and Exchange Board of India ( SEBI ) to hold that clause (c) to subregulation (15) of Regulation 18 mandates consent of the unitholders for winding up of mutual fund schemes even when the trustees form an opinion that the scheme is required to be wound up in terms of clause (a) to sub-regulation (2) of Regulation 39 of the Mutual Fund Regulations - Primary objection raised relates to appointment of M/s. KFin Technologies Pvt. Ltd. ( KFin Technologies ) for providing e-voting platform services - objection to the e-voting results emanates from the notice to the unitholders HELD THAT:- Though we have not been provided with scheme-wise break-up of the votes which should have been given, it does not matter in view of the overwhelming consent for winding up of the schemes. The trustees also state that a large number of corporate votes were rejected by the Scrutiniser on technical grounds of absence of corporate formalities for authorisation of the concerned representatives. The rejected votes represent 1,997 unitholders holding approximately 68.10 crore units valued at ₹ 2,464 crores. Further, an overwhelming majority of the rejected votes ₹ 2,420 crores by value, 98.6% by units and 97.5% by number of unitholders were in favour of the scheme. Accordingly, if these rejected votes are taken into consideration, the total votes being polled in proportionate terms would increase from approximately 54% to approximately 62%. We do not think we are required to go into the said aspect in great detail. As already held above, the unitholders were given a chance and option to vote and about 38% of the unitholders in numerical terms and 54% in value terms had exercised their right to give or reject consent to the proposal for winding up. In the absence or need for minimum quorum, which is not provided or stipulated in the Regulations nor mandated under law, the e-voting result cannot be rejected on the ground that 38% of the unitholders in numerical terms and 54% in value terms, even if we do not account for the rejected votes, had participated. This cannot be a ground to reject and ignore the affirmative result consenting to the proposal for winding up of the six mutual fund schemes. Objection raised relates to appointment of M/s. KFin Technologies Pvt. Ltd. ( KFin Technologies ) for providing e-voting platform services - This argument does not impress us and cannot be a ground to reject the results. KFin Technologies, it has been pointed out, has been providing e-voting platform services to listed public limited companies ever since the Ministry of Corporate Affairs mandated them to secure approval of the resolutions by the shareholders through electronic voting. The e-voting platform of KFin Technologies is certified by the Ministry of Corporate Affairs approved certification agency, viz. STQC Website Quality Certification Services. KFin Technologies has conducted more than 4,500 e-voting events since 2013. To reject the voting results on this rather specious submission would cast doubts with serious repercussions on e-voting results of several reputed companies. The objectors are unable to point out even a single instance where KFin Technologies has been indicted. In the present case, the e-voting exercise was also supervised by a team of technical experts, including Mr. M. Krishna and Mr. Ch E. Sai Prasad, Assistant Directors, CFSL, Hyderabad. Contention of the trustees that they were required to justify and explain the reasons for winding up of the six schemes and hence the notice was worded in this manner - The notice had also informed the investors that there would be suspension of subscription and redemption post the cut-off time from 23rd April, 2020. All Systematic Investment Plans, Systematic Transfer Plans and Systematic Withdrawal Plans into and from the abovementioned funds stood cancelled post the cut off time from 23rd April, 2020. The notice had also furnished information and clarification regarding distribution of monies from the Fund Assets, inter alia stating that following the decision to wind up the six schemes, the trustees would proceed for orderly realization and liquidation of the underlying assets with the objective of preserving value for unitholders. Their endeavour would be to liquidate the portfolio holdings at the earliest opportunity, to enable an equitable exit for all investors in the unprecedented circumstances . We do not think, in the facts of the present case, the notice for e-voting and the contents would justify annulling the consent given by the unitholders for the winding up of the six schemes. The present case, we do not think the procedure prescribed by Regulation 41 is required to be followed as the trustees themselves have stated that the process of winding up, which would include liquidation of the securities and distribution/payment to the unitholders, should be undertaken by a third party. The objectors had also made similar submissions. Accordingly, with the consent of the parties, we have appointed M/s. SBI Funds Management Private Limited to undertake the exercise of winding up, which would include liquidation of the holdings/assets/portfolio and distribution/payment to the unitholders. We hold that for the purpose of clause (c) to Regulation 18(15), consent of the unitholders would mean consent by majority of the unitholders who have participated in the poll, and not consent of majority of all the unitholders of the scheme. In view of the findings and reasons stated above, we reject the objections to poll results and hold that the unitholders of the six schemes have given their consent by majority to windup the six schemes. Winding up and disbursements would be in terms of our directions in earlier orders dated 2nd February, 2021 and 9th February, 2021.
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Insolvency & Bankruptcy
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2021 (2) TMI 605
CIRP proceedings - Seeking directions under Section19(3) of the IBC, 2016 to all the personnel of the Corporate Debtor to assist and cooperate with the Applicant and comply with the instructions of the applicant and provide the applicant all information, document etc,. required by the applicant - HELD THAT:- When the application was listed before the Bench, several notices were issued to the Corporate Debtors which had been returned unserved. Thereafter, a paper publication has also been made in the local dailies. In spite of all these exercises, the Respondent/Corporate Debtor did not appear before this Tribunal and the Bench relying on Sections 5(20) and (21) and Section (3)(1)(b) (c) of the IBC 2016, admitted the application and ordered Corporate Insolvency Resolution Process (CIRP). Non-cooperation of the respondent/Corporate Debtor is evident from their behaviour. Now after admission, all the steps taken by the Resolution Professional for getting cooperation from the side of the suspended Directors have been failed. Hence, he has appraoched this Tribunal seeking aforesaid reliefs, under Section 19(2) of the IBC, 2016. As per Section 19(2) of the IBC, 2016, it is made clear that this Tribunal can direct such personnel or other person to comply with the instructions of the Resolution Professional and to cooperate with him for collection of information and management of the Corporate Debtor. This Tribunal directs the Respondents 1 2 who are suspended Directors of the Corporate Debtor to assist and cooperate with the Applicant to provide all information, documents required by him and hand over all records, books and paper, books of accounts etc. for management of the Corporate Debtor and complete the CIRP without further delay. This direction should be carried out by the Respondents immediately, at any rate within two weeks from the date of receipt of this order - Application disposed off.
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PMLA
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2021 (2) TMI 620
Validity of provisional attachment order - proceeds of crime - unauthorised payments for obtaining the coal blocks allocation - allegations against her in the PAOs date back to the time when she was a PR professional i.e., sometime between 2007-08 to 2015 when the FIR was lodged - HELD THAT:- The manner in which all the liquid savings of the Petitioner have been completely frozen appears completely unjustified, especially when the allegations against the Petitioner are merely in the realm of speculation, at this stage. The letter dated 22nd January 2021 issued to M/s. Centrum attached the Petitioner s entire deposits to the tune of ₹ 6 crores. Coupled with the assets attached in the PAO, the total assets attached are cumulatively worth 9,23,51,787/- crores, when admittedly, even as per the ED s own case, the total amount received by M/s. Centrum from M/s. AES Chhattisgarh Energy Private Ltd is only ₹ 5.60 crores. Some opportunity ought to have been granted to the Petitioner before passing orders attaching all her accounts and deposits. Attaching all her assets was totally unwarranted. It is directed that in place of the attachment of the assets of the Petitioner, as per the PAOs dated 22nd January, 2021 and 8th February, 2021, the Petitioner shall voluntarily keep a fixed deposit of ₹ 3 crores and not dispose of the immovable property, being Commercial Shed bearing No. Gat No.-126, Sawardari, Tal-Khed, Chakan, Pune-410501, Maharashtra, India, valued at ₹ 2,24,43,670/-. Details of the Fixed deposit of ₹ 3 crores, shall be provided to the ED within one week. Subject to the above terms being complied with within a week by filing of an affidavit of undertaking before this Court, the Petitioner would be free to deal with all other assets - Petitioner is now free to approach the Adjudicating Authority in accordance with law, at the appropriate stage. The de-freezing of the bank accounts shall be effected by the banks concerned upon service of a digitally signed copy of this order, downloaded from the High Court s website - Petition disposed off.
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CST, VAT & Sales Tax
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2021 (2) TMI 616
Validity of assessment order - Revenue submits that since an assessment order has been passed with regard to the petitioner and the appeal was dismissed, the respondents were well within their right to initiate steps for recovery of dues as well as for prosecution - HELD THAT:- The appeals should be heard and decided on merit. Matter is remanded back to respondent No.5 for taking up the appeal of the petitioner for hearing and to decide the same in accordance with law. Representative of the petitioner shall appear before respondent No.5 on 01.02.2021 at 11:00 a.m. whereafter respondent No.5 shall proceed with the hearing of the appeal and decide the same in accordance with law within a period of three months therefrom - Petition allowed by way of remand.
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Wealth tax
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2021 (2) TMI 624
Wealth tax assessment - entitlement to exemption u/s. 5(vi) on the value to the extent of land admeasure 500 Sq mts, irrespective of the number of plot s - assessee and his wife are the co-owners/co-purchasers of two plots and the former s share neither exceeds the threshold limit of 500 sq.mts. or more as per the exemption clause u/s 5(vi) of the Act. - HELD THAT:- Assessee and his wife purchased these two plots on 23/02/2011 by way of as many sale deeds; both dated 23/02/2011 through their power of attorney. There is also no material to suggest that both these parties have clubbed their two plots and got the same sanctioned from the town planning or municipality. The precise question that arises for apt adjudication as to whether the said two plots can be assumed to have been clubbed or not so as to be exigible to wealth tax is to be answered in negative i.e. in assessee s favour and against the department. We make it clear that section 5(vi) of the Act nowhere provides for application thereof by applying such a deeming fiction of clubbing so as to arrive at the threshold limit of 500 sq. mtrs.. We refer to Commissioner of Customs (Imports) Vs. M/s Dilip Kumar and Company [ 2018 (7) TMI 1826 - SUPREME COURT] in these facts and circumstances to hold that both the lower authorities have erred in law and on facts in assessing this taxpayer s share each in the above two plots; by applying clubbing, as liable for wealth tax assessment. We make it clear that the hon ble constitutional bench has settled the law now that a taxing statute has to be strictly interpreted and benefit of doubt in such an exercise goes to the taxpayer. The assessee succeeds in his sole grievance on this count alone. All other remaining issues on merits are rendered infructuous.
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Indian Laws
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2021 (2) TMI 599
Seeking grant of anticipatory bail - renewal of passports - HELD THAT:- A perusal of the impleadment shows that there are matrimonial disputes between the Petitioner and his wife leading to complaints being filed. In one such complaint filed by Ms.Vaid, the Petitioner sought anticipatory bail which was dismissed. Since he was already in Australia, finally he travelled to India and was even arrested. The Petitioner then sought permission to travel to Australia which was initially dismissed on 26th August 2019. However, in a Revision petition filed by the Petitioner, vide order dated 25th November 2019, the Sessions Court granted permission to travel subject to conditions imposed. The conditions contained in the order dated 25th November, 2019 shall continue to apply on the Petitioner. Ld. counsel for the Petitioner submits that he does not dispute this position. Accordingly, the Ministry of External Affairs and the Consulate General of India in Sydney shall ensure that the Petitioner strictly abides by the conditions contained in the order dated 25th November, 2019 upheld by this Court vide order dated 29th January, 2020 - Since the new passport has now been issued for a period of five years, the old passport which was suspended shall now be treated as cancelled. Petition disposed off.
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