9911796707
TMI Blog2015 (2) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... during the relevant period 1999-2003 provisions were ever made on the basis of any material to suspect such claims by HLL. At the same time the Court cannot ignore the circumstance that the overwhelming majority of the Board of Directors of the assessee was comprised of HLL’s nominees who could conveniently impose this law which they did. The palpable exaggeration of this claim is also evident from the fact that HLL subsequently in the year 2013 conceded that it only claimed ₹81,22,072/-, which was payable towards the balance part of the payment of salaries of supervisors etc. In the circumstances, this Court is of the opinion that the ITAT’s reasoning affirming the order of the CIT(A) is entirely without justification. - Decided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier years towards short payment of processing charges? 2. The brief facts are that the assessee who was originally incorporated in 1975, set up a paper plant, started incurring losses and faced winding up proceeding during which rehabilitation proposals were made. Subsequently, at the request of financial institutions who backed the rehabilitation plant, Hindustan Lever Ltd. (HLL) agreed to participate in the rehabilitation proposal and accordingly a scheme of compromise was drawn on 15.2.1990. In terms of this arrangement HLL had five nominees on the Board of Directors of the assessee; the promoter had one nominee and financial institutions had three nominees. The rehabilitation scheme was to end on 30.9.2004. HLL however decided not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was aggrieved by these additions it approached the CIT, who directed deletion of both the amounts. It was held by the CIT firstly that merely because the liability of 1.52 crores pertained to earlier years its deduction could not have been disallowed. It was observed that this liability has crystallized on account of Board Resolution of 4.12.2003. Speaking about the other amount i.e. 24.3 crores, the CIT noted as follows : 5.3 Now the same principles are to be applied to the other item. The amount of ₹ 24.30 crores was also taken by the AO from the appellant's petition filed before the High Court against HLL who was managing the company's affairs for 12 years as per Rehabilitation scheme. This claim was therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the appellant has not obtained any right to receive and has simply filed a petition before the court, the addition to its income is not justified. 5.4 There is another reason because of which the addition is not correct. Even without prejudice to the fact that the petition does not give any right to receive, it is to be noted that the petition before Delhi High Court filed by the appellant in May 2006. Therefore the claim for additional amount from HLL was for the first time made in FY 06-07 which relevant to AY 07-08. Hence other wise also no action of what ever nature could have been taken in the year under appeal because the ITA No.2906/Del./2007 events based on which addition has been made did not take place in the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT had noticed that the matter with respect to this liability was sub-judice and pending adjudication in the Company Court which since by its interim judgment dated 25.4.2013 in Company Petition No.5/1985 CA No.714/2006, rejected the plea made on behalf of the original promoter director of the assessee Sh. Choudhrie that the sum of ₹24.3 crores was payable. In this regard reliance was placed on the following extract of the judgment dated 25.4.2013 of the Court : 19. It is next contended that HLL owes the Applicant arrears of conversion/processing charges to the tune of ₹ 24 crores. As pointed out in its reply HLL enhanced the conversion charges which were required to be paid only if Phase-II was implemented at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hermore, large part of those amounts was in fact time-barred. That the debit note demanded ₹1.52 crores may be a matter of record. 9. Furthermore, there is no evidence on the record that at any time during the relevant period 1999-2003 provisions were ever made on the basis of any material to suspect such claims by HLL. At the same time the Court cannot ignore the circumstance that the overwhelming majority of the Board of Directors of the assessee was comprised of HLL s nominees who could conveniently impose this law which they did. The palpable exaggeration of this claim is also evident from the fact that HLL subsequently in the year 2013 conceded that it only claimed ₹81,22,072/-, which was payable towards the balance part ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
