Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 23, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Seeking release of detained goods and vehicle - generation of second E-way bill - The action of the GST officers in seizing the goods in question is evidently an act of harassment to the petitioners, breach of their fundamental rights guaranteed under Article 14 of the Constitution of India and blatant abuse of power by the respondents. - the writ petition is, accordingly, allowed with cost of Rs.50,000/- to each of the petitioners, i.e. total Rs.1,00,000/- which the respondents (GST officers) shall pay the petitioners within four weeks from today. - HC
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Classification of services - Place of supply - export of services or not - the applicant extends vessel related services to their customers when the vessel enters the Indian territory and the service with respect to the said vessel ends when the vessel exits the Indian territory. In other words, the proposed services are rendered in respect of the vessels which are physically available in the Indian Territory and therefore, the proposed services are squarely covered under Section 13(3) - the place of supply of service in the location where the services are actually performed, which is the taxable territory. - AAR
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Review of order - Levy of penalty - grounds for review are that the imposition of penalty by the authorities is not automatic and the same can be imposed only when there is a fraud or willful intention to defraud the revenue - The order under review would clearly indicate that intentional and willful non-disclosure of crucial facts can be inferred from the self-declaration made in the web-portal - there are no grounds to interfere with the order impugned in the review - HC
Income Tax
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Addition u/s 68 - Penny stock purchases - addition on account of Long Term Capital Gains (LTCG) which the assessee derived from sale of scrip - exemption u/s 10(38) denied - there is nothing against the assessee and no inquiry whatsoever has been done by the AO or the Ld CIT (A) - both the lower authorities were not justified in not allowing the appellant’s claim for exemption u/s 10(38) in respect of the profit derived by the appellant - AT
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Reopening of assessment u/s 147 - validity of the notice u/s 148A(b) - By not considering the reply of the Petitioner dated 31st March, 2022, the mandate of Section 148A(c) has been violated as it casts a duty on the Assessing Officer, by using the expression ‘shall’, to consider the reply of the Petitioner/assessee in response to notice under Section 148A(b) before making an order under Section 148A(d) of the Act. - HC
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Revision u/s 263 - contention raised by the assessee was that the proceedings are liable to be stayed since the assessee has been admitted for Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) and presently the assessee is under moratorium by orders of the National Company Law Tribunal (NCLT) - the appeal is allowed. The assessment order is set aside and the matter is restored to the file of the assessing officer and the matter shall be kept in abeyance till the completion of the IRP - HC
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Adopting the commission income at 0.5% - Unexplained bank deposits - assessee could not rebut the fact that the assessee himself has stated of having received commission in cash @ 0.5% out of which 0.3% was paid as bank charges. We find that the CIT(Appeal) on the basis of this statement has adopted the commission income but he has allowed the expenses on the actual basis - statement cannot be used in part. It is to be read as a whole. Therefore, considering the statement of the assessee we hereby direct the Assessing Officer to adopt 0.20% as the net commission income of the assessee. - AT
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TDS (withholding tax) u/s 195 - Disallowance u/s 40(a)(i) - non-deduction of tax at source on payment made towards membership/subscription fee - principle of mutuality- amount paid by a member firm to the umbrella association - the payment made by the assessee to GTIL towards membership and subscription fee is not taxable at the hands of the payee. - No TDS liability - AT
Customs
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Validity of preventive detention order - allegation of smuggling activities - COFEPOSA - The purpose of detention order is a preventive measure and if the detenu is not served or detained at the earliest possible, keeping in view the spirit of Article 22(5) of the Constitution of India, the purpose is defeated. A sense of urgency needs to be exhibited by the respondents, if the preventive detention order is to be justified. The entire exercise for service of detention order appears to have been undertaken in a casual and cavalier manner, which, in our considered view is fatal to the case of the respondents. - HC
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Levy of penalty u/s 112(a) of the Customs Act, 1962 on the Customs Broker - Section 112 ibid. does not contemplate penal action for violations of provisions or regulations under any other law, much less violation under the CBLR; the charge is very specific: the act or omission should result in improper import of goods and consequently, confiscation of such goods, which is not the case of the Revenue here in the case on hand. - No penalty - AT
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Levy of penalty u/s 114(i) of the Customs Act, 1962 on Customs Broker - All the allegations if any, would fall under the Customs Broker Licensing Regulations. No evidence has been adduced to show that the appellant has connived with the exporter in the attempt to export the goods. - The penalty imposed under section 114(i) of the Customs Act, 1962 on the appellants herein cannot sustain and requires to be set aside - AT
Indian Laws
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Interpretation of statute - whether the "sum" awarded under Clause (a) of Sub-section (7) of Section 31 of the Arbitration and Conciliation Act, 1996 would include the interest pendente lite or not? - In view of the specific agreement between the parties, the interest prior to the date of award so also after the date of award will be governed by Article 29.8 of the Concession Agreement, as has been directed by the Arbitral Tribunal - SC
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Offence punishable under Section 63 of the Copyright Act - cognizable offence or not - Only in a case where the offence is punishable for imprisonment for less than three years or with fine only the offence can be said to be noncognizable. - the High Court has committed a grave error in holding that the offence under Section 63 of the Copyright Act is a noncognizable offence. Thereby the High Court has committed a grave error in quashing and setting aside the criminal proceedings and the FIR. - SC
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Dishonor of Cheque - private complaint of cheating after filing a complaint alleging offence punishable u/s 138 of the NI Act - the submission of the learned counsel appearing for the petitioners that the proceeding for offence punishable under Section 420 of the IPC is not maintainable once the complainant invokes Section 138 of the Act is unacceptable. It is a matter of trial for the petitioners to come out clean. - HC
PMLA
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Jurisdiction - power to initiate proceedings as against the Petitioner under the provisions of Prevention of Money Laundering Act - possession of proceeds of crime - It appears that the petitioner wants to prolong the matter one way or the other. After failing to get any relief from the Madras High Court he has approached this Court raising almost same contentions, which are barred by principles of issue of estoppel and cause of action estoppel. - HC
Service Tax
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Validity of SCN - opportunity of pre-show cause notice consultation - As the stand taken by the respondent authorities in the impugned show cause notice dated 31.12.2020 that the petitioner had suppressed material facts, the same would come within the exception as mentioned in Clause 5 (d) of the Circular dated 11.11.2021 and as such it was not mandatory for respondent authorities to have a pre-show cause notice consultation. Another aspect also needs to be looked into, i.e., whether the authority which had issued the Demand-cum-Show Cause Notice dated 31.12.2021 had the authority to do so. The power so exercised by the authority is a statutory power conferred upon the respondent authorities under Section 73 of the Finance Act of 1994 and as such the issuance of the said show cause notice cannot be said to be without jurisdiction. - HC
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Levy of service tax - Scope of negative list - composite engagement to deliver goods outside the country - Place of Provision of Service Rules, 2012 is not a provision for charging of tax; it is limited to determination of location of taxable entity as an adjunct to the charging provision in section 66 B of Finance Act, 1994. The impugned order has not evaluated the impugned activity from that perspective. - Since the basic / foundation activity of transportation of goods is exempt, demand set aside - AT
Central Excise
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Demand of differential duty - Similar Goods - The Chartered Engineer certificate has been brushed aside by the Commissioner (Appeals) stating that it is merely an after-thought. The Commissioner (Appeals) has failed to note that it is an opinion given by an expert and unless there is some evidence to rebut such opinion, the certificate issued by the Chartered Engineer cannot be discarded in toto. - AT
Case Laws:
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GST
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2022 (5) TMI 1022
Seeking release of detained goods and vehicle - generation of second E-way bill - HELD THAT:- It is admitted to the parties that the goods in question originated from Panipat and were being transported with valid invoice from Panipat to Nepal but due to restriction imposed on account of COVID-19 pandemic, as specifically mentioned in paragraphs 14, 16, 17, 27 and 28 of the writ petition, the goods were unloaded at Gorakhpur and after the arrangement of another vehicle was made under prevailing situation of COVID-19 pandemic, the goods were transported to Nepal. Since the time gap was much, therefore, a second e-way bill was generated so that the goods may reach to its destination at Nepal. There is absolutely no dispute that the goods in question were dispatched by the petitioner no.1 from Panipat (Haryana) under valid invoice and valid papers. The goods in question were intercepted and seized by the respondents on hyper-technical ground and assumptions, without there being any allegation of intention to evade payment of tax. The second e-way bill was generated bonafidely and in circumstance beyond control of the petitioners. The averments of the petitioners that generating the second e-way bill was totally bonafide, has also not been denied by the respondents. Since the goods were covered by valid documents, therefore, it could not have been detained or seized and hence the entire proceedings were totally arbitrary, illegal and without jurisdiction. The action of the respondents in seizing the goods in question is evidently an act of harassment to the petitioners, breach of their fundamental rights guaranteed under Article 14 of the Constitution of India and blatant abuse of power by the respondents. The impugned detention order dated 07.03.2022, the release order dated 13.03.2022 and notices dated 22.03.2022 and 28.03.2022, are hereby quashed being totally arbitrary and illegal. The goods and vehicle in question seized by the respondents are directed to be released forthwith - the writ petition is, accordingly, allowed with cost of Rs.50,000/- to each of the petitioners, i.e. total Rs.1,00,000/- which the respondents shall pay the petitioners within four weeks from today.
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2022 (5) TMI 1021
Refund of unutilized balance of input tax credit - nil rate of tax/exempt supply - rejection on ground that levy of Nil Rate of Tax on exported goods, i.e., Iron Ore Fines falling within the fold of Code No.26011142 specified under Second Schedule of the Export Tariff appended to the Customs Tariff Act, 1975 does not qualify for refund of GST paid in view of Clause (i) of Proviso to sub-section (3) of Section 54 of the OGST/CGST Act - Section 54 of the Odisha Goods and Services Tax Act, 2017 - period 1st June, 2019 to 31st October, 2019 - HELD THAT:- The export of Iron Ore Fines even though attracts Nil Rate of Tax, in view of Second Schedule to the Customs Tariff Act, 1975, the Petitioner would be entitled to refund on such export transactions. In view of Section 16 of the IGST Act read with Section 54(3) of the OGST/CGST Act, export of goods or services or both is levied with zero-rate. NIL rate of Tax falls within the ken of the term exempt supply defined under Section 2(47) of the OGST/CGST Act. Reliance can be placed in the case of M/S. B.S. MINERALS VERSUS STATE OF ODISHA AND OTHERS [ 2021 (11) TMI 1013 - ORISSA HIGH COURT ] where it was held that it is clarified that only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54 (3) from availment of refund of accumulated ITC. Goods, which are not subject to any export duty and in respect of which either NIL rate is specified in Second Schedule to the Customs Tariff Act, 1975 or which are fully exempted from payment of export duty by virtue of any customs notification or which are not covered under Second Schedule to the Customs Tariff Act, 1975, would not be covered by the restriction imposed under the first proviso to section 54 (3) of the CGST Act for the purpose of availment of refund of accumulated ITC. T his Court deems it proper to set aside the order dated 13th July, 2021 of the Appellate Authority passed by the Additional Commissioner of State Tax (Appeal), Bhubaneswar and remand the matter to the said Appellate Authority for deciding the appeal afresh - petition allowed by way of remand.
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2022 (5) TMI 1020
Review of order - Levy of penalty - grounds for review are that the imposition of penalty by the authorities is not automatic and the same can be imposed only when there is a fraud or willful intention to defraud the revenue - HELD THAT:- It is clear that the argument that was advanced at the time of hearing of the Writ Petition was with regard to inclusion of VAT regime for the purpose of deciding the tax to be paid under Section 10(1) of GST Act. In the Review Petition, it is now urged that Section 10 encompasses Section 73 and 74 of GST as well and in the absence of any fraud, the authorities erred in invoking Section 74 of the GST Act and imposing 100% penalty. The averments in the affidavit filed in support of the Writ Petition does not anywhere refer to the plea now taken, though such plea was available at the time of filing of the Writ Petition, more so, when it involves only interpretation of the provisions of GST. Without taking such plea, namely, that 100% penalty can be imposed only when there is fraud or willful concealment, in the Review Application such a plea is sought to be raised. It is not as if that such a plea was not available at the time filing of the Writ Petition. The order under review would clearly indicate that intentional and willful non-disclosure of crucial facts can be inferred from the self-declaration made in the web-portal - there are no grounds to interfere with the order impugned in the review - the Review application is dismissed.
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2022 (5) TMI 1019
Classification of services - support services or not - Place of supply - Providing support services for water transport - to be classified under SAC 9985 of Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017 or not - export of services or not - HELD THAT:- The applicants are registered under the Companies Act but not under the GST Act. They have stated that they propose to provide end-to-end services to the shippers located outside the Indian territory with respect to the vessels of such customers, when their vessels calls on the Indian Port. They have stated that the services proposed relates only to the vessel when they call on Indian Ports and not related to the Cargo the vessel carry. The services proposed to be provided by the applicant to their clients are end to end requirements of the vessel when such vessel calls on the Indian Port. This being in the nature of supporting the activities of their clients, the applicant states that the services are covered under 'Supporting Services -others'. On going through the various service description under the Heading 9985, it is found that the services of the applicant, may at best fit under 'SAC 998599- Other support services nowhere else classified' - the services proposed as per the write-up and the pictorial representation above, is Berth hire services for docking the vessels; Lighthouse dues; customs/documentation for the vessel to enter/exit the territorial waters/port; husbandry services; Survey/Launch hire services; Requirement of Crew/fuel for the vessels. Thus, it is seen that the applicant extends vessel related services, supporting the shipper to facilitate the entry/exit of the vessel in the Indian Ports, i.e., the services are more in the nature of support services for transport of vessels' and more aptly will be classifiable under SAC 9967. Thus, the services are support services classifiable under SAC 9967 and the applicable rate is as per SI.No. 1 l(ii) of Notification No. 11 /2017-C.T.(Rate) dated 28.06.2017 as amended. Export of services or not - HELD THAT:- It is seen that the services extended are to enable the vessel reach the port; leave the port and undertaking repairs/ requirements of the vessel 8s crew when such vessel is in the Indian territory. Thus, the entire gamut of services are towards bringing the vessel(goods) to the Port, enabling the vessel(goods) leave the port and undertaking repairs, requirements of the vessel(goods) and therefore, it is seen that the services extended are intrinsically rely on the presence of the Vessel(goods) in the Indian territorial waters/port. In the case at hand, the applicant is extending the 'support services for water transport' which includes services facilitating berthing of the vessel, liaising with jurisdictional authorities and attend to the requirement of the vessel when the vessel is in Indian territory and the service jurisdiction of the applicant rests with the applicant until the vessel exits the Indian waters. Thus, the applicant extends vessel related services to their customers when the vessel enters the Indian territory and the service with respect to the said vessel ends when the vessel exits the Indian territory. In other words, the proposed services are rendered in respect of the vessels which are physically available in the Indian Territory and therefore, the proposed services are squarely covered under Section 13(3) - the place of supply of service in the location where the services are actually performed, which is the taxable territory. Having decided that the 'Place of supply' is the taxable territory wherein the vessels call in, the condition of the place of supply being outside India is not satisfied in the case at hand. Therefore, the proposed supply is not an 'Export of Service'. Accordingly, the proposed supply classifiable under SAC 9967 is taxable to GST @ 18% under Sl.No. 11(ii) of the Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended read with SI.No. 11(ii) of Notification No.II(2)/CTR/532(d-14)/2017 in G.O. Ms.No.72, CT R(B1), dt.29-6-2017 - the claim of the applicant that they are not 'Intermediary' under GST and therefore, their location, i.e., the taxable territory is not the Place of Supply as per Section 13(8) of IGST Act 2017 is not examined as considered Void.
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2022 (5) TMI 974
CENVAT Credit - substance of the dispute relates to the payment by the assessee of the service tax component pertaining to manpower and the like services received by the assessee partly for the quarter ending March 31, 2017 and partly for the quarter ending June 30, 2017 long after the appointed date of July 1, 2017 and claiming cenvat credit therefor - HELD THAT:- In terms of Section 140(1) of the Act of 2017, a qualified registered person is entitled to take the amount of cenvat credit carried forward in the return relating to the period immediately prior to the appointed date as furnished by such person under the existing law. In other words, the essence of Section 140(1) of the Act of 2017 is that if a matter is reflected in the return for the relevant period, due credit therefor may be taken as long as the return has been filed in accordance with the existing law and in the manner prescribed thereby. In this case, the return pertaining to the quarter immediately preceding the appointed date was filed on October 24, 2017, a day after the service tax component pertaining to the payment was tendered by the assessee, together with a GST TRAN-1 form duly filled up. Since it is evident that the service tax return relating to the quarter ended June 30, 2017, immediately preceding the appointed date, was filed in accordance with the existing law and there is no dispute that it has been filed in the prescribed form since the Revenue has acted thereon, it is now necessary to see the impact of such service return filed in October, 2017 qua the entitlement of the assessee to obtain cenvat credit for the service tax component - it is Section 140(1) of the Act of 2017 which is the only guiding light. As noticed earlier, the relevant provision pertains to the cenvat credit carried forward in the relevant return. Cenvat credit is qualified in the amended provision by the additional words incorporated therein of eligible duties and further qualified by Rule 117 of the Rules of 2017 that refers to eligible duties and taxes . A fortiori, if the relevant return of an assessee irrespective of whether it was filed before the appointed date or not was furnished in accordance with the existing law and in the prescribed manner, the cenvat credit on account of service tax reflected therein could be availed of in terms of Section 140(1) of the Act of 2017. The Revenue s limited challenge to the appellate order of January 8, 2021 pertaining to cenvat credit claimed by the respondent assessee to the extent of Rs.2,18,75,232/- fails and the appellate order in such regard is found to be unexceptionable - Petition dismissed.
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2022 (5) TMI 973
Profiteering - purchase of flats - benefit of reduction in the rate of GST not passed on - contravention of section 171 of CGST Act - penalty - HELD THAT:- The authority finds that the respondent has profiteered by an amount of Rs. 7,23,50,135/-, Rs. 12,94,35,170/- and Rs. 4,91,23,070/- for the projects 'The Camellias','The ultima' respectively during the period of investigation i.e., 01.07.2017 to 30.11.2020. The above amount that has been profiteered by the respondent from his home buyer, in all the three projects shall be refunded by him, alongwith interest @18% thereon, from the date when the above amount was profiteered by him till the date of such payment, in line with the provisions of Rule 133(3)(b) of CGST Rules 2017. It is also evident from the narration of facts that the respondent has denied benefit of ITC to the buyers of the flats and the shops being constructed by him in his projects in contravention of section 171 (1) of CGST Act, 2017 and has committed an offence under section 171(3A) of the Act. That section 171 (3A) of the CGST Act, has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was 01.07.2017 to 30.11.2020, therefore, he is liable for imposition of penalty under the above section. Application disposed off.
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Income Tax
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2022 (5) TMI 1018
Addition on differential stock - Whether ITAT was right in law in confirming the addition on account of fittings which has been sold along with the pipes, the value of which has been included in the closing stock of finished goods? - HELD THAT:- Court does not wish to examine this Question any further. The Court has examined the concurrent findings of the AO, CIT(A) and the ITAT in this regard and is of the view that they do not call for interference. Unexplained/non-existent creditors - HELD THAT:- As the Court is satisfied that sufficient opportunity was granted to the Appellant to furnish the evidence to prove the genuineness of such credit balance and the Appellant was unable to avail of such opportunity. Consequently, on Questions (ii) and (iii), this Court answers the Questions in the affirmative i.e. in favour of the Department and against the Assessee. Addition of inflated credit balance of RIL - HELD THAT:- This Question is answered in the negative and relying on the decisions of the Courts, the question of addition is remanded to the CIT(A) for examining it afresh in light of the evidence produced by the Assessee, which was not examined earlier. For this purpose, the matter would be listed before the CIT(A) on 18th July, 2022. It will be open to the CIT(A) to seek a fresh remand report from the AO and in particular, after issuing notice under Section 131 of the Act to KME to ask for its books of account for the relevant period.
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2022 (5) TMI 1017
Adjustment of refund against the outstanding demand - HELD THAT:- Issues involved in this writ petition are covered by an order of this court in Ultra Tech Nathdwara Cement Limited v. Union of India Ors [ 2021 (7) TMI 1342 - CALCUTTA HIGH COURT] and also in the case of Murli Industries Limited [ 2021 (12) TMI 1182 - BOMBAY HIGH COURT] and in the case of The Sirpur Paper Mills Limited Anr. v. Union of India Ors. [ 2022 (1) TMI 977 - TELANGANA, HIGH COURT] is disposed of by directing the respondent concerned to refund the sum of Rs.4,311,640/- subject to factual verification along with statutory interest to be calculated from the date of adjustment dated December 18, 2021 till the date of refund, within eight weeks from the date of communication of this order.
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2022 (5) TMI 1016
Reopening of assessment u/s 147 - validity of the notice u/s 148A(b) on the ground that there was no information that suggested that income had escaped assessment - HELD THAT:- In the present case, this Court finds that the impugned notice dated 17th March, 2022 as well as the order dated 4th April, 2022 are cryptic as is evident from the fact that information culled out from Petitioner s own return and records (namely Form 10DB, GST return, Form 26AS) have been used to issue notice u/s 148A(b) of the Act without mentioning as to what is wrong in these transactions, what are the apprehensions of the Assessing Officer and what are the points on which clarification is required. It is not understood as to how expenditure incurred by the Petitioner on salaries, payment of professional fees and purchases can amount to income having escaped assessment without there being any allegation that the employees/professionals to whom salaries and fees had been paid are dummies or fictitious entities. Perusal of the impugned notice suggests that reassessment in the present case was sought to be initiated merely for verification. This Court is of the view that even if the re-assessment was being done for verification in accordance with Explanation 1 to Section 148, nothing prevented the Assessing Officer from conducting an enquiry with respect to the said information in accordance with Section 148A(a) of the Act. In any event, it was all the more necessary in the present case for the Assessing Officer to thoroughly scrutinise the contentions and submissions advanced by the petitioner-assessee before passing an order under Section 148A(d) of the Act. Denial of effective opportunity to file a reply - This Court further finds that the information/material stated in the impugned show cause notice dated 17th March, 2022 issued under Section 148A(b) of the Act have not been shared with the Petitioner, despite specific request made by the Petitioner vide letter dated 24th March, 2022, thereby denying the Petitioner an effective opportunity to file a response/reply. The non-sharing of the information is violative of the rationale behind the judgment of this Court in Sabh Infrastructure Ltd [ 2017 (9) TMI 1589 - DELHI HIGH COURT] Reasonable time to file a reply - It is pertinent to mention that Section 148A(b) permits the Assessing Officer to suo moto provide up to thirty days period to an assessee to respond to the show cause notice issued under Section 148A(b), which period may in fact be further extended upon an application made by the Assessee in this behalf, and such period given to the assessee is excluded in computing the period of limitation for issuance of notice under Section 148 of the Act in terms of the third proviso to Section 149 of the Act. Order passed without considering detailed reply file by petitioner - Order u/s 148A(d) of the Act had been passed on 04th April, 2022 i.e. after receipt of the detailed reply by the Petitioner dated 31st March, 2022, the Assessing Officer should have considered the same as it was available on record. By not considering the reply of the Petitioner dated 31st March, 2022, the mandate of Section 148A(c) has been violated as it casts a duty on the Assessing Officer, by using the expression shall , to consider the reply of the Petitioner/assessee in response to notice under Section 148A(b) before making an order under Section 148A(d) of the Act. In fact, this Court in Fena Pvt. Ltd. [ 2022 (5) TMI 892 - DELHI HIGH COURT] had quashed the order passed under Section 148A(d) of the Act in similar circumstances i.e. where Assessing Officer had not taken into consideration the replies along with the documents/evidences filed by the assessee before passing the order under Section 148A(d). Significance of issuance of a show cause notice at a stage prior to issuance of a reassessment notice under Section 148 - This Court is of the opinion that significance of issuance of a show cause notice at a stage prior to issuance of a reassessment notice under Section 148 of the Act has been lost on the Respondents. This Court takes judicial notice that in a majority of reassessment cases post 1st April, 2021, the orders under Section 148A(d) of the Act use a template / general reason to reject the defence of the assessee on merits, namely, found devoid of any merit because the assessee company has failed to produce the relevant documents in respect of transactions mentioned in show cause notice it is established that the assessee has no proper explanation Consequently, this Court is of the opinion that a progressive as well as futuristic scheme of re-assessment whose intent is laudatory has in its implementation not only been rendered nugatory but has also had an unintended opposite result. Thus the impugned order dated 04th April, 2022 issued under Section 148A(d) of the Act and the notice dated 04th April, 2022 issued under Section 148 of the Act are quashed and the matter is remanded back to the Assessing Officer for a fresh determination. The Assessing Officer is directed to pass a fresh reasoned order under Section 148A(d) of the Act after considering the Petitioner s detailed reply.
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2022 (5) TMI 1015
Revision u/s 263 - contention raised by the assessee was that the proceedings are liable to be stayed since the assessee has been admitted for Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) and presently the assessee is under moratorium by orders of the National Company Law Tribunal (NCLT) - HELD THAT:- Firstly, AO after receipt of the reply dated 26th March, 2022 did not hear the assessee on the issue relating to the effect of IBC. The so called hearing by way of exchange of chat messages cannot satisfy the test of fairness or the test embodied in the principles of fair play. That apart AO was so adamant and he even failed to take note of the order passed by the PCIT-II, who had acceded to similar request made on behalf of the assessee for a later assessment year which was pending on the file of the PCIT-II u/s 263 - we are of the considered view that the observations made against Advocate appearing for the appellant/assessee were not required in the facts and circumstances of this case. While on this issue we take note of the decision of the High Court of Judicature of Madras in the case of Director General of Income Tax (INV.) and Others vs. T. S. Kumaraswamy, Proprietor, Christy Friedgram Industry and Others [ 2019 (5) TMI 194 - MADRAS HIGH COURT] . The said appeal filed by the Income Tax Department was directed against certain adverse remarks made against the officer of the Income Tax Department and their senior standing counsel. The first objection which was raised was by the writ petitioner/assessee that he should be heard in the matter. This was rejected by the following decisions of the Hon ble Supreme Court as the writ petitioner/assessee was not concerned with the subject in issue and, therefore, no notice was required to be issued to the assessee. The next aspect of the matter is whether the observations/remarks made by the learned Single Judge against the officer of the Department and the senior standing Counsel are required to be expunged or not. The court noted the decision in Manish Dixit v. State of Rajasthan [ 2000 (10) TMI 970 - SUPREME COURT] wherein the Supreme Court pointed out and cautioned that before any ex parte remark is made by the Court against any person, particularly, when such remarks could eschew serious consequences on the future career of the person, he should be given an opportunity of being heard in the matter in respect of the proposed remarks or strictures otherwise the adverse remark would be in violation of the principals of natural justice. On similar grounds the adverse remarks were quashed in the case of State of Gujarat Vs. K.V. Joseph [ 2000 (11) TMI 1253 - SUPREME COURT] Testa Setalvad v. State of Gujarat [ 2004 (4) TMI 640 - SUPREME COURT] and also in Samya Sett v. Shambu Sarkar [ 2005 (8) TMI 741 - SUPREME COURT] In the result, the appeal is allowed. The assessment order is set aside and the matter is restored to the file of the assessing officer and the matter shall be kept in abeyance till the completion of the insolvency resolution proceedings.
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2022 (5) TMI 1014
Validity of assessment order passed u/s 253 - Draft Assessment Order on two issues i.e., the arm s length and the Rate - Assessing Officer had opined that the petitioners would be liable to pay capital gains tax at the rate of 20% instead of 10% - DRP has examined the first ground viz. the arm s length and has issued certain directions which has resulted in the Assessment orders that are impugned in the respective appeals as aforesaid, the DRP has not examined the second ground on the question of its jurisdiction - HELD THAT:- This Court, in the peculiar circumstances of the case, and the fact that the Department does not dispute that the question of the Rate could also be gone into in the pending appeals, is of the considered view that there should be no impediment to the appellate Tribunal to consider the petitioners grounds even as regards the Rate. Therefore, the petitions must be disposed of with liberty to the petitioners to prosecute their appeals even as regards the Rate.
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2022 (5) TMI 1013
Penalty passed u/s. 271(1 )(c) - defective notice - Non specification of clear charge - HELD THAT:- There is no dispute with regard to the fact that the notice issued u/s 271(1)(c) of the Act does not specify the specific charge. See M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] - Decided in favour of assessee.
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2022 (5) TMI 1012
Deduction u/s.80-IA on its income derived out of its captive power plant denied - as per assessee independent new industrial undertaking at substantial capital outlay, producing power for consumption in its industrial undertaking entitled for deduction u/s 10B is setup and is approved under various sanctions and permissions - Assessee submitted that the issue relating to the entitlement of deduction u/s 80IA(4) in relation to the subsequent years may be kept open and for the Assessment Year under consideration, since the assessee otherwise is entitled to exemption u/s 10B of the Act, therefore, the issue relating to entitlement of the assessee of deduction u/s 80IA(4) will not have any tax implication for this relevant year HELD THAT:- Admission/comment of the assessee should not have any bearing regarding the issue of eligibility of the assessee of claiming deduction u/s 80IA(4) in respect of the said power captive unit in relation to subsequent years, wherein the assessee may be affected by some tax implications. In view of above submissions, for the assessment year under consideration without adjudicating upon the issue of the eligibility of the assessee for claiming deduction u/s 80IA(4) on the power captive unit, the appeal is disposed off with the direction to the Assessing Officer to compute the eligible profits of the assessee by taking the entire unit as single unit including power captive unit and determine eligible profits of the assessee for exemption u/s 10B - At the sake of repetition, it is again reiterated that our directions given above will not have any bearing on the issue of entitlement of the assessee for deduction u/s 80IA(4) in any of the previous or subsequent years. In view of this, the appeal of the assessee is treated as partly allowed.
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2022 (5) TMI 1011
Validity of reopening of the assessment - Unexplained bank deposits - HELD THAT:- As perused the material on record and gone through the orders of authorities below. There is no dispute with regard to the fact that there were deposits in the bank account of the assessee. The assessee had not offered the amount of commission. Considering the facts of the present case, there is no infirmity in reopening of the assessment of the assessee. Ground nos. 1 2 of the assessee s appeal are dismissed. Adopting the commission income at 0.5% and the direction to this effect issued by CIT(Appeals) to the assessing authority - HELD THAT:- It is clear that the basis of adopting 0.5% as the commission income was on the basis of the statement of the assessee himself. However, this statement was not brought to the notice of the Division Bench of this Tribunal - assessee could not rebut the fact that the assessee himself has stated of having received commission in cash @ 0.5% out of which 0.3% was paid as bank charges. We find that the CIT(Appeal) on the basis of this statement has adopted the commission income but he has allowed the expenses on the actual basis - statement cannot be used in part. It is to be read as a whole. Therefore, considering the statement of the assessee we hereby direct the Assessing Officer to adopt 0.20% as the net commission income of the assessee.
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2022 (5) TMI 1010
Unexplained cash deposits in the bank account of the appellant and brought to tax u/s 69A - onus to believe - HELD THAT:- Despite the fact that Sh.Kartar Singh was present before the ld.CIT(A) he was denied to record his statement in support of the claim of the assessee that Sh. Kartar Singh gave him cash against purchase of car owned by the assessee. It is also not in dispute that in the block of assets the assessee has shown a car Ford Fiesta with Regn. No.HR51AC0551 and written down value of such car as on 01.04.2009. These facts have remained uncontroverted as the assessee claimed depreciation on the car and the same was allowed by the AO. On the basis of the foregoing discussion, reach to a logical conclusion that the assessee submitted all possible evidence under his command to explain the source of cash deposit in his bank account as the amount received by the assessee against sale of car is much higher than the impugned amount - AO as well as the CIT(A) without allowing recording of statement of Shri Kartar Singh and without considering the aforementioned and other evidence submitted by the assessee in this regard have proceeded to make and confirm addition in the hands of the assessee which is not justified and reasonable and a right approach of tax officers. Therefore, we are compelled to hold that the addition made by the AO and confirmed by the CIT(A) has no legs to stand on the sound principles of tax jurisprudence. Therefore, we direct the AO to delete the same. Grounds No.2 to 2.4 of the assessee is allowed. Addition on Lumpsum basis representing unexplained expenditure incurred on foreign travel - whether assessee has successfully demonstrated the source of such expenditure? - HELD THAT:- Onus lie on the shoulders of the person or entity who made the foreign visit. In the present case, in reply to the show cause notice issued by the AO, the assessee explained that the expenses incurred towards his foreign travel to Dubai was incurred by his friend, but, no evidence, confirmation or documentary evidence was submitted before the authorities below to substantiate that the expenditure was incurred by the friend of the assessee. Even during the first appellate proceedings, the name of the friend was stated as Shri Munish Uppal but no supporting evidence in the form of confirmation, affidavit and purpose was explained. Therefore, the authorities below were right in making the addition in the hands of the assessee in this regard. Therefore, the addition made by the AO and confirmed by the CIT(A) towards unexplained expenditure on foreign travel to Dubai is correct and sustainable. Accordingly, ground No.3 of the assessee is dismissed.
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2022 (5) TMI 1009
Addition u/s 68 - transaction was accommodation entry arrangement - bogus long term capital gain on the sale of shares - HELD THAT:- As assessee has not furnished any material suggesting that the transaction in question was genuinely in normal course and was not accommodation entry arrangement as held by the authorities below. In the absence of any supporting evidence regarding claim of the assessee we see no reason to interfere with the finding of the learned CIT(Appeals) and the same is hereby upheld. - Decided against assessee.
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2022 (5) TMI 1008
Scope of scrutiny selected for limited scrutiny - exercise of jurisdiction by the Ld. AO in expanding the scope of scrutiny - Deduction u/s 54F denied - whether AO has fallen in error in passing the assessment order beyond the scope of scrutiny - as submitted reason for selection of the case of assessee under limited scrutiny was first High increase in Annual Letting Value of House Property and second Large deduction claimed u/s 54B, 54C, 54D, 54G, 54GA but the addition was made declining benefit of section 54 - HELD THAT:- Appreciating the matter on record it can be observed that the case of assessee was selected for limited scrutiny but the Ld. Assessing officer has not discussed a word about the original reasons for selection of the case under limited scrutiny and straightway proceeded to examine the disallowance on account of exemption claimed as per the provisions u/s 54 of the Act. The ld. AO made a detailed inquiry into the claim and also discussed the plea in alternative of the assessee for allowing the benefit u/s 54F of the Act. Settled proposition of law is that the Assessing officer can widen the scope of scrutiny even when the case was selected for limited scrutiny. However, the condition precedent for such widening of the scope is that the Assessing Officer has to seek prior approval of the PCIT. Reliance in this regard can be placed on the judgment of the Co-ordinate Bench [ 2020 (4) TMI 531 - ITAT DELHI] where after referring to various instructions of CBDT. aforesaid proposition of law was upheld. There is irregular exercise of jurisdiction by the Ld. AO in expanding the scope scrutiny. Ld. CIT(A) has fallen in error in dismissing this ground against the assessee by a sweeping observation that there was no prejudice to the assessee and it was a procedural or administrative matter. Consequentially, the ground no 1 and 2 of Cross Objection filed by assessee, going to the root of jurisdiction of the assessment order are allowed. Even on merits, Ld. DR has questioned the findings of Ld CIT(A) of allowing claim of assessee on basis that it failed to consider the detailed enquiry of Ld. AO but the Bench is of considered opinion that the ld. CIT(A) after taking into consideration, the entire facts of the case viz., date of purchase, date of sale, date of investment in capital gain scheme held that the assessee is eligible for claim u/s 54F of the Income Tax Act, 1961. Notwithstanding anything, the amount once invested in the capital gain scheme cannot be brought to tax in the year of investment itself without considering the utilization within the period allowed under the said scheme. - Decided against revenue.
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2022 (5) TMI 1007
Disallowance of cost of construction - addition for the reason that the assessee was not sure of constructing his own house and hence a sum would not have been available for investment in the construction of the new house - CIT(A) noted that the construction of house involves cash purchases from many people most of whom are in unorganized sector and would not like to appear before authorities - HELD THAT:- As no clarity whether the withdrawals were utilized for construction of building and accordingly, AO was directed to verify the said facts. Pursuant to these directions, the assessee filed confirmation letters wherein it transpired that the money was paid only to close relatives. AO issued summons to the payees, however, none appeared except one who denied having issued any such confirmation. In one case, tiles were found to be purchased even before purchase of land on which the building was to be constructed. Various other discrepancies were also noted in the confirmations. Finally, it was concluded by AO that the confirmations were fabricated and not supported by any material evidences - CIT(A), in our considered opinion, clinched the issue in correct perspective and held that the construction of house involves cash purchases from many people most of whom are in organized sector and would not like to appear before authorities. However, the disallowance of 30%, in our opinion, is on the higher side. Considering the given factual matrix, wee direct Ld. AO to restrict the same to the extent of 10% instead of 30% as estimated by Ld. CIT(A). Appeal partly allowed.
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2022 (5) TMI 1006
Late fees u/s. 234E - Scope of enabling clause (c) was inserted in the section 200A w.e.f. 01.06.2015 - whether late filing fee u/s. 234E of the Act has rightly been charged in the intimation issued u/s. 200A/206CB of the Act while processing the TDS returns/statements as the enabling clause (c) having been inserted in the section w.e.f. 01.06.2015 - HELD THAT:- We understand that earlier, there was no enabling provision in the Act u/s. 200A for raising demand in respect of levy of fee u/s. 234E. As such, as per the assessee, in respect of TDS statement filed for a period up to 31.03.2015, no late fee could be levied in the intimation issued u/s. 200A of the Act. On similar facts, the same issue has been adjudicated in the case of SHRI BHASKAR ROY [ 2021 (12) TMI 784 - ITAT KOLKATA ] respectfully following 'Shri Fatehraj Singhvi and Ors' [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT] accept the grievance of the assessee as genuine. Accordingly, the orders of the CIT(A) are reversed and the fee so levied under section 234E of the Act is cancelled. Appeal of assessee allowed.
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2022 (5) TMI 1005
Bogus LTCG - Addition u/s 68 - addition of amount received by the appellant as share capital from various shareholders - HELD THAT:- It is established principle of law that the pre-requisites of section 68 of the Act, the onus is on the assessee to prima-facie establish the three ingredients for the purposes of the section. Before us also, the ld. AR could not prove the merits of the case. He only relied on the submissions made before the CIT(A) in the first round of appeal where his case was allowed. But that becomes irrelevant now since the order of the ld. CIT(A) in the first round has already been overturned by the Tribunal. Even the case laws placed on record by the ld. AR are substantially different on facts and are not applicable to the facts and circumstances in respect of the present assessee. Admittedly, the assessee has not been able to prove the identity nor the assessee was able to prove the credit worthiness nor the genuineness of the transaction. Therefore, the prima-facie onus of the provisions of the Act has not been discharged by the assessee. We find the Hon ble Supreme Court in the case of P. R.Ganpathy [ 2012 (9) TMI 482 - SUPREME COURT] has observed that the burden to show that the amount received by purported gifts from the donors was a gift in the legal sense is upon the assessee. Also in the case of Roshan Di. Hatti Vs. CIT [ 1977 (3) TMI 3 - SUPREME COURT] has held that the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. Where the nature and source of a receipt, whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that income is from any particular source. - Decided against assessee.
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2022 (5) TMI 1004
Deduction under section 80HHC - Whether provision written back is eligible for deduction under section 80HHC? - HELD THAT:- We note that in the case of Class India Ltd. vs ACIT, [ 2008 (2) TMI 451 - ITAT DELHI-A ] held that provision written back should not be excluded from profits, therefore these are eligible for deduction under section 80HHC. Respectfully following the binding judgment of Hon'ble Jurisdictional High Court of Gujarat in the case of Mistu Ltd.[ 2010 (6) TMI 668 - GUJARAT HIGH COURT] we direct the Assessing Officer to treat these provisions written back as a part of manufacturing profit eligible for deduction under section 80HHC of the Act. Therefore, second issue mentioned in the miscellaneous application is allowed in favour of assessee.
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2022 (5) TMI 1003
Penalty u/s.271(1)(c) - defective notice u/s 274 - non specification of clear charge -failure to frame specific charge against the assessee during penalty proceedings - As argued appellant has neither furnished inaccurate particulars of income nor has concealed the particulars of income warranting levy of penalty - addition u/s 68 - HELD THAT:- As relying on MANJUNATHA COTTON AND GINNING FACTORY, MANJUNATH GINNING AND PRESSING, VEERABHADRAPPA SANGAPPA AND CO., V.S. LAD AND SONS, G.M. EXPORT [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] , M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] and MR. MOHD. FARHAN A. SHAIKH [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] since no specific charge was framed either in the show-cause notice or in the body of penalty order and there was failure on the part of Ld. AO to frame specific charge against the assessee, the penalty would not be sustainable in the eyes of law. By deleting the impugned penalty, we allow the appeal.
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2022 (5) TMI 1002
TDS u/s 195 - Disallowance u/s 40(a)(i) - non-deduction of tax at source on payment made towards membership/subscription fee - principle of mutuality- amount paid by a member firm to the umbrella association - nature of membership and subscription fee paid to GTIL and whether such payment required withholding of tax at source under section 195 - whether the payment made by the assessee to GTIL falls within the definition of royalty either under the India- UK DTAA or domestic law? - HELD THAT:- As irrespective of the fact whether use of trade mark/brand name is mandatory or voluntary, the nature and character of payment made has to be determined by looking at the terms of the agreement under which payment was made. A reading of the Member Firms Agreement as a whole does not indicate that the payment made was for use of brand name. Member Firms Agreement read as whole would demonstrate that the umbrella association, GTIL, was formed for the benefit of its members. Therefore, the relationship between GTIL and its members would be governed by the principle of mutuality. While dealing with, more or less, identical issue concerning payment of membership fee by KPMG to an international association/umbrella association, viz, KPMG International, the Coordinate Bench in case of DCIT Vs. KPMG [ 2017 (4) TMI 869 - ITAT MUMBAI] has held that the amount paid by a member firm to the umbrella association would fall within the ambit of principle of mutuality, hence, would not be taxable. Therefore, the Bench held that there was no obligation on the assessee to deduct tax at source. In our view, the ratio laid down by the Coordinate Bench in case of DCIT Vs. KPMG (supra) will also apply to the facts of the present appeal. In a recent decision rendered in case of DCIT vs. M/s. Deloitte Touche Tohmastu, [ 2022 (5) TMI 896 - ITAT DELHI] , the Coordinate Bench has reiterated the view expressed in case of DCIT Vs. KPMG. Thus, the issue in dispute, in a way, is covered by the aforesaid decisions of the Tribunal. Thus we hold that the payment made by the assessee to GTIL towards membership and subscription fee is not taxable at the hands of the payee. That being the case, the assessee was not required to withhold tax at source in terms with section 195 of the Act. In view of the aforesaid, we delete the addition. This ground is allowed. Addition u/s 40(a)(ia) with 195 - whether the assessee was required to withhold tax under section 195 of the Act on the payment made to GT UK LLP.? - HELD THAT:- In the facts of the present case, an Indian company had engaged a group entity of the assessee in India to render certain professional services which required to be performed in UK. Instead of deploying its employees to travel to UK to do the work, GT Firm engaged another group entity GT UK LLP to do the work on its behalf. GT UK LLP instead of raising the invoice for the services rendered on GT Firm raised it on the assessee. Whereas, GT Firm reimbursed the expenses incurred by the assessee on actual basis after deduction of tax at source. Obviously, the departmental authorities have treated the payment made by the assessee to GT UK LLP as FTS under section 9(1)(vii) of the Act. However, the departmental authorities have not at all examined, whether it can be regarded as FTS under Article 13(4) of the Tax Treaty. The payment made cannot be regarded as FTS under Article 13(4) of the Tax Treaty. The only other provision under which it can fall is Article 15 of the Tax Treaty which speaks of independent personal services. However, the payment cannot also fit into Article 15 as neither the services were rendered in India or any employees of the payee came to India to render such services. Even, there is no material on record to suggest that the payee has rendered such services from any fixed base in India. Thus, the payment made cannot even come under Article 15. In any case of the matter, the amount in dispute has been subjected to TDS in India, though, may not be at the hands of the payee but certainly at the hands of the assessee. That being the factual position, in our view, the assessee was not obliged to deduct tax at source under section 195 of the Act while remitting the amount to GT UK LLP. Accordingly, the disallowance is deleted. Ground is allowed.
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2022 (5) TMI 1001
TP Adjustment - MAM - Internal Resale Price Method (RPM) as the most appropriate method for benchmarking the 'Trading segment - HELD THAT:- Assessee purchased and sold the same goods without increasing or reducing their inherent value, clearly the most appropriate method for determining the ALP in such a situation is the RPM. In case Pr.CIT vs. Matrix Cellular International Services Pvt. Ltd. [ 2017 (11) TMI 1655 - DELHI HIGH COURT] has held that where the goods are re-sold without making any value addition, the RPM is the most appropriate method. The contention of the ld. DR that more employee cost was booked in the Trading segment or that there was something amiss in the computation of the ALP under the RPM are irrelevant considerations. The ground before the Bench is against the selection of the most appropriate method and not the manner of its application. As the assessee sold the goods as such without tinkering with its inherent value, we countenance the view taken by the ld. CIT(A) in approving the application of the Internal RPM as most appropriate method against the TNMM applied by the TPO. This ground fails. Comparable selection for Manufacturing Segment - HELD THAT:- It is evident that the only reason for the exclusion of this company by the TPO is the losses incurred by it in the year under consideration. In CIT vs. Welspun Zucchi Textiles Ltd. [ 2017 (1) TMI 1037 - BOMBAY HIGH COURT] has held that loss made in one year would not ipso facto result in exclusion of a company from comparability analysis. In an earlier decision in CIT Vs. Goldman Sachs (India) Securities (P) Ltd [ 2016 (4) TMI 1136 - BOMBAY HIGH COURT] has held that only persistent loss making companies can be excluded from the list of comparability. Since Electronica Machine Tools Ltd. admittedly incurred loss only in the year under consideration and was into profits in the earlier years, it ceased to be persistent loss making company. We are thus satisfied that the ld. CIT(A) was justified in including this company in the list of comparables. This ground fails. Direction of the ld. CIT(A) to allow adjustment on account of higher Customs duty paid by the assessee - assessee submitted before the TPO that it had made 100% import of raw materials and components in comparison with comparables importing at 25.20% - HELD THAT:- It is not a case of payment of Customs duty by the assessee at a higher rate vis-a-vis comparables. It is just fundamental that if a person uses better quality raw materials, obviously, the corresponding sale price also goes up and vice-versa. Given the fact that the assessee imported more raw materials for manufacturing, it is but natural that the corresponding sale price would also have been on higher side, thereby nullifying the effect of higher payment of Customs duty, forming a part of the Operating cost base on the overall basis. The situation would have been different if the assessee had paid Customs duty at a rate higher than that paid by its comparables, which would have called for adjustment to have a level playing. Instantly, we are confronted with a case in which the assessee is claiming exclusion of extra custom duty on the strength of its higher quantum and not the higher rate of Customs duty. In that view of the matter, we are satisfied that the ld. CIT(A) was not justified in reducing the operating cost base of the assessee in the Manufacturing segment by higher Customs duty paid by the assessee. This ground is allowed. Treatment of Project expenses as operating, which were claimed as deductible in the computation of total income - assessee claimed that unallocated project expenses (consisting of travelling expenses, legal professional charges and other expenses) were non-operating and hence required exclusion from the operating cost base - TPO rejected the contention and considered the same as operating cost - HELD THAT:- It is seen from the nature of expenses that they are otherwise of the revenue nature as they cater to travelling, legal professional and other small heads. The assessee admittedly claimed deduction for such amount in the computation of total income, which has not been denied. A case has been set up that such expenditure related to the setting up phase of the manufacturing unit and hence, should be considered as non-operating. We are unable to countenance this contention for the reason that the Manufacturing unit was already in existence, which fact is borne out from the assessee s Profit loss account for this year, which shows the figure of `Revenue from operations in the preceding year at Rs.7.75 crore as against Rs.7.99 crore for the year. This manifests that the unit was already set up in an earlier year and was in operation even in the preceding year much less the year under consideration. This appears to be the reason for the assessee claiming deduction for such expenses in its Profit loss account and not capitalizing the same. But for that, there is no dispute that the expenses are otherwise of the operating nature. We, therefore, uphold the view taken by the ld. CIT(A) in treating Rs.1.12 crore as operating cost and including it in operating cost base. This is not allowed. Non-adjudication by the ld. CIT(A) of the exclusion of consultancy charges from the total AE cost while computing the proportionate adjustment - HELD THAT:- We have given directions hereinabove concerning the ALP of the Manufacturing segment, which would require a re-do of the exercise, the AO / TPO will examine this claim of assessee also in such fresh proceedings. Needless to say, the assessee will be given reasonable opportunity of hearing.
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2022 (5) TMI 1000
Addition u/s 68 - Penny stock purchases - addition on account of Long Term Capital Gains (LTCG) which the assessee derived from sale of scrip - exemption u/s 10(38) denied - HELD THAT:- D.R. except relying heavily on the orders of the lower authorities could not bring to our attention any material to show that the documents placed before us were sham, bogus or there was any factual infirmity therein. The Ld. D.R. also could not controvert the Ld. A.R s submissions that the disallowance was made solely on the basis of the report of the Investigation Wing in the shares of M/s GCM. D.R. could not bring to our attention any material or evidence from which one could infer that the transactions in shares of M/s GCM Securities Limited were either manipulated or sham or that any enquiry was conducted either by the Investigation Wing or by the AO in respect of assessee s transactions in shares of M/s GCM Securities Limited. We may gainfully refer to the decision in the case of CIT Vs Odeon Builders Pvt Ltd [ 2014 (9) TMI 100 - ITAT DELHI] wherein the Hon ble Court upheld the deletion of the disallowance in this case is based on third party information gathered by the Investigation Wing of the Department, which have not been independently subjected to further verification by the AO. In the present case we find that the entire addition is on the basis of some investigation report, the relevant portions of which is also not cited in the show cause or the assessment order, there is nothing against the assessee and no inquiry whatsoever has been done by the AO or the Ld CIT (A). In such circumstances the assessee having discharged her onus and nothing adverse being found against her, the addition cannot be sustained. We hold that both the lower authorities were not justified in not allowing the appellant s claim for exemption u/s 10(38) in respect of the profit derived by the appellant on sale of 120,000 shares of M/s GCM Securities Limited. We accordingly set aside the order of Ld. CIT(A) and direct the AO not to treat the long term capital gain as bogus and delete the consequential addition and the AO is directed to allow the exemption u/s 10(38) of the Act as claimed by the assessee. - Decided in favour of assessee.
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2022 (5) TMI 999
Late filing fee payable under section 234E - assessee belatedly filed its quarterly e-TDS statements in Form-26Q - HELD THAT:- Late fee cannot be imposed for the statements of TDS filed before 1st June 2015. Therefore, respectfully following the decision of Fatehraj Singhavi [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT] and Eurotech Maritime Academy (P.) Ltd [ 2022 (2) TMI 233 - KERALA HIGH COURT] no late fee can be levied under section 234E of the Act and hence the same cannot be sustained. We also find substance in the arguments of the learned Counsel for the assessee that in assessee's case statements have been filed during the financial year 2013-14 relevant to the assessment year 2014-15 in terms of the provisions of section 200A(1) of the Act and intimation can be passed only within one year from the end of the financial year of filing of statement of TDS. The aforesaid period of the assessee has expired on 31st March 2015. In the order of the learned CIT(A), levy of fee under section 234E was directed to be deleted. It was also directed that if there is limitation, the Assessing Officer is free to levy fee under section 234E of the Act. Since the limitation to pass intimation had already expired on 31st March 2015, hence no order levying fee can be passed by the Assessing Officer - we hold that the levy of fee under section 234E of the Act by the Assessing Officer while giving effect to the order of the learned CIT(A) is unjustified which is liable to be deleted. We also hold that the fee charged by the Assessing Officer and confirmed by the learned CIT(A) was not in accordance with law. Since the issue is covered by the judicial pronouncements cited supra, therefore, we set aside the impugned orders passed for the assessment year 2013-14 and 2014-15, and allow the grounds of appeal raised by the assessee allowed.
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2022 (5) TMI 998
Revision u/s 263 - disallowance of deduction u/s.54B - assessment order passed by the AO is erroneous, insofar as it is prejudicial to the interests of revenue on the issue of assessment of difference in guideline value of property u/s.56(2)(vii)(b) - HELD THAT:- The assessee neither appeared nor filed any details in response to show-cause notice. Therefore, the PCIT has passed order u/s.263 and set aside assessment order passed by the Assessing Officer. We have gone through order passed by the learned PCIT and find that the PCIT has given one opportunity of hearing to the assessee in contravention of settled legal principles, as per which, it is requirement of law that reasonable opportunity of hearing must be given to the assessee before passing an order. Since, the learned Principal CIT has not given sufficient opportunity of hearing to the assessee, we are of the considered view that appeal needs to be set aside to the file of the PCIT to give another opportunity of hearing to the assessee. Hence, we set aside order passed by the learned PCIT and restore the issue back to the file of PCIT to reconsider the issue afresh in accordance with law, after affording reasonable opportunity of hearing to the assessee - Appeal filed by the assessee is treated as allowed for statistical purposes.
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2022 (5) TMI 972
Penalty levied u/s. 271G - assessee failure to provide documents maintained by the assessee in support of AE and non-AE segment of its business - TNMM adopted by the assessee, the profit of the international transaction has to be furnished, whereas the assessee has only furnished the entity level margins which consists of overall profits on AE and significant non-AE transactions - failure on the part of the assessee to provide documents maintained by the assessee in support of AE and non-AE segment of its business - CIT- A deleted the addition - HELD THAT:- As decided in own case [ 2021 (10) TMI 167 - ITAT MUMBAI] assessee failed to furnish the segmental profitability of the AE and non-AE transactions which would be explained by the fact that it was practically difficult to maintain these details considering the nature of assessee s business. It could also be seen that finally the transactions have been accepted to be at arm's length. If the Transfer Pricing Officer was not satisfied with the benchmarking of the assessee under TNMM, nothing prevented him from rejecting assessee' benchmarking and proceed to determine the ALP independently by applying any one of the prescribed methods. The blame for failure on the part of the Transfer Pricing Officer to determine the arm's length price cannot be fastened with the assessee. Similar issue of penalty u/s 271G for diamond industry has been adjudicated in assessee s favor in various decisions of this Tribunal. The coordinate bench of Mumbai Tribunal in the case of D. Navinchandra Exports (P.) Ltd. [ 2017 (11) TMI 1307 - ITAT MUMBAI ] held that considering the practical difficulties in furnishing the segment wise details of AE segment and non-AE segment transactions in diamond industry, no penalty under Sec. 271G could justifiably be imposed for failure to furnish the said information - we confirm the impugned order deleting the penalty u/s 271G. - Decided in favour of assessee.
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2022 (5) TMI 971
TP Adjustment - determination of Arms Length Price of specified domestic transactions - expenditure in respect of which payment has been made or is to be made to a person referred to in clause (b) of sub-section (2) of Section 40A - HELD THAT:-. According to the provisions of Section 92BA, the specified domestic transaction, in case of an assessee, covers the transaction of any expenditure in respect of which payment has been made or is to be made to a person referred to in clause (b) of sub-section (2) of Section 40A of the Act. To such transactions, the provisions of Section 92, 92C, 92D and 92B were made applicable. However with effect from 1/4/2017 The Finance Act, 2017 omitted Section 92BA (i) of the act. In view of the above omission, the controversy arose that whether transfer-pricing provisions are applicable to transactions covered under that clause or not. The honourable Karnataka High Court in case of PCIT vs. Texport Overseas (P.) Ltd. [ 2019 (12) TMI 1312 - KARNATAKA HIGH COURT] held that when clause (i) 92BA is omitted with effect from 1st April, 2017, the resultant effect is that it had never been passed and to be considered as law never existed. Therefore, the Hon'ble Karnataka High Court held that the decision taken by the Assessing Officer under the effect of section 92BA (i) and reference made to Transfer Pricing Officer under section 92CA was invalid and bad in law. In view of this, the addition made by the learned Assessing Officer by applying the provision of section 92CA to the transaction covered under section 92BA (i) of the Act deserves to be deleted. Therefore respectfully following decision of Hon'ble Karnataka High Court, we direct the learned Assessing Officer to delete the same.But we cannot lose sight of the fact that coordinate bench in that particular case specifically directed the learned assessing officer to examine the transactions with respect to provision of section 40A (2) of the Act. We hastened to add that only the arm's-length price of such specified domestic transactions could not be determined by applying the above provisions as contained in Chapter X of The Income Tax Act. Still the provisions of Section 40A (2) are on the statute book, which governs the deductibility of such expenses. Therefore, we set aside the issue to the file of the learned Assessing Officer to examine the transactions covered under 40A (2)(b) of the Act and decide issue afresh. Accordingly, grounds no. 2 to 7 of these appeals are allowed for statistical purposes. The learned Assessing Officer is directed to grant the opportunity of hearing to the assessee and decide the same in accordance with law. Disallowance under section 14A r.w.r. 8D - HELD THAT:- As we find that tax exempt income claimed by the assessee is only Rs. 1,12,635/- and therefore, disallowance under that section cannot exceed the exempt income. Accordingly, we direct the Assessing Officer to restrict the disallowance to the extent of Rs. 1,12,635/-. Accordingly, ground no. 8 is partly allowed. Disallowance of 50% of the property tax - AO found that assessee has occupied 50% of the property for its own use - HELD THAT:- Before the learned DRP, the assessee submitted that it has already disallowed Rs. 786000/- in the return of income and the learned DRP directed that disallowance should be restricted to the disallowance of Rs. 8,46,653/-. We do not find any infirmity in such direction given by the DRP. In view of this ground no. 9 of the appeal is dismissed.
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Customs
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2022 (5) TMI 997
Validity of preventive detention order - allegation of smuggling activities - COFEPOSA - impugned Preventive Detention Order is yet to be served on the petitioner - firms alleged to be operated/controlled by the petitioner were placed in Denied Entry List (Blacklist), prior to passing of the detention order - diligent to serve the detention order on the petitioner at the earliest despite being available for service since the detention order was passed on 26.03.2019 and the petitioner had appeared before the Ld. CMM on 28.03.2019 and 05.04.2019 after the passing of the impugned detention order - whether petitioner is absconding or concealing himself to avoid execution of the impugned detention order or not - HELD THAT:- If a person against whom the preventive detention order is passed comes to the court at pre-execution stage and satisfies the court that such order is clearly illegal, there is no reason why the court should stay its hands and compel him to go to jail even though he is bound to be released subsequently because of the illegality of such order. Coming to the present petition, as per the case of respondent No. 3, the petitioner was engaged in smuggling activities referred to in section 3(1) of COFEPOSA Act and resorted to mis-declaration of material particulars to avail undue benefits in exporting goods under MEIS Scheme. Also, the petitioner had been involved in smuggling of goods, abetting the smuggling of goods and engaging in transporting or concealing or keeping smuggled goods. Further, the Officers of Respondent No. 3 arrested the petitioner on 18.12.2018 for alleged commission of offences punishable under section 132 and 135 of the Customs Act 1962, in respect of the firms M/s C.L. International, of which the petitioner is a partner and M/s Purav International of which the petitioner is the proprietor. The petitioner is also alleged to be involved directly or indirectly in affairs of other two firms, namely, M/s Yashee Impex and M/s Gauri Global Exports and Trading. The fact remains that presence of the petitioner on 05.04.2019 before Ld. CMM has not been denied and assumption by respondents that petitioner would not appear, is an afterthought. In the facts and circumstances, the respondents cannot be absolved of their conduct of non taking of steps for service of detention order on 28.03.2019 and 05.04.2019. No justified reasons have been disclosed by the respondent for non-service of detention order on the petitioner on 28.03.2019 and 05.04.2019 despite availability of the petitioner. In the aforesaid backdrop, despite opportunities to serve the detention order, neither the Detaining Authority nor the Executing Agency as well as Sponsoring Authority was diligent or responsible to serve the detention order on the petitioner. There is absolutely no reasonable justification for non-service of detention order dated 26.03.2019 on the petitioner, from 28.03.2019 to 05.04.2019, despite the petitioner being available to the authorities. The purpose of detention order is a preventive measure and if the detenu is not served or detained at the earliest possible, keeping in view the spirit of Article 22(5) of the Constitution of India, the purpose is defeated. A sense of urgency needs to be exhibited by the respondents, if the preventive detention order is to be justified. The entire exercise for service of detention order appears to have been undertaken in a casual and cavalier manner, which, in our considered view is fatal to the case of the respondents. The non placement of the vital fact that the firms had been placed in Denied Entry List (DEL) before the Detaining Authority prior to passing of detention order also vitiates the subjective satisfaction of the Detaining Authority. Petition allowed.
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2022 (5) TMI 996
Levy of penalty u/s 112(a) of the Customs Act, 1962 on the Customs Broker - wrongful availment of benefit of exemption under N/N. 69/2011-Cus. dated 29.07.2011, N/N. 46/2011-Cus. dated 01.06.2011 and N/N. 12/2012-Cus. dated 17.03.2013 dated, which was not available to the importer - HELD THAT:- The allegation levelled against this appellant in the Show Cause Notice is clearly the violation of Regulations 13(d) and (e) of the CBLR, no specific act or omission is attributed to this appellant. What is important is the act or omission that leads to the confiscation of improperly imported goods. Section 111 of the Customs Act, 1962 deals with confiscation of improperly imported goods, etc. and Section 112 prescribes penalty for improper importation of goods, etc. It becomes clear that both Section 111 and Section 112 are attracted only when the goods are held to be liable for confiscation when they are improperly imported goods . Once the Revenue collects duty along with interest, then there remains nothing improper about import as the import itself becomes a proper import, in which event both these Sections will have no role, since when there is no improper import, then there remains nothing to confiscate. Moreover, Section 112 ibid. does not contemplate penal action for violations of provisions or regulations under any other law, much less violation under the CBLR; the charge is very specific: the act or omission should result in improper import of goods and consequently, confiscation of such goods, which is not the case of the Revenue here in the case on hand. The penalty levied here under Section 112 ibid. on the appellant, that too for violation under the CBLR, on the peculiar facts of the case, cannot be sustained - Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 995
Levy of penalty u/s 114(i) of the Customs Act, 1962 on Customs Broker - goods are not confiscated, as there is no such proposal in the Show Cause Notice - it is claimed that the question of imposing penalty under sec. 114(i) does not arise as the provision of section 114 will be invocable only when section 113 of the Customs Act, 1962 has been invoked - HELD THAT:- It is seen from the facts that the appellant had only filed the shipping bill and had not got registered or filed any KYC documents along with it to proceed with the export of the goods. It is submitted by the learned counsel that after filing the shipping bill, as they had not got documents from the exporter, they did not pursue the matter so as to get the shipping bill registered. On perusal of the records, there are no evidence established against the appellant to show that they have abetted in the attempt to export the prohibited goods namely Star Tortoises. In para 51 of the Order in Original, the original authority has stated that Shri P. Thirumoorthy, Manager of M/s. AKR Logistics India Pvt. Ltd. has failed to exercise due diligence and has not been able to furnish KYC documents. It is also stated that he has lend his Customs Broker card to one Shri Gokula Kannan who was not an employee of the company to handle the export. All these allegations if any, would fall under the Customs Broker Licensing Regulations. No evidence has been adduced to show that the appellant has connived with the exporter in the attempt to export the goods. The penalty imposed under section 114(i) of the Customs Act, 1962 on the appellants herein cannot sustain and requires to be set aside - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2022 (5) TMI 994
Breach of interim order or not - IL FS default case - Whether IL FS has any claim whatsoever on the receivables which are the subject matter of an Assignment Agreement in favour of the Lender deposited in the Escrow Account? - Whether by debiting the money so assigned from the Escrow Account even after 15.10.2018, can Lender and Escrow Bank be said to have violated the order dated 15.10.2018? - HELD THAT:- A perusal of the relevant conditions of transaction documents, makes it clear that a facility of Rs.400 Crores was advanced by the lender to the borrower payable in 96 months with tentative repayment schedule. The amount of interest component and principal component payable on each month has been provided in Schedule 2 of the Agreement. The immovable property of the borrower i.e. IL FS Financial Centre, Plot-No. 22, G Block, Bandra Kurla Complex, Bandra East, Mumbai was mortgaged as security to the facility. All the right, title and interest of the borrower in the receivables in respect of the TIFC Property was assigned to the lender. All receivables were to be deposited by the tenants of the IL FS in the Escrow Account which Escrow Account was to be operated by the Escrow Bank on the irrevocable instructions issued by the borrower to the lender. The Escrow Account, as per the Escrow Account Agreement, is to be operated by Escrow Bank under the instructions of lender. The borrower is specifically prohibited to issue any cheque or draft on the Escrow Account. Escrow Bank under the Escrow Agreement is obliged to follow the instructions given by the lender. Further, Clause 3 of the Assignment and Administration Agreement, clearly contemplates that sufficient portion of receivables to pay the principal and interest is assigned and set aside for that purpose, the transaction documents thus, clearly indicate that insofar as the amount receivables deposited in the Escrow Account which are sufficient to pay the principal and interest are concerned, they are assigned to the lender and cannot be dealt with the borrower in any manner. The present is not a case where lender has enforced any security interest created in their favour nor is a case where they have exercised any right given to them consequent to an event of default. Assigned receivables are as per transaction documents, noted above, are lender s property which on instructions given by the lender to the Escrow Bank is transferred to the account of lender. It is however, clear that only part of receivables which is sufficient to pay the principal and interest is assigned. Any amount deposited in the Escrow Account out of receivables which is in excess of principal and interest is not part of assignment and can be transferred back to the borrower and that part of the amount which is in excess of principal and interest can be said to be part of security which can also be enforced by lender in an eventuality. Insofar as that part of the receivables deposited in the Escrow Account which is sufficient to meet the principal and interest which has been assigned by the borrower to lender, no proprietary interest continues with the borrower nor borrower can exercise any right over that part of the Escrow Account which is assigned. The borrower may have right and interest on the residual of deposits which is an excess of principal and interest for which security interest is created in favour of the lender which Escrow Bank is permitted to transfer to the borrower - There being express assignment of lease rental which is sufficient to meet the principal and interest, the assignment has to be accepted as assignment in favour of the lender. Use of word pledge in Assignment Agreement does not take away the nature of the transaction documents which is assignment of receivables. Having come to the conclusion that the lender has right to instruct the Escrow Bank to debit the amount sufficient to cover interest and principal deposited in the Escrow Account out of the receivables, no direction can be issued to reverse the said amount to the borrower. However, in case the amount debited are in excess of amount sufficient to cover principal and interest and also after adjusting any shortfall the said amount needs to be reversed by the borrower since that amount cannot be said to be part of the amount assigned to the lender. The prayer of Applicant IL FS seeking direction to lender to reverse the amount of Rs. 112,79,18,348/- from the accounts of the IL FS towards debt service payments, is refused - part of receivables in excess of payment of interest and principal payable which was assigned to the lender after adjusting any shortfall in the amount payable need to be reversed to the borrower - Escrow Bank shall re-visit all its debits after 15.10.2018 to find out as to whether any amount in excess to the amount payable to cover principal and interest subject to adjustment any shortfall in earlier payment have been debited; and in event, any excess amount has been debited, the same shall be reversed to borrower which exercise shall be completed within the period of one month from today with due intimation in writing to the IL FS. Application disposed off.
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Insolvency & Bankruptcy
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2022 (5) TMI 993
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- There being clear stipulation that on any of the default Bank reserve its right to cancel the compromise settlement and will be entitle to exercise against the borrowers/ guarantors all rights and remedies available prior to the compromise settlement as per applicable law. The Default Clause clothe the Financial Creditor the right to file Application under Section 7 which was done after 30.06.2020 when default was committed. The Appellant submitted that there was no cancellation of the compromise OTS dated 28.05.2020, hence, it cannot be said that there was any debt due on the Corporate Debtor - said submission cannot be accepted in view of the clear stipulation of Clause 6 'Default Clause', the Bank has every right to proceed and exercise all its rights when default is committed. It is not the case that no default was committed on 30.06.2020 nor there is any material on record to indicate that payment as was required to be paid on 30.06.2020 was paid - there are no error in the order of the Adjudicating Authority admitting Section 7 Application - appeal dismissed.
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2022 (5) TMI 992
Seeking to give directions to appropriate authorities to investigate into the affairs of the corporate debtor - Section 210(2) and 213(b) of the Companies Act, 2013 - HELD THAT:- As per the scheme of 213(b) of the Companies Act, 2013, there are three instances in which this Tribunal can refer the matter to Central Government for investigation into the matter of affairs of the company. The instances on the basis of which the applicant wants this Tribunal to refer the matter for investigation, are carefully perused. The applicant has failed to prove that prima-facie the business of the corporate debtor is being conducted with an intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose. Furthermore, there is no evidence placed before this Tribunal to show prima-facie that the persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members. Moreover, there is no single evidence placed before this Tribunal to show that the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the calculation of the commission payable to a managing or other director, or the manager, of the company. The contention of the applicant that this Tribunal has directed to file an appropriate application cannot survive as the application should stand on its own feet and application should be accompanied by prima-facie evidence, which is not the case in the present application. Hence, this Tribunal is not inclined to allow the present application. Application dismissed.
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2022 (5) TMI 991
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The applicant has submitted that Balance Sheet of the Corporate Debtor for the financial year 2018-19 at Annexure P22 (pages 195-287) shows acknowledgement of debt by the Corporate Debtor. On perusal of the same it is seen that at page 230 it is stated that the company has default in the repayment of dues of banks and the banks have filed suit before DRT for following dues including inter alia due of Rs. 34,82,63,123 to PNB, the Financial Creditor - Further the Financial Creditor has filed certificate alongwith Bank Statement under Section 2A of the Bankers' Books Evidence Act 1891 and containing the transactions relating to the account of Corporate Debtor from 01.01.2014 to 15.03.2020 which is evidence of default as per Section 7(3)(a) r/w. Regulation 2A of IBBI (Resolution Process for Corporate Persons) Regulation, 2016. Application admitted - moratorium declared.
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2022 (5) TMI 990
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Service of demand notice - HELD THAT:- The Respondent fabricated the documents later on just to make out a defence that it has intimated to Mr. Vivek Goel that the articles were defective in nature. From the above said facts and circumstances, it is established that there was no genuine pre-existence dispute between the Operational Creditor and the Corporate Debtor. Service of demand notice - HELD THAT:- It is apparent that there is a email sent on 26.11.2018 by Karin Palmetshofer to Mr. Vivek Goel and copy to Christoph Merkens, whereby Mr. Abhishek Anand, Advocate was authorized to issue demand notice to Franco Leone Limited. Merely, that the General Power of Attorney has been executed in favour of the Mr. Pawan Kumar on 24.01.2019 does not mean that the Mr. Abhishek Anand was never authorized - Mr. Abhishek Anand was duly authorized to send a demand notice to the respondent/Corporate Debtor on behalf of the applicant herein; accordingly, the demand notice was valid and legal one. Therefore, the contention raised on behalf of respondent that demand notice was defective in nature stands discarded. The present application under Section 9 of the code stands accepted - Moratorium declared.
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2022 (5) TMI 989
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or Operational Creditors - existence of debt and dispute or not - whether the decree holder M/s Prashant Electricals Ltd who holds a decree against the Corporate Debtor M/s VETPharma Ltd qualifies as a Financial Creditor or an Operational Creditor? - Section 8 and 9 of Insolvency and Bankruptcy Code read with Rule 6 of Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- The Hon ble Supreme Court of India in the matter of SUBHANKAR BHOWMIK VERSUS UNION OF INDIA ANR. [ 2022 (5) TMI 893 - SC ORDER] have held that decree holder as a class of Creditors are separate from Financial Creditors and Operational Creditors. The conclusion, therefore, is that IBC treats decree holders as a separate class of Creditors and it does not fall in the category of either a Financial Creditor or an Operational Creditor . The conclusion, therefore, is that IBC treats decree holders as a separate class of Creditors and it does not fall in the category of either a Financial Creditor or an Operational Creditor . In this instant Petition, the decree holder is neither a Financial Creditor nor an Operational Creditor. Therefore, as per Section 6 of IBC, the decree holder by law is not entitled to initiate CIRP against the Corporate Debtor - Petition dismissed.
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PMLA
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2022 (5) TMI 988
Jurisdiction - power to initiate proceedings as against the Petitioner under the provisions of Prevention of Money Laundering Act - possession of proceeds of crime - predicate offence or not - provisional attachment of properties - alleged offences under Section 4(d) and 4(f) of the Lotteries Regulation Act and Rule 4(5) of the Lotteries Regulation Rules - HELD THAT:- The petitioner wanted to say that by virtue of the order of discharge passed by the Chief Judicial Magistrate, the substratum of the case has been lost and that he is not in possession of any proceeds of crime within the meaning of Section 2(u) of the PML Act. He wanted to make this Court believe that on account of the order of discharge, charge of generation of proceeds of crime is totally eliminated and he is not liable to be proceeded against - But after having gone through the materials on record and the detailed and erudite arguments of learned counsel on both sides, there are no doubt in mind that the petitioner is not entitled to get any relief in his favour. Even though the learned Chief Judicial Magistrate granted only partial discharge of the charges levelled against the petitioner, he has stated that by virtue of the order, the substratum of proceedings initiated by the respondents against him has been lost. There is no legal or factual basis in the contention. It is true that offences under the Lottery (Regulation) Act or Lottery (Regulation) Rules are not predicate offences under the PML Act. Similarly, offences under Sections 120B and 420 of the IPC were inserted by amendment dated 01.06.2009. It is also clear that the partnership firm in which the petitioner was a partner had been in the lottery business for the period from 31.12.2007 to 13.06.2010. That means, at the time when he had left the lottery business on 13.06.2010, offence under Sections 120B and 420 of the IPC were brought in as scheduled offences under the PML Act - the specific case of the CBI is that the first accused Santiago Martin, the proprietor of Future Gaming Solutions India Private Limited had sold tickets to the third accused, M/s. Future Gaming Solutions India Private Limited (formerly Martin Lottery Agencies,) during the period from 31.12.2007 to 04.04.2010. It is the well settled proposition of law that when an alternative and equally efficacious remedy is open to a litigant, he should be requested to pursue that remedy and not to invoke the extraordinary jurisdiction of the High Court to issue a prerogative writ. It is true that existence of a statutory remedy does not affect the jurisdiction of the High Court to issue a writ. The PML Act is a self contained code. It provides sufficient safeguards preventing excessive acts from the side of the Director. If prima facie materials are made out, the appropriate authorities can be approached with a provisional order of attachment as provided under Section 5 of the PML Act followed by adjudication for confiscation of the proceeds of the crime - The petitioner has no case that procedural safeguards are violated and he is being proceeded against arbitrarily. Thus he has approached the Madras High Court at the threshold hastily, overlooking the procedures provided in the PML Act. When the Writ Petition was dismissed finding that it is not maintainable, he has approached this Court a second time, almost on the same lines. He has neither resorted to the remedies available under the PML Act nor chose to approach the Apex Court, challenging the correctness of that decision. There is also considerable force in the submission that the petitioner has not approached this Court with clean hands. On initiation of proceedings under Exts.P2 to P4, he had hurriedly approached the Madras High Court and obtained interim orders in 2015. The Writ Petition was dismissed on 08.02.2021. Immediately thereafter he approached this Court without realising or conveniently ignoring the message given by the Hon'ble Madras High Court. Even though it was made clear that he is bound to face trial in respect of the remaining offences, he has approached the court as though entire proceeds of the crime are wiped out by the order of discharge, which is unfounded. Even now he has not prepared to resort to the remedies available under the PML Act, which is not understandable - Even though it was necessary that the lottery should have been printed either in Government press or in presses recognised by Indian Bank Association, all lotteries were printed in some private press in Sivakasi in Tamil Nadu for sale by the 1st accused Santiago Martin and his aids. It may be true that the petitioner had been in the field only for three years, the respondents have reasons to believe that he was part of the larger conspiracy at least during the period between 31.12.2007 to 13.06.2010. By that time, the offences under Sections 120B and 420 IPC were incorporated in the schedule of offence. It appears that the petitioner wants to prolong the matter one way or the other. After failing to get any relief from the Madras High Court he has approached this Court raising almost same contentions, which are barred by principles of issue of estoppel and cause of action estoppel. Petition dismissed.
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Service Tax
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2022 (5) TMI 987
Validity of Demand-cum-Show-Cause Notice - seeking direction that the respondent authorities should provide an opportunity of pre-show cause notice consultation to the petitioner - whether the Circular dated 11.11.2021 is clarificatory in nature thereby clarifying the Master Circular dated 10.03.2017? - Suppression of facts or not - HELD THAT:- A Perusal of the said Circular dated 11.11.2021 stipulates that the concept of pre-show cause notice consultation in Central Excise and Service Tax was introduced vide the Board s instructions dated 21.12.2015 as a trade facilitation measure. Thereupon in para 5 of the Master Circular No.1053/02/2017-CX dated 10.03.2017, the said principle of pre-show cause notice consultation was reiterated. Subsequent thereto, a reference was received from the DGGI to clarify whether the DGGI formation fell under the exclusive/inclusive category of the CBEC instructions dated 21.12.2015 or otherwise and in that regard it was clarified that the exclusion from pre-show cause notice consultation is case-specific and not formation specific. In Clause 5 of the said Circular it was reiterated that the pre-show cause notice consultation shall not be mandatory for those cases booked under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 for recovery of duties or taxes not levied or paid or short levied or short paid or erroneously refunded for the reason mentioned in sub-clauses (a) to (e) of Clause 5. A perusal of the said Circular does not bring anything new. As the stand taken by the respondent authorities in the impugned show cause notice dated 31.12.2020 that the petitioner had suppressed material facts, the same would come within the exception as mentioned in Clause 5 (d) of the Circular dated 11.11.2021 and as such it was not mandatory for respondent authorities to have a pre-show cause notice consultation. Another aspect also needs to be looked into, i.e., whether the authority which had issued the Demand-cum-Show Cause Notice dated 31.12.2021 had the authority to do so. The power so exercised by the authority is a statutory power conferred upon the respondent authorities under Section 73 of the Finance Act of 1994 and as such the issuance of the said show cause notice cannot be said to be without jurisdiction. Whether there was suppression of facts in the case of the petitioner? - HELD THAT:- Taking into consideration that this Court is at the stage of deciding whether the said Demand-cum-Show Cause notice dated 31.12.2020 is beyond the jurisdiction and this Court having held that the respondent authorities issuing the Demand-cum-Show Cause Notice have exercised the authority within the realm of the Finance Act, 1994, this Court would not like to go into the said question as any opinion rendered may affect the petitioner or the respondent as the case may be. Taking into consideration that the petitioner has approached this Court and the matter has been pending adjudication, this Court deems it proper to permit the petitioner to submit his show cause reply within a period of 30 (thirty) days from the date of this judgment before the adjudicating authority as mentioned in the Corrigendum dated 21.02.2022. Upon furnishing the said show cause reply, the respondent adjudicating authority, i.e., the respondent No. 5 is directed to offer the petitioner an opportunity of hearing either online or physically in person or through the authorized representative - this writ petition stands disposed of.
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2022 (5) TMI 986
Rejection of the application filed under the Service Tax Voluntary Compliance Encouragement Scheme (VCES), 2013 - time limitation - construction of residential complex - rejection on the ground of pendency of enquiry initiated against it before 01.03.2013 that suffered an adjudication process and gone on appeal to the Commissioner of CGST Central Excise (Appeals-II), Mumbai - period from October, 2007 to December, 2012 - HELD THAT:- It can be noticed that there is a stipulation under Section 106(2) that if any enquiry, investigation or audit is pending on 01.01.2013, VCES declaration shall be rejected. However, no such documentary evidence/proof of such pending enquiry as define in Section 2(g) of the CrPC or investigation under Section 2(h) of the CrPC was found to be available in its true sense that would empower invocation of jurisdiction by the Central Excise Officer under Section 14 of the Central Excise Act except that a letter of authorisation bearing no. 6/2013 was issued on dated 20.02.2013 by the Assistant Commissioner authorising the Superintendent of Anti-evation Consideration Cell to carryout necessary verification of service provided by M/s. Kamla Group or its associated company and Service Tax liability that has been discharged by them before the deadline prescribed in the scheme i.e. before 01.03.2013. In the instant case notice for personal hearing proposing rejection of application filed under VCES was issued to the Appellant on 1 st September, 2015 (page 80 of the appeal memo) which is admittedly after laps of one year of filing of the VCES application on 18.12.2015 and therefore such a proceeding including rejection order is liable to be quashed as unsustainable in law. The order passed by the Commissioner of CGST Central Excise (Appeals-II), Mumbai vide rejecting the VCES application filed by the Appellant is hereby set aside - Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 985
Levy of service tax - scheme of levy under section 66B of Finance Act, 1994 imposed on all services , as defined in section 65B (44) of Finance Act, 1994, that were either not excluded by section 66D of Finance Act, 1994 (negative list) or not exempted by notification issued under section 93 of Finance Act, 1944 - composite engagement to deliver goods outside the country, for which consideration was received from the recipient of services located outside India - services performed outside the taxable territory - Place of Provision of Services Rules - HELD THAT:- It would appear that there is no demand for the pre - negative list period and that it was only the inevitable passage of export goods through India at commencement of outward journey till loading on foreign going vessel/aircraft that was considered to be necessary and sufficient reason for invoking rule 4 of Place of Provision of Service Rules, 2012. In this implied convergence of rule 4 and rule 10 of Place of Provision of Service Rules, 2012, the transaction between M/s ATA Freightline Ltd, New York and M/s ATA Freightline (India) Pvt Ltd was split as one within India and one thereafter by appropriating the accountal segregation adopted by the appellant. Place of Provision of Service Rules, 2012 is not a provision for charging of tax; it is limited to determination of location of taxable entity as an adjunct to the charging provision in section 66 B of Finance Act, 1994. The impugned order has not evaluated the impugned activity from that perspective. In the context of identifiable recipient of service located outside the taxable territory, and concomitant absence of goods provided by recipient of service as well as the marked absence of recipient of service in the truncated segment of impugned activity and of the goods being put to use for rendering of service, rule 4 of Place of Provision of Service Rules, 2012 is not applicable. That the activity is transportation of goods is the foundation of the proceedings against the appellant, as is evident from the contrived segmentation of stages according to geography and from the unarguable existence of recipient outside India; rule 10 of Place of Provision of Service Rules, 2012 is unambiguously clear about the consequent non-taxability. Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 984
Refund claim - claim is hit by limitation when filed after the introduction of GST, or not - overriding effect of section 142(8)(b) of CGST Act, 2017 - rejection on the ground of unjust enrichment - HELD THAT:- The Tribunal in the case of Jai Mateshwaari Steels Pvt. Ltd. [ 2022 (3) TMI 49 - CESTAT NEW DELHI ] where it was held that in the facts of the present case, no limitation is applicable as provided under Section 11B (one year from the relevant date), due to overriding effect of CGST Act. Accordingly, I find that the appellant is entitled to refund under the provisions of Section 142(3) r/w 142(8) (b) of the CGST Act r/w the erstwhile provisions of Central Excise Act and the Cenvat Credit Rules. The rejection of refund claim on the ground of limitation is not justified - Appeal allowed - decided in favor of appellant.
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Central Excise
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2022 (5) TMI 983
Rectification of Mistake - relevancy of statements relied upon - primary challenge made in the original proceedings as well as the proceedings under rectification of mistake is to the fact that statements of various witnesses have been relied without the said statement being tested for relevance under Section 9D of the Central Excise Act, 1944 - HELD THAT:- Since there is some documentary evidence available on record and there are various statements which the appellant claims have been obtained under duress reliance on the said statements cannot be placed in absence of the same being tested under Section 9D of the Central Excise Act, 1944. There are no option but to remand the matter to the original adjudicating authority to examine the relevance of the statements under Section 9D of the Central Excise Act and only thereafter, relied on the said statement - appeal allowed by way of remand.
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2022 (5) TMI 982
Demand of differential duty - Similar Goods - export of goods to DTA exceeding the limit of 50% of on board value of exports - benefit of N/N. 51/96-Cus. dated 23.07.1996 denied - clearance of the goods not similar to goods exported, denying benefit of N/N. 23/2003-CE. - full rate of duty on sale is to be paid when Customs Exemption Notifications - requirement to pay second time in respect of DTA clearance the Education Cess and Secondary higher Education Cess - non-submission of certificate signed by an authority not belong the rank of Deputy Secretary to the Govt. of India under Customs Notification No.21/2002 (as amended by Customs Notification No.20/2007) and Customs Notification No.12/2012 - HELD THAT:- In the present case, the appellants contend that the goods exported by them as well as cleared to DTA are precision optical components and are similar to the goods exported. The department alleges that goods are not similar and that the earlier case applies only in respect of cover and coveter glasses and therefore not applicable to the present case. The goods other than cover and coveter glasses which fall under the current show cause notices are listed out in para-16 of the OIO. The reason stated by original authority for confirming the demand is that the appellant did not submit any conclusive technical proof to prove that the goods cleared are similar goods as envisaged in the notification. Apart from this, there is no other discussion given thereto - Commissioner (Appeals) also has reiterated that the appellant has not produced any technical proof to show that the goods are not similar . It is to be seen that appellant is authorized to manufacture precision optical components, instrument assemblies / sub-assemblies. Such authorization is given by the Secretariate of Industrial Approvals from the Department of Industrial Development under the Ministry of Industry. The goods can be cleared only when the Development Commissioner grants permission for the same - The DTA clearances are governed by para 6.8 of FTP and the appellants have obtained permission from the Development Commissioner for making such DTA clearances. The argument of the Ld. Counsel that such permission is granted only when Development Commissioner is satisfied that the goods are similar is not without substance. When the appellants have been given permission to clear the goods in DTA by the DC, the department cannot then vaguely allege that they are not similar goods. In the present case, the appellant has furnished a Chartered Engineer certificate dt. 12.03.2019 certifying that the goods are similar and fall within the category of precision optical components. The said certificate has been brushed aside by the Commissioner (Appeals) stating that it is merely an after-thought. The Commissioner (Appeals) has failed to note that it is an opinion given by an expert and unless there is some evidence to rebut such opinion, the certificate issued by the Chartered Engineer cannot be discarded in toto. The allegation raised in the SCN that the goods are not similar goods is without any basis - demand do not sustain - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2022 (5) TMI 981
Denial of concessional rate of tax - D-Forms not accepted - D Forms disallowed on the ground that the said dealer is a Government concern and not a Government and, as such, D Forms, issued by it cannot be accepted and by further on the ground that a Govt. concern being a registered dealer could not issue D Forms - HELD THAT:- The provision as laid down under Section 8 (1) (a) is applicable in case of inter-state sale made to Government whether registered or not being registered and in case of Government not being a registered dealer, the selling dealer has to furnish certificate in Form D as referred to in Rule 12 (1) of the CST (Registration Turnover) Rules, 1959. A selling dealer is not required to furnish any certificate or declaration if the sale is made to Government being a registered dealer. Considering the judgment of the Hon ble Karnataka High Court in the case of KARNATAKA DAIRY DEVELOPMENT CORPORATION LIMITED VERSUS COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA [ 1992 (6) TMI 164 - KARNATAKA HIGH COURT] and in view of admitted fact that in past the respondents have already accepted the D Forms and allowed the petitioner the concessional rate of tax on the similar sales in their assessment orders and appeals relating to 2001-02 and 2002-03, this Writ Petition is allowed by quashing the impugned assessment orders and order of the Appellate authority and Revisional authority arising out of the impugned assessment order, by directing the respondent no. 1 to accept the D Forms in question and to allow consequential benefits of concessional rate of tax to the petitioner, within three months from the date of communication of this order subject to factual verification of genuineness of the transaction in question. Petition disposed off.
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2022 (5) TMI 980
Principles of natural justice - principal grievance of the petitioner is that the objections filed in the matter to the notice of default assessment of tax, interest and penalty issued under Section 32 of the Delhi Value Added Tax Act, 2004 - HELD THAT:- There is complete sloth and procrastination on the part of the respondents/revenue - the spirit of the law has, certainly, not been adhered to. Given the fact that the physical interaction often, for various reasons, is not possible with the Commissioner, the respondents/revenue are directed to create a portal/online mechanism for intimation of notices issued under subsection (8) of Section 74 of the Act, read with Rule 56 of the 2005 Rules. The writ petition is, accordingly, disposed of with a direction to the respondents/revenue to dispose of the objections filed by the petitioner, within 15 days of receipt of a copy of the judgment passed today.
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2022 (5) TMI 970
Preferential payments of state claim over workmen and other creditors - Seeking priority and preference over other creditors and to release the amount said to be due in favour of the applicant-department - preferential treatment or priority to be accorded to the State claim/crown s debt vis-a-vis the claim of workmen and other secured creditors - HELD THAT:- The issue of priority of secured creditor s debt over that of the State Government, commonly known as crown s debt, has been examined by different High Courts and the Hon ble Supreme Court. This Court deems it proper to narrate the facts and law, with respect to different High Courts, as how the priority issue has been dealt with by them. The Gujarat High Court in the case of BANK OF INDIA VERSUS STATE OF GUJARAT 3 OTHER (S) [ 2020 (1) TMI 1197 - GUJARAT HIGH COURT] again considered the provisions of Section 48 of the Value Added Tax Act, 2003 vis- vis the provisions contained in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the RDB Act ) and whether Section 31B of the RDB Act give priority to the secured creditor to realize its dues over the Government debts. The Gujarat High Court held that the secured creditor will have priority over the dues of the State Government. This Court finds that Article 246 of the Constitution of India opens with a non-obstante clause and the Parliament has been given exclusive power to make laws in respect of matters enumerated in List-I of the 7th Schedule, known as Union List - This Court finds that both the Parliament and the State legislature are supreme in their respective assigned fields and it becomes duty of the Court to interpret the legislations made by both the Parliament and the State legislature in such a manner as to avoid any conflict. This Court in no way finds that the State had no competence to insert Section 47 in the Act of 2003 and the same law is in no way useless or redundant, however, if the Central Act, as enacted by the Parliament, provides for proceeds of the assets of a Company being wound up, to be given to the secured creditors and the workers, then the same has to be distributed pari passu among others, as per the priority given in Section 529A of the Act of 1956 - this Court finds that even the preferential payments to the revenues, taxes, cesses, etc. due from the Company in winding up to the Central or the State Government or the local authority, will be subject to the provisions of Section 529A of the Act of 1956. This Court, if accepts the plea of the learned Advocate General, in a way, would be re-writing Section 530 of the Act of 1956 and the same cannot be done by this Court. The legislature-Parliament, if has brought any change in respect of the preferential payment and only the dues of workmen have been given priority, no grievance can be allowed to be raised by any other person including the State. This Court finds that the claim of the applicant- State to give them priority for payment of their dues over other secured creditors, cannot be granted - Application dismissed.
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Indian Laws
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2022 (5) TMI 979
Offence punishable under Section 63 of the Copyright Act - whether the offence under Section 63 of the Copyright Act is a cognizable offence as considered by the Trial Court or a noncognizable offence as observed and held by the High Court? - HELD THAT:- For the offence under Section 63 of the Copyright Act, the punishment provided is imprisonment for a term which shall not be less than six months but which may extend to three years and with fine. Therefore, the maximum punishment which can be imposed would be three years. Therefore, the learned Magistrate may sentence the accused for a period of three years also. In that view of the matter considering Part II of the First Schedule of the Cr.P.C., if the offence is punishable with imprisonment for three years and onwards but not more than seven years the offence is a cognizable offence. Only in a case where the offence is punishable for imprisonment for less than three years or with fine only the offence can be said to be noncognizable. Under the circumstances the High Court has committed a grave error in holding that the offence under Section 63 of the Copyright Act is a noncognizable offence. Thereby the High Court has committed a grave error in quashing and setting aside the criminal proceedings and the FIR. Therefore, the impugned judgment and order passed by the High Court quashing and setting aside the criminal proceedings/FIR under Section 63 of the Copyright Act deserves to be quashed and set aside. The offence under Section 63 of the Copyright Act is a cognizable and nonbailable offence - appeal allowed.
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2022 (5) TMI 978
Dishonor of Cheque - conduct of trials of complaints under Section 138 of the Negotiable Instruments Act - HELD THAT:- The Court directs that the pilot study shall be conducted in the manner indicated. The Secretary General of this Court shall ensure that a copy of the present order is directly communicated to the Registrar Generals of the said five High Courts, who shall place it before the Hon ble Chief Justice for immediate action. To report progress and compliance, each of the said five High Courts shall file an affidavit on or before 21.07.2022. List on 26.07.2022 to review the further proceeding.
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2022 (5) TMI 977
Interpretation of statute - whether the sum awarded under Clause (a) of Sub-section (7) of Section 31 of the Arbitration and Conciliation Act, 1996 would include the interest pendente lite or not? - HELD THAT:- As per Article 29.8 of the Concession Agreement, the Termination Payment would become due and payable to the Concessionaire by DMRC within thirty days of a demand being made by the Concessionaire. It further provides that if the DMRC fails to disburse the full Termination Payment within 30 days, the amount remaining unpaid shall be disbursed along with interest at an annualized rate of SBI PLR plus two per cent for the period of delay on such amount. It can thus clearly be seen that Article 29.8 of the Concession Agreement deals with payment of interest on Termination Payment amount. It is thus clear that the Arbitral Tribunal has directed that the Termination payment would be as per the provisions of the Concession Agreement and the interest on the Termination payment would accrue from 7th August, 2013 (i.e., the date 30 days after the demand of Termination payment by DAMEPL on 8th July, 2013). It is pertinent to note that though the Arbitral Tribunal has found that the rates of interest on loans taken by the Appellant-DAMEPL are lower than SBI PLR + 2%, it has observed that it was beyond the competence of the Arbitral Tribunal to change or alter or modify the provisions of the Concession Agreement. The Arbitral Tribunal, therefore, has granted interest at an annualized rate of SBI PLR + 2%, though it had found that the rate of interest on which the loan was taken by the Appellant-DAMEPL was on the lower side. The Arbitral Tribunal, therefore, has rightly given effect to the specific agreement between the parties with regard to the rate of interest. We find that the arbitral award has been passed in consonance with the provisions as contained in Clause (a) of Sub-section (7) of Section 31 of the 1996 Act and specifically, in consonance with the phrase unless otherwise agreed by the parties . In view of the specific agreement between the parties, the interest prior to the date of award so also after the date of award will be governed by Article 29.8 of the Concession Agreement, as has been directed by the Arbitral Tribunal - Appeal dismissed.
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2022 (5) TMI 976
Dishonor of Cheque - private complaint invoking Section 200 of the Cr.P.C. alleging cheating under Section 420 of the IPC on the part of the Company and its Directors - invocation of jurisdiction of the competent criminal Court by filing a complaint alleging offence punishable under Section 138 of the Act - HELD THAT:- Issuance of cheques, they getting dishonoured and all other factual narration are not required to be reiterated. The issue with regard to registration of criminal case for offence punishable under the IPC notwithstanding registration of case under the Act need not detain this Court for long as the Apex Court in the case of SANGEETABEN MAHENDRABHAI VERSUS STATE OF GUJARAT ANR. [ 2012 (4) TMI 728 - SUPREME COURT ] where the Apex Court considers the very issue of whether a petition under Section 420 of the IPC would be maintainable, during the pendency or even after conviction under Section 138 of the Act. The Apex Court holds that the two operate in different fields - In a case under the Act what is required to be noticed is, whether it is for a legally enforceable debt and a fine is imposed. In an offence involved on the same instrument under Sections 406 or 420 IPC sentence of seven years can be imposed and the element mens rea is what is required to be seen in a case for offence of cheating under Section 420 of the IPC inter alia. The Apex Court holds that there can no question of it being violative of Article 20(2) of the Constitution of India or Section 300(1) of the Cr.P.C. as it does not amount to double jeopardy. The complaint registered is also not in violation of the judgment of the Apex Court in the case of PRIYANKA SRIVASTAVA [ 2015 (5) TMI 47 - SUPREME COURT ]. There is no other document produced that is so unimpeachable that would warrant interference at the hands of this Court under Section 482 of the Cr.P.C. The contentions advanced by the learned counsel for the petitioners are thus untenable. Petition dismissed.
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2022 (5) TMI 975
Termination of proceedings under Section 25(a) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The Arbitrator has failed to exercise the jurisdiction vested in her, inasmuch as she has passed no order on the applications filed by the Union for recall of the orders dated 19.02.2021. The factual position pleaded in these petitions, to the effect that the applications were taken up for hearing before the Arbitrator on 08.03.2021 and returned without any order been passed thereupon, has not been controverted by the respondent. There is an additional factual circumstance which also persuades me that the impugned orders of the Arbitrator in the present cases, suffer from perversity of approach. As noted, prior to the impugned orders, the last order of the Arbitrator was passed on 06.01.2021. By that order, the case was fixed for hearing on 22.01.2021 and the Union was given time to file the Statement of Claims on the next date of hearing . It is the admitted position that no hearing was, in fact, held on 22.01.2021, and none was fixed thereafter. The Arbitrator, in the impugned orders, has lost sight of this position and has referred only to the earlier order passed by her on 16.10.2020. It would be appropriate to allow the Union s alternative prayer for a direction upon the Arbitrator to consider the applications presented by it for recall of the impugned orders dated 19.02.2021. It may be noted that, whether or not the Union is able to show sufficient cause for its delay in submitting the Settlement of Claims, is a matter for the Arbitrator to consider. The Arbitrator is directed to consider the applications presented by the Union for recall of the orders dated 19.02.2021 terminating the arbitral proceedings under Section 25(a) of the Act. As the proceedings have been unduly prolonged, the Arbitrator is directed to dispose of the applications after hearing the parties, within three months from today. It is made clear that this Court has not made any comment on the merits of the said applications - the writ petitions are partly allowed.
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