TMI Tax Updates - e-Newsletter
March 21, 2025

Case Laws in this Newsletter:

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

Articles

1. IGST refund cannot be denied despite availing duty drawback

   By: Bimal jain

2. ANALYSIS OF SECTION 169 of CGST ACT 2017

   By: K Balasubramanian

3. CLASSIFICATION OF MSME ACCOUNTS AS ‘NON-PERFORMING ASSET’

   By: DR.MARIAPPAN GOVINDARAJAN

4. Annual Return Filing for Pvt. Ltd: Documents, Due Dates, Penalties & Late Fees

   By: Ishita Ramani

5. GST Amnesty Scheme- Relief promised-challenges delivered?

   By: Pradeep Reddy

6. Obtaining GST Registration: Why has it turned into a Nightmare?

   By: Pradeep Reddy

7. The Food Safety and Standards Act, 2006 (FSS Act)

   By: YAGAY andSUN

8. The Food Safety and Standards (Packaging and Labeling) Regulations, 2011

   By: YAGAY andSUN

9. Food Safety and Standards (Contaminants, Toxins, and Residues) Regulations, 2011

   By: YAGAY andSUN

10. Legal Framework for Registration and Licensing under FSSAI Laws.

   By: YAGAY andSUN

11. Phasing Out of HFCs under the Kigali Amendment.[Environment Protection & Climate Change]

   By: YAGAY andSUN

12. Montreal Protocol and Kigali Amendment[Environment Protection & Climate Change].

   By: YAGAY andSUN

13. Kigali Amendment to the Montreal Protocol - An Introduction.[Environment Protection and Climate Change].

   By: YAGAY andSUN

News

1. KDMC approves Rs 3361 cr budget for 2025-26; AI robotics lab in schools key plan

2. Rs 800 crore allocated in MCD budget for regularisation of 12,000 contractual employees

3. T'gana CM hails 2025-26 budget, opposition accuse govt of 'deceiving' public

4. Maximize Your Savings Through Ujjivan Small Finance Bank’s Tax Saving Fixed Deposit

5. DPIIT and Kyndryl Partner to Drive Innovation in India’s Manufacturing and IT Startup Ecosystem

6. DPIIT and YES BANK Partner to Strengthen India’s Startup Ecosystem

7. Ministry of Corporate Affairs Hosts Second Candidate Open House for PM Internship Scheme

8. Need to scale up commercial applications of space tech to drive economic growth: former ISRO chief

9. CBDT issues Circular on Frequently Asked Questions (FAQs) relating to Revised Guidelines for Compounding of Offences under Income-Tax Act, 1961 dated 17.10.2024

10. India-Latin America & Caribbean (LAC) partnership holds immense potential for economic and trade expansion: Shri PiyushGoyal

11. APEDA showcases India’s Agricultural offerings, Processed Foods and alcoholic beverage products at the IFE London 2025

12. CCI invites comments from public in respect of proposed combination between Bharat Forge Limited and AAM India Manufacturing Corporation Private Limited

13. Telangana GSDP grows at 10 pc in FY25; valued over Rs 16 lakh cr: Socio Economic Outlook

14. Commerce ministry recommends 12 pc import duty on certain steel products for 200 days

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/CFD/DCR1/CIR/P/2025/0034 - dated 20-3-2025

Online Filing System for reports filed under Regulation 10(7) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

2. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/35 - dated 20-3-2025

Disclosure of holding of specified securities and Holding of specified securities in dematerialized form

GST - States

3. TRADE CIRCULAR No. 07/2025 - dated 18-3-2025

Regularizing payment of GST on co-insurance premium apportioned by the lead insurer to the co-insurer and on ceding /re-insurance commission deducted from the reinsurance premium paid by the insurer to the reinsurer.

4. TRADE CIRCULAR No. 08/2025 - dated 18-3-2025

Clarifications regarding applicability of GST on certain services

5. TRADE CIRCULAR No. 09/2025 - dated 18-3-2025

Clarification on applicability of late fee for delay in furnishing of FORM GSTR-9C

6. TRADE CIRCULAR No. 10/2025 - dated 18-3-2025

Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 55th meeting held on the 21st December, 2024, at Jaisalmer.

DGFT

7. Trade Notice No. 34/2024 - dated 20-3-2025

Review the SIONS pertaining to Automobile tyres

8. 51/2024-25 - dated 19-3-2025

Extension of the last date for filing Annual RoDTEP Return (ARR) for Financial Year 2023-24

Customs

9. PUBLIC NOTICE -36/2025 - dated 18-3-2025

Enhancement of Women participation in the EXIM trade ecosystem-reg.

Highlights / Catch Notes

GST

• Input Tax Credit Refund for Export Services Without Tax Payment Awaits Authority Review

  Case-Laws - HC : The HC disposed of a petition concerning refund of Input Tax Credit (ITC) for export of services without tax payment. The petitioner committed to furnish any required materials without delay when requested. The Court expressed confidence that authorities would examine the matter diligently and pass appropriate orders within the timeframe indicated by respondent's counsel. The application was accordingly disposed of without specific directives, relying on the authorities to process the ITC refund claim appropriately.
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• Denial of Input Tax Credit Overturned as Section 16(5) Extends Time Limit for Claims from FY 2017-18 to 2020-21

  Case-Laws - HC : The HC set aside the denial of Input Tax Credit (ITC) for FY 2018-19 that was based on Section 16(4) of CGST/SGST Act. The Court recognized that Section 16(5) extended the time limit for claiming ITC for FYs 2017-18 to 2020-21 until November 30, 2021. The impugned order failed to consider this provision. The HC directed the competent authority to reconsider the petitioner's claim within three months, specifically accounting for Section 16(5) provisions and after providing the petitioner an opportunity of hearing.
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• Adjudication Order Upheld After Petitioner Repeatedly Failed to Respond Despite Multiple Hearing Notices Sent by Post and Email

  Case-Laws - HC : The HC dismissed an application seeking to quash a show-cause notice and adjudication order. The Court found that despite multiple hearing notices sent both by post and email, the petitioner failed to appear before the adjudicating authority. The Court determined that the show-cause notice was sufficiently detailed, setting out all necessary particulars requiring response. Although the petitioner claimed violation of natural justice principles by not being afforded proper opportunity to be heard, the Court declined to exercise discretion to grant any special opportunity due to the petitioner's serious laches in responding to the hearing notices.
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• Authorities Directed to Consider GST Non-Payment Allegations and Issue Speaking Order Within Two Weeks

  Case-Laws - HC : The HC directed respondent No. 1 to consider the petitioner's representations regarding non-payment of GST and other alleged offenses by respondent No. 2. A speaking order must be issued within two weeks, with discretion given to respondent No. 1 to hear both parties before making the determination. The petition was allowed, though the Court did not directly order registration of an FIR as requested, instead mandating proper consideration of the petitioner's complaints through appropriate administrative channels with a time-bound resolution requirement.
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• Revenue Department's Order Set Aside: Petitioner Must Deposit 25% of Disputed Tax Amount Within Four Weeks

  Case-Laws - HC : The HC set aside the impugned order due to violation of natural justice principles, specifically non-service of notices and orders that prevented the petitioner from participating in adjudication proceedings. The petitioner demonstrated willingness to pay 25% of the disputed tax amount. The Court allowed the petition with the condition that the petitioner must deposit 25% of the disputed taxes within four weeks from receipt of the order copy. This resolution balances procedural fairness with the petitioner's tax obligations while providing an opportunity for proper adjudication.
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Income Tax

• Delhi Government's Additional Chief Secretary (IT) Authorized to Access Tax Information for Social Welfare Schemes Under Section 138

  Notifications : The Central Government has specified the Additional Chief Secretary (IT), Department of Information & Technology, Government of NCT Delhi as an authorized officer under s.138(1)(a)(ii) of the Income-tax Act, 1961. This designation permits the sharing of income tax payer information specifically for identifying eligible beneficiaries under Delhi government's social welfare schemes. The notification (No. 20/2025) was issued on March 18, 2025, by the CBDT pursuant to its authority under the IT Act to allow disclosure of otherwise confidential taxpayer information to specified authorities for limited purposes.
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• Resale Price Method Appropriate for Solar Product Distributor, Warranty Reimbursements Constitute Separate Transactions

  Case-Laws - HC : The HC ruled in favor of the assessee, confirming that RPM was the most appropriate method for benchmarking international transactions. The Court determined that the assessee functioned as a distributor, not a manufacturer, importing solar products from its AE for resale without value addition. The HC rejected revenue's contention that warranty cost claims and expense reimbursements should be aggregated with purchase transactions, finding these were separate, unrelated transactions. The Court noted that warranty costs were merely reimbursed by the AE without any service element. Following precedents in Burberry India, Matrix Cellular, and Fujitsu India, the HC held that RPM is appropriate for distributors without product value addition, and that transaction aggregation is fact-dependent rather than a question of law.
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• Delay of 597 Days in Filing Appeal Under Section 246A Condoned When Order Sent to Inactive Email Address

  Case-Laws - HC : The HC condoned a 597-day delay in filing an appeal under Section 246A. The appellant claimed they did not receive communication of the order as it was sent to an inactive email address, and filed the appeal promptly upon discovering the order. The Court noted that the revenue department did not file any counter-affidavit to contest the appellant's explanation. Following the Supreme Court's precedent in Vidya Shankar Jaiswal, which mandates a justice-oriented approach to condonation applications, the HC condoned the delay subject to payment of Rs. 5,000/- costs to the High Court Legal Services Committee within 15 days.
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• Share Capital Investments Validated: Assessee Successfully Proves Identity, Creditworthiness, and Genuineness Under Section 68

  Case-Laws - HC : The HC upheld the ITAT's deletion of additions under section 68, confirming that the assessee had successfully discharged the burden of proving identity, creditworthiness, and genuineness of shareholders' investments. The Court found that both appellate authorities had thoroughly examined available records and concurrently determined that the investors were existing shareholders with sufficient funds and properly disclosed past transactions. The HC declined to interfere with these findings, noting that while the AO had examined the materials, conclusions were recorded without supporting reasons, rendering such findings perverse. The Court affirmed the ITAT's reliance on CIT v. Divine Leasing & Finance Ltd. and dismissed the revenue's appeal.
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• Insufficient Time to Respond to Show Cause Notice Leads to Quashing of Assessment and Penalty Orders Under s143(3), s270A, and s271AAD(1)(i)

  Case-Laws - HC : The HC quashed an assessment order under s143(3) and penalty orders under s270A and s271AAD(1)(i) due to violation of natural justice principles. The petitioner received Annexure I to a show cause notice only two days before the scheduled hearing, insufficient time to respond adequately. Though the assessment was hurried to avoid statutory limitation under s153B, the court found procedural deficiencies warranting intervention. The court balanced interests by remitting the case back to the assessing officer for fresh consideration on merits. The court clarified that cross-examination of suppliers is only permissible when their statements are relied upon, and employee statements constitute admissions unless promptly retracted. The writ petition was allowed.
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• Rights Entitlement Constitutes Separate Asset from Shares under India-Ireland DTAA, Gains Taxable Only in Resident State

  Case-Laws - AT : ITAT held that rights entitlement constitutes a distinct asset from shares under the India-Ireland DTAA, similar to derivatives. While shares fall under Article 13(5) of the treaty, rights entitlement is covered by Article 13(6), making gains from its alienation taxable only in the resident state (Ireland) and not in India. The Tribunal rejected the DRP's view that rights entitlement and shares are closely related assets, confirming they are separate. Additionally, ITAT ruled that capital losses from share sales taxable in India under Article 13(5) cannot be offset against capital gains from rights entitlement sales exempt under Article 13(6), upholding the taxpayer's exclusion of such gains from total income.
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• Interest Expenses Under Section 57(iii) Allowed as Taxpayer Established Nexus Between Borrowed Funds and Income-Earning Investments

  Case-Laws - AT : The ITAT reversed the CIT(A)/NFAC's disallowance of interest expenses claimed under section 57(iii). The Tribunal held that the appellant had successfully established the requisite nexus between borrowed funds on which interest was paid and the funds lent on which interest was earned, satisfying the statutory requirements. The ITAT noted that the Assessing Officer had allowed similar deduction claims in subsequent assessment years after scrutiny of the same loans and advances. Consequently, the Tribunal set aside the CIT(A)/NFAC's order and ruled in favor of the appellant, allowing the deduction of interest expenditure under section 57.
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• Additions Under Section 69C Cannot Be Based Solely on Seized Diary Entries Without Corroborative Evidence

  Case-Laws - AT : The ITAT reversed additions made by the AO under Section 69C based on entries in a seized diary, finding that the assessee had discharged the primary onus by denying the contents, while Revenue failed to conduct independent inquiries or produce corroborative evidence. The Tribunal held that additions based solely on diary entries without supporting evidence would be contrary to judicial precedent, noting that the presumption under Sections 132(4A) and 292C is rebuttable. The ITAT applied the principle that the burden of proof lies on the person making allegations, and an assessee cannot be required to prove a negative. Similarly, unexplained investment allegations for plot purchase were rejected due to lack of documentary evidence. The assessee's appeals were allowed.
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• Sale Consideration for Property Upheld at Rs. 5.04 Crore, Rejecting Sham Transaction with Unauthorized Agent

  Case-Laws - AT : The ITAT upheld the Assessing Officer's determination that the actual sale consideration for the immovable property was Rs. 5,04,80,000/-, rejecting the assessee's arrangement with True Value as a sham transaction designed to divert sale proceeds and reduce tax liability. True Value was neither the property owner nor the assessee's authorized agent, and the claimed 50% commission was unjustified. The Tribunal confirmed the reduction of the sale consideration from WDV of the block of assets and the consequent disallowance of excess depreciation of Rs. 25,48,000/-. However, the separate addition of Rs. 2.54 Crores for disallowance of expenditure was deleted as Revenue failed to establish that this amount was separately debited in the assessee's P&L account. The Revenue's appeal was partly allowed.
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• Travel Agent Using Computerized Reservation System Not an E-commerce Operator Under Section 194O

  Case-Laws - AT : ITAT held that the assessee, a travel agent using Computerized Reservation System (CRS) for booking air tickets, is not an e-commerce operator under Section 194O. The Tribunal determined that the assessee merely had access to the Galileo system owned by Interglobe Technology Quotient Pvt. Ltd. (ITQPL) for obtaining travel information and making bookings, without any ownership rights or operational control over the platform. The subscriber agreement explicitly restricted the assessee from modifying the software and confirmed ITQPL's ownership. Consequently, the assessee was not liable to deduct TDS under Section 194O and cannot be considered "an assessee in default." Revenue's appeal dismissed.
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• Interest Expenses Allowed When Investment in Subsidiary's Debentures Serves Business Purpose of Acquiring Controlling Interest

  Case-Laws - AT : The ITAT dismissed the Revenue's appeal against disallowance of interest expenses. The Tribunal held that the assessee's investment in compulsory convertible debentures of Shreeniwas Cotton Mills Ltd., which increased its shareholding from 95.30% to 99.76%, was made to acquire controlling interest in its subsidiary and therefore constituted a business purpose. The assessee demonstrated that it had interest-free investment of Rs. 505.32 crores, presumed to be funded from non-interest bearing funds of OCD worth Rs. 450 crores. The ITAT affirmed the CIT(A)'s finding that investments made to acquire controlling interest in another company are considered to be for business purposes.
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• For Capital Gains, Holding Period Begins from Registered Allotment Agreement Date, Not Final Payment Date

  Case-Laws - AT : ITAT determined that the period of holding for capital gains calculation should be reckoned from the date of the registered allotment agreement (03.10.2016), not the final payment date (21.08.2019). The Tribunal found that the taxpayer acquired title and interest in the property upon registration of the allotment agreement. The taxpayer correctly computed Long-Term Capital Gain by claiming indexation benefit only for payments made per the initial agreement, without indexing payments made in FY 2019-20. The AO's addition treating the gain as Short-Term Capital Gain was directed to be deleted, as the property qualified as a Long-Term Capital Asset based on the holding period from the allotment agreement date.
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• Fair Market Value Determination Set Aside: AO Must Refer to DVO After Proper Hearing; Interest on Substituted Loan Allowable Under Section 48

  Case-Laws - AT : The ITAT set aside the CIT(A)'s findings regarding fair market value determination of the Nellore property. The Tribunal held that the AO improperly adopted the SRO rate (33.88 lakhs) without providing the assessee an opportunity to present their case, despite the sale document showing 9 lakhs consideration. The matter was remanded to the AO to refer valuation to the DVO after giving the assessee proper hearing. Regarding the Jubilee Hills property, the Tribunal followed a coordinate bench ruling that interest paid on a loan used to substitute the housing loan had direct nexus with property acquisition and was allowable as a deduction under section 48. The interest expense disallowance and corresponding indexed cost disallowance were directed to be deleted. The appeal was partially allowed.
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• Employee Who Spent 210 Days Abroad for Work and Job Hunting Qualifies as Non-Resident Under Section 6

  Case-Laws - AT : The ITAT ruled that an assessee who stayed outside India for 210 days (182 days for employment and 28 days seeking employment) qualified as a non-resident under section 6 of the Act. The Tribunal determined that going abroad "for the purpose of employment" includes both actual employment and searching for employment. Following precedent from Suresh Nanda cases, the ITAT held that residential status depends solely on the number of days stayed in India, with non-resident status applying when stay is less than 182 days. The assessee's foreign income was therefore exempt from Indian taxation, as the Department failed to prove the foreign visits were for purposes other than employment. The appeal was allowed and the addition deleted.
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• Taxpayer Allowed to Set Off Carried Forward Losses Against Current Year Profits Under Section 80

  Case-Laws - AT : The ITAT ruled that the assessee is entitled to set off brought forward losses from AYs 2012-13 and 2013-14 against profits earned in AY 2017-18. The Tribunal clarified that Section 80 permits carry forward and set off of losses when returns were filed within the due date and losses were properly determined by the AO, which was satisfied in this case. The ITAT set aside the lower authorities' orders and remanded the matter to the AO to rectify calculation errors and quantify the exact amount of losses after adjusting profits earned in subsequent years before granting the appropriate set off.
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Customs

• Anti-Dumping Duties Imposed on Chinese Ferrite Cores Under Tariff Item 8505 11 10 Following Material Injury to Domestic Industry

  Notifications : The Ministry of Finance has imposed anti-dumping duties on Manganese-Zinc-based Soft Ferrite Cores imported from China PR under tariff item 8505 11 10. The duties vary by producer: 31% for Huzhou Haotong Electronic Technology Co., Ltd., nil for Yibin Jinchuan Electronics Co., Ltd. and Hengdian Group DMEGC Magnetics Co., Ltd., and 35% for all other producers. The measure follows findings that Chinese manufacturers exported these goods at dumped prices, causing material injury to domestic industry. The duties apply to specific geometries and lengths of cores and will remain effective for five years from publication unless revoked or amended earlier. CIF value will be determined per Customs Act provisions.
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• Customs Rules Amended: "Certificate" Replaced with "Proof" in Rules of Origin Documentation for Trade Agreements

  Notifications : The Central Government has amended the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 through Notification No. 14/2025-Customs (N.T.), effective upon publication. The amendments primarily replace the term "certificate" with "proof" throughout the rules, including in definitions, documentation requirements, and verification procedures. In Form I, "CoO" has been replaced with "proof of origin." These changes modify how importers must demonstrate preferential tariff claims under trade agreements, broadening terminology to potentially accommodate various forms of origin documentation beyond traditional certificates. The amendment was issued under powers conferred by section 156 read with section 28DA of the Customs Act, 1962.
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• Inordinate 35-Year Trial Delay Violates Article 21 Right to Speedy Trial, Proceedings Quashed

  Case-Laws - HC : HC quashed criminal proceedings due to violation of the petitioner's right to speedy trial under Article 21. The case revealed extreme delays: 13 years between investigation (1983) and complaint filing (1996), followed by 22 years of trial proceedings with minimal progress. From 2003-2018, prosecution witnesses were consistently absent, hampering trial progression. The court noted the petitioner had endured prosecution for "almost half of her entire life" without contributing to delays through appeals. Following Kadra Pahadiya and Hussainara Khatoon precedents, the court found the delay "inordinate, gross and unjust," warranting exercise of powers under Article 226 to terminate proceedings.
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DGFT

• Indian Potash Limited's State Trading Enterprise status for urea imports extended until March 31, 2026

  Notifications : The Central Government has extended the State Trading Enterprise (STE) status of Indian Potash Limited (IPL) for importing Urea [Exim Code 31021010] on Government account from March 31, 2025, to March 31, 2026. This amendment to the import policy condition under ITC(HS) Code 31021010 of Chapter 31 of ITC (HS), 2022, Schedule - I (Import Policy) was made pursuant to powers under Sections 3 and 5 of the Foreign Trade (Development & Regulation) Act, 1992, read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2023. All other terms from Notification No. 79/2023 remain unchanged.
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Corporate Law

• Company Ordered to Refund $1 Million Investment with 12% Interest After Failing to Allot Shares Under Companies Act

  Case-Laws - HC : HC held that Respondents must deposit USD 1 million (converted to INR at applicable exchange rates) plus 12% statutory interest within two weeks. The court found Respondents breached their obligation to allot shares to Petitioner after receiving investment funds, triggering statutory refund requirements under Companies Act. Petitioner established a strong prima facie case that Respondents improperly benefited from his funds used to discharge SIDBI debt, releasing mortgaged properties and personal guarantees without fulfilling contractual obligations. The interim relief will remain in effect until arbitration concludes, protecting Petitioner's interests under s.9 of the Arbitration and Conciliation Act, 1996.
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State GST

• GST Rates Clarified: 5% on Pepper, Exemptions for Farmers, Different Rates for Popcorn Types

  Circulars : The Goa Commissioner of State Taxes has adopted Circular No. 247/04/2025-GST from the Tax Research Unit, Ministry of Finance, for uniform implementation under the Goa GST Act. The circular clarifies that: pepper of genus Piper attracts 5% GST; agriculturists supplying dried pepper or raisins are exempt from GST registration; ready-to-eat popcorn with salt/spices attracts 5% GST (unpackaged) or 12% GST (packaged), while caramel popcorn attracts 18% GST; AAC blocks with over 50% fly ash content attract 12% GST; and the amended entry regarding SUVs with specific ground clearance requirements for compensation cess applies from July 26, 2023.
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• Late Fees for Delayed GST Annual Returns Apply Until Both GSTR-9 and GSTR-9C Are Filed Under Section 47(2)

  Circulars : The CBIC clarifies that late fees under section 47(2) of the CGST Act apply to delays in filing complete annual returns under section 44, which includes both FORM GSTR-9 and GSTR-9C (when required). For taxpayers with turnover exceeding the threshold (currently five crore rupees), the annual return is considered incomplete until both forms are submitted. Late fees accrue from the due date until complete submission, with no separate penalties for each form. For financial years up to 2022-23, excess late fees beyond those applicable until GSTR-9 filing date are waived if GSTR-9C is submitted by March 31, 2025. The Goa government has adopted these clarifications for state GST implementation.
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• Goa adopts Finance Ministry's Circular 245 clarifying GST exemptions for loan penalties and payment aggregators

  Circulars : The Goa Commissioner of State Taxes has adopted Circular No. 245/02/2025-GST issued by the Ministry of Finance for uniform implementation under the Goa GST Act. The circular provides several key clarifications: penal charges levied by regulated entities for loan contract non-compliance are exempt from GST; RBI-regulated Payment Aggregators qualify for GST exemption on settlement transactions up to 2,000; GST payments are regularized for certain research services by Government Entities (July 2017-October 2024) and for skilling services by NSDC-approved Training Partners (October 2024-January 2025). Additionally, facility management services to MCD are confirmed as taxable, DDA is clarified not to be a local authority under GST law, and certain electricity utility support services are regularized.
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• GST Exemption on Insurance Premium Sharing and Reinsurance Services Under Schedule III Amendment

  Circulars : The circular regularizes GST payment on two insurance-related transactions from July 1, 2017 to October 31, 2024 on an "as is where is" basis. Effective November 1, 2024, Schedule III of the CGST Act was amended to exclude: (1) premium apportionment by lead insurers to co-insurers, provided the lead insurer pays GST on the entire premium; and (2) services by insurers to reinsurers where ceding/reinsurance commission is deducted from reinsurance premium, provided the reinsurer pays GST on the gross reinsurance premium inclusive of commission. This implementation follows recommendations from the 53rd GST Council meeting and applies uniformly across Goa's GST framework.
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IBC

• Section 7 Petition Not Time-Barred as Balance Sheet Acknowledgment Extends Limitation Period Despite 2015 Default

  Case-Laws - AT : The NCLAT dismissed the appeal, confirming that the Section 7 petition was not time-barred due to the Corporate Debtor's acknowledgment of debt in its FY 2019-20 balance sheet, which extended the limitation period. The Tribunal held that while the original default occurred on 31.12.2015, the limitation period was extended by the acknowledgment and further by the Supreme Court's COVID-19 relief order. The Appellant's claims of excessive interest rates (30% p.a. with 36% p.a. penal interest) were rejected as the Corporate Debtor had voluntarily executed and adhered to the loan agreement without previous challenge. The Tribunal noted that if settlement is desired, Respondent may file a Section 12-A application within two weeks; otherwise, CIRP would proceed.
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• Apartment Owners Association's Right to Take Over Maintenance from Corporate Debtor's Agency Upheld Under IBC Section 60(5)(c)

  Case-Laws - AT : In this NCLAT decision, the Tribunal affirmed its jurisdiction under IBC Section 60(5)(c) to adjudicate maintenance disputes during CIRP. The case involved Supernova Apartment Owners Association seeking to take over maintenance from YG Estates, an agency appointed by the corporate debtor. The Tribunal ruled that since CIRP had commenced against the corporate debtor, all assets including the Supernova project fell under IRP supervision. The registered association under the UP Apartment Act 2010 has statutory rights to assume maintenance responsibilities. YG Estates, merely an agency of the corporate debtor, cannot resist handover to a properly registered association. The NCLAT directed YG Estates to transfer maintenance to the association within seven days.
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• Corporate Debtor's Projects to Continue Under IRP Supervision with Mandatory CIRP Expense Payments and Phased Salary Disbursements

  Case-Laws - AT : The NCLAT held that the corporate debtor's projects must continue as a going concern under IRP supervision per the 10.06.2022 order, with cooperation from promoters, staff, and employees. All CIRP-period expenses for construction, materials, and services must be paid with priority. The IRP must verify vendor bills using the process that was in place before 12.12.2024. Regarding salaries, December 2024 and January 2025 payments have been processed, while outstanding salaries for September-November 2024 must be paid in three tranches by 31.05.2025. The application regarding non-cooperation was deferred as the 12.12.2024 order was stayed by the Supreme Court on 25.02.2025.
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• Resolution Plan Modifications Cannot Be Made After Deadline Despite Higher Financial Offer, CoC's Commercial Wisdom Prevails

  Case-Laws - AT : The NCLAT dismissed the appeal challenging a resolution plan approval, affirming that once all resolution applicants had submitted their final plans by the deadline, no further financial enhancements could be permitted. The appellant's plan was properly deliberated by the CoC and rejected in favor of another plan that received 98% approval. The Tribunal emphasized that commercial wisdom of the CoC holds paramount status with minimal scope for judicial intervention, as established in K. Sashidhar vs. Indian Overseas Bank. The NCLAT noted that Regulation 39(1A) of CIRP Regulations is merely enabling and does not mandate modification of plans. Since all applicants had equal opportunity to submit revised plans within the allowed timeframe, no grounds existed to interfere with the impugned order.
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Indian Laws

• Jurisdiction of Indian Courts to Appoint Arbitrators Under Section 11(6) Despite Foreign Venue and Procedural Rules

  Case-Laws - SC : The SC held that Indian courts have jurisdiction to appoint arbitrators under Section 11(6) of the Arbitration and Conciliation Act, 1996, despite conflicting clauses in the Distributor Agreement. While the arbitration venue was Bogota, Colombia, and procedural rules of the Arbitration and Conciliation Centre at the Chambers of Commerce in Bogota applied, Clause 16.5 explicitly granted supervisory jurisdiction to Indian courts in Gujarat. The Court determined that Indian law governed the arbitration agreement's validity, scope, and interpretation, making the A&C Act applicable. Clause 18's provision that awards conform to Colombian law pertained only to arbitration proceedings and did not override Clause 16.5's stipulation that Indian law governed the agreement and disputes. The arbitration petition was allowed.
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Law of Competition

• Appeal Dismissed: Appellant Concealed Material Facts While Alleging Abuse of Dominant Position Under Sections 3(4) and 4

  Case-Laws - AT : NCLAT dismissed the appeal concerning alleged abuse of dominant position under Sections 3(4) and 4 of the Competition Act, 2002. The Appellant failed to disclose that their retailer tier status had been restored on 23.06.2021, prior to filing information on 01.07.2021, yet continued seeking reinstatement of the same status in their prayer. The tribunal determined this constituted "unclean hands" as the Appellant submitted false affidavits and concealed material facts. The Commission found the retailer tier downgrade resulted from consistently reduced offtake by the Appellant rather than anti-competitive conduct. The appeal was dismissed for lack of merit, with the investigation process deemed fair.
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PMLA

• Court Quashes Money Laundering Case Under Section 3 PMLA as Surrendered Land Compensation Cannot Be "Proceeds of Crime"

  Case-Laws - HC : HC quashed the ECIR and summons issued to the petitioner under PMLA, finding no evidence of money laundering. The court determined that sites granted as compensation, which had already been surrendered and allotment canceled, could not constitute "proceeds of crime" as defined under Section 3 PMLA. Following precedent established in NATESHA that site allotments cannot be proceeds of crime, the court found the petitioner was not in possession, enjoyment, or usage of any proceeds of crime. While the ED could pursue investigations against others implicated in MUDA corruption, the petitioner could not be prosecuted under PMLA, though this ruling does not affect the predicate offense proceedings in Crime No. 11/2024.
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SEBI

• SEBI Reduces Minimum Application Size for Zero Coupon Zero Principal Instruments on Social Stock Exchange from 10,000 to 1,000

  Circulars : SEBI has revised the minimum application size for Zero Coupon Zero Principal Instruments on the Social Stock Exchange (SSE) from 10,000 to 1,000, effective immediately. This amendment to the SSE framework follows recommendations from the Social Stock Exchange Advisory Committee and public consultation. The modification aims to enhance investor accessibility to social enterprise funding instruments while protecting investor interests. The change was implemented through SEBI's regulatory powers under Sections 11 and 11A of the SEBI Act, 1992, read with Regulation 299 of SEBI ICDR Regulations, as part of SEBI's mandate to regulate securities markets and promote their development.
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• SEBI Mandates DigiLocker Integration for AMCs and KRAs to Reduce Unclaimed Assets Starting April 2025

  Circulars : SEBI has directed AMCs, depositories, and KRAs to integrate with DigiLocker effective April 1, 2025, to reduce unclaimed assets in the securities market. The directive requires these entities to register as "Issuers" on DigiLocker, enabling investors to access their holding statements, transaction statements, and annual Consolidated Account Statements through their DigiLocker accounts. KRAs must share information about deceased investors with DigiLocker, which will then notify the deceased's DigiLocker nominees. This mechanism allows nominees to access the deceased's financial information and facilitates asset transmission by informing appropriate parties (nominees, joint holders, or legal heirs) about investments that might otherwise remain unclaimed. The circular preserves existing transmission norms while leveraging digital infrastructure to prevent unidentified unclaimed assets.
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VAT

• Central Sales Tax Exemption Remains Valid Without C-Forms for Prior Investments Under Section 8(5)

  Case-Laws - HC : The HC ruled that the notification dated 31-10-2006, which made production of C-Forms mandatory for CST exemptions under Section 8(5), would not apply retrospectively to the petitioner company. Following the Supreme Court's decision in Prism Cement Limited, the court held that such restrictions operate prospectively and cannot affect absolute exemptions granted prior to the amendment. Since the petitioner had been granted exemption from 07-11-1997 (having invested over Rs. 550 crores in an Integrated Steel Plant), the mandatory C-Form requirement introduced on 10-05-2002 would not apply to them. The petitioner remains entitled to exemption benefits without C-Form submission until 17-04-2013 as originally granted.
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Service Tax

• Government Entities Selling Plots at Commercial Rates Cannot Claim Service Tax Exemption Under Notification 25/2012-ST

  Case-Laws - AT : CESTAT ruled against exemption under S.No. 12(a) of Notification No. 25/2012-ST for services provided to RDA and NRDA, finding both authorities were engaged in commercial activities with plots and townships sold at commercial rates. However, the Tribunal remanded the matter regarding S.No. 12(e) exemption for reservoirs, sumps, and pumping stations, clarifying that "plant" would include pumping stations and interconnected reservoirs/sumps. CESTAT also directed reexamination of NRDA services eligibility under S.No. 12(e). The Tribunal set aside the extended period of limitation and associated penalties, finding no deliberate misstatement or suppression. Appeals allowed by way of remand to the Original Sanctioning Authority.
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• Free Diesel Provided to Service Provider Not Included in Taxable Value for Service Tax Computation

  Case-Laws - AT : CESTAT ruled that free diesel provided to service provider M/s. R.K. Carriers should not be included in the taxable value for service tax computation, following the Supreme Court's decision in Bhayana Builders which established that free supplies do not constitute non-monetary consideration. The Tribunal clarified that Notification No. 12/2003-ST is inapplicable as it only covers goods sold by service providers, not free supplies from recipients. Regarding exemption under Notification No. 34/2004-ST, CESTAT determined that Clause (ii) applies to appellant but remanded the matter to Original Adjudicating Authorities for proper quantification of differential duty. Appeal allowed by way of remand.
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Case Laws:

• GST

• 2025 (3) TMI 943
  Refund of Input Tax Credit on account of export of services without payment of tax - petitioner fairly submits that as and when the petitioner is required to furnish any material, it shall do the needful, without any delay - HELD THAT:- This Court is sanguine that the authorities shall look into the matter in the right earnest. And the appropriate orders shall be passed within the time indicated by learned counsel for the respondents. Application disposed off.

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• 2025 (3) TMI 942
  Denial of the benefit of Input Tax Credit on account of the provisions contained in Sub Section(4) of Section 16 of the Central Goods and Services Tax/State Good and Services Tax Act, 2017 for the financial year 2018-19 - HELD THAT:- By the incorporation of section 16(5) to the CGST Act, the time limit to claim the Input Tax Credit for the financial years 2017-18 to 2020-21 has been extended till 30-11-2021. In view of the incorporation of sub-section (5) of Section 16 of the CGST/SGST Act, petitioner claims that he will be entitled to Input Tax Credit, as he had filed the returns within the time prescribed therein. Petitioner s claim for Input Tax Credit has been rejected without reference to section 16(5) of the Act. Hence, Exhibit-P4 order is liable to be set aside to the extent it had denied Input Tax Credit to the petitioner on the basis of Sub Section (4) of Section 16 of the CGST/SGST Act and a reconsideration is required to be directed. Exhibit-P4 is set aside to the extent it has denied Input Tax Credit to the petitioner, and the competent authority is directed to pass fresh orders within three months from the date of receipt of a certified copy of this judgment, after taking note of the provisions contained in Section 16(5) of the CGST/SGST Act and after affording the petitioner an opportunity of hearing. Petition disposed off.

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• 2025 (3) TMI 941
  Seeking to quash SCN, and an adjudication order - no proper opportunity to be heard provided - violation of principles of natural justice - HELD THAT:- It appears that the show-cause notice is quite detailed one setting out all the necessary particulars about what the petitioner was to respond to. Here, personal hearings were offered to the petitioner by giving notices not only at the address of the petitioner by post, but also through email ID provided by the petitioner. Once the petitioner received at least one such notice even belatedly, he ought to have been sure about which authority he was to appear before. In spite of several notices, the petitioner failed to appear before the adjudicating authority. Therefore, this Court cannot use its discretion to grant any special opportunity to the petitioner, especially when there were serious laches on his part in not responding to the notices for hearing. Application dismissed.

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• 2025 (3) TMI 940
  Seeking direction for registration of F.I.R. against respondent No. 2 for non-payment of GST and other offences - HELD THAT:- It is directed that respondent No. 1 shall consider the representations dated 26.10.2024 and 24.12.2024 made by the petitioner and pass the speaking order within a period of 2 weeks from today. The respondent No. 1, if it deems fit, shall hear the petitioner and respondent No. 2 before passing the said speaking order - Petition allowed.

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• 2025 (3) TMI 939
  Violation of principles of natural justice - non-service of notices and orders - petitioner was unaware of the initiated proceedings and thus unable to participate in the adjudication proceedings - petitioner is ready and willing to pay 25% of the disputed tax - HELD THAT:- The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondents, within a period of four weeks from the date of receipt of a copy of this order. The impugned order is set aside - Petition allowed.

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• Income Tax

• 2025 (3) TMI 938
  Validity of orders passed by Settlement Commissioner to the extent that it has granted immunity from prosecution as well as the penalty to the Respondents - Maintainability of review petition - as decided by HC [ 2024 (12) TMI 1267 - DELHI HIGH COURT] there is no foundation for the finding of the Settlement Commission that there was full and fair disclosure. Hence the matter was remanded for reconsideration as to whether immunity from penalty and prosecution ought to be granted or not. The Court is of the opinion that there is no error apparent on the face of the record or any other grounds that merit consideration for reviewing the order. HELD THAT:- We do not find any good ground and reason to interfere with the impugned judgment(s) and, hence, the special leave petitions are dismissed. We, however, clarify that the remit direction has not been interfered with. The matter(s) would be examined in accordance with law without being influenced by the findings recorded in the impugned judgment(s). Pending application(s), if any, shall stand disposed of.

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• 2025 (3) TMI 937
  TP Adjustment - selection of MAM - Whether ITAT has fallen in error in considering RPM adopted by the assessee as the most appropriate method for benchmarking the international transactions? - HELD THAT:- Assessee is a distributor and not a manufacturer. Undeniably, the assessee is engaged in importing of various solar products manufactured by the AE and resale of the said products. The fact that the assessee makes necessary arrangements for rectification of the defects, which are necessarily in the nature of manufacturing defect, by way of replacement/refurbishment/repair of the products/parts of the same, is also not disputed. Revenue has also neither disputed nor brought any contrary material on record doubting the existence of the agreement dated 01.04.2016 executed between the assessee and its AE covering the aforesaid warranty. As the cost of rectification of the manufacturing defect, during the warranty period, shall be recovered by the assessee from the AE. In other words, the said warranty cost claim shall be reimbursed by the AE apart from reimbursement of expenses. Pertinently, the amounts so recovered/reimbursed do not comprise any service element as the AE would have borne these expenses directly, had the assessee not incurred the same. Thus, there is no service element involved. Ergo, the purchase of solar products/lights on the one hand and warranty cost claim on the other, are unrelated transactions and can neither be aggregated/clubbed nor are they so inextricably linked as to not survive without the other, so far as the present facts are concerned. Selection of MAM - In the present case, the TPO and the DRP concluded that RPM, in the facts of the case, was not the most appropriate method, essentially based on the assumption that the warranty cost claim and the reimbursement of expenses are inextricably inter-linked with the transaction of purchase of the solar products and cannot survive without the other. This assumption is erroneous. It was equally erroneous to conclude that these three transactions were required to be aggregated or clubbed together for benchmarking or determination of the ALP. This is for the reason that there is no value addition done by the assessee on the products purchased and subsequently sold by it. The construction and interpretation sought to be proposed by the learned counsel for the Revenue is fundamentally flawed on that ground. The reliance on sub-section (3) of Section 92CA of the Act is misplaced. Undoubtedly, under that sub-section, the TPO is mandated to determine the ALP consequent upon taking into account all relevant materials gathered, yet would have to necessarily or essentially examine as to whether (i) the assessee is a manufacturer or a distributor and; (ii) any value addition has been made to such imported products by the distributor prior to putting such products for sale. In case such examination has not been conducted by the TPO, the determination of ALP may become questionable, depending on the facts of each case. For the same reason, the directions of the DRP concurring with the determination of ALP, adopting TNMM as the most appropriate method too, is erroneous and unmerited. Value addition in the nature of advertising and marketing strategy - This issue is no more res integra with the view taken by this Court in the case of Burberry India [ 2024 (11) TMI 434 - DELHI HIGH COURT ] DRP had accepted the TPO s conclusion that RPM was not the most appropriate method, essentially, for the reason that the assessee had incurred AMP expenses, which the DRP considered as substantial. Accordingly, the DRP had also concluded that the assessee is not a simple distributor. The judgement in the case of Burberry India (supra) also reiterated the principles settled in Matrix Cellular [ 2017 (11) TMI 1655 - DELHI HIGH COURT ] and Fujitsu India [ 2023 (11) TMI 289 - DELHI HIGH COURT ] with regard to adoption of RPM as the most appropriate method in the case of a distributor without value addition to the imported products before sale. Aggregation/clubbing of the transactions is entirely a fact dependent exercise, which cannot, ipso facto, be treated as a question of law. In the present case too, the Revenue seeks aggregation of the purchase value with that of the warranty cost claim and reimbursement of expenses, which would, in our opinion, be wholly a foundational fact. No substantial question of law.

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• 2025 (3) TMI 936
  Rejection of application for condonation of delay in filing the appeal u/s 246A - sufficient cause has not been shown for condonation of delay of 597 days in filing the appeal - HELD THAT:-Admittedly, there is a delay of 597 days in filing the appeal before the ITAT and for which the appellant/assessee has assigned the reason that the communication of the order was made on an e-mail of which the appellant was not an active user and even the authorized representative of the assessee did not amend the e-mail id on which the order was to be communicated and, therefore, the order could not be communicated and as soon as the appellant came to know about the order, the appeal was preferred. Supreme Court vide its Order passed in the matter of Vidya Shankar Jaiswal [ 2024 (4) TMI 986 - CHHATTISGARH HIGH COURT ] while setting aside the order of this Court rejecting the appeal on the ground of delay, has held that the High Court ought to have adopted justice oriented and liberal approach by condoning the delay. Though the application of the appellant was supported by the affidavit, but the revenue did not file any counter-affidavit controverting the reason assigned by the assessee and, as such, the delay of 597 days occurred in filing the appeal remained uncontroverted, the delay of 597 days occurred in filing the appeal deserves to be and is hereby condoned subject to payment of cost of Rs. 5,000/- by the appellant to the High Court Legal Services Committee and the appellant is also directed to file proof thereof within 15 days from today. The substantial question of law is answered accordingly.

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• 2025 (3) TMI 935
  Addition u/s 68 - onus to prove - ITAT deleted addition as creditworthiness, genuineness and identity of the shareholders is proved just because they are existing shareholders - HELD THAT:- All requisite information and documents regarding the shareholders were available with the AO, yet the conclusion appears to be contrary to record available. ITAT has satisfied itself, albeit, after a thorough examination of material available on record that the assessee had successfully discharged the burden cast upon it under the mandate of section 68 of the Act, and unequivocally concluded that the assessee has complied completely with the conditions of triple test. The aforesaid paragraphs demonstrate the re-examination and re-appreciation of facts/material and record by the two Appellate Authorities which propel us not to interfere with such findings. Suffice it to state that though the AO appears to have examined the material available before him, yet, recorded findings without rendering any reasons in support thereof. This itself would render such findings perverse requiring hierarchical appellate authorities to scrutinise such findings. Both the Appellate Authorities have concurrently found that the shareholders, who were the investors in the relevant years were existing shareholders of the assessee and thus, not doubting their identities. The creditworthiness was tested on the anvil of some such shareholders having huge exempt income in their individual capacities to offer such investments. In fact it was found to be beyond doubt that such shareholders had sufficiency of funds available which satisfactorily explained the source. The appellate authorities had also taken into consideration the past transactions of the shareholders which were duly disclosed to the AO. Having rendered reasons on the triple test envisaged in section 68 of the Act by the CIT (A) and learned ITAT, we are not persuaded to interfere with such findings. The submissions of the revenue are unmerited. We also find that the ITAT had relied upon the judgement of this Court in CIT vs. Divine Leasing Finance Ltd. [ 2006 (11) TMI 121 - DELHI HIGH COURT ] and rightly so. Decided against revenue.

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• 2025 (3) TMI 934
  Validity of Assessment Order passed u/s 143(3) and Penalty order issued u/s 270A and 271AAD(1)(i) - violation of the principles of natural justice - HELD THAT:- The petitioner received the Annexure I to the Show Cause Notice dated 22.04.2023 later vide Notice dated 24.04.2023 which was issued by the 1st respondent under the subject Furnishing of Annexure I of Show Cause Notice dated 22.04.2023 - Reg leaving only two days for the Petitioner to respond to the same. 26.04.2023 was the date fixed for personal hearing as in the above mentioned Show Cause Notice dated 22.04.2023. Thus, the petitioner requested further time to reply and furnish details. On 27.04.2023, the petitioner had also sent a similar Letter to the Directorate General of Income Tax, Chennai requesting to conclude the assessment after due consideration of Fast Track Record of the petitioner etc. However, the impugned Assessment Order dated 29.04.2023 was passed in a hurried manner to avoid lapsing of the assessment due to the limitation prescribed under Section 153B of the IT Act. As such, there is a clear violation of the principles of natural justice, although the respondent cannot be wholly blamed as assessment orders have to be passed within the time stipulated in the statute. It is noticed that the directions issued by the 2nd respondent on 22.03.2023 also has not been fully complied with in the impugned order. Therefore, to balance the interest of the petitioner and the respondent Department, the impugned Assessment Order deserves to be quashed and the case deserves to be remitted back to the 1st respondent to pass a final order on merits. The request of the petitioner for cross examination of various suppliers and sub-contractors to whom payment were made by the petitioner also cannot be extended, if no statements have been relied upon by the respondent Department in the proposal to disallow the expenses based on the documents that were seized during the search conducted under Section 132 of the IT Act on 20.07.2022. Only if statements of third parties were recorded and relied upon, the request for cross-examination of such third parties can be entertained. As far as the statements of own employees of the petitioner is concerned, unless such statements were retracted immediately after they were recorded, the statements recorded cannot be ignored. They are admissions of the petitioner. Thus, impugned Assessment Order passed u/s 143(3) and the consequential Penalty Orders are quashed and the cases are remitted back to the 1st respondent to pass a fresh Assessment Order. WP allowed.

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• 2025 (3) TMI 933
  Reopening of assessment u/s 147 - Addition of interest income - HELD THAT:- Respectfully following the decision of the coordinate bench of the Tribunal in assessee s own case for the assessment year 2013-14 [ 2023 (11) TMI 930 - ITAT MUMBAI] we do not find any merits in the addition on account of notional interest income in the hands of the assessee, and accordingly, the same is deleted. Proceedings u/s 147 also initiated on the basis of the assessment proceedings for the assessment year 2013-14, and it was alleged that the interest income in respect of loan/advance to M/s Ramgopal Ganpatrai Co. Pvt. Ltd. has escaped assessment. As in assessee s own case for the assessment year 2013-14 cited supra, we do not find any merits in the addition on account of notional interest income in the hands of the assessee, and accordingly, the same is deleted. Appeals by the assessee are allowed.

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• 2025 (3) TMI 932
  Taxation of short term capital gain on sale of rights entitlement falling within the purview of Article 13(5) of DTAA between India and Ireland (Treaty) - whether capital gain earned from sale of rights entitlement can be claimed as exempt u/Article 13(6) of India-Ireland DTAA which provides that gains from transfer/alienation of any property other than those mentioned in Articles 13(1) to 13(5) shall be taxable only in Ireland? - HELD THAT:- We find that the definition of shares even in Section 2(84) of the Companies Act, 2013 provides a restrictive definition of shares to mean a share in the share capital of a company and includes stock. Otherwise also an asset, which may come into existence or derive its value from another underlying asset, cannot be regarded as being same as the original asset. An analogy may be drawn to a derivative , which may derive its value from the underlying equity but it is a well-established principle that the derivative contract is a distinct and separate asset. Under the India-Ireland DTAA a derivative deriving its value from underlying equity would not be subject to tax in India u/Article 13(6). Likewise rights entitlement which is granted on account of shareholding cannot be regarded as being the same as shares especially since the rights shares are allotted, only on subscription. The rights entitlement, being a distinct asset, may be sold lapsed or subscribed and thus, akin to derivatives, ought to be not subject to tax under Article 13(6) of the India-Ireland DTAA. Similarly, the investor can either sell the rights entitlement option or exercise the option to get shares or decline the offer for shares. Hence, in our opinion, rights entitlement would also be covered under the provisions of Article 13(6) of India Ireland DTAA and in that case it would not be subjected to tax in India but it shall be taxable in the resident state i.e. Ireland. As per explanation given by the ld. Counsel and the view taken by the ld. DRP to hold that rights entitlement shares and the shares are closely related assets; we are in agreement with the contention raised by the ld. Counsel that these are separate assets and it distinct of the shares of the Indian Government. Accordingly, we hold that rights entitlements is not covered under Article 13(4) and Article 13(5) so as to be taxed in the country of source i.e. in India, albeit, it falls under Article 13(6) whereby, gain on alienation of any property which are not covered in para 1 to 5 is taxable only in the resident state i.e. Ireland. Adjustment of short term capital gain arising on sale of rights entitlement from which the assessee had claimed benefit of Article 13(6) of India Ireland DTAA against the short term capital loss arising on sale of shares which is taxable in India in terms of Article 13(5) of the DTAA - Accordingly, we hold that the capital loss incurred under the provisions of the Act r.w. Article 13(5) of India-Ireland DTAA cannot be set off against short term capital gain derived from sale of rights of entitlement because such case is not subjected to tax in India as per Article 13(6) of DTAA and therefore, assessee has rightly excluded from the computation of total income, accordingly, this issue is decided in favour of the assessee.

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• 2025 (3) TMI 931
  Interest expenses claimed u/s 57(iii) - whether there was no co-relation between interest earned and interest paid as required u/s 57 ? - HELD THAT:- Since the assessee in the instant case has proved the nexus of amount borrowed on which interest has been paid and the amount lent on which interest has been earned and since the AO in the subsequent year has allowed the claim of such deduction u/s 57 on account of same loans and advances after scrutiny, therefore, we are of the considered opinion that the Ld. CIT(A) / NFAC was not justified in sustaining the disallowance of interest expenditure claimed by the assessee u/s 57. We accordingly set aside the order of the Ld. CIT(A) / NFAC and allow the grounds raised by the assessee.

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• 2025 (3) TMI 930
  Additions made u/s 153A - Addition u/s 69C for unexplained payments - entries in a seized diary relied upon - AO also took cognizance of Annexure A-4 of small diary on which certain date-wise hand-written entries towards payments made to different parties were found - HELD THAT:- The assessee has denied the contents of loose papers. In the absence of any corroborative material or any admission on the part of the assessee, the primary onus which lay upon the assessee stood discharged. It is difficult to conceive as to how the assessee would be able to disprove the contents of the loose papers/documents. Revenue, on its part, has not made any worthwhile inquiry independently using tools available u/s 133(6) or sec 131, except making enquiries from the assessee at the time of assessment. No material is brought on record to justify the contents of the loose papers/diary. The presumption available u/s 132(4A) S. 292C of the Act being rebuttable, has to be seen in the light of direct and circumstantial evidences. Despite extreme course of search, no irregularity in the form of excess cash or other unaccounted assets has been claimed to be discovered. The circumstantial evidence thus, does not stand contrary to the assertions made by the assessee. Additions based on mere discovery of diary without anything more, in such circumstances would tantamount to assuming such entry to be conclusive for the purpose of assessment. Such view, if taken, would run contrary to the judicial dicta available in this regard. The adverse view taken by the AO as well by Ld.CIT(A) based on the entries in diary seized in the course of search appears to be of abstract nature and without corroboration. Preponderance of probabilities in the facts of the present case are in favour of the assessee and against the Revenue. It is well settled that onus lies on the person who alleges. The assessee cannot be placed with impossible burden to prove a negative point as held in the case of K.P.Varghese [ 1981 (9) TMI 1 - SUPREME COURT] No negative evidence to support the entries was found despite a drastic step of search. The absence of material and denial by the assessee coupled with social status of the assessee where, as claimed, number of people regularly visit the premises of the assessee, do raise estoppels. The benefit of doubt thus, requires to go in favour of the assessee. The CIT(A) was thus not justified in applying Peak Theory to partially confirm additions carried out by AO. Where the veracity of entries itself is not conclusively established, the additions made by the AO were not justified at all. The additions made in the instant case cannot be countenanced. The order of the CIT(A) is thus modified and additions made by the AO stands reversed. Unexplained investment by way of purchase of plot from one Mr. Pintu arose in AY 2011-12 based on jottings in loose papers/diary - The legal position was perused and in the absence of any cogent evidence against the assessee, it was held that the preponderance of probabilities do not support the case of the AO. The facts placed in AY 2013-14 are also identical. No documentary evidence has been found towards alleged purchase of plot from Mr. Pintu giving rise to additions of INR 18,50,000/-. The observation made in the case of Maulikumar K Shah [ 2007 (7) TMI 267 - GUJARAT HIGH COURT] that mere entries in seized diary are not sufficient to prove the assessee is indulged in such transaction, was taken into account. The delineations made in AY 2011-12 shall thus apply mutatis mutandis to the instant appeal concerning AY 2013-14. Appeal of the assessee is allowed.

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• 2025 (3) TMI 929
  Estimation of income - bogus purchases - addition restricted being 12% of the total bogus purchases - HELD THAT:- We note that in this case, the assessee is a very big jeweler, who has declared income during the year and each and every item of purchases were meticulously recorded in the book of accounts as well as in stock register. Thereafter, the movement of stocks were also recorded minutely with all details and descriptions and finally, recording the sales made against the said purchases. Direct stock tally is available in the stock register of the assessee. Besides the payments were made through banking channels and it was not the allegation that the cash was introduced before the payments made for the purchases. Therefore we are in a position to subscribe to the conclusion drawn by the ld. CIT (A) of partly sustaining the addition to the extent of 12% of the so-called bogus purchases, especially when the sales were accepted by both the authorities below. Even GST authorities have not made any adverse inference qua these purchases by the assessee from these parties. Considering all these facts and circumstances, we are not in a position to sustain the addition. We are inclined to set aside the finding of the ld. CIT (A) with regard to sustaining of addition to the tune of 12% and direct the ld. AO to delete the addition -Appeal of the Revenue is dismissed.

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• 2025 (3) TMI 928
  Short term capital gain arising on sale of immovable property - correct amount of sale consideration - action of the AO in reducing the WDV of stock-in-trade and disallowing the depreciation as well as the disallowance of expenses - what was the actual sale consideration received by the assessee on the sale of shop? - HELD THAT:- Assessee was required to obtain permission of the management body/vendor for sale of Shop No.4 and there was no stipulation that the permission has to be obtained from True Value as booking agent or that the booking agent was required to be involved in the future sale transactions. Thus, the contention of the assessee that it could not have sold the property without making an agreement with True Value is not found correct. As rightly held by the AO, neither the True Value had exclusive selling right of the property nor any such right could have been exercised in respect of the property already acquired by the assessee. Therefore, the involvement of True Value in the sale transaction of the property by the assessee has to be treated in the capacity of a mere agent only. There was no fiduciary relationship between True Value and the assessee and in the absence of any such relationship True value either explicitly or implicitly couldn t have agreed to act on behalf of the assessee to sale the property owned by the assessee. It is also mentioned in this agreement that the booking price of Rs. 75 Lacs paid on 26.03.2012 by ASPL was received by True Value. Since, the True Value was neither the owner of the property nor power of attorney holder on behalf of the assessee and no reference of any agreement between the True Value and the assessee was appearing in this booking agreement, the payment of Rs. 75 Lacs could not have been received by True Value. In the absence of any evidence on record that True Value was an agent of the assessee, the booking agreement dated 1st March, 2012 was not at all enforceable and binding on the assessee. As rightly held by the AO, the commission payable to the agent for providing professional assistance was in the range of 2 to 5% and the payment of 50% of the sale consideration as commission to the agent was not justified. As already discussed earlier True Value had no locus standi in the transaction. Neither it was having any booking rights in respect of this property nor it was authorized by the assessee to sell the property on its behalf, by way of any power of attorney. All the arrangements were made post the date of actual sale of the property with an intention to divert the sale consideration and to reduce the tax liability. Therefore, the AO was correct in treating the transaction as sham transaction and in holding that the payment made by the assessee to True Value was not genuine. To that extent, the finding of the AO is upheld. AO was correct in treating the sale consideration of property at Rs. 5,04,80,000/-. As the profit derived from sale of property was in the nature of short-term capital gain, the same was required to be reduced from WDV of the block of assets. Accordingly, the action of the AO in reducing the sale consideration of Rs. 5,04,80,000/- from WDV of block of assets and thereby disallowing excess depreciation of Rs. 25,48,000/- is upheld. However, the action of the AO in making separate addition of Rs. 2.54 Crores on account of disallowance of expenditure cannot be held as correct. It has not been made out by the Revenue that this expenditure of Rs. 2.54 Crores was separately debited in the P L account of the assessee. Therefore, the addition of Rs. 2.54 Crores in respect of disallowance of expense is deleted and the ground taken by the Revenue in this regard is dismissed. Appeal filed by the Revenue is partly allowed.

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• 2025 (3) TMI 927
  TDS u/s 194O - TDS liability on bookings made through CRS system - assessee has made payments under the Billing and Settlement (BSP) Mechanism to BSP IATA for air tickets of Full Cost Carrier (FCC) airlines booked through e-commerce platform viz. CRS System - assessee contends that the assessee denies it to be an e-commerce operator and is merely a travel agent booking tickets for its clients using a digital platform (CRS) which is a computerized system which stores and retrieves information for transactions related to air travel. HELD THAT:- Section 194O mandates that the sale of goods of provision of services of e-commerce participants is carried on by the e-commerce operator through its digital or electronic facility or platform then the e-commerce operator shall deduct TDS @1% on the gross amount of such sales or services or both either during the credit of the amount or any other time were payment is made to the e-commerce participant whichever mode may be. Here in the present case, there is no iota of doubt that the CRS system is not owned by the assessee and even otherwise as per the subscriber agreement entered into by the assessee Interglobe Technology Quotient Pvt. Ltd. (ITQPL), assessee shall be provided access to the software system solely for the purpose of using the Galileo system for obtaining information about the schedules, fares, seat availability, etc. and other services and also for making bookings. It is also narrates the obligation of the assessee and specifies that the assessee cannot without prior consent modified, enhance, or make copies of old or part of the software and also categorically states that the ownership of the software is with ITQPL. It also facilitates the calculations of incentives and payments to the assessee and also restricts productivity incentive payments in case the assessee failed to achieve the target segments in any quarter. The recital of the agreement does not in any manner create the ownership right neither does it let the assessee operate or manage the CSR system. In the absence of any of these we find no justification in holding the assessee to be e-commerce operator and resultantly Section 194-O is not applicable in assessee s case and hence the assessee is held to be not liable to deduct TDS and therefore is not an assessee in default . No infirmity in the order of the ld. CIT(A). Appeal filed by the revenue is dismissed.

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• 2025 (3) TMI 926
  Disallowance of interest expenses for not utilising the funds for the purpose of business - HELD THAT:- The assessee has earned interest income on investment made in compulsory convertible debentures. As undisputed fact that assessee held 95.30% shares in the Shreeniwas Cotton Mills Ltd. and after acquiring compulsory convertible debentures, the shareholding of the assessee company in that company would be of 99.76%. This fact was not converted by the assessing officer that assessee had made investment in the said associated company to acquire controlling interest in its subsidiary. The assessee has also submitted before both the authorities that it had interest free investment of Rs. 505.32 crores (purchase consideration Rs. 1005.20 crores face value of investment of Rs. 499.88 crores) and the said investment was presumed to be funded out non-interest bearing fund of OCD of Rs. 450 crores as discussed in the finding of CIT(A). CIT(A) has also discussed the decision of Shristi Securities Pvt. Ltd. and assessee itself on the proposition that investment made with a view to acquiring controlling interest in an another company is considered to be for the purpose of business. Appeal of the Revenue is dismissed.

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• 2025 (3) TMI 925
  Stay of demand - validity of intimation u/s 143(1) - mistakes in intimation by holding that the JAO was liable to make such rectification - HELD THAT:- AO did not follow the directions of the ld. DRP in verifying and rectifying the rectification petition filed before the Assessing Officer. Similarly, the Ld. Addl/JCIT(A)-5, Mumbai also did not decide the appeal filed against the order u/s 143(1) on merits but held that once the draft assessment order u/s 144C(1) is passed by the Assessing Officer, the intimation u/s 143(1) of the Act gets merged with the draft order and therefore after such merger, the intimation u/s 143(1) does not survive. Further, as noted above the same income determined u/s 143(1) of the Act dated 25.12.2021 has been again added in the order u/s 143(3) r.w.s. 144C(13) of the Act dated 24.07.2024, which amounts to taxing the same income twice. Therefore, this is a fit case for grant of stay of the balance demand of Rs. 1,32,23,10,668/- raised against the assessee and the same is stayed till the disposal of the quantum appeal u/s 143(3) r.w.s. 144C(13) or the appeal against the order u/s 143(1) dated 25.12.2021 or for a period of 180 days from the date of order, whichever is earlier.

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• 2025 (3) TMI 924
  Validity of Reopening of assessment as barred by limitation - as argued reasons recorded for reopening the assessment were based on a change of opinion - HELD THAT:- Recording of reasons therefore is very important factor, to be taken care of by the assessing officer. Section 148(2) stipulates that, AO shall before issuing notice u/s 148 record the reasons for doing so. Which means before issuing notice u/s 148 recording of reason is mandatory and prerequisite to assume jurisdiction by the AO to initiate reassessment proceedings u/s. 147. Even when no return of income was filed, the basic requirement of recording reasons must be fulfilled. Department s contention that since the assessee had not filed return of income and this was not a case of reassessment, the recording of reasons was not required was not acceptable. Power of reopening was not exercised in a fair manner. Admittedly, the reasons were issued by an officer who completed the reassessment by issuing notice under section 143(2), is different from the officer who initiated reassessment proceeding by issuing notice u/s 148 of the Act. The revenue placed nothing on record to show any thing contrary to the observation by this Tribunal. Thus the officer who issued notice u/s 148 had not recorded reasons prior to its issuance and therefore did not validly assume jurisdiction to reopen the assessment. The reasons recorded are post 31/03/2021, is beyond the period of 6 years and is therefore barred by limitation. Decided in favour of assessee.

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• 2025 (3) TMI 923
  Disallowance u/s.14A r.w.r. 8D - exempt income in the form of share of profit earned from a partnership firm - HELD THAT:- The undisputed fact is that the assessee had borrowed money for investment in the partnership firm in the form of capital contribution. The assessee has earned taxable interest amounting to Rs. 48,53,903/- and has paid interest of Rs. 41,04,638/- thereby showing positive interest income which is taxable. We are of the considered view that netting off of the interest is permissible in such circumstances as held in the case of CIT v. Jubiliant Enterprises P. Ltd.[ 2017 (2) TMI 1219 - BOMBAY HIGH COURT] .Thus we hold that no disallowance is to be made u/s 14A of the Act as the net taxable interest is higher. Disallowance u/s 36(1)(iii) - We are of the considered view that investment of borrowed funds as capital contribution in a partnership firm in itself is a business justifying the commercial expedience of the transactions. Therefore, in our considered view, any interest on such borrowed capital has to be allowed. Therefore, we direct the AO to allow the claim of interest paid on borrowed capital invested in Mahavir Developers. Appeal of the assessee is allowed.

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• 2025 (3) TMI 922
  Gain on sale of residential flat - LTCG or STCG - Period of holding - contention of the assessee that for the purpose of capital gains the period of holding should reckoned from the date of registration when the flat was allotted - HELD THAT:- The period of holding is to be computed from the date of issue of allotment letter. The facts in assessee s case is in a better position since the assessee has entered into an agreement of allotment which is registered on 03.10.2016 whereby the assessee has acquired the title and interest in the impugned property. The fact that the final payment towards purchase of the property was made on 21.08.2019 cannot be the only reason for treating the asset as Short Term Capital Asset. Therefore, we see merit in the contention of the ld. AR that the period of holding in assessee s case should be reckoned from the date of agreement i.e. 03.10.2016. From the perusal of the Capital Gain computation as extracted in the earlier part of this order, we notice that the assessee has claimed the benefit of indexation only for the payment made as per agreement dated 03.10.2016 and that the assessee has not indexed the payments made during the Financial Year (FY) 2019-20. No infirmity in the computation of Capital Gain done by the assessee. Assessee has correctly claimed the gain on transfer of property purchased vide agreement dated 03.10.2016 as LTCG. We direct the AO to delete the addition made by treating the gain as STCG and give relief to the assessee accordingly.

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• 2025 (3) TMI 921
  Computing the Long Term Capital Gains - determination of the fair market value of the asset at Nellore - HELD THAT:- No opportunity was given to the assessee in respect of the adoption of the SRO rate by AO is concerned, there is no dispute that the document bears the sale consideration at Rs. 9 lakhs, and consequent to the revisionary orders while adopting the SRO rate in respect of the property at Rs. 33.88 lakhs, the record does not reveal that any opportunity was granted to the assessee to put forth his case on this aspect. In this context the submission of AR that there is no column in the ITR to insist on the mention of stamp duty value of the asset assumes importance. We, therefore, are of the considered opinion that in all fairness the determination of the fair market value should have been referred to the DVO to be decided after hearing the assessee and considering the material put forth by him. We accordingly set aside the findings of CIT(A) on this aspect and restore the same to the file of AO to refer the determination of the fair market value of the asset at Nellore to the DVO to be decided after affording an opportunity to the assessee. Capital gains relatable to the property in Jubilee Hills, Hyderabad - As perusal of the findings of the co-owner of the property, brother of the assessee, who holds 50% of share in the property and who litigated on the very same issue before the Tribunal, we find that the coordinate Bench returned an unequivocal finding and held that since the interest paid in respect of the property at Jubilee Hills on the loan amount used by him for substituting the housing loan has a direct nexus with the acquisition of the property, the same is allowable deduction in terms of section 48 and it is required to be reduced from the sale consideration received by the assessee, being one of the components of the cost of acquisition. We do not think it just and proper to revisit the same issue and the judicial discipline requires that due deference must be shown to the findings given by the coordinate benches. Disallowance of this interest expense and also the consequential disallowance of the corresponding index of the cost of acquisition needs to be deleted. We accordingly direct AO to delete the same. Appeal of the assessee is allowed in part and for statistical purpose.

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• 2025 (3) TMI 920
  Reopening of assessment u/s 147 as barred by limitation - application of TOLA - scope of new law/regime - HELD THAT:- It is an admitted fact that earlier, the notice u/s 148 in the case of assessee was issued on 30/06/2021 which was dropped and proceedings u/s 148 of the Act were initiated in terms of order of Hon ble Supreme Court in the case of Union of India vs. Ashish Agarwal [ 2024 (10) TMI 264 - SUPREME COURT (LB)] and finally the notice u/s 148 was issued on 25/07/2022. Additional Solicitor General of India in the case of Rajiv Bansal [ 2022 (5) TMI 240 - SUPREME COURT] has made categorical statement at Bar before the Hon ble Supreme Court that all the notices issued for Asst. Year 2015-16 on or after 1st April 2021 will be dropped, however, in the instant case, no such action has been taken and re-assessment order has been framed in the case of the assessee on the basis of the notice issued u/s 148 of the Act on 25/07/2022. As considering the assessment year involved is 2015-16, notice issued in the case of originally on 30/06/2021 and later on 25/07/2022 which both the dates have fallen on or after 1st April, 2021, therefore, both the notice deserves to be dropped in view of the admission made by the Revenue before the Hon ble Supreme Court. Further, for Assessment Year 2015-16, no notice u/s 148 of the Act could be issued after the expiring of six years from the end of the relevant assessment year which limitation expired on 31st March, 2022. As the Hon ble Supreme Court in the case of Rajiv Bansal (supra) has observed that Tola is not applicable for Asst. Year 2015-16, therefore, even otherwise under the old provisions of section 149 of the Act, the notice issued u/s 148 of the Act for Asst. Year 2015-16 on 25/07/2022 is barred by limitation. Appeal of the assessee is allowed.

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• 2025 (3) TMI 919
  Residential status - Period of stay outside India - 28 days stay in the USA, which the Assessee has claimed that he went to the USA for seeking the employment and tried to get the employment but could not get succeeded - Assessee has claimed that going outside India for the purpose of employment, does not mean that the actual services have to be rendered for employment, but if someone goes outside India for the purposes of searching employment, then also the purpose can be construed as purpose of employment outside India HELD THAT:- Assessee who went to a foreign country partially for employment and partially for in search of employment and stayed in India for a period less than 182 days in the preceding year, is entitled to claim the exemption qua income earned out of India being non-resident of India during that year, as per explanation 1 to section 6 of the Act. Thus, the question posed is answered accordingly. Admittedly the Assessee in the instant case during the AY under consideration, was out of India for a period of 210 days in total, for the purposes of employment (182 days) and in search of employment (28 days) and remained in India for a period of less than 182 days. As in Suresh Nanda [ 2012 (7) TMI 772 - ITAT DELHI] case Coordinate Bench has categorically held, as approved by Suresh Nanda case [ 2013 (3) TMI 77 - DELHI HIGH COURT] that residential status of the person for the purpose of section is to be determined only on the basis of number of days stay in India and there is no restriction for number of days spent abroad and if the period of stay in India is less than 182 days then the status to be applied, would be of non-resident and his global income cannot be taxed in India in such case . And therefore, the Assessee in this case is entitled to get the status of non-resident for the claiming the income earned from outside India, as exempt from taxation in India. Even it is not the case of the Department that the Assessee had visited foreign countries exclusively for other purposes such as tourists, medical treatment, studies, or the like as outlined in the case of CIT V/s O. Abdul Razak [ 2010 (12) TMI 940 - KERALA HIGH COURT] . Thus, in the absence of relevant contrary material, the certificates issued by the concerns at USA {Texas and Miami} cannot be sidelined and cannot be construed that the Assessee visited foreign countries for the specific and exclusive purposes other than the employment. Therefore, for the just decision of the case and substantial justice, we are inclined to allow the claim of the Assessee to the effect that he visited outside India for a period of 210 days in total for the purposes of employment and remained in India for a period of less than 182 days in total during the AY under consideration and therefore entitled to claim the exemption sought for, being non-resident of India during the AY under consideration and thus such claim is allowed. Resultantly the addition is deleted. Appeal of the Assessee is allowed.

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• 2025 (3) TMI 918
  Denial of Foreign Tax Credit u/s 90/90A - delayed filling of Form No. 67 - HELD THAT:- We hold that the filing of form no. 67 is directory and not mandatory ad violation of procedural norms does not adversely affect the substantive rights or claims. Thus, the assessee is eligible for FTC and the matter is restored back to the file of ld. AO with the direction to verify assessee s claim in respect of Foreign Tax Credit as per law after admitting/accepting Form No. 67 and to decide the issue as per law.

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• 2025 (3) TMI 917
  Disallowance of the foreign tax credit - taxes paid in foreign country namely Norway - appellant did not file Form No. 67 within the statutory time limit - HELD THAT:- The requirement of filing Form 67 is directory and not mandatory. The assessee cannot be deprived of Foreign Tax Credit merely on account of a procedural lapse, especially when the revised return, along with Form 67, was filed before the completion of assessment. Appeal of the assessee is allowed.

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• 2025 (3) TMI 916
  Disallowing the set-off of brought forward losses due to the alleged belated filing of the return - HELD THAT:- Loss should be determined in pursuance of the return filed within the due date and in such circumstances, the assessee is entitled to carry forward the losses and set off the same as against the profits earned in the subsequent years. Admittedly, in the present case, the loss in respect of the assessment years 2012-13 and 2013-14 were determined by the AO pursuant to the return of income filed during the years and also the returns were filed in time and therefore as per the section 80, the assessee is entitled for carry forward the losses and set off the same against the profits available in the subsequent years. The above provision speaks about the determination of the losses in the earlier previous years and not the determination of loss in the immediately preceding year and therefore the orders of the lower authorities are not in accordance with the provision. Assessee is entitled for set off of the carried forward losses incurred during the A.Ys. 2012-13 and 2013-14 for which period the assessee filed their return of income in time. As a result we set aside the order of the lower authorities and allowed the grounds raised by the assessee and directed the AO to allow the set off of loses incurred during the A.Ys 2012-13 and 2013-14. At the time of argument, the AR also brought to our notice that some mistakes have crept in the calculation of the losses and we have also perused the said details and satisfied ourselves that there are some mistakes in the calculation of the losses and therefore the same should be rectified and the correct amount of loss should be given set off during the A.Y. 2017-18. In order to quantify the correct amount of losses, we are remitting this issue to the file of the AO with the direction to quantify the exact amount of loss incurred after adjusting the profits earned during the subsequent years and thereafter grant the set off for the carried forward of losses incurred during the A.Ys. 2012-13 and 2013-14.

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• Customs

• 2025 (3) TMI 915
  Infringement of Petitioner s right to speedy trial guaranteed under Article 21 of the Constitution of India - inordinate delay in the prosecution of the criminal case pending since 1996 - HELD THAT:- As rightly submitted by the Petitioner, there were about ninety dates between 1996 upto 2018; but before that there was inordinate delay in filing of the complaint itself. The investigation had started in the year 1983 and the complaint was actually filed in the year 1996. It took thirteen long years for the authorities to even file the complaint. After that, cognizance was taken and evidence before charge started in the year 1999. It was closed in February, 2003 but the prosecution was permitted to lead further evidence by recalling a witness on 25.4.2003. The dates after that reflect sorry state of affairs. It can be seen that from 2003 upto 2018 continuously the prosecution witnesses were absent. The roznama also shows that the accused were also absent on almost all of these occasions but obviously the trial could not proceed in the absence of the prosecution witnesses. The evidence before charge was not formally closed in the year 2003. The order of the learned Magistrate passed on 13.11.2017, which is annexed at Exhibit-F to this Petition, mentions that till that date i.e. till 13.11.2017 the prosecution had examined only three witnesses - the Court directed that evidence before charge was closed and the matter was fixed for consideration of framing the charge. Thus, this order passed by the learned Magistrate shows that since November, 2003 till November, 2017 the prosecution did not take any steps to complete the step of evidence before charge and it had to be finally closed by the order of the learned Magistrate on 13.11.2017. In the case of Kadra Pahadiya, the Hon ble Supreme Court in Paragraph-2 has referred to this issue and held that as already held in the case of Hussainara Khatoon and others Vs. Home Secretary, State of Bihar, Patna [ 1979 (3) TMI 215 - SUPREME COURT] , speedy trial was a fundamental right implicit in the guarantee of life and personal liberty enshrined in Article 21 of the Constitution of India and any accused who is denied this right of speedy trial is entitled to raise this issue - The Hon ble Supreme Court further observed that the Court could not lose sight of the fact that the trial had not made much headway even though no less than twenty years had gone by. Such protraction itself means considerable harassment to the accused not only monetarily but also by way of constant attention to the case and repeated appearances in Court, apart from anxiety. In the present case, the Petitioners original accused had not challenged any order passed by the learned Magistrate before any higher forum. In that sense they had not caused any delay in conduct of the trial by approaching higher forums - the delay is not only at the stage of conduct of the trial but it starts right from the time when the investigation started as is observed by the Hon ble Supreme Court in the judgments referred. Conclusion - There is considerable force in the submissions of learned Senior Counsel Shri Jagtiani that the sword of prosecution was hanging on the Petitioner for almost half of her entire life which cannot be justified by any arguments which could be advanced in favour of saving the prosecution against the Petitioner Prabha. The delay in this case is so inordinate, so gross and so unjust, that this is a fit case where powers under Article 226 of the Constitution of India exercised to quash the proceedings. Petition allowed.

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• Corporate Laws

• 2025 (3) TMI 914
  Power of Bombay High Court to intervene u/s 9 of the Arbitration and Conciliation Act, 1996, to protect the interests of the Petitioner, Manmohan, particularly concerning the Greater Kailash Property, which is not owned by Kapani Resorts but was released using Manmohan s funds - shares were not allotted to Manmohan as per the Agreement - parties are indeed privy to an arbitration agreement contained in the Agreement - HELD THAT:- Even a plain reading of the foregoing would show that it is now a statutory obligation of Kapani Resorts to refund the monies invested by Manmohan. The allotment of shares ought to have been made within sixty days of February 11, 2022 (for USD 350,000) and of February 22, 2022 (for USD 650,000). Such allotment not having been made, these amounts ought to have been refunded within fifteen days of such deadline to make allotment. Manmohan s right to refund has accrued on expiry of the 75-day period from the date of the receipt of the share application money. Before the funds infused by Manmohan could have been used to repay SIDBI, it was incumbent on Kapani Resorts to allot shares (which would have given control to Manmohan over Kapani Resorts), after which allotment, it was permissible to use such funds to repay SIDBI. This was a necessary statutory condition precedent that has not been met. Now, the statutory obligation to refund has kicked in on the expiry of 75 days from each tranche of infusion. Evidently, a strong prima facie case has been made out on behalf of Manmohan, for grant of protective reliefs. Grave and irreparable harm and injury would be occasioned to Manmohan if such intervention is not made. The protection that Manmohan enjoyed at the hands of the NCLT (a freeze on the capital structure of Kapani Resorts) too now stands removed owing the withdrawal of the NCLT proceedings in reaction to the objection raised on behalf of Virendra and Vaibhav, who have shown scant regard for legal obligations owed by them under the solemn Agreement executed by them. Evidently, a strong prima facie case for refund of the amounts invested by Manmohan exists in law. Evidently, a strong prima facie case of the Respondents enjoying the fruits of their violation of the Agreement exists on the record. Evidently, a strong prima facie case to show that the properties mortgaged to secure Kapani Resorts obligations owed to SIDBI now stand released. Indeed, the personal guarantees too stand discharged. All these benefits are being enjoyed without fetter, thanks only to Manmohan s funds, even while the Respondents frustrate Manmohan s rights under the Agreement and under Company Law. The interim reliefs granted hereby shall hold the field until completion of the arbitral proceedings - Kapani Resorts, Virendra and Vaibhav shall jointly or severally deposit an Indian Rupee equivalent of USD 1 million (valued at the US Dollar-Indian Rupee exchange rate applicable as of the respective dates of their remittance by Manmohan) along with interest at the statutory interest rate of 12% per annum (on the INR equivalent of USD 350,000 from the expiry of 75 days after February 11, 2022; and on the INR equivalent of USD 650,000 from the expiry of 75 days after February 22, 2022, until the date of deposit) with the Registry of this Court, which deposit shall be made no later than two weeks from the date on which this Order is uploaded on the website of this Court. Conclusion - i) The Greater Kailash Property is relevant to the arbitration dispute, and the Court can issue interim measures concerning it under Section 9 of the Act. ii) The failure to allot shares to Manmohan, despite using his funds to discharge debts, constitutes a breach of the Agreement and statutory obligations under Section 42 (6) of the Companies Act. iii) The actions of Virendra and Vaibhav, in benefiting from Manmohan s investment without fulfilling their obligations, demonstrate a misappropriation of funds. Petition disposed off.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 913
  Dismissal of Application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Respondent, seeking resolution of an outstanding amount - existence of Pre-Existing Dispute between the Parties or not - it was held by NCLAT that the dismissal of the application upheld, concluding that there was a pre-existing dispute between the parties and that the Code was not the appropriate forum for the claim. HELD THAT:- There are no reason to interfere with the impugned order - appeal dismissed.

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• 2025 (3) TMI 912
  Violation of principles of natural justice - challenge to ex-parte order - notice or opportunity of being heard not provided to any of the stakeholders - takeover and liquidation of properties allowed - HELD THAT:- It would be appropriate to direct the appellants to approach the learned Single Judge seeking their impleadment in the underlying writ petition and simultaneously file an appropriate application seeking recall/clarification/modification or review of the impugned order dated 22.10.2024 so as to enable the learned Single Judge to re-consider the grievances raised by the appellants after giving due opportunity to them. 10 days time granted for the appellants to file their impleadment applications and any other appropriate application, if so advised, in the underlying writ petition pending before the learned Single Judge. The learned Single Judge is requested to take up the applications, if so filed, and dispose of the same with due expedition, preferably within a period of 30 days thereafter. Appeal disposed off.

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• 2025 (3) TMI 911
  Section 7 petition is time-barred or not - Term loan having separate dates of default - Respondent, being an Asset Reconstruction Company (ARC), was entitled to grant a fresh loan to the Corporate Debtor or not - excessive interest rate charged by the Respondent or not. Whether the present Section 7 petition is time-barred or not and whether TL-1 and TL-2 could have separate dates of default? - HELD THAT:- It is the case of the Appellant that Respondent No. 1 was trying to use the CIRP process as a recovery tool and had supressed material facts and particulars before the Adjudicating Authority and fraudulently filed the Section 7 application. It has also been asserted that the Respondent No. 1 by supressing material facts has misused the insolvency proceedings and hence the Section 7 application attracts Section 65 of the IBC. On seeing the prayers contained in the present appeal, it is not found that Section 65 has been sought to be invoked. Furthermore, the degree of proof and evidence required to prove any transaction to be fraudulent in nature should be beyond reasonable doubt and of an unimpeachable nature which is not found established in the present case. There are no substance in this contention of the Appellant and the same is rejected. The account of the Corporate Debtor for this Term Loan was declared as NPA on 31.03.2016. Calculating three months prior to the date of NPA, the date of default works out to be not later than 31.12.2015. The Section 7 application was filed on 09.01.2021 which is clearly beyond three years from the date of default. What therefore needs to be seen is whether the Respondent No. 1 has effectively substantiated the argument canvassed by them that the debt and default having been acknowledged by the Corporate Debtor within the three years limitation period made room for extension of the period of limitation. There is sufficient evidence to prove the existence of debt and default. The balance sheet of the Corporate Debtor for FY 2019-20 and the Independent Auditor s Report attached thereto clearly indicate both the Term Loans along with unpaid interest amount. We therefore find no error in the impugned order that in view of the acknowledgement of liability on the part of the Corporate Debtor, the period of limitation stood extended. Hence, though the Section 7 application was filed on 09.01.2021, it fell within the limitation period in view of the judgment of the Hon ble Supreme Court in Suo-Motu Writ Petition (C) No. 3 of 2020 [ 2021 (3) TMI 497 - SC ORDER ] wherein it was held that in all case where limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, the limitation period of 90 days was to be counted from 01.03.2022. Hence the application under Section 7 was clearly filed within limitation. Imposition of 30% interest p.a. and penal interest 36% p.a. - HELD THAT:- The Corporate Debtor having signed the TL-2 dated 07.02.2014, the terms of the same have become binding. Having signed the TL-2 and adhered thereto without challenging the same, the Corporate Debtor cannot now raise the issue of legality or validity of the Term Loan Agreement. Moreover, when the TL-2 was executed voluntarily and was never challenged at any stage and the Corporate Debtor had even voluntarily made interest payment at the agreed rate of interest, there are not much force in the contention of the Appellant of the applicability of the Tulip Hotels ratio. It is not found that the issue of rate of interest was pressed before the Adjudicating Authority. It is well settled that while dealing with a Section 7 application neither the Adjudicating Authority nor the Appellate Authority is expected to interfere with the terms of contract entered into between the concerned parties. All that is required to be seen is whether the debt and default is proven without adjudicating on whether the rate of interest was unreasonable or inflated. That being the case, raising this fresh plea at the appellate stage of excessive interest rate cannot be looked into. The Adjudicating Authority had substantial material on record placed before it for determination of date of default. We have no reasons to disagree with the Adjudicating Authority in recording its satisfaction basis the materials on record placed by Respondent No. 1 in Part-V. The Adjudicating Authority has also adverted attention to the decision of this Tribunal in the case of Manmohan Singh Jain Vs SBI [ 2021 (11) TMI 794 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI ] wherein it had been held that omission to mention date of default is not fatal to a Section 9 application as long as sufficient documentary evidence is adduced to establish the date of default. In the present case, since the CoC has already been constituted, in the event the settlement proposal as proposed by the Appellant is accepted by the Respondent No. 1, it shall be open for the Respondent No. 1 to file a Section 12- A application read with Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 within two weeks from date of pronouncement of this order. In the event the settlement proposal is not accepted by Respondent No. 1 and the Section 12-A application is not filed within two weeks from date of pronouncement of this order, the RP shall proceed with the CIRP of the Corporate Debtor in accordance with law. Conclusion - i) The Section 7 application is not time-barred due to the acknowledgment of debt by the Corporate Debtor, which extended the limitation period under Section 18 of the Limitation Act, 1963. ii) TL-2 is a separate loan with its own default date, distinct from TL-1, and the application is filed within the limitation period. iii) The ARC is entitled to grant a fresh loan to the Corporate Debtor for restructuring purposes, as per RBI guidelines. iv) The interest rate agreed upon in the Term Loan Agreement is binding, and the Court would not interfere with the contractual terms. v) The absence of a specific date of default in the application did not render it defective, as sufficient evidence of default was provided. Appeal dismissed.

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• 2025 (3) TMI 910
  Jurisdiction of National Company Law Appellate Tribunal (NCLAT) to adjudicate the dispute regarding the handover of maintenance from YG Estates to the Supernova Apartment Owners Association under the Insolvency and Bankruptcy Code (IBC), 2016 - validity and enforceability of the registered association of apartment owners under the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 - HELD THAT:- The present is a case where CIRP has been commenced against the corporate debtor by order of the NCLT dated 12.06.2024. It is an admitted position that project in question i.e., Supernova project is the project of the corporate debtor. CIRP having been commenced, the project is clearly in the purview of the CIRP and assets of the corporate debtor. In the interim order which we have passed on 03.07.2024, we have directed however, the ongoing project maybe continued under the supervision of the IRP and IRP shall be extended all cooperation by the corporate debtor, its officers and employees in carrying out the construction . The YG Estates is an agency appointed by corporate debtor for carrying out the maintenance. Entitlement of YG Estates to carry out the maintenance flow from Agreement executed by corporate debtor in its favour, which Agreement was prior to commencement of the insolvency. After insolvency commencement date, the management of the corporate debtor stands suspended and it is the IRP who is entitled to carry on and manage the operation of the corporate director. When the Supernova project (East and West) are part of the assets of the corporate debtor, for which maintenance agencies is the YG Estates, it does not appeal to the reason that management of said project including the its maintenance is beyond the purview of the IRP - Against the corporate debtor, insolvency resolution process has commenced and the IRP being in charge of all affairs of the corporate debtor, including its assets, including Supernova projects, IRP has jurisdiction to look into the maintenance. It is on the record that IRP after receiving complaints from the association has already issued show cause notice to the YG Estates and IRP has also clearly supported the association insofar as handing over the maintenance by the association is concerned. The provisions of Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, which contains the statutory obligation on the promoter and apartment owners to form an association. Section 14(2) clearly provides that it shall be the joint responsibility of the promoter to form an association and it is the promoter to get the association registered - the association having been registered and the registration of association still being valid it is not open for the YG Estates to contend that registration of association is not in accordance with the law. The issue with regard to non-fulfilment of the necessary conditions for registration of association cannot be allowed to be raised in this proceeding nor can it be examined in these applications. When the association has been registered, it has to be presumed that registration was made after compliance of all necessary requirement. YG Estates has no right to resist the handing over of maintenance to the association. Association having been formed and its registration being current, it has all rights and obligations as contained in UP Act, 2010. YG Estates is nothing but an agency appointed by corporate debtor, cannot resist the handover of the maintenance to the association. Conclusion - i) Tribunal has jurisdiction u/s 60(5)(c) of the IBC to adjudicate issues related to the maintenance of the corporate debtor s assets during the CIRP. ii) A registered association under the Uttar Pradesh Apartment Act, 2010, has the right to take over maintenance from a maintenance agency appointed by the corporate debtor. iii) YG Estates is directed to hand over maintenance to the association within seven days, affirming the association s statutory rights. Appeal disposed off.

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• 2025 (3) TMI 909
  Requirement to comply with the Tribunal s order dated 10.06.2022 regarding the continuation of construction projects and the management of the Corporate Debtor s operations by IRP - HELD THAT:- Under the order dated 10.06.2022, the projects of the corporate debtor are being run as a going concern under the supervision of the IRP. The construction has been carried out with the co-operation/assistance rendered by the promoters and their staff and employees. The order dated 10.06.2022 being still in operation, all have to act in accordance with the said direction. Any expenses incurred in carrying out the construction, supply of materials and services during the CIRP period payment of CIRP costs has to be paid in priority. It is the case of the parties that earlier the vendors were being paid for their supplies/services which process has halted after 12.12.2024 order - The IRP shall verify/finalise the bills received from vendors/operational creditors as per the process which was being adopted prior to passing of the order dated 12.12.2024. Obligation of the IRP who is discharging duties under Section 17 of the IBC to manage the affairs of the corporate debtor and make payment of salary - HELD THAT:- The submissions of the IRP is that salary for December 2024 has been paid and salary for the month of January 2025 has also been processed and was to be paid in February itself. With regard to outstanding salary for September, October and November, 2024, IRP has stated that the said outstanding salary be paid in three tranches up to 31.05.2025. IRP being the authority to run the corporate debtor as a going concern has to take all steps for meeting necessary expenses including salary. By recording the statement of IRP that outstanding salary for September, October and November 2024 shall be paid by 31.05.2025 in three tranches, we dispose of the application. All outstanding salary shall be paid by 31.05.2025. The employees and officers of the corporate debtor shall render all necessary assistance to the IRP with respect to preparation of salary, bills, invoices etc. Non-cooperation or obstruction from the vendors/ operational creditors as well as the promoters of the corporate debtor in inspection of projects/ taking possession of the projects for carrying out the order dated 12.12.2024 - HELD THAT:- It is already noticed that the operation of the order passed by this Tribunal dated 12.12.2024 has been stayed by the Hon ble Supreme Court vide its order dated 25.02.2025. As on date, there is no question of taking steps in compliance of the order dated 12.12.2024. The reliefs which are claimed in the application is principally with respect to compliance of the order dated 12.12.2024. We, thus, are of the view that as on date, no order needs to be passed in IA No.1082 of 2025. Consideration of IA No.1082 of 2025 is deferred with liberty to the IRP making a request for fixation of the date in IA. Conclusion - The IRP is directed to comply with the order dated 10.06.2022, manage payments to employees and vendors as per the outlined timelines, and ensure the verification of claims using the pre-12.12.2024 process. Application disposed off.

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• 2025 (3) TMI 908
  Condonation of 139 days delay in refiling of Company Appeal - sufficient cause for condonation, presented or not - HELD THAT:- In the present facts of case where delay in refiling is for an unduly prolonged period of 139 days, it becomes incumbent on the Bench to be satisfied with the cogency and plausibility of the reasons set forth by the Applicant to explain the delay. Coming to our analysis, we find that one of the principal explanations given for delay is that the applicants were not available for long periods of time which led to delay in review of documents. This explanation is rather airy and light-weighted as no concrete reasons have been given to explain as to why the Applicants were absent or remained unavailable for consultation for such long periods. The refiling delay condonation application fails to explain to satisfaction as to why the Applicants were unavailable individually and collectively from 27.07.2024 to 21.09.2024 to file the application - Neither has any credible explanation been given as to what prevented the Applicant or his counsel to obtain certified copy of the impugned order on time. Conclusion - The Applicant has clearly failed to effectively demonstrate sufficient cause for condonation of delay of 139 days in refiling the appeal. Application for condonation of delay in refiling dismissed.

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• 2025 (3) TMI 907
  Approval of Resolution plan - Plan was approved without resorting to Swiss Challenge Mechanism - RFRP having contemplated holding of challenge mechanism, requirement of CoC and the RP to conduct Swiss Challenge Mechanism, so as to maximize the value of the CD - HELD THAT:- When the final Resolution Plan has been submitted by all Resolution Applicants by 24.06.2024, there was no occasion to permit any Resolution Applicant to enhance its financial offer. The Resolution Plan was submitted by the Appellant on 24.06.2024 and all Resolution Applicants were permitted to submit their revised Resolution Plan within the time allowed. After revised Resolution Plans have been submitted by Resolution Applicants, no Applicant can be permitted to enhance its financial offer. The Appellant is only a Resolution Applicant and his claim can at best be with regard to considering of his Resolution Plan in accordance with law by the CoC. The Resolution Plan submitted by the Appellant was deliberated, compared with Resolution Plan of Orissa Metaliks and was approved with vote shares of more than 98% of the CoC. It is well settled that commercial wisdom of CoC in approving the Resolution Plan is not required to be interfered with by the Adjudicating Authority while approving the Resolution Plan, unless the Adjudicating Authority is satisfied that Resolution Plan is not compliant of Section 30, sub-section (2). Present is not a case where there is any ground that Resolution Plan submitted by SRA is not compliant. The scope of interference in commercial wisdom of CoC is minimal. The Hon ble Supreme Court in K. Sashidhar vs. Indian Overseas Bank and Ors [ 2019 (2) TMI 1043 - SUPREME COURT] held that the commercial wisdom of CoC has been given paramount status without any judicial intervention. Conclusion - Regulation 39 (1A) of CIRP Regulations, 2016 is an enabling Regulation and does not cast any obligation to permit modification of a Resolution Plan. In present case all Resolution Applicants were permitted to submit revised Resolution Plan. The CoC having not instructed the RP to permit any modification in Plan, RP cannot be said to have faulted in any manner. No ground made out to interfere with the impugned order - appeal dismissed.

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• Law of Competition

• 2025 (3) TMI 906
  Abuse of dominant position under Sections 3(4) and 4 of the Competition Act, 2002 - Appellant s failure to disclose the restoration of its retailing tier status prior to filing the information constituted a lack of clean hands - adequate opportunity of hearing provided or not - HELD THAT:- The Information under Section 19(1)(a) was filed on 01.07.2021 but before the said date the retailer tier revoked on 20.04.2021 was restored on 23.06.2021 but this fact was not made part of the information. In the information, the Appellant mainly pray for clubbing the information filed by it with case no. 36 of 2019 and made the interim prayer to direct the R2 to immediately reinstate the CR states of the Appellant and restart the CR products. In support of the information, an affidavit has also filed by the Appellant in which it had specifically averred that and 47 of information are based on my personal knowledge which means that the prayer made in para 47 (a) for immediately reinstatement of CR status of the Appellant was also based upon the information of the Appellant to be correct whereas the CR status of the Appellant had already been restored on 23.06.2021 much before the information was filed on 01.07.2021 and false affidavit was filed in support of it. Besides this fact that the Appellant did not disclose the fact in the information that the issue of downgrade of CR status, which is the bedrock of the information, has already been restored and as far as the Appellant is concerned, the personal injury caused to it has been redressed, it not only filed the information but also continued with it before the R1 and disclosed the same very late. The Hon ble Supreme Court in the case of S.P. Chengalvaraya Naidu [ 1993 (10) TMI 315 - SUPREME COURT ] has held that the courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax-evaders, bank-loan- dodgers and other unscrupulous persons from all walks of life find the court- process a convenient lever to retain the illegal-gains indefinitely. There are no hesitation to say that a person, who s case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation. The Commission has therefore observed that the allegation made by the Appellant that the sudden revocation of the CR status without prior intimation was to punish him for dealing with R3 is misplaced. It has also been brought on record that from Oct, 2020 to March, 2021 there has been consistent reduction in the offtake by the Appellant, in this regard a chart has been given in the earlier part of this order from which it can be assumed that change of the retailing tier of the Appellant was not because of its new dealership taken by the Appellant but because of the reducing offtake. Conclusion - The appeal was dismissed due to lack of merit in the abuse of dominant position claim and the Appellant s failure to disclose material facts, with the investigation process deemed fair. There are no merit in the present appeal for the purpose of interference and the same is hereby dismissed.

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• PMLA

• 2025 (3) TMI 905
  Money Laundering - allotment of sites - proceeds of crime - challenge to registration of Enforcement Case Information Report (ECIR) against the petitioner arising out of predicate offence and consequent act of issuance of summons under Section 50 of PMLA - Whether the petitioner should be permitted to be investigated into on the impugned ECIR? - HELD THAT:- Section 3 has certain ingredients to be present. It should be concealment, possession, acquisition and usage of property which is allegedly proceeds of crime. What is proceeds of crime in the case at hand is sites granted in lieu of compensation. The compensation is granted under respective enactments. Whether the petitioner or other accused are guilty of those offences is being investigated into by the Lokayukta Police pursuant to registration of a crime in Crime No. 11 of 2024. The facts as on the date of registration of ECIR is that the petitioner is not in possession, enjoyment and usage of sites that were allotted to her, as they have been surrendered and cancellation of allotment has happened. Therefore, there is no laundering in the case at hand. In the case at hand, the alleged proceeds of crime are referable to allotment of sites. The coordinate bench in the case of NATESHA [ 2025 (2) TMI 216 - KARNATAKA HIGH COURT ] holds in two of its paragraphs that allotment of sites cannot become proceeds of crime. In the light of the findings rendered by the coordinate Bench, as also different High Courts interpreting what would be proceeds of crime and whom would be guilty of proceeds of crime, the case at hand neither projects the petitioner being in possession, enjoyment and usage of proceeds of crime. The Enforcement Directorate has filed detailed objections appending to it proceedings of search, seizure and attachment of property. While so doing, it has relied on those very judgments which have all been considered by the coordinate Bench as quoted. A communication from the Enforcement Directorate to the Additional Director General of Police, Lokayukta dated 30-11-2024 is produced as Annexure-R1. The allegations against the petitioner, and all other accused are verbatim similar to what is alleged in the complaint registered before the concerned Court which has become a crime in Crime No. 11 of 2024. As submitted by the learned Additional Solicitor General, the Enforcement Directorate has found a larger picture of corruption and laundering in MUDA to which the present petitioner is no way responsible. The information gathered qua others could be taken forward by the Enforcement Directorate in a manner known to law. But, those cannot be attached to Crime No. 11 of 2024. Even according to the investigation, search, seizure, and recording of statements, nothing has emerged against the petitioner, except the repetition of what was an allegation at the outset which formed the fulcrum of Crime No. 11 of 2024. Therefore, in the peculiar facts of this case, in view of the preceding analysis as also, the judgment rendered by the coordinate Bench, this Court is of the considered view that the petitioner cannot be permitted to be prosecuted for offences under the provisions of Money Laundering Act through the impugned ECIR. However, the findings rendered herein are for the purpose of consideration of the case qua the impugned ECIR. This would not become applicable to proceedings in Crime No. 11 of 2024. Conclusion - i) For an offence under the PMLA, there must be possession, concealment, or usage of proceeds of crime, and mere possession without projection as untainted property does not suffice. ii) The ECIR and all consequential actions, including the summons issued against the petitioner quashed, due to the lack of evidence supporting the possession or laundering of proceeds of crime. Petition allowed.

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• Service Tax

• 2025 (3) TMI 904
  Wrong availment of CENVAT Credit - short payment of service tax at the time of audit - lack of evidences - levy of penalties - levy of late fine - invocation of extended period of limitation - penalties - HELD THAT:- It is found that the appellant had paid the amounts towards the irregularly availed CENVAT Credit and Service Tax short paid by them on being pointed out during the audit and much before the issuance of show cause notice, the matter in respect of the said demands should have been closed in terms of Section 11 A (2) of the Central Excise Act, 1944 or Section 73 (3) of the Finance Act, 1994. Section 11 A (2) of the Central Excise Act, 1944 or Section 73 (3) of the Finance Act, 1994 clearly provide that appellant could have paid the amounts short paid by him either on his own ascertainment or on being pointed out by the department. Undisputedly appellant has paid the amounts on being pointed out by the audit. That being so the proceedings for the recovery of the said amounts by issuing show cause notice under Section 11A of the Central Excise Act, 1944 or Section 73 of Finance Act, 1994 for the recovery of the amounts already deposited are bad in law and the penalties imposed equivalent to those amounts cannot be justified. Demand of interest - HELD THAT:- There is no clarity about the interest payment for the delay in payment of taxes/ duty. Appellant has claimed that they had paid the interest also which should have been apportioned against the demand of interest. However they have not produced any evidence in respect of the payment of interest. Time of ten days allowed on the date of hearing to the counsel to produce the details and evidence of payment of interest. However even after more than three months from the date of hearing nothing has been produced before me. Thus there are strong reasons to reject the claim made by the appellant towards the payment of interest. Accordingly the demand of interest upheld by the impugned order is again confirmed. Levy of late fee - HELD THAT:- Appellant has not challenged the late fee levied on the delay filing of their returns by them. The demand for late fee is also upheld. Conclusion - i) The denial of CENVAT credit was upheld due to a lack of evidence from the appellant. ii) The imposition of penalties was set aside due to the appellant s prior payment of duty and interest. iii) The demand for late fees and service tax under RCM was confirmed. iv) The invocation of the extended period was deemed appropriate. v) The demand for interest was confirmed due to the appellant s failure to provide evidence of payment. The impugned order is modified to the extent of setting aside the penalties equivalent to irregularly availed cenvat credit and service tax short paid by the appellant - Appeal allowed in part.

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• 2025 (3) TMI 903
  Admissibility of refund claim - entitlement for exemption under S.No. 12(a) of Notification No. 25/2012-ST for services provided to Raipur Development Authority (RDA) and Naya Raipur Development Authority (NRDA) - S.No. 12(e) covers the excluded category, which has been left out by the Commissioner or otherwise while extending the benefit under S.No. 12(e) to RDA - benefit under S.No. 39 covers a situation where the service provider is not a Governmental Authority - invocation of extended period of limitation - penalty. Whether S.No. 12(a) would be admissible to appellants or otherwise? - HELD THAT:- It is found from the submissions made by the learned Special Counsel, as also from the grounds taken by the Adjudicating Authority that these two authorities are clearly engaged in commercial activities. It is also found that the other arguments taken by the learned Advocate is that their work is not for commercial use, per se, and therefore, they would be covered within the ambit of S.No. 12(a). This argument is also not correct, inasmuch as the exemption notification has to be construed strictly in terms of the wordings of the notification and a plain reading would obviously indicate that if the service was for use for commercial purpose then it would not get covered. In this case, it is obvious that all these activities are for value addition of the plot and township, which are being sold at commercial rates and terms by these two authorities, therefore, these services are obviously provided to the authorities, who are otherwise engaged in commerce. In view of the same, there are no infirmity in the impugned order in denying them the benefit under S.No. 12(a) of the notification 25/2012-ST. Whether S.No. 12(e) covers the excluded category, which has been left out by the Commissioner or otherwise while extending the benefit under S.No. 12(e) to RDA? - HELD THAT:- While the learned Advocate has contested that all these activities are civic in nature and therefore, they should be covered under the notification and that the wordings under S.No. 12(e) of the Notification clearly covers even the activities of work relating to reservoirs, sumps and pumping stations, we find that the notification only covers three activities viz., pipeline, conduit or plant for (a) water supply, (b) water treatment, (c) sewerage treatment or disposal. Therefore, a plain reading of the entry would indicate that reservoirs and sumps would not be covered on the plain reading. However, we feel that since the expression used is plant , this would include pumping stations. Further, a plant for either water supply or water treatment or sewerage treatment or disposal would invariably also have certain reservoirs or sumps or pumping stations attached thereto - the facts have not been correctly appreciated insofar as denial of benefit under S.No. 12(e) of the notification in respect of reservoirs, sumps and pumping stations is concerned and accordingly, this needs to be remanded back to the Original Adjudicating Authority. It is, however, made clear that the expression plant used in the entry would cover pumping stations and also interconnected reservoirs and sumps meant to feed or collect water, sewerage, etc., from these pumping stations. Whether benefit under S.No. 39 covers a situation where the service provider is not a Governmental Authority? - HELD THAT:- The Adjudicating Authority was examining the broad description of the project and observed that unlike the works executed for RDA, in the case of NRDA, there is no breakup for each specified work and therefore, he did not allow the benefit in respect of WCS provided to NRDA in terms of S.No. 12(e) of the notification - there is clear breakup in case of activities provided to RDA, which helped in taking decision as to what services were covered or otherwise within the ambit of S.No. 12(e). However, similar breakups were not provided in case of NRDA, though it is apparent that on a broader level, they are almost similar to the activities as that of RDA - the matter needs to be remanded back to the Original Adjudicating Authority to reexamine the eligibility under S.No. 12(e) in respect of WCS provided to NRDA on the similar lines as that of RDA and also keeping in view, the as regards exclusions i.e., reservoirs, sumps and pumping stations. Whether, in the facts of the case, limitation has been rightly invoked or otherwise and whether penalty has been rightly imposed? - HELD THAT:- There was no substantive and positive grounds for alleging that there was deliberate and willful misstatement or suppression by the appellant to evade service tax in the facts of the case and therefore, the invocation of extended period of limitation in terms of proviso to section 73(1) is not sustainable. Accordingly, the decision of the Adjudicating Authority in the impugned order to the extent upholding the invocation of extended period is liable to be set aside and is accordingly, set aside. Further, since the extended period is not invocable, the penalty imposed is also not tenable and accordingly, the same is also set aside. Conclusion - i) The denial of exemption under S.No. 12(a) due to the commercial nature of the services provided to RDA and NRDA upheld. ii) The appellants were not eligible for exemption under S.No. 39 as they were not a governmental authority. iii) Since the extended period is not invocable, the penalty imposed is also not tenable and accordingly, the same is also set aside. Appeals are allowed by way of remand to the Original Sanctioning Authority.

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• 2025 (3) TMI 902
  Levy of service tax - transportation or insurance related expenses recovered in excess from the buyers - HELD THAT:- It is found that the appellant discharged the excise duty liability of Rs.10,04,21,540/-, i.e. Rs.7,86,81,141/- and Rs.2, 17,40,399/- on excess freight and insurance charges, respectively, consequently, the levy of service tax is unsustainable. The activity of arranging transportation of goods till the dealers premises cannot be classified under Business Auxiliary Service and, therefore, no service tax is payable on transportation related expenses recovered in excess by the appellant from their buyers. It is an activity which is directly related to the supply of goods on which excise duty has been paid by the appellant and once the excise duty has been paid, no service tax is leviable on the said transaction. Although, the learned counsel for the appellant has raised several other contentions, however, since the issue is decided on merits in favour of the appellant, it is no more relevant to record a finding on them. Conclusion - When excise duty is paid on the transaction value, which includes transportation and insurance charges, no additional service tax is exigible on those charges as they are part of the supply of goods. Appeal allowed.

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• 2025 (3) TMI 901
  Classification of services - Works Contract Services or Construction of Complex Services - period from April 2009 to September 2012 - services provided to the Housing Board Haryana are exempt from service tax - HELD THAT:- The matter is covered by the decisions of Bajrang Lal Gupta Vs Commissioner of Delhi-III [ 2023 (6) TMI 246 - CESTAT CHANDIGARH] for the Pre Negative List period and by Bharat Bhushan Company Vs State of Haryana [ 2016 (8) TMI 722 - PUNJAB AND HARYANA HIGH COURT] for the Post Negative List period. Bajrang Lal Gupta deals with the exemptions for the services provided for the Pre Negative List period holding that the Hon ble Apex court in the case of CCE v. Larsen Toubro Limited [ 2015 (8) TMI 749 - SUPREME COURT] has settled the issue relating to works contract service which includes supply of material and labour for consideration and the same is taxable only from 1-6-2007. It was also held that even for the period after 1.06.2007, various decisions of the Tribunal have consistently held that the composite contract or works contract service even after 1-6-2007 cannot be taxed under Construction of Complex Service under section 65(105) (zzh) read with Section 65 (30a) of the Finance Act, 1994. Conclusion - i) The appellant s services were correctly classified as Works Contract Services and not subject to service tax under Construction of Complex Services. ii) The services provided to the Housing Board Haryana were exempt from service tax as they were provided to a governmental authority for non-commercial purposes. Appeal allowed.

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• 2025 (3) TMI 900
  Calculation of service tax - requirement of inclusion of value of free diesel provided to the service provider, namely, M/s. R.K. Carriers - liability of service tax on the appellants under reverse charge mechanism - eligibility for exemption benefit in terms of N/N. 34/2004- ST dated 03.12.2004. Whether the appellants are required to include the value of free diesel provided by them to the service provider, M/s. R.K. Carriers? - HELD THAT:- Issue decided by Hon ble Apex Court in the case of Bhayana Builders [ 2018 (2) TMI 1325 - SUPREME COURT] where it was held that the value free supplies by a construction services recipient, for incorporation in the constructions would not constitute a non-monetary consideration to the service provider nor form part of the gross amount charged for the services provided. - thus, the value of free diesel should not be included in the taxable value. Whether there was any liability of service tax on the appellants under the reverse charge mechanism? - HELD THAT:- It is true, as contended by Revenue, that even if one of the literal meanings of the expression used, namely free supplies used is considered as the legal meaning as well, construction service providers may not be handicapped as they may seek benefits under Notification No. 12/2003-ST. However the fact that the assessees have an alternative recourse to avoiding the rigor cannot be the criterion for interpreting the Explanation. This contention by Revenue proceeds on a fallacious comprehension of Notification No. 12/2003-ST. The benefits under this Notification are only in respect of the value of goods and materials sold by a service provider to the recipient of a taxable service. In the case of free supplies by the recipient there is no sale or transfer of title in the goods and materials in favour of the service provider, at any point of time. Therefore when free supplied goods and materials are incorporated into the construction would be no sale by the provider to the recipient either. Notification No. 12/2003-ST would therefore be inapplicable. - the value of free diesel should not be included in the gross amount for service tax computation, as the notifications do not mandate such inclusion. Whether appellants are eligible for the exemption benefit in terms of N/N. 34/2004-ST dated 03.12.2004? - HELD THAT:- Clause (ii) of Notification No. 34/2004 applies to the appellant. However the quantification is not apparent on record. Resultantly, we remand the matter back to the Original Adjudicating Authorities to quantify the amount of the differential duty, if any, to be recovered from the appellant, however, after arriving at a proper calculation showing as to whether the calculation arrived at by appellant is correct. If not, the reasons to be recorded - Commissioner (Appeals) is required to look into the calculation given by the appellant in their written submissions and also to provide two opportunities of personal hearing to the appellant. Order thereafter be passed within two months of the receipt of the present order. Conclusion - i) The value of free diesel provided by the appellant is not includible in the taxable value. ii) The value of free diesel should not be included in the gross amount for service tax computation, as the notifications do not mandate such inclusion. iii) There are discrepancies in the calculation of the gross amount charged and remanded the matter for recalculation to determine if the exemption applies. The appeal is allowed by way of remand.

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• Central Excise

• 2025 (3) TMI 899
  Admissibility of benefit of N/N. 214/86-CE - activities conducted by the appellant qualify as job work or not - invocation of extended period of limitation - HELD THAT:- Admittedly appellant have used certain alloying elements when converting scrap into pure lead and leady alloys. The appellants, through an elaborate process, converted the used and defective batteries into scrap and thereafter, further converted it into pure lead and thereafter, again further converted it into lead alloys by using/adding certain elements like Antimony, Tin, Selenium, etc. It is also not in dispute that these three inputs are used by the appellant themselves and are not being supplied by the principal manufacturer. The wordings of the notification has to be construed strictly, as has been held by the Hon ble Supreme Court in the case of CC (Import) vs Dilip Kumar Co. [ 2018 (7) TMI 1826 - SUPREME COURT (LB)] . On a plain reading of the explanation, which defines what constitutes job work , it would be obvious that all the inputs or semi finished goods are to be sent by the principal manufacturer and the activities are to be undertaken by the job worker, which may or may not amount to manufacture - Once, it is not considered as job work, there has to be payment of duty as there is no other notification available for exempting the same and the plea that ultimately the principal manufacturer would have paid the duty on the same would be of no consequence when the duty is required to be discharged at the stage where the said manufactured goods are cleared from the factory where they are manufactured. Extended period of limitation - HELD THAT:- No substantive ground has been adduced by the appellant in support that there was a bonafide mistake or wrong understanding of the law - there is enough ground for the department to invoke extended period as there has been a deliberate suppression and misstatement of fact. Therefore, the extended period has been rightly invoked. Penalty u/s 11AC and under Rule 25 of Central Excise Rules, 2002 - HELD THAT:- Penalties are sustainable and upheld. Conclusion - i) Substantial additions by a job worker disqualify activities from being considered job work under Notification No. 214/86-CE. ii) The demand for duty and the imposition of penalties upheld. iii) The extended period has been rightly invoked. Appeal dismissed.

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• 2025 (3) TMI 898
  Classification of quilt panel - can be classified under Central Excise Tariff Heading (CETH) 9404 90 19 as quilt or should remain classified under CETH 5811 as quilted textile products ? - invocation of extended period of limitation - HELD THAT:- It is an admitted fact that the the quilt panel manufactured by the Appellant are exclusively used for the manufacture of the final products coir mattress and it is exempted from payment of customs duty. There is no evidence to show the marketability of the quilt panel and it is also admitted fact that the quilt panel manufactured by the Appellant are exclusively used for final product. Thus, considering the decision of this Tribunal in the matter of Collector of Central Excise, Jaipur Vs Meca Quilts Ltd [ 2000 (5) TMI 74 - CEGAT, COURT NO. IV, NEW DELHI] , once the manufacturing is not complete, it cannot be considered as different marketable product, and no demand of duty can be confirmed. Conclusion - i) The intermediate products used exclusively in the manufacture of exempted final products are not excisable if they lack marketability. ii) The extended period of limitation requires evidence of willful suppression or intent to evade duty. Appeal allowed.

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• 2025 (3) TMI 897
  Liability of Central Excise Duty - appellants used aromatic compounds captively within the factory - benefit provided under N/N. 67/95-C.E. dated 01.03.1995 is applicable to the intermediate product - HELD THAT:- The CBEC vide Circular No. 495/61/99-CX.3 dated 22.11.1999 has clarified that manufacturing activity undertaken by the Agarbatti producers are a trade secret and composition contained therein are never disclosed to outside parties. The said Circular dated 22.11.1999 was further clarified by the CBEC vide subsequent Circular No. 989/13/2014 dated 07.11.2014, clarifying that in cases where, on the basis of evidence, it is established that such intermediate compounds are capable of being marketed, the same will be excisable, irrespective of whether the compound is actually marketed or otherwise. In the case in hand, the Department has relied upon certain invoices to demonstrate that the aromatic compound is capable of being bought and sold in the open market for a consideration. However, on perusal of sample copy of the invoices relied upon by the Revenue, we find that chemical composition of aromatic compound was not mentioned in those invoices and also the composition of such intermediate product used by the appellants was also not considered by the Department, in order to conclude that the self-same aromatic compounds used by the appellants for the intended purpose, is marketable. Since the aromatic compound used by other Agarbatti manufacturers and those used by the appellants were not examined by the Department to ascertain the chemical composition and other parameters, the Department s stand in demanding the Central Excise duty on such intermediate goods i.e. aromatic compound cannot be sustained, inasmuch as it cannot be said that such use of aromatic compounds by the appellants captively, are capable of being marketed. Conclusion - i) The aromatic compounds used by the appellants within their factory for manufacturing Agarbatties are not liable for Central Excise duty. ii) The benefit under N/N. 67/95-C.E. is applicable to the aromatic compounds used captively. iii) The aromatic compounds do not qualify as manufacture under Section 2(f) of the Central Excise Act, 1944, for the purpose of excisability. iv) The Department failed to demonstrate the marketability of the aromatic compounds used by the appellants, thus they are not excisable. The impugned order is set aside, and the appeal is allowed in favor of the appellants.

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• CST, VAT & Sales Tax

• 2025 (3) TMI 896
  Time Limitation of proceedings initiated u/s 27 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) - HELD THAT:- For passing an order under Section 27(1)(a) of the TNVAT Act, 2006, the proceedings should have been initiated within a period of six years from the date of assessment. Since the learned Single Judge took 31.10.2013 as the starting point for limitation, it was concluded that proceedings under Section 27(1)(a) of the Act, 2006 should have been initiated prior to 29.10.2019. As the proceedings were initiated only on 22.02.2021, the learned Single Judge held that they were hit by limitation - The starting point for limitation cannot be 31.10.2013 but only 29.01.2016 as rightly contended by the assessing officer. The assessment order impugned in the writ petition was rightly set aside. This is because, the notices preceding the assessment order are delightfully vague. Vagueness is one of the recognized grounds for judicial review. Section 27(1)(a) of the TNVAT Act, 2006 which provides for revision of assessment contemplates issuing show cause notice, giving the dealer a reasonable opportunity and making enquiry. In other words, there has to be due compliance with the principles of natural justice. A show cause notice is like a charge. Unless it is precise, the person called upon to respond cannot defend himself. That is why, vagueness is a ground for interference by the writ court even at the notice stage. It would have been better if the writ petitioner had pointed this out earlier and demanded better particulars from the appellant. But the failure or omission on the part of the assessee cannot be taken advantage by the assessing officer. An order is like a superstructure. The show cause notice is the foundation. If the foundation is weak, the superstructure will fall at the slightest push. Conclusion - i) The proceedings were not time-barred, as the limitation period began from the date of re-assessment. ii) The quashing of the assessment order confirmed due to the vagueness of the notice, allowing the appellant to initiate fresh proceedings with adequate notice. Appeal allowed in part.

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• 2025 (3) TMI 895
  Seeking clarification of notification - Retrospective application of notification dated 31-10-2006, which incorporates the amended provisions of Section 8(5) of the Central Sales Tax Act, 1956 (CST Act) - HELD THAT:- It is not in dispute that pursuant to the notification dated 07-11-1997, the petitioner Company was granted exemption as the petitioner Company is said to have invested more than Rs. 550 crores in Integrated Steel Plant and the benefit of exemption started from 07-11-1997, thereafter on 10- 5-2002, Section 8 (5) of the CST Act was amended making fulfillment of Section 8 (4) of the CST Act (production of C-Form) mandatory for availing the benefit of exemption under Section 8 (5) and pursuant to the notification dated 10-5-2002 making production of C-Form mandatory, the State Government issued notification dated 31-10-2006 in exercise of the powers conferred by Section 15-B 72(i)(b) of the Chhattisgarh VAT Act read with sub-section (5) of Section 8 of the CST Act incorporating the amended provisions of Section 8 (5) of the CST Act by which filing / production of C-Form has been made mandatory for availing the benefit of exemption under Section 8 (5) of the CST Act which the petitioner Company has called in question in the instant writ petitions. Decision of the Bombay High Court in Prism Cement Limited [ 2013 (7) TMI 668 - BOMBAY HIGH COURT] was assailed before the Supreme Court by the State of Maharashtra in Prism Cement Limited s case [ 2025 (2) TMI 475 - SUPREME COURT] in which their Lordships have considered the issue with respect to Section 8 (5) of the CST Act clarifying the legal position and held that such restrictions are prospective in nature and would not apply retrospectively to cases where absolute exemption was permitted much prior to the amendment. Reverting to the facts of the case in light of the aforesaid decision of the Supreme Court, it is quite vivid that the petitioner Company has been granted absolute exemption from the tax liability on fulfillment of certain conditions as per the notification dated 07-11-1997 and as per the decision of the Supreme Court, the amendment made in Section 8 (5) of the CST Act making the production of C-Form mandatory for availing benefit of tax exemption would apply with effect from 10-5-2002 and the amended provision of Section 8 (5) with effect from 10-5-2002 would apply prospectively to the transactions in respect of which Eligibility Certificate are issued subsequently, as held by their Lordships of the Supreme Court. It is made clear that notification dated 31-10-2006 would not apply to the petitioner Company as they had already been exempted with effect from 07-11-1997, as the exemption was available up to 17-04-2013. Conclusion - Notification dated 31-10- 2006, would not apply to the petitioner Company and exemption would be available as per the notification dated 07-11-1997 up to 17-04-2013. The petitioner Company would be entitled for the benefit of exemption without submission of C-Form. Petition allowed.

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• Indian Laws

• 2025 (3) TMI 894
  Jurisdiction of Indian Courts to appoint an arbitral panel under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the conflicting clauses in the Distributor Agreement regarding jurisdiction and arbitration - HELD THAT:- The law governing the arbitration agreement, being Indian law, means that its validity, scope, and interpretation will be determined in accordance with Indian law. But which national courts those in India or Colombia exercise supervisory jurisdiction over the arbitration proceedings? Does the A C Act apply to these arbitration proceedings? Upon a consistent reading of the Distributor Agreement, it is clear that only the courts in Gujarat, India, are referenced. While it is acknowledged that the venue for arbitration is Bogota, Colombia, and that the procedural rules of the Arbitration and Conciliation Centre at the Chambers of Commerce in Bogota are to apply, this does not diminish the supervisory powers of Indian courts, as explicitly outlined in Clause 16.5. The use of the premises at the Centre, or any other location designated by the Director of the Centre in Bogota, does not imply that Colombian law governs the arbitration agreement. Although Clause 18 specifies that the award shall conform to Colombian law, this provision pertains solely to the arbitration proceedings or the award matters. It does not override or diminish the effect of Clause 16.5, which clearly stipulates that Indian law shall govern the agreement and the related disputes. The legal implications of this would include the applicability of the A C Act, and the appointment jurisdiction of Indian courts. We do not interpret the final portion of Clause 18 as undermining the legal impact of Clause 16.5. Therefore, the applicability of the A C Act under Section 11(6) of the Arbitration and Conciliation Act affirmed. In accordance with Clause 16.5 and 18, the procedural rules of the arbitration would be the rules of the Conciliation and Arbitration Centre of the Chamber of Commerce of Bogota DC, with Bogota DC as the venue of arbitration. Conclusion - Indian law governs the arbitration agreement, and Indian courts have jurisdiction to appoint arbitrators under Section 11(6) of the A C Act. The arbitration petition is allowed.

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• 2025 (3) TMI 893
  Dishonour of cheque - cheques were issued under coercion or not - Dismissal of application of the appellant seeking leave to defend the suit - Order XXXVII of CPC - HELD THAT:- So far as drawing of the cheques in question is concerned, there is clear admission on the part of the appellant that the same were drawn by him. As regards the allegation that the cheques were obtained after abducting the appellant and illegally detaining him, admittedly no police complaint was lodged, nor even any notice was issued by the appellant to the respondent or the bank, alleging the issuance of cheques under force. Nothing prevented the appellant from instructing his bank to stop payment of the said cheques on the ground that the same were not issued voluntarily, but that also was not done. That being so, pushing the parties to undergo rigmaroles of trial would be travesty of justice, since there is no triable issue in this regard. As regards the liability argument, the issuance of the cheques in question in itself would raise a presumption of legally enforceable debt. As mentioned above, it is not in dispute that the present respondent paid a total sum of Rs.14,04,000/- to the appellant towards investments. And as regards the cheques in question, admittedly drawn by the appellant were towards repayment of the money invested by the respondent. As mentioned above, there is not even shred of material to show that the said cheques were not voluntarily issued by the appellant. Merely because the appellant opted not to initiate proceedings under Section 138 Negotiable Instruments Act, his right to claim recovery of money through this suit cannot get defeated. Conclusion - The appellant has no substantial defence and raises no genuine triable issues; rather, the defence raised by the appellant is completely frivolous and vexatious. Appeal dismissed.

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• 2025 (3) TMI 892
  Dishonour of Cheque - complainant was unable to prove that there existed any legally enforceable debt in respect of the impugned cheque - HELD THAT:- The entire events as deposed by the Respondent which is fully corroborated by the testimony of DW3-Smt. Gurmeet Kaur, establishes that the missing of the cheque got reported on 05.09.2007. The cheque has been admittedly presented for encashment thereafter, and has been dishonoured on 13.09.2007. It is difficult to believe that this entire event of missing of the cheque and repayment to Smt. Gurmeet Kaur could have been pre- planned by Respondent in connivance with DW3-Smt. Gurmeet Kaur, only to disprove the claim of the Revisionist of having given loan of Rs. 2 lakhs to the Respondent. It is also pertinent to note that Smt. Gurmeet Kaur was an employee with the Complainant, which does not rule out the possibility of he having found the blank signed cheque of Respondent. Therefore, the cheque which got misplaced from Smt. Gurmeet Kaur may have landed in the possession of the Complainant as they both were working in the same office, a defence which cannot be completely discarded. Conclusion - The learned ASJ has thus, rightly concluded that there is no evidence to establish the legally enforceable liability for which the impugned cheque could have been issued by the Respondent. The present Revision Petition is without merit and is hereby, dismissed.

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• 2025 (3) TMI 891
  Entitlement to the decree for the claimed amount with interest - Jurisdiction of District Court, Cuddalore to try the suit. Whether the plaintiff is entitled to a decree for money as prayed for? - HELD THAT:- The defendants have never complained about the breakdown of the machinery at any point of time during the subsistence of the contract. It is also pointed out that there is no plea in the written statement regarding break down or un-utilization or under-utilization of the machinery hired. The defendants in fact claim no knowledge regarding the fact as to whether the machinery was put in use in Nagpur or not. Such an ambiguous and nebulous plea without support of documentary evidence cannot be accepted by the plaintiff. Whether the District Court, Cuddalore had the jurisdiction to try the suit? - HELD THAT:- The offer under Ex.A1 was made from Neyveli and it was accepted, of course from the Head Office of the defendant at Mumbai. The payments were made by the cheques and the cheques were en-cashed at Neyveli. In order to invoke Clause (c) of Sub Section 1 of Section 20 of the Code of Civil Procedure, it is sufficient if the plaintiff is able to demonstrate that at least part of the cause of action arose within the jurisdiction of the Trial Court, the fact that the offer was made from Neyveli and it was accepted without any reservation coupled with the fact that the Cheques were encashed at Neyveli would definitely amount to part of the cause of action arising at Neyveli within the jurisdiction of the Trial Court. Conclusion - Jurisdiction can be established where part of the cause of action arises, and that a valid contract and acknowledgment of liability are sufficient grounds for awarding a decree for unpaid dues. Appeal dismissed.

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