Charitable trust registration requires a specified-violation notice; settled cash deposits and related-party payments did not justify cancellation or ...
External development charges trigger TDS under section 194C, while disputed administrative payments require factual verification and fresh adjudicatio...
Section 270AA penalty immunity requires identified statutory defaults and a hearing before rejection; reassessment disclosure may constitute under-rep...
Section 80JJAA employee-cost deduction allowed for deployed staff but barred against transfer-pricing income enhancement, with pricing issues remanded...
Transfer-pricing methodology protects commercially genuine associated-enterprise payments, while pre-2016 secondary adjustments and related notional i...
Negative liens over operating assets can constitute international transactions requiring arm's-length pricing reflecting restricted borrowing and expa...
Cross-examination rights in Customs Broker revocation inquiries require witness examination; procedural denial may be cured through fresh adjudication...
Insolvency and BankruptcySeptember 7, 2024Case LawsAT
The Corporate Debtor denied the existence of a loan agreement with 12% interest, as claimed by the Financial Creditor in the Section 7 application. To qualify as a Financial Debt u/s 5(8) of the IBC, the transaction must involve disbursal for time value of money. The Supreme Court in Anuj Jain vs. Axis Bank held that transactions u/s 5(8) clauses must contain the essential element of the principal clause or features traceable to it. In this case, the transfer of funds by the Financial Creditor to the Corporate Debtor was between family companies, not a loan or disbursal for time value of money. The Adjudicating Authority erred in admitting the Section 7 application without examining the nature of the transaction and the disputed loan letter. The essential element of disbursal for time value of money was not proved, so the debt cannot be treated as a Financial Debt. However, since the Corporate Debtor admitted owing Rs. 1,22,50,000 and handed over a draft, the Financial Creditor is allowed to retain the amount, despite offering to return it. The appeal is allowed.
The Corporate Debtor denied the existence of a loan agreement with 12% interest, as claimed by the Financial Creditor in the Section 7 application. To qualify as a Financial Debt u/s 5(8) of the IBC, the transaction must involve disbursal for time value of money. The Supreme Court in Anuj Jain vs. Axis Bank held that transactions u/s 5(8) clauses must contain the essential element of the principal clause or features traceable to it. In this case, the transfer of funds by the Financial Creditor to the Corporate Debtor was between family companies, not a loan or disbursal for time value of money. The Adjudicating Authority erred in admitting the Section 7 application without examining the nature of the transaction and the disputed loan letter. The essential element of disbursal for time value of money was not proved, so the debt cannot be treated as a Financial Debt. However, since the Corporate Debtor admitted owing Rs. 1,22,50,000 and handed over a draft, the Financial Creditor is allowed to retain the amount, despite offering to return it. The appeal is allowed.
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
TaxTMI 
of 4828 
Join Channel 
