Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 29, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Securities / SEBI
Insolvency & Bankruptcy
Service Tax
Central Excise
Articles
News
Notifications
GST - States
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38/1/2017-Fin(R&C)(152) - dated
25-6-2020
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Goa SGST
Seeks to amend Notification No. 38/1/2017-Fin(R&C)(148), dated 5th June, 2020,
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38/1/2017-Fin(R&C)(151) - dated
25-6-2020
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Goa SGST
Extend due date of compliance which falls during the period from “20.03.2020 to 29.06.2020” till 30.06.2020 and extend validity of e-way bills under section 168A of the Goa Goods and Services Tax Act, 2017
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29/2020-State Tax - dated
23-6-2020
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Himachal Pradesh SGST
Seeks to prescribe return in FORM GSTR-3B of HPGST Rules, 2017 along with due dates of furnishing the said form for April, 2020 to September, 2020
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28/2020-State Tax - dated
23-6-2020
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Himachal Pradesh SGST
Seeks to prescribe the due date for furnishing FORM GSTR-1 by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, for each of the months from April,2020 to September, 2020.
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27/2020-State Tax - dated
23-6-2020
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Himachal Pradesh SGST
Seeks to prescribe the due date for furnishing FORM GSTR-1 for the quarters April, 2020 to June, 2020 and July, 2020 to September, 2020 for registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year.
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19/2020-State Tax - dated
23-6-2020
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Himachal Pradesh SGST
Seeks to specify class of persons, other than individuals who shall undergo authentication, of Aadhaar number in order to be eligible for registration.
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18/2020-State Tax - dated
23-6-2020
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Himachal Pradesh SGST
Seeks to notify the date from which an individual shall undergo authentication, of Aadhaar number in order to be eligible for registration.
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17/2020-State Tax - dated
23-6-2020
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Himachal Pradesh SGST
Seeks to specify the class of persons who shall be exempted from aadhar authentication.
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16/2020-State Tax - dated
23-6-2020
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Himachal Pradesh SGST
Himachal Pradesh Goods and Services Tax (Third Amendment) Rules, 2020.
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432/2020/5(120)/XXVII(8)/2020/CT-47 - dated
25-6-2020
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Uttarakhand SGST
Seeks to amend Notification No. 344 dated 20.05.2020 in respect of extension of validity of e-way bill generated on or before 24.03.2020 (whose validity has expired on or after 20th day of March 2020) till the 30th day of June, w.e.f 20.3.2020
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431/2020/5(120)/XXVII(8)/2020/CT-46 - dated
25-6-2020
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Uttarakhand SGST
Seeks to extend 15 days or till 30-6-2020 (whichever earlier) of time for the issuance of refund order
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430/2020/5(120)/XXVII(8)/2020/CT-44 - dated
25-6-2020
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Uttarakhand SGST
Seeks to appoint 08-6-2020 as enactment of UKGST (fifth amendment) rules,2020 to come in force.
Income Tax
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38/2020 - dated
26-6-2020
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IT
Income-tax (13th Amendment) Rules, 2020
Highlights / Catch Notes
GST
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Supply of goods or not - transport of money by cash-carry vans - goods or not - levy of GST - the compliance of the guidelines issued by the RBI will not detract the subject money from being goods - ITC in respect of the cash carry vans used for the transportation of cash will be available
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Classification of goods - Fortified Rice Kernels (FRK) - the FRK manufactured by the appellant do not have essential character of natural Rice - The moment the Rice is converted into Flour, essential characteristics of rice is changed and no grain remain present in the product and therefore, the same cannot be classified in any of the heading of Chapter 10 in terms of Chapter Note 1(A)
Income Tax
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Ingenuine Commission expenses - The agents have included the receipts in their return of income and that there was no evidence to show that the money has come back to assessee so as to allege that the transactions are bogus to avoid tax by reducing the profit. In the assessee’s case, relevant conditions laid out in section 37(1) have been fulfilled.
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Revision u/s 263 - referring specified domestic transaction to the TPO - since clause (i) of section 92BA never existed in the statute book therefore, ld PCIT cannot exercise his jurisdiction under section 263 of the Act in respect of specified domestic transactions referred to in clause (i) of section 92BA of the Act.
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Registration u/s 12AA and u/s 80G denied - Whether objects of the society/trust should be charitable in nature and the activities of the society/trust should be genuine? - The genuineness of the activities would mean that the activities are not bogus or artificial or camouflaged by some means and whether the activities are in accordance with the object of the institution.
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Taxable income - Relevant assessment year - if the assessee is paying tax at the maximum marginal rate for the preceeding year as well as for the year under consideration then it shall have no revenue effect and in case as there is no taxable income for the preceeding year then the said claim of business loss on account of sales return is otherwise eligible for carry forward and is an allowable deduction for the year under consideration.
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Addition u/s 68 - unexplained cash credit - Assessee has discharged the primary onus to demonstrate fulfilment of primary ingredients of Sec.68 and it was incumbent upon revenue to dislodge the assessee’s claim by bringing on record, cogent material to establish that the assessee’s unaccounted money was routed in its books of account in the garb of unsecured loans
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Reopening of assessment u/s 147 - Validity of reason to believe - Undisclosed share transactions - It cannot be said that Petitioner did not disclose fully and truly all material facts necessary for the assessment. Consequently, Respondent No. 2 could not have arrived at the satisfaction that he had reasons to believe that income chargeable to tax had escaped assessment.
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Stay petition - recovery proceedings - condition of deposit of 25% within a period of six months - CIT(A) directed to hear the appeal within a period of six months as prescribed subject to condition that the petitioner would deposit 12.5% within a period of one month from today.
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Grant of depreciation on Solar Power Plant (“SPP”) - Year of assessment - block of asset - On account of some technical ground, if it is denied in this year, then it will be admissible in the next year - blocks of panel owned by assessee be treated as integrated part of 16 blocks purchased and installed by AIPL and not to be treated separately.
IBC
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Rejection of Resolution Plan - CIRP process - Even though the suspended Board of Directors has a right to attend the meeting and may offer any suggestion but they cannot force their decision on their terms to Committee of Creditors especially when the suspended Board of Directors has no right to vote on the Resolution Plan.
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Initiation of CIRP - Starting of the CIRP against a functional company is a serious matter and parties cannot be allowed to play hide and seek - We propose to impose heavy costs on the operational creditor as well as Authorized representative.
Case Laws:
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GST
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2020 (6) TMI 658
Carry forward of Transitional credit - credit of eligible dues in respect of stock available with the petitioner as on appointed day - vires of Rules l17 and 120A of the Central Goods and Services Tax Rules, 2017 as ultra vires Sections 140 and 174 of Central Goods and Services Tax Act, 2017 - HELD THAT:- List on 16th September, 2020.
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2020 (6) TMI 657
Carry forward of Transitional credit - credit of eligible dues in respect of stock available with the petitioner as on appointed day - vires of Rules l17 and 120A of the Central Goods and Services Tax Rules, 2017 as ultra vires Sections 140 and 174 of Central Goods and Services Tax Act, 2017 - HELD THAT:- List on 16th September, 2020.
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2020 (6) TMI 656
Carry forward of Transitional credit - credit of eligible dues in respect of stock available with the petitioner as on appointed day - vires of Rules l17 and 120A of the Central Goods and Services Tax Rules, 2017 as ultra vires Sections 140 and 174 of Central Goods and Services Tax Act, 2017 - HELD THAT:- List on 16th September, 2020.
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2020 (6) TMI 654
Carry forward of Transitional credit - credit of eligible dues in respect of stock available with the petitioner as on appointed day - vires of Rules l17 and 120A of the Central Goods and Services Tax Rules, 2017 as ultra vires Sections 140 and 174 of Central Goods and Services Tax Act, 2017 - HELD THAT:- To await the judgment of the Supreme Court in UNION OF INDIA VERSUS BRAND EQUITY TREATIES LIMITED AND ORS. ETC. ETC. [ 2020 (6) TMI 517 - SC ORDER] .
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2020 (6) TMI 644
Classification of goods - Fortified Rice Kernels (FRK) - whether classifiable under HSN 19049090 or not - rate of tax - Challenge to AAR decision - HELD THAT:- From the manufacturing process, it is noted that to manufacture FRK, the natural rice has to be converted into Rice Flour. The moment the Rice is converted into Flour, essential characteristics of rice is changed and no grain remain present in the product and therefore, the same cannot be classified in any of the heading of Chapter 10 in terms of Chapter Note 1(A) ibid. Further, consequent upon changing from rice grains to rice flour and then preparation of any product out of rice flour, whether similar to Rice or not in shape, the resultant product does not fail in the inclusive part of the Chapter note 1(B) of Chapter 10, which specifically mentions Rice (i) Husked, (ii) milled, (iii) polished, (iv) glazed, (v) parboiled or (vi) broken as in all such form of Rice, natural grains are present in the product - thus, FRK is out of the ambit of Chapter 10. The appellant supplied the FRK to various millers/suppliers with instruction this product should be first mixed (blended) with traditional rice in ratio of 1:100 and then the mixed rice is cooked and consumed. This is an admission of fact by the appellant that FRK is a product different from the traditional rice and to be used for blending in traditional rice - the FRK manufactured by the appellant do not have essential character of natural Rice and also does not merit classification under Chapter 10 in terms of Chapter Note 1 (A) of the said Chapter. It is appropriately classifiable under the sub-heading of Chapter 19 i.e. under Chapter sub-heading 19049000. Appeal disposed off.
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2020 (6) TMI 643
Supply of goods or not - transport of money by cash-carry vans - goods or not - levy of GST - rate of GST and/or Compensation Cess - Input tax credit. Whether the money being transported by the Appellant in the cash carry vans can be construed as goods or otherwise for the purposes of determining the availability of Input Tax Credit of the GST paid on the purchase and fabrication of the subject transport vehicles? HELD THAT:- On perusal of Rule 138 (14) of the CGST Rules, 2017, it is clearly evident that only goods are mentioned therein as well as in the annexure thereto. Among those goods, one of the items mentioned in the annexure bearing the heading Description of Goods is money , which clearly indicates that the legislature has considered money as goods , when money is being transported from one place to another. By applying the above interpretation in the present fact and circumstances of the case in hand, it can decisively be inferred that money under question is nothing but goods. The transportation of the currency for the purpose of cash replenishment in ATMs operated by the Appellant s clients are being regulated by RBI in the capacity of the Regulatory Authority, the guidelines of which have to be mandatorily complied with by the Appellant for carrying out their activities. Therefore, the compliance of the guidelines issued by the RBI will not detract the subject money from being goods. Further, non- applicability of the RBI guidelines on the goods other than money is quite obvious, as the RBI is the regulatory authority only in the matter related to the money and not for all the goods. Hence, such arguments, put forth by the Respondent is erroneous and absurd, and do not merit to be considered. Input tax credit - HELD THAT:- Now, when it has been established that money, transported by the Appellant in the cash -carry vans, can be considered as goods, ITC in respect of the cash carry vans used for the transportation of cash will be available to the Appellant in accordance with provisions of section 17 (5) (a)(ii) of the CGST Act, 2017.
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2020 (6) TMI 640
Filing of Form GST TRAN-1 - interim order - HELD THAT:- The respondent no.3 shall reopen the portal within two weeks from today. In the event they do not do so, they will entertain the GST TRAN-1 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. They will also ensure that the petitioner is allowed to pay its taxes on the regular electronic system also which is being maintained for use of the credit likely to be considered for the petitioner. List this matter after six weeks.
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Income Tax
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2020 (6) TMI 648
Rectification of mistake u/s 154 - orders passed u/s.154 that the revenue has relied on the CBDT Circular No.1725 dated 22.8.2016 of the CBDT - HELD THAT:- By virtue of amendment to the provisions of section 251 of the Act w.e.f. 1.6.2001, the first appellate authority does not have any power to set aside an assessment or issue for consideration by the AO. Hence, as rightly contended by the assessee, the aforesaid Instruction cannot be the basis for passing the impugned orders. Secondly, the Tribunal [ 2016 (9) TMI 1572 - ITAT BANGALORE] has held that the assessment order framed by the ITO is not valid and that the assessment has to be framed de novo by a competent Officer either ACIT/DCIT. By virtue of this order of Tribunal, the order of the AO which is sought to be rectified in the proceedings u/s. 154 of the Act is no longer in existence and even on this ground, the proceedings u/s. 154 of the Act are thoroughly misconceived, and in our view, deserves to be quashed. Thirdly, it was also brought to our notice by the ld. counsel for the assessee that pursuant to the order of the Tribunal, the ACIT, Circle 4(3)(1), Bangalore has passed an order u/s. 254 of the Act r.w.s. 143(3) dated 30.12.2017 determining the total income of assessee. By virtue of this order of assessment, the previous determination of total income and tax payable no longer survives and therefore the orders passed u/s. 154 of the Act are purely academic. The assessee has already filed an appeal against the order dated 30.12.2017 and the same is stated to be pending for adjudication before the first appellate authority. We are of the view that the orders passed u/s. 154 of the Act are required to be quashed and are accordingly quashed.
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2020 (6) TMI 647
Ingenuine Commission expenses - whether the commission payments made by the assessee to the above agents are genuine and are allowable expenditure u/s 37(1) - HELD THAT:- Payment of commission was a normal trade practice in the line of business, and every business man pays commission to procure business. Assessee in order to prove its case has provided documents viz. copy of agreement entered into by the assessee and the agents, which inter alia provide the appointment and scope of the work of the assessee. Capacities of the agents to act as agents of the assessee and the business they have performed for the assessee have not been doubted. The commissions were paid in relation to the business procured by agents from various locations as indicated in the details furnished by the agents. Such commission payments were in the form of account payee cheques, and in order to evidence the genuineness of transactions of commission received by the agents, these agents have provided a summary of commission received from various companies including that of the assessee. They have also filed copies of form no.26AS showing details of TDS against the receipt of commissions, therefore, a live link between the business of the assessee and payments made to the agents have been established. These independent evidences produced by the assessee would prove that services were rendered by the agents, which have not been disputed by the Revenue. Revenue authorities doubted the payment of commissions merely on the facts that agents are related to the assessee, and that commission expenses were claimed to reduce the tax liability of the assessee company, which allegation was not supported by any independent finding. The agents have included the receipts in their return of income and that there was no evidence to show that the money has come back to assessee so as to allege that the transactions are bogus to avoid tax by reducing the profit. In the assessee s case, relevant conditions laid out in section 37(1) have been fulfilled. Therefore, the commission expenses paid was in the nature of business expense which requires to be allowed as deduction. - Decided in favour of assessee.
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2020 (6) TMI 642
Benefit of Kar Vivad Samadhan Scheme - amount of penalty and interest payable by the petitioner under Section 220(2) read with Sections 271(1)(a), 271(1)(b) and 271(1)(c) was computed @ 50% as due and payable by the petitioner under the KVSS - HELD THAT:- Since the liability of the petitioner for the assessment year 1987-88 against the tax demand of ₹ 3,11,206.00 being crystallized, the petitioner was called upon to pay interest and penalty @ 50% as determined at ₹ 6,16,838.00 over and above the aforesaid tax liability of ₹ 3,11,206.00 for the assessment year 1987-88 (which was appropriated by the Income Tax Department). However, if the said tax demand was appropriated and adjusted (as it was received in October 1991), then the petitioner cannot be burdened with payment of penalty and interest in the year 1999, merely because the interim order in WP 2490/1991 did not give such directions for adjustment and appropriation. In any event, since October 1991, the Income Tax Department was in receipt of ₹ 6,00,000.00 from the petitioner. ORDER: The Certificate of Intimation dated 26.02.1999 which confers liability on the petitioner towards payment of penalty and interest under the Act for the assessment year 1987-88 is set aside. The respondents / Revenue are directed to compute and intimate to the petitioner within a period of 8 weeks any outstanding penalty and interest, if payable, by the petitioner for the assessment year 1987-88 until the date of deposit (i.e. October 1991) by the petitioner of the amount of ₹ 6,00,000.00 with the Revenue. If the petitioner is liable to pay any penalty and interest, the same shall be adjusted from the balance amount of ₹ 6,00,000.00, if any, held by the Revenue. If the Revenue holds any further balance amount after adjusting the above penalty and interest, if any, the same shall be adjusted towards the outstanding liability for assessment year 1985-86. Rule is discharged.
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2020 (6) TMI 638
Deduction u/s. 10A - Tribunal held that the interest earned on deposits kept as margin money is part of the profits derived from export and therefore eligible for deduction in terms of the provisions of Section 10A - HELD THAT:- Parties jointly submitted that the first substantial question of law has been answered by a Full Bench of this Court in 'COMMISSIONER OF INCOME TAX Vs. HEWLETT PACKARD GLOBAL SOFT LTD. [ 2017 (11) TMI 205 - KARNATAKA HIGH COURT] in the favour of assessee. Computing deduction u/s. 10A - losses of EC-1 EC-2 units cannot be set off against the profits of the EC-3 unit for the purpose of computing deduction - Whether the Tribunal committed an error in not taking into consideration the amendment to Section 10A of the Act by Finance Act 2000 w.e.f. 01.04.2001, the deduction of profits and gains earned by the undertaking from the export of the article or things or computer software is required to be allowed from the total income of the assessee and consequently the loss from any STP / non STP unit is required to be set off against the income of the other STP unit before allowing deduction u/s. 10A of the Act? - HELD THAT:- The second and third substantial questions of law have been answered by the Supreme Court in 'COMMISSIONER OF INCOME-TAX Vs. YOKOGAWA INDIA LTD.' [ 2016 (12) TMI 881 - SUPREME COURT] - Decided in favour of assessee.
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2020 (6) TMI 637
Stay petition - recovery proceedings - condition of deposit of 25% within a period of six months - HELD THAT:- No doubt that in the instant case vide Ext.P3 stay application, petitioner has been directed to pay 25% of the total amount on or before 15.03.2020 and the balance amount has been stayed for a period of six months or till the disposal of the appeal whichever is earlier. The order in writ appeal cannot be said to be in knowledge or notice of CIT Appeal/the assessing officer while exercising power under Section 226(3). But despite that such types of orders are passed imposing a condition of payment of 20% or 25%. Be that as it may. The impugned order of stay Ext.P3 is hereby set aside and the 2nd respondent ie., Commissioner of Income Tax, Kozhikode is directed to hear the appeal within a period of six months as prescribed subject to condition that the petitioner would deposit 12.5% within a period of one month from today. In case the petitioner complies with the order, the appeal shall be heard, otherwise the competent authority ie. the Commissioner shall be at liberty to pass any appropriate order in accordance with law.
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2020 (6) TMI 636
Reopening of assessment u/s 147 - Validity of reason to believe - Undisclosed share transactions - HELD THAT:- As we revert back to the reasons furnished by Respondent No. 2 for re-opening of assessment u/s 147 after referring to the information received following search and seizure action carried out in the premises of Shri Naresh Jain, it was stated that information showed that Petitioner had traded in the shares of M/s. Scan Steels Ltd., and was in receipt of ₹ 23,98,014.00 and therefore, Respondent No. 2 concluded that he had reasons to believe that this amount had escaped assessment within the meaning of section 147 of the Act. First of all it would be evident from the materials on record that Petitioner had disclosed the above information to the Assessing Officer in the course of the assessment proceedings. All related details and information sought for by the Assessing Officer were furnished by the petitioner. Several hearings took place in this regard where-after the Assessing Officer had concluded the assessment proceedings by passing assessment order under section 143 (3) of the Act. Thus it would appear that Petitioner had disclosed the primary facts at its disposal to the Assessing Officer for the purpose of assessment. He had also explained whatever queries were put by the Assessing Officer with regard to the primary facts during the hearings. It cannot be said that Petitioner did not disclose fully and truly all material facts necessary for the assessment. Consequently, Respondent No. 2 could not have arrived at the satisfaction that he had reasons to believe that income chargeable to tax had escaped assessment. In the absence of the same, Respondent No. 2 could not have assumed jurisdiction and issued the impugned notice under section 148 of the Act. Respondents have tried to traverse beyond the disclosed reasons in their affidavit which is not permissible. The same cannot be taken into consideration, while examining validity of notice under section 148. As has been held in Prashant S. Joshi [2010 (2) TMI 271 - BOMBAY HIGH COURT] the reasons which are recorded by the Assessing Officer for re-opening an assessment are the only reasons which can be considered when the formation of the belief is impugned; such reasons cannot be supplemented subsequently by affidavit (s). Attempt made by Respondent No.2 to reopen the concluded assessment is not at all justified and consequently the impugned notice cannot be sustained. - Decided in favour of assessee.
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2020 (6) TMI 635
Undisclosed income of the block period u/s 158BB - Sale of Naphtha in open market - Unaccounted sale consideration - seized material and statement recorded u/s 131 which established that the assessee sold in open market the Naphtha products at hefty cash premium and part of which unaccounted sale consideration routed back in the books through accommodation entries - addition on account of sale and delivery orders - Addition on protective basis merely relying on the statement of Naresh B. Vora recorded by the Assessing Officer that the assessee was working on behalf of several parties in Ahmedabad and Baroda - Addition of foreign tour expenses on the basis of evidence which was gathered - addition of household expenses on entry found in one Gandhi diary in the premises of Sunil Chemicals - ITAT deleted all the addition HELD THAT:- Section 158BC requires the Assessment Officer to determine the undisclosed income of the block period in the manner provided under Section 158BB. While determining / computing the undisclosed income of the block period, the Assessing Officer shall compute the income on the basis of evidence found as a result of search or on requisition of books of accounts. This is so because the correctness or otherwise of the return filed in pursuance of notice under Section 158BC (a) has to be examined with reference to the materials in possession of the Assessing Officer having nexus to the assessment of undisclosed income. Hence block assessment has to be framed in the light of material coming in to the possession of the assessing authority pursuant to the search, which is the foundation of the proceedings. On a thorough consideration, we have no reason to believe that the above findings are otherwise incorrect or improper. From the above, it is clear that the findings returned by the Tribunal in respect of the five deletions exhibit due application of mind on the part of the Tribunal and on the basis of the factual evidence on record. We do not find any perversity, much less any ambiguity, in the findings returned by the Tribunal. We find that the CIT (A) has dealt with the related issues in great detail which have been affirmed by the Tribunal. Thus, there is concurrent findings of fact by the two lower appellate authorities. We are in agreement with the reasons recorded by the Tribunal in respect of deletion of the five additions made by the CIT (A) and upheld by the Tribunal. Appeal filed by the revenue is devoid of merit and the same is liable to be dismissed.
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2020 (6) TMI 634
Addition u/s 68 - unexplained cash credit - AO's stand that mere filing of documents by the lender, does not prove identity and creditworthiness of the lender and genuineness of the transaction - HELD THAT:- It is settled position of law that to avoid the rigors of Section 68, the assessee must prove the identity, creditworthiness of the lenders / investors to advance such monies and genuineness of the transactions. Assessee has discharged the primary onus to demonstrate fulfilment of primary ingredients of Sec.68 and it was incumbent upon revenue to dislodge the assessee s claim by bringing on record, cogent material to establish that the assessee s unaccounted money was routed in its books of account in the garb of unsecured loans. However, we are unable to find any such material except for the fact that additions were made merely on suspicious, conjectures and surmises. Therefore, no infirmity could be found, in the impugned order, in this regard. We confirm the appellate order. Revenue s appeal stands dismissed. Validity of Reopening of assessment u/s 147 - HELD THAT:- Original return was processed u/s 143(1) and the case was reopened within 4 years upon receipt of tangible information from investigation wing which suggested possible escapement of income in the hands of the assessee. In our opinion, nothing more was required at this stage since Ld. AO had sufficient reasons to form such a belief. Therefore, we do not find much substance in assessee s cross-objections and see no reason to deviate from the findings of Ld.CIT(A), in the impugned order, in this regard. Resultantly, the cross-objections stands dismissed. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [ 2020 (5) TMI 359 - ITAT MUMBAI ]
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2020 (6) TMI 633
Revision u/s 263 - mistake of entry in the books of account made by the assessee - addition on account of repurchase of flat debited in P L A/c considering it as a correction entry for sales return on account of cancellation of booking of flat whereas it was repurchase not properly accounted for it the relevant F.Y. 2009-10 - HELD THAT:- Pr.CIT has not given a concluding finding on the issue which was taken up in the proceedings u/s 263 of the Act. CIT in the revision proceedings u/s 263 of the Act has taken up an issue of allowability of claim of sales return of ₹ 13.00 lacs and has observed in the order passed u/s 263 that the A.O. did not make enquiry regarding the allowability of the claim which should have been made by him. Thus, making a reference to the explanation to Section 263 of the Act, he has held that the order passed by the A.O. without conducting enquiry regarding the claim of deduction on account of sales return of ₹ 13.00 lacs are erroneous and prejudicial to the interests of the revenue. The ld. Pr.CIT, accordingly, set aside the original assessment order passed U/s 143(3) of the Act dated 30/10/2013 and directed the A.O. to make fresh assessment after conducting a proper enquiry regarding the allowability of claim of expenses of ₹ 13.00 lacs. Thus, it is manifest from the record that there was no concluding finding given by the ld. Pr.CIT on the issue of allowability of claim of ₹ 13.00 lacs on account of sales return. Hence, when the A.O. has to take a decision based on the outcome of the enquiry conducted in the proceedings pursuant to the revision order U/s 263 of the Act then the said finding of the A.O. is subjected to challenge in the appeal and non-challenge of the revision order passed U/s 263 of the Act, will not operate as a bar for filing the appeal against the order passed by the A.O. As regard the allowability of claim of deduction on account of sales return for the year under consideration instead of the said claim made in the A.Y. 2010-11 when the transactions of sales return was completed - Even if the assessee would have made correct entry and claimed sales return for the A.Y. 2010-11 then the same would have been part of the closing stock of the said year ending on 31/03/2010 and consequently part of the opening stock of the assessment year under consideration as on 01/04/2010. For the year under consideration instead of taking the said amount as part of the opening stock, the assessee has first time claimed this amount under the head sales return. However, correspondingly the same is claimed to have been part of the closing stock of the year under consideration. Therefore, it is only contra entry in the books and there will be no effect in the P L account as the assessee has debited amount under the head sales return and at the same time, this is also part of the closing stock as on 31/03/2011. Thus, we find that except the element of profit which would have been claimed as loss in the A.Y. 2010-11, there is no significant or substantial revenue effect for the year under consideration. Even otherwise, if the assessee is paying tax at the maximum marginal rate for the preceeding year as well as for the year under consideration then it shall have no revenue effect and in case as there is no taxable income for the preceeding year then the said claim of business loss on account of sales return is otherwise eligible for carry forward and is an allowable deduction for the year under consideration. Therefore, in these facts and circumstances of the case, we do not find any error or illegality in the order of the ld. CIT(A), accordingly, we uphold the same. - Decided against revenue.
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2020 (6) TMI 632
Disallowance of employees contribution to PF and ESI - Addition u/s 36(1)(va) r.w.s. 2(24)(x) - delay from the due date prescribed by the Act - HELD THAT:- The proofs of payments made towards employees contribution of PF which has claimed to have been made within due date prescribed by PF Act i.e. 20th of the next month are also appearing from page nos. 1 to 12 of the paper book filed before us. In that view of the matter, we find force in the submissions made by the Learned counsel and therefore, we set aside the issue to the Learned AO to take into consideration the entire details filed by the assessee regarding payment made towards employees contribution to PF and ESIC and to give relief to that particular amount which has been paid in time as prescribed in the concerned acts taking into consideration the judgment passed in the case of CIT vs. GSRTC [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] . Hence, first ground of assessee s appeal is partly allowed for statistical purposes. TP Adjustment - upward transfer pricing adjustment in respect of the appellant s International Transactional of Share Capital subscription into its Associated Enterprise (AE) - re-characterizing a share subscription transaction as a transaction of advancing of loan and holding the appellant s international transaction is not at arms length by the Revenue - HELD THAT:- So far as the re-characterization of the transaction is concerned the case of the assessee is this that after 240 days, the share was allotted instead of 180 days as stipulated by the RBI Circular but the AO treated the entire transaction as on loans. The assessee joins issue here to this effect that the TPO cannot question the commercial expediency of the assessee entered into such transaction, neither cannot disregard the appellant transaction and substitute the same without any material of exceptional circumstances pointing out that the assessee had tried to conceal the real transaction or the transaction in question was sham. In this regard we have carefully considered the judgment passed in the matter of PCIT vs. M/s. Sterling Oil Resources Ltd. [ 2019 (7) TMI 390 - BOMBAY HIGH COURT] wherein it has been pleased to hold that the TPO cannot question the commercial expedience of the assessee entered into such transaction. When nothing has been brought on record by the Revenue to suggest that the transaction is sham, the TPO has no authority to treat such transaction as a loan and charge interest thereon on notional basis.Respectfully relying upon the ratio laid down by the said judgment we are agreed to the proposition. Delay of 80 days - submission made by the AR in charging interest only on the period of delay - Taking into consideration the entire aspect of the matter, the ratio laid down in M/S. STERLING OIL RESOURCES LTD. [ 2019 (7) TMI 390 - BOMBAY HIGH COURT] on the question of TPO s jurisdiction in questioning the commercial expediency of the assessee or suggesting this transaction sham and also the fact of charging interest on the period of delay in view of the Master Circular 15/2014-15 dated 01.07.2014, we are of he considered opinion of restrict the adjustment in respect to the allotment of shares for the period of 80 days only. Accordingly interest is charged @2% for 80 days; the total addition is, therefore, to the tune of ₹ 3,53,108/-. The Ld. AO is directed to give effect to this order. - Decided in favour of assessee.
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2020 (6) TMI 631
Registration u/s 12AA and u/s 80G denied - Whether objects of the society/trust should be charitable in nature and the activities of the society/trust should be genuine? - HELD THAT:- CIT(E) has not disputed the charitable nature of the activity of the assessee but the registration has been rejected mainly due to non-genuineness of the activity of the assessee concluded on the basis of non-submission of evidence by the assessee. Before us, the Ld. Counsel has accepted that various activities have been carried out by the assessee in furtherance of its objects till date. As already held that the ratio in the case of Baburam Education Society [ 2017 (12) TMI 867 - ALLAHABAD HIGH COURT] is not applicable over the facts of the assessee and it is imperative to examine the genuineness of the activities of the assessee duly supported with the evidences. The genuineness of the activities would mean that the activities are not bogus or artificial or camouflaged by some means and whether the activities are in accordance with the object of the institution - we feel it appropriate to restore the matter of registration under section 12AA of the Act back to the Ld. CIT(E) for examining the genuineness of the activities with the direction to the assessee to submit the necessary details of the activities carried out supported by the evidences. The appeal of the assessee against rejection of registration is accordingly allowed for statistical purposes. The matter of approval u/s 80G of the Act is an action consequent to the registration, therefore, the appeal filed against rejection of approval u/s 80G is also restored to Ld. CIT(E ) for deciding afresh. Appeals of the assessee are allowed for statistical purposes.
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2020 (6) TMI 630
Exemption u/s 80P(2)(a)(i) - advancing of loan to Members of the Society is not at par with providing credit facility to its members and thus the assessee was not entitled to a claim of exemption - treating interest earned on Fixed Deposit and Savings account as income from other sources and not business income - HELD THAT:- Where a co-operative society is engaged in carrying on business of giving loans and accepting deposits from its members, the income which relates to the business of these facilities to its members or providing credit facilities to its members will be eligible for deduction u/s 80P(2)(a)(i). There is no prohibition u/s 80P not to allow deduction to such co-operative societies in respect of these facilities provided to its members. The provisions of Sec. 80P(2)(a)(i) are applicable to a co-operative society which is engaged in carrying on banking business facilities to its members if it is not a co-operative bank. The ratio laid down in the judgment of Totagars Co-operative Sale Society Ltd. vs. ITO [ 2010 (2) TMI 3 - SUPREME COURT] cannot apply in present case as the facts are different in that case. Thus, the CIT(A) wrongly applied the ratio in present case. Therefore, interest on saving bank account of the members is business income and cannot be termed as income from other sources as it has direct nexus of this income with the activity of business of providing credit facilities to its members who are banks. Hence, the CIT(A) was not correct in holding that the said interest is income from other sources. Section 80P(2)(i)(a) is very much applicable to the present assessee society. - Decided in favour of assessee.
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2020 (6) TMI 629
Challenged the correctness of the order passed by the learned Principal Commissioner of Income Tax ( PCIT ) u/s 263 - erroneous and prejudicial to interest of revenue - meaning of omission - meaning of '' saving clause '' - Effect of omission of clause (i) of Section 92BA by Finance Act, 2017 - Impact of non-referral of specified domestic transactions to the Transfer Pricing Officer - Applicability of Section 6 of the General Clauses Act to omissions. The assessees s primary argument is that the omission renders the provision either nonexistent or not in force within the statute. Consequently, they assert that the jurisdiction exercised by the Principal Commissioner of Income Tax (PCIT) u/s 263 is invalid. As a result, the order issued by the assessing officer, u/s 143(3) is neither erroneous nor prejudicial to the Revenue s interest . HELD THAT:- It is a very well-recognized rule of interpretation of statutes that where a provision of an Act is omitted by an Act and the said Act simultaneously reenacts a new provision which substantially covers the field occupied by the repealed provision with certain modification, in that event such re-enactment is regarded having force continuously and the modification or changes are treated as amendment coming into force with effect from the date of enforcement of the reenacted provision. We are of the view that at this juncture it is necessary to examine, the meaning of saving clause, As Per the law.Com Law Dictionary Black's Law Dictionary 2nd Ed, the saving clause has been defined as follows: A saving clause in a statute is an exception of a special thing out of the general things mentioned in the statute; it is ordinarily a restriction in a repealing act which is intended to save rights pending proceedings penalties etc. from the annihilation which would result from an unrestricted repeal. In contracts it is a clause that states that ambiguities should not render a contract void or voidable but the contract should be enforced in all other respects provided it can still exist as a valid and binding agreement. Thus, the Saving clause means a clause which denotes a reservation or exception. As per Find Law Legal dictionary, saving clause means a clause in a statute exempting something from statute s operation. Having discussed the meaning of saving clause , it has become quite clear that at the time of omission of clause (i) of section 92BA with effect from 01.04.2017 the Legislature did not mention any terms and conditions to the effect that after omission of clause (i) of section 92BA, pending proceedings/penalties etc, till the date of omission (01.04.2017) will survive. That is, the Legislature did not insert new section in the Income Tax Act to the effect that pending proceedings/penalties etc in relation to clause (i) of section 92BA will survive even after omission, (that is, after 01.04.2017). Hence, we note that these terms and conditions, as discussed above, are absent in case of omitted clause (i) of section 92BA of the Act, therefore as per the law laid down by the Hon ble Supreme Court in the case of Rayala Corporation [ 1969 (7) TMI 109 - SUPREME COURT] and Kohlapur Cane Sugar [ 2000 (2) TMI 823 - SUPREME COURT] , it will be presumed that clause (i) of section 92BA never existed in the Statute Book, meaning thereby it is obliterated from the very beginning and hence the jurisdiction exercised by the Ld. PCIT u/s. 263 of the Act invoking clause (i) of section 92BA, for reference by A.O. to TPO is null in the eye of Law, as clause (i) of section 92BA is omitted and not repeated and there is no provision in any other section of the Income Tax Act saving the pending proceedings initiated under the omitted provision [ (clause (i) of sec, 92BA)] as the said clause (i) was omitted on 01.04.2017, therefore, subsequent revision proceedings by ld. PCIT u/s. 263 on dated 08.03.2019 would be invalid. As we noticed above that an omission of a provision is different from a repeal and section 6 of the General Clauses Act applies to a repealed law and not to omission of law, therefore section 6 of the General Clauses Act does not apply. So in the assessee`s case it is noted that in the Income Tax Act, clause (i) of section 92BA was omitted from the Act and not repealed, hence pending proceedings/ prosecution could not have been launched or continued by invoking section 6 of the General Clauses Act after its omission. In this case, Clause (i) of section 92BA was omitted w.e.f 01.04.2017, and after its omission the ld. PCIT passed order u/s. 263 on 28.03.2019. Since clause (i) of section 92BA was unconditionally omitted without a saving clause in favour of Pending Proceedings therefore ld. PCIT ought not to have proceeded u/s. 263 of the Act, since the omission took place prior to 08.03.2019 and such omission in clause (i) of section 92BA is unconditional, that is, it does not say that Pending Proceedings under clause (i) of section 92BA would continue in future, even after its omission on 01.04.2017. Therefore, Ld. PCIT erred in exercising his jurisdiction u/s. 263 of the Act, so far clause (i) of section 92BA is concerned, reason being, in the eyes of law after omission of clause (i) of section 92BA, it would be treated as if it never existed in the Statute Book. In other words, clause (i) of section 92BA, was omitted w.e.f 1.4.2017 unconditionally and without a saving clause therefore section 6 of the General Clauses Act has no application. We note that ld PCIT issued the above show cause notice u/s 263 in respect of specified domestic transactions referred to in clause (i) of section 92BA of the Act which was omitted with effect from 01.04.2017, and effect of such omission of clause (i) of section 92BA means that this provision never existed in the statute book, since clause (i) of section 92BA never existed in the statute book therefore, ld PCIT cannot exercise his jurisdiction under section 263 of the Act in respect of specified domestic transactions referred to in clause (i) of section 92BA of the Act. Therefore, the action of the Assessing Officer cannot be held to be erroneous as well as prejudicial to the interest of the revenue, in the facts and circumstances as narrated above. Thus, the usurpation of jurisdiction of exercising revisional jurisdiction by the Principal CIT is null in the eyes of law and, therefore, we are inclined to quash the very assumption of jurisdiction to invoke revisional jurisdiction u/s 263 of the Act by the Principal CIT. Therefore, we quash the order of the Principal CIT dated 08.03.2019 being ab initio void. Since we allowed both the appeals on the technical ground, as narrated above, therefore we do not adjudicate the grounds raised by the assessees on merits. In the result, both the appeals of the assessees are allowed.
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2020 (6) TMI 628
Grant of depreciation on Solar Power Plant ( SPP ) - Year of assessment - block of asset - CIT(A) accepted the claim of the assessee and allowed it - HELD THAT:- MP Power Management Co. Ltd. an instrumentality of Madhya Pradesh State Government, has awarded a contract for establishment of 16 blocks of solar power plant, and such blocks were established, thereafter it as sold to Real Gold Developers LLP, and RGD LLP further sold these 16 blocks in part to five concerns including the present two assessees. It is to be appreciated that if this solar power plant of 16 blocks is an integrated power plant and part of the block purchased by present two assessees cannot work independently, then it is to be treated that the plant was established. Though there is no specific discussion on this point, and there is no conclusion, but we would like to take note of the fact that as far as purchase of these assets, its user for the purpose of business has not been denied by the AO himself in the subsequent year. He has allowed the depreciation to the assessee in the next assessment year. In the present year only dispute is year of admissibility of the depreciation. On account of some technical ground, if it is denied in this year, then it will be admissible in the next year, thus, considering stand of the Revenue in the case of Aditya Medisales Ltd. where such depreciation has been allowed and accepted, more so when no finding was recorded that the part of the assets owned by the assessees could be used independently for generation of power in a phased manner. We construe that blocks of panel owned by assessee be treated as integrated part of 16 blocks purchased and installed by AIPL and not to be treated separately. Part of assets owned by these two assessee be treated as integrated part of total solar plant consisting of 16 blocks. If that be so, then installation of other blocks have been accepted by the department, and not challenged before the Tribunal. There is no disparity on the facts with regard to the blocks owned by the AMSL vis - vis of the assessee. We are of the view that there is no justification to interfere in the finding of the ld.CIT(A) in the cases of present two assessee also. - Decided against revenue.
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Customs
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2020 (6) TMI 653
Release of Drawback amount payable to petitioner - HELD THAT:- We are surprised to hear that despite the letter dated 19.03.2019 addressed by the respondent No.2/DRI to respondent No.1/ Commissioner of Customs, no steps have been taken by the latter so far to release the drawback amount payable to the petitioner in respect of the Shipping bill dated 09.10.2015 - Mr. Harpreet Singh, learned counsel for the respondent No.1 states that he may be permitted to obtain instructions from the Department. List on 29.06.2020.
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Corporate Laws
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2020 (6) TMI 652
Oppression and Mismanagement - Transfer of Shares - siphoning of funds - act of oppression against the minority shareholders or not - petition filed after a delay of 4 years of cause of action - failure on the part of respondents in their capacity as directors of the company to comply with the fiduciary duty towards expulsion of petitioners Nos. 1 and 2 - increase of share capital. Whether the company petition filed after a delay of 4 years of cause of action is maintainable? - HELD THAT:- The facts are overwhelmingly loaded against the respondents as the acts of oppression and mismanagement are continuing till date. Considering the facts of the present case the petitioners are continuously knocking the doors of various forums to redress their grievances since 2010 and finally filed this petition on April 5, 2013 under sections 397, 398 and 111(4) of the Act - this is a fit case to consider the redressal under sections 397 and 398 of the Act. Therefore the first issue framed, that whether the condonation of delay of 4 years is maintainable can be answered affirmatively and can be considered without any iota of doubt - This is also a fit case to consider the continuous acts of oppression and mismanagement against the minority shareholders. In such a situation, delay cannot be held against the aggrieved party to seek redressal - petition is maintainable. Whether the respondents in their capacity as directors of the company had failed in complying with the fiduciary duty towards expulsion of petitioners Nos. 1 and 2? - HELD THAT:- The first petitioner is the promoter of the respondent-company who has put his signature on the memorandum of association along with respondent No. 7. The first petitioner was also the managing director of the respondent-company till June, 2008. While deciding the issue of removal of petitioners as directors for not attending the boards meetings continuously, we have considered the proximity of board meetings, i. e., 5 meetings in a span of 4 months clearly raises doubts on the genuineness of the so-called board meetings. It appears from the records that no attempt was made by the respondents to duly inform the promoter director when he was not attending the board meeting nor find out the reason for the same. Whether the increase of share capital of respondent No. 1-company was properly done? - HELD THAT:- On going through the argument of both parties and gone through the records pertaining to this subject matter and came to the conclusion that the company while increasing its share capital from ₹ 1,00,000 to ₹ 3,00,000 have not followed the law. Whether the apportionment of the increased share capital between respondents Nos. 2 and 7 amounts to oppression and mismanagement to other members of the company? - HELD THAT:- We have not come across any document or record showing the increased share capital offer was made to other shareholders also. No proof was also shown to us that it was offered to other shareholders. Respondents Nos. 2 and 7 has apportioned between them the entire increased share capital which clearly led to the conclusion that the entire act of increase in share capital of the respondent-company and also apportionment done between respondents Nos. 2 and 7 clearly raises doubts whether the Act was done with bona fide intention. The petitioners have clearly mentioned that they have been deprived of subscribing to the shares as no offer was made to them. In the absence of proof of offer to other shareholders, we are forced to come to the conclusion that this is clearly an act of oppression done by respondents Nos. 2 and 7 to deprive other shareholder of their legitimate right to subscribe to increased share capital. The increase of authorised share capital of the respondent-company at the annual general meeting dated September 26, 2009 from ₹ 1,00,000 to ₹ 3,00,000 is declared illegal, null and invalid - allotment of 2,000 shares made by the board of the company in favour of respondents Nos. 2 and 7 is illegal and set aside - By exercising the power under section 111(5)(a), the respondent-company is directed to rectify the register of members deleting the additional shares issued and restoring the shareholding pattern existed prior to September 26, 2009 - the removal of the petitioners as directors of the respondent-company is illegal and void and hence set aside. Petition allowed.
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Securities / SEBI
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2020 (6) TMI 646
Withhold of money by SEBI - penalty for violation of Regulations 3 and 4 of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 - During the pendency of the appeal, the Recovery Officer of SEBI recovered an amount - HELD THAT:- Once the order of the AO imposing a penalty was set aside, there was no justification for SEBI to withhold any amount which was recovered pursuant to the order of the AO. Such retention of the amount after the order of the AO has been set aside, is without any authority of law. The fact that no direction for refund of the amount was issued by the Tribunal is immaterial. Once the order has been set aside, there is no amount to be recovered and consequently any amount so recovered has to be refunded immediately. Respondent has a right to file an appeal before the Supreme Court against the order of the Tribunal. The appeal was allowed by the Tribunal on 21/2/2020. No steps were taken by SEBI to file an appeal before the lockdown i.e. 25/3/2020. Therefore, retention of the money by SEBI was wholly unwarranted, especially when the appellant has also given an undertaking to abide by the order of the Supreme Court, if any. In view of the aforesaid and in view of the undertaking given by the appellant, we dispose of the Misc. Application directing SEBI to refund the amount of ₹ 6,35,521/- on or before 22/5/2020, failing which SEBI would be further liable to pay interest from the date of recovery till date of payment @ 12% per annum.
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Insolvency & Bankruptcy
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2020 (6) TMI 651
Approval of Resolution Plan - CIRP process - HELD THAT:- It is a settled law that the 'Resolution Applicant' has no right for re-negotiation or further negotiation. After submission of the 'Resolution Plan', if it is found in order and in accordance with Section 30(2), it is required to be placed before the 'Committee of Creditors. The process of evaluation is guided by the said criteria as set out in the 'Request for Resolution Plan'. If the evaluation criteria suggest that only top three 'Resolution Applicants' should be negotiated, the Appellant who ranked 6th among the 'Resolution Applicants' cannot have any right to participate for re-negotiation over the decision of the 'Committee of Creditors'. In COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME COURT] , the Hon'ble Supreme Court held that the commercial aspects of a 'Resolution Plan', its viability or otherwise, and, distribution of proceeds amongst stakeholders, were to be looked only by the 'Committee of Creditors' who are competent to go through all relevant aspects. Therefore, this Appellate Tribunal cannot deliberate on such issue. In the present case, as no ground has been made out in terms of Section 61(3), we are not inclined to interfere with the 'Resolution Plan' of 3rd Respondent duly approved by the Adjudicating Authority - Appeal dismissed.
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2020 (6) TMI 650
Rejection of Resolution Plan - CIRP process - time limitation - HELD THAT:- The appellant has also admitted that the innova car owned by the corporate debtor was purchased by the appellant and the appellant is also using the brand name 'Double Bull Basmati' which the brand name of the corporate debtor. This also establishes that the appellant is related party and is not eligible as per section 29A of the Insolvency Bankruptcy Code, 2016. The Resolution Plan has been duly considered by the Committee of Creditors. In their commercial wisdom, COC have decided not to accept the Resolution Plan with conditions contained therein. Also, the process cannot be kept pending endlessly that revision of a plan after plan may be considered by the Committee of Creditors without considering the mandatory period within which the insolvency resolution is completed as per the provisions of Insolvency Bankruptcy Code. Even though the suspended Board of Directors has a right to attend the meeting and may offer any suggestion but they cannot force their decision on their terms to Committee of Creditors especially when the suspended Board of Directors has no right to vote on the Resolution Plan. Impugned order upheld - appeal dismissed.
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2020 (6) TMI 649
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The Financial Debt ought to have been repaid by the Corporate Debtor to the Applicant in accordance with the Repayment schedule annexed to the facility Agreements. The Corporate Debtor failed to repay the amounts due as per the repayment schedules and the defaulted in payment of the Financial Debt. The last date of payment received by the Applicant is 24-11-2017. The CIBIL Report issued by TransUnion CIBIL reflects that the Corporate Debtor's assets are classified as Sub-Standard. The Applicant issued Notice dated 24-04-2017 demanding repayment under the 3 Agreements. However, the Applicant has not received any payments - as per section 7 of the I B Code, 2016, the contention of the Corporate Debtor that the debt is disputed is not maintainable as the existence of a dispute is of no consequence in an application filed under section 7 of the Code. The Application filed under sub-section (2) of section 7 of I B Code, 2016 is complete. The existing financial debt of more than Rupees One Lakh against the corporate debtor and its default is also proved. Accordingly, the application filed under section 7 of the Insolvency and Bankruptcy Code for initiation of Corporate Insolvency Resolution Process against the corporate debtor deserves to be admitted. Application admitted - moratorium declared.
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2020 (6) TMI 645
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Having gone through the matter and on considering record, there remains hardly any doubt that the earlier correspondence shows that between the parties there were disputes regarding installation of the project as well as functioning of the same. Although the project had been commissioned for which completion certificate had been issued, still if disputes had arisen between the parties regarding the installation and functioning of the project, the operational creditor merely pointed out certificate of appreciation dated April, 2015 issued and claims that once completion certificate had been issued, corporate debtor could not raise issues with regard to the quality of the work done. In fact, the record shows that there had been even a review meeting between the operational creditor and the corporate debtor and excerpts of which minutes have been placed on record by the corporate debtor at page 187 which showed that full installation was yet to be completed (see page 188) - Only by observing that the respondent-corporate debtor have not come forward to dispute the application would not be sufficient to initiate CIRP, if the record already showed existence of dispute. Considering the voluminous records showing pre-existing disputes between the parties, there is no fault found with the affidavit filed by the authorized representative of the operational creditor as at page 495 of which paragraph 5 we have reproduced earlier. Although the Adjudicating Authority had specifically asked for the correspondence, it can be seen that the authorized representative Mr. Rahul Gupta resorting to articulate wordings avoided placing on record the correspondence claiming that presently the communication is not retrievable . Starting of the CIRP against a functional company is a serious matter and parties cannot be allowed to play hide and seek - We propose to impose heavy costs on the operational creditor as well as Mr. Rahul Gupta. The initiation of the corporate insolvency resolution process against the corporate debtor is quashed and set aside - We release the corporate debtor from rigour of the corporate insolvency resolution process . The interim resolution professional /resolution professional will handover the assets and records to the corporate debtor / promoter /board of directors - We impose costs of ₹ 5 lakhs on operational creditor. We impose costs of ₹ 2,50,000 on Mr. Rahul Gupta, son of Rajendra Prasad Gupta the director of the operational creditor which he shall pay from his personal account to the corporate debtor. The corporate debtor will be at liberty to execute and recover these costs or it may adjust the same from payments, if any, it has to make to the operational creditor.
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Service Tax
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2020 (6) TMI 641
Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - Waiver of interest and penalty for the period October 2013 to September 2016 - Rejection of waiver without affording any opportunity of hearing - HELD THAT:- Issue notice. Mr. Harpreet Singh, learned counsel accepts notice on behalf of the respondents. He states that he has no objection if the present writ petition is directed to be treated as representation to the respondent No.2 - Consequently, the present writ petition is directed to be treated as a representation by the respondent No.2, who is directed, to dispose of the same on or before 30th June, 2020 after giving an opportunity of hearing to an authorised representative of the petitioner on 29th June, 2020 at 11.30 A.M. Petition disposed off.
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Central Excise
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2020 (6) TMI 639
De-freezing of petitioner's Bank Savings Account - after waiting for over three months, the petitioner has approached this Court with a grievance that the respondent has failed to take appropriate action of defreezing its Saving Bank Account and releasing its lien on the LIC policy in question - HELD THAT:- Mr. Harpreet Singh, learned counsel for the respondent accepts notice and informs this Court that the file of the petitioner has been put up to the Competent Authority and the same is under process. However, he is unable to inform this Court as to when was the file put up before the Competent Authority and how much more time would it take to defreeze the petitioner's Saving Bank account and release the lien on its LIC policy particularly when more than three months have already expired after issuance of the Discharge Certificate. It is therefore deemed appropriate to dispose of the present petition with directions issued to the respondent to clear the file of the petitioner within three working days reckoned from today and defreeze its Saving Bank Account No. 664301427517 with ICICI Bank, Vikas Puri Branch and withdraw its lien on the LIC Policy No.330573064 - Petition disposed off.
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