TaxTMI Updates e-Newsletter
Jun 12,2020

Breach of principles of natural justice - opportunity of actual hearing - order under Section 130 of the GST Act - quash and set aside - remand for fresh decision after hearing

Breach of principles of natural justice - opportunity of actual hearing - Impugned order dated 14.5.2020 passed without hearing the petitioners was vitiated for breach of principles of natural justice. - HELD THAT: - The Court found that the impugned order was passed in the absence of the petitioners and without giving an opportunity of actual hearing. Although it was stated to the Court that a notice for hearing had been issued and that the petitioners did not remain present, the circumstances of the pandemic (Corona Virus Covid-19) were accepted as a reason why the petitioners could not or preferred not to attend. The High Court held that the failure to hear the petitioners amounted to a violation of principles of natural justice and that the impugned order could not stand for that reason. The Court expressly did not examine the merits of the underlying proceedings and confined its decision to the procedural infirmity of non-hearing.

Impugned order quashed and set aside on the ground of non-hearing for breach of principles of natural justice.

Remand for fresh decision after hearing - quash and set aside - Direction to the authorities to pass a fresh order on merits after affording opportunity of hearing to the petitioners. - HELD THAT: - Having quashed the impugned order solely on the procedural ground of non-hearing, the Court directed that the authorities concerned shall pass a fresh order on merits without being influenced by the earlier order. The petitioners were to be informed in advance of the date fixed and were required to remain present for the hearing. The Court clarified that it did not decide or comment on the substantive issues pending before the authorities, and the remand was for fresh consideration after giving the petitioners an opportunity to be heard.

Matter remitted to the authorities for fresh adjudication on merits after giving the petitioners an opportunity of hearing.

Final Conclusion: Writ petition allowed to the extent that the impugned order dated 14.5.2020 is quashed and set aside for want of hearing; the matter is remitted to the authorities to decide afresh on merits after affording the petitioners an opportunity of hearing; no order as to costs.

Anti-profiteering - Section 171 of the CGST Act, 2017 - benefit of input tax credit - commensurate reduction in prices - absence of pre-GST base for comparison

Section 171 of the CGST Act, 2017 - benefit of input tax credit - absence of pre-GST base for comparison - commensurate reduction in prices - Whether the respondent contravened the provisions of Section 171 of the CGST Act, 2017 by not passing on the benefit of input tax credit to the applicant. - HELD THAT: - The Authority accepted the DGAP's finding that the project in question was conceived, launched, registered and its building plan approved entirely after the implementation of GST, and that no sale, booking or price history existed in the pre-GST regime which could serve as a basis for comparison. Section 171(1) operates where there is a reduction in rate of tax or an increase in the benefit of input tax credit that can be shown to have arisen relative to a pre-change baseline. In the present case, there was neither a post-GST reduction in tax rate nor any demonstrable additional ITC benefit accruing to the respondent relative to a pre-GST position because the project and all relevant dealings commenced in the post-GST period. On these findings the DGAP reported that Section 171(1) was not contravened, and the Authority, after considering the report and the applicant's concurrence, found no reason to differ from that conclusion. [Paras 13, 14, 17, 19]

The respondent did not violate Section 171 of the CGST Act, 2017 as there was no pre-GST comparator to establish any ITC benefit that required passing on to the recipient.

Final Conclusion: The application alleging failure to pass on benefit of input tax credit is dismissed as not maintainable; no contravention of Section 171 of the CGST Act, 2017 is found and the complaint is rejected.

Appealability of orders under the C.G.S.T. Act - remedy of appeal to the Appellate Tribunal - non constitution of the Appellate Tribunal and Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 - extension of limitation where Tribunal is not constituted - availability of writ relief under Article 226 where alternative statutory remedy exists

Appealability of orders under the C.G.S.T. Act - remedy of appeal to the Appellate Tribunal - non constitution of the Appellate Tribunal and Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 - availability of writ relief under Article 226 where alternative statutory remedy exists - Petition filed under Article 226 bypassing statutory appeal remedy where Appellate Tribunal was not constituted - HELD THAT: - The impugned order was appealable to the Appellate Tribunal under the statutory scheme and the statutory period for preferring appeal is ninety days from communication of the order. The petitioner sought writ relief by bypassing the appeal on the ground that the Appellate Tribunal had not been constituted. The Court noted the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, which addresses the difficulty of filing appeals where the Tribunal is not constituted by treating the three months' period as commencing from the date the President or State President of the Tribunal, as applicable, enters office after constitution. The petitioner and State counsel both accepted that the seized goods have been released and that the Removal of Difficulties Order provides a statutory mechanism to preserve the right to appeal once the Tribunal is constituted. In those circumstances, the Court declined to exercise writ jurisdiction to circumvent the statutory appellate remedy and directed that the petitioner may avail the remedy of appeal before the Tribunal in terms of the Ninth Removal of Difficulties Order, 2019.

Writ petition disposed with direction that petitioner may invoke the remedy of appeal before the Appellate Tribunal in terms of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019.

Final Conclusion: The petition under Article 226 is disposed of by permitting the petitioner to await constitution of the Appellate Tribunal and to file appeal in accordance with the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019; no writ relief was granted to bypass the statutory appellate remedy.

Maintainability of writ petition in presence of alternative remedy - appeal under Section 112 of the CGST Act, 2017 - extension of limitation by Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 - constitution of Appellate Tribunal under Section 109

Maintainability of writ petition in presence of alternative remedy - appeal under Section 112 of the CGST Act, 2017 - extension of limitation by Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 - constitution of Appellate Tribunal under Section 109 - Whether the petitioner could bypass the statutory appeal remedy and maintain a petition under Article 226 when the Appellate Tribunal is not constituted, and what remedy is available. - HELD THAT: - The court observed that the impugned orders are appealable under Section 112 of the CGST Act, 2017 and that the appeal period runs from communication of the order. Recognising the practical difficulty caused by non-constitution of the Appellate Tribunal and its Benches, the court relied on the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, which treats the three months' period as commencing from the date the President or State President of the Appellate Tribunal, as constituted under Section 109, enters office. The court noted that the petitioner had filed the writ bypassing the statutory appeal remedy but also observed that the seized goods have already been released and the petitioner would not suffer prejudice by awaiting constitution of the Tribunal. In those circumstances the court declined to entertain the writ as an alternative to the statutory appeal and directed that the petitioner may avail the remedy of appeal before the Tribunal in terms of the Ninth Removal of Difficulties Order, 2019.

Petition disposed of by permitting the petitioner to file an appeal before the Appellate Tribunal in terms of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 when the Tribunal is constituted.

Final Conclusion: The writ petition was disposed of: the petitioner is directed to invoke the statutory appellate remedy under Section 112 of the CGST Act, 2017 and may file the appeal before the Appellate Tribunal in terms of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 upon constitution of the Tribunal.

Condonation of delay under CBDT circular - Form 10B - exemption under Section 11 - certificate under Section 12AA - abeyance of demand

Form 10B - condonation of delay under CBDT circular - certificate under Section 12AA - Disposal of the application (Ext.P3) filed under Form 10B seeking condonation of delay and recall of denial of exemption. - HELD THAT: - The petitioner filed Ext.P3 (Form 10B) seeking relief under the Board's circular permitting condonation of delay for assessees holding registration under Section 12AA. The High Court directed the 1st respondent to take a decision on Ext.P3 in accordance with law after affording the petitioner an opportunity of hearing. The Court did not express any opinion on the merits of the application and required only expeditious adjudication within a specified time-frame.

1st respondent directed to decide Ext.P3 after opportunity of hearing as expeditiously as possible, within two months.

Exemption under Section 11 - abeyance of demand - Interim treatment of the demands (Exts.P1, P2 and P4) raised during pendency of Ext.P3. - HELD THAT: - In view of the pendency of Ext.P3 and without adjudicating the substantive merits, the Court ordered that the demands made in Exts.P1, P2 and P4 shall be kept in abeyance until the application Ext.P3 is disposed of. The interim protection was expressly limited to the period until disposal of Ext.P3 and does not extend beyond the final decision on that application.

Demands in Exts.P1, P2 and P4 stayed (kept in abeyance) until disposal of Ext.P3.

Final Conclusion: Writ petition disposed of by directing the 1st respondent to decide the Form 10B application (Ext.P3) after hearing within two months; meanwhile demands in Exts.P1, P2 and P4 are kept in abeyance until such decision; no observation made on the merits of Ext.P3.

Reassessment - Escapement of income - Reasons recorded for reopening assessment - Validity of reassessment where additions are not based on grounds recorded for reopening - Initiation of reassessment on grounds constituting escapement of income under section 147

Reasons recorded for reopening assessment - Escapement of income - Validity of reassessment where additions are not based on grounds recorded for reopening - Whether the reassessment initiated on the basis of recorded reasons alleging escapement of income is void where the Assessing Officer makes additions on grounds other than those stated in the reasons for reopening. - HELD THAT: - The reasons recorded by the Assessing Officer comprised (i) factual material concerning allotment and payments for a flat and (ii) a specific finding of discrepancy between the closing capital balance and balance-sheet figure leading to a quantified escapement of income of Rs. 47,093. The re-assessment was therefore initiated on the limited premise of that discrepancy. On scrutiny, the Assessing Officer did not make any addition or adjustment based on the very discrepancy which formed the basis for reopening; instead, additions were made on unrelated grounds. The Tribunal, following the principle that reassessment proceedings must be confined to the grounds expressly recorded for reopening, held that where no addition is made on the basis of the grounds which led to initiation of reassessment, the reassessment is without jurisdiction and liable to be annulled. The Tribunal noted and followed the view of the High Courts as referred to in the judgment in CIT Vs. Jet Airways and CIT Vs. Cheil Communications India Pvt. Ltd. , and applied that precedent to set aside and quash the impugned assessment orders which did not proceed on the grounds recorded for reopening. [Paras 5, 6, 7, 8]

Reassessment order is quashed and the resultant assessment is annulled because no addition was made on the basis of the grounds recorded for reopening.

Final Conclusion: All six appeals are allowed on the legal ground that the reassessment proceedings were void insofar as the Assessing Officer did not make any addition on the specific grounds recorded for reopening, and the impugned assessment orders are set aside and quashed.

Application of income - exemption under Section 11(1)(a) - capital gains on sale of trust property - transfer of sale proceeds to corpus of another charitable trust - winding up clause and transfer of corpus - inapplicability of Section 11(1A)

Exemption under Section 11(1)(a) - application of income - winding up clause and transfer of corpus - inapplicability of Section 11(1A) - Donation of sale proceeds of immovable property to the corpus of another charitable trust by a trust invoking its winding up clause constitutes application of income and is exempt under Section 11(1)(a); Section 11(1A) does not apply. - HELD THAT: - The Trust Deed contains a winding up provision (Sub clause 'z' of Clause 3) stipulating that on winding up the corpus and other funds, movable and immovable properties shall be transferred to another public charitable trust/institution having the same objects. The assessee sold the immovable property and donated the sale proceeds to the corpus of another charitable society/trust in accordance with that clause. The Tribunal found that this transfer of sale proceeds satisfied the conditions of application of income and entitled the assessee to exemption under Section 11(1)(a). The Assessing Officer and the CIT(A) erred in treating the transaction as an acquisition of another capital asset and invoking Section 11(1A); there was no acquisition of a capital asset by the assessee but a bona fide winding up transfer of corpus by way of donation. The Tribunal noted and accepted reliance placed on judicial precedents including Bagri Foundation and the Tribunal decision in ACIT v. M/s Bhartiya Yug Vashista Sanga as supportive of this approach, and accordingly set aside the addition made to taxable income as long term capital gain. [Paras 7, 9]

Appeal allowed; addition treating sale proceeds as taxable long term capital gain set aside and exemption under Section 11(1)(a) held to be available as the proceeds were applied to the corpus of another charitable trust in terms of the winding up clause.

Final Conclusion: The Tribunal allowed the assessee's appeal for Assessment Year 2014 15, holding that sale proceeds donated to the corpus of another charitable trust pursuant to the trust's winding up clause amounted to application of income and qualified for exemption under Section 11(1)(a); the Assessing Officer's invocation of Section 11(1A) was incorrect and the addition was set aside.

Presumptive taxation under section 44AD - deemed income under sections 69 to 69C - cash flow statement and unexplained investment addition - nexus between cash inflow and cash outflow - exemption from maintenance of books under section 44AD

Presumptive taxation under section 44AD - cash flow statement and unexplained investment addition - deemed income under sections 69 to 69C - nexus between cash inflow and cash outflow - exemption from maintenance of books under section 44AD - Validity of addition of unexplained investments of Rs. 11,52,273 where assessee's business income was declared under section 44AD - HELD THAT: - The Tribunal held that where an assessee is assessed under the presumptive scheme of section 44AD, the prescribed percentage is a deemed income and, conversely, the residual may be treated as deemed expenditure for taxation purposes; accordingly the Assessing Officer cannot, by mechanically drawing a cash flow statement and treating routine business debits/transfers as unexplained investments, make additions inconsistent with the protective object of section 44AD. The A.O.'s cash flow omitted opening cash/bank balances, included many items plainly referable to the business of running houseboats, and treated certain estimated household expenses and transfers as unexplained without supporting evidence. The cash flow was therefore held to be based on assumptions and arbitrary estimates. Reliance was placed on earlier Tribunal and High Court reasoning that once income is accepted under section 44AD (or declared at a higher presumptive rate), additions based on reconstructed cash flows require clear demonstration that entries are not relatable to the business or to any other proved taxable source; that burden was not discharged here. For these reasons the addition under section 69 (and akin provisions) was not sustained. [Paras 7, 8]

The addition of Rs. 11,52,273 as unexplained investment is deleted and the assessee's appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that the Assessing Officer's reconstructed cash flow and resultant addition were based on assumptions and not maintainable against an assessee assessed under the presumptive scheme of section 44AD; the unexplained investment addition of Rs. 11,52,273 was deleted.

Unexplained cash credit - treatment of employee deposits/security - allowability of expenditure under section 43B - gratuity - nature of payment v. nomenclature in books - deduction for employees' contribution to provident fund - timing and Explanation to section 36(1)(va) - disallowance under section 40(a)(ia) for non-deduction of TDS - retrospective effect of amendment and restriction to 30% - penalty under section 271(1)(c) contingent on quantal additions - remand for verification of disclosure by recipients

Unexplained cash credit - treatment of employee deposits/security - Deletion of addition of unsecured loans from employees treated as unexplained cash credit - HELD THAT: - The Tribunal accepted the assessee's explanation that small cash amounts shown as liability were security deposits/advances from employees and noted production of identity cards for 40 of 61 employees. The Bench observed that if the AO had serious doubt as to identity or genuineness he could have issued notices under the relevant inquiry provisions but did not do so; mere absence of PAN or income-tax returns for some depositors was insufficient to sustain the addition. Having regard to the facts and circumstances and the submissions, the Tribunal directed the AO to delete the addition made as unexplained cash credit. [Paras 15]

Addition on account of unsecured loans from employees of Rs.10,02,312/- deleted; appeal allowed on this head.

Allowability of expenditure under section 43B - gratuity - nature of payment v. nomenclature in books - Deletion of additions made in respect of leave encashment and gratuity - HELD THAT: - The Tribunal accepted that, in the context of a small organisation, the payments characterized as leave encashment did not fall within the disallowance under section 43B as applied by the AO, having regard to the manner of work and practices of the assessee. Regarding gratuity, the Tribunal accepted the assessee's explanation that the payment was compensatory in nature and that an erroneous nomenclature in the books led to the confusion. On these bases both additions were deleted and the AO was directed accordingly. [Paras 16]

Additions on account of leave encashment and gratuity (Rs.6,77,823/-) deleted; grounds allowed.

Deduction for employees' contribution to provident fund - timing and Explanation to section 36(1)(va) - remand for verification of disclosure by recipients - Remand of issue regarding disallowance of employees' contribution to Provident Fund (and related EPF) for verification by AO - HELD THAT: - The Tribunal observed that the assessee had not deposited employees' contribution within the statutory due date under the relevant enactment and that section 36(1)(va) requires credit to employees' accounts by the due date defined in the Explanation to that section. In line with earlier decisions of this Bench, the Tribunal found it appropriate to restore the matter to the file of the AO to examine the actual dates of deposits and to verify whether recipients had disclosed the receipts in their returns; relief, if any, was to be granted by the AO in accordance with law. The issue was therefore restored to the AO for fresh consideration and verification. [Paras 17]

Issue remanded to the AO to verify deposit dates and disclosure by recipients; ground allowed for statistical purposes (restored).

ESI contribution - timing and verification - remand for verification of disclosure by recipients - Remand of issue regarding disallowance of ESI contribution for verification by AO - HELD THAT: - The Tribunal treated the ESI contribution issue as similar to the provident fund issue and, following the same reasoning, restored the matter to the AO to examine dates of payment and related verifications so as to determine entitlement to deduction under the statutory scheme. [Paras 18]

Issue remanded to the AO for verification; ground allowed for statistical purposes.

Disallowance under section 40(a)(ia) for non-deduction of TDS - retrospective effect of amendment and restriction to 30% - Restriction of disallowance under section 40(a)(ia) to 30% where AO made 100% disallowance for non-deduction of TDS - HELD THAT: - Relying on decisions of coordinate benches and authoritative precedents addressing the curative/remedial nature of the proviso inserted by the Finance Act, 2014 (w.e.f. 01.04.2015), the Tribunal held that the 100% disallowance confirmed by the CIT(A) should be restricted to 30% of the expenditure claimed in the profit and loss account. The Tribunal observed that the proviso is remedial and intended to reduce hardship and therefore ought to operate retrospectively; the AO was directed to restrict the disallowance accordingly and compute the consequence. [Paras 19]

Disallowance under section 40(a)(ia) on account of non-deduction of TDS restricted to 30% of the expenditure claimed; ground partly allowed.

Penalty under section 271(1)(c) contingent on quantal additions - Deletion of penalty imposed under section 271(1)(c) which was based on additions deleted in the quantum appeal - HELD THAT: - The Tribunal observed that the AO had imposed penalty on additions which the Tribunal deleted in the quantum proceedings (leave encashment and the unexplained employee deposit). Since the underlying additions have been deleted, the basis for the penalty fell away. Consequently, the Tribunal deleted the penalty levied under section 271(1)(c) and allowed the appeal against penalty. [Paras 24]

Penalty under section 271(1)(c) deleted insofar as it related to the deleted additions; appeal allowed.

Final Conclusion: The Tribunal partly allowed the quantum appeal: additions on account of unsecured employee deposits, leave encashment and gratuity were deleted; disallowance under section 40(a)(ia) was restricted to 30%; issues relating to employees' PF and ESI contributions were restored to the Assessing Officer for verification; the penalty under section 271(1)(c) was deleted as it related to the deleted additions.

Capitalization of interest - investment company - cost of acquisition of shares - deduction of preliminary expenses - section 35D - before commencement of business - disallowance under section 14A - rule 8D - limit of disallowance to exempt income

Capitalization of interest - investment company - cost of acquisition of shares - Accounting Standard 13 - Interest expense incurred on borrowed funds used to acquire shares by an investment company treated as part of the cost of acquisition and capitalized - HELD THAT: - The Tribunal held that the assessee being an investment company incurred interest directly attributable to the acquisition of shares; such interest must be capitalized as part of the cost of the shares rather than treated as revenue expenditure. The CIT(A)'s finding that the expenditure could be neither allowed as revenue nor capitalized was held to be contrary to the provisions of the Act. The Tribunal relied on the principle in Trishul Investments Ltd. that interest paid for acquisition of shares partakes the character of the cost of the shares and therefore is to be capitalized. Although Accounting Standard 13 was noted, the statutory characterisation of the expenditure for an investment company was determinative and the capitalisation was directed. [Paras 10, 11]

Assessee's ground allowed; interest directly attributable to acquisition of shares is capitalized as part of cost of shares.

Deduction of preliminary expenses - section 35D - before commencement of business - Expenditure incurred before commencement of business for incorporation and increase of authorised capital qualifies for deduction under section 35D and is to be allowed to be amortised one-tenth for ten years - HELD THAT: - The Tribunal found that incorporation/registration and the subsequent increase in authorised share capital were incurred before the commencement of the assessee's business, which commenced upon the acquisition of the shares. Under section 35D, items of expenditure specified if incurred before commencement of business are eligible for deduction by amortisation over ten years. The Tribunal held the impugned expenditure falls within clause (c)(iii) of section 35D and directed the Assessing Officer to allow the claim, setting aside the CIT(A)'s contrary finding. [Paras 19]

Assessee's ground allowed; the impugned pre commencement expenditure is deductible under section 35D.

Disallowance under section 14A - rule 8D - limit of disallowance to exempt income - Disallowance under section 14A read with rule 8D cannot exceed the amount of exempt income and CIT(A)'s deletion of the AO's addition is justified where exempt income for the year is nil - HELD THAT: - The Tribunal held that section 14A disallows expenditure 'incurred in relation to' tax exempt income and therefore the quantum of disallowance cannot exceed the exempt income itself. Reliance was placed on precedent of the Delhi High Court and the jurisdictional High Court (as cited in the order) holding that disallowance under section 14A/read with rule 8D is limited by the amount of exempt income. As the assessee had nil exempt income in the year, the CIT(A)'s deletion of the AO's disallowance was upheld and the addition deleted. [Paras 26, 27]

Revenue's ground dismissed; disallowance under section 14A/read with rule 8D cannot exceed exempt income and deletion by CIT(A) upheld.

Final Conclusion: For AY 2014-15 the Tribunal allowed the assessee's appeals: (i) interest on borrowed funds used to acquire shares by an investment company is to be capitalized as part of cost of acquisition; (ii) pre commencement expenditure including fees for registration and increase of authorised capital is deductible under section 35D by amortisation; and the Revenue's appeal was dismissed as disallowance under section 14A/read with rule 8D cannot exceed exempt income (CIT(A)'s deletion upheld).

Validity of notice under Section 143(2) - Application of mind by the Assessing Officer before issuing notice - Reopening assessment under Section 147 - territorial and jurisdictional efficacy of subsequent proceedings - Admission of additional legal grounds at appellate stage where no fresh facts are required - Use of AIR information to initiate reassessment proceedings

Validity of notice under Section 143(2) - Application of mind by the Assessing Officer before issuing notice - Use of AIR information to initiate reassessment proceedings - Whether the notice issued under section 143(2) on the same day the return was filed (and served on the assessee's counsel on the spot, together with a questionnaire) was valid and whether the consequent reassessment under section 147/143(3) was maintainable. - HELD THAT: - Section 143(2) permits serving a notice after the Assessing Officer 'considers it necessary or expedient' on examination of the return; no statutory minimum time is prescribed between receipt of the return and issuance of such notice. An AO may therefore issue a notice on the same day if, having examined available material (including an original return already on record), he genuinely considers it necessary or expedient. However, where the AO issues a notice at the moment the return is filed without any prior examination or any material beyond an AIR entry that led to initiation under section 147, and issues accompanying questionnaire on the spot to the assessee's representative, that conduct indicates mechanical issuance of the notice without application of mind. In the present case the AO had only AIR information of cash deposits and no contemporaneous examination to justify immediate issuance of notice and questionnaire on the spot; that conduct fell within the category where the AO had not applied his mind as required by section 143(2). The Tribunal distinguished decisions where the AO already had the original return or other material on record and could legitimately issue a contemporaneous notice. On the facts, the assessment completed under section 147 read with section 143(3) was therefore quashed for want of jurisdiction arising from an invalid section 143(2) notice. [Paras 18]

Assessment order passed under section 147 read with section 143(3) quashed as the notice under section 143(2) was issued mechanically on the spot without application of mind.

Admission of additional legal grounds at appellate stage where no fresh facts are required - Whether the additional legal grounds filed by the assessee during the appeal, raising jurisdictional objection to the section 143(2) notice and scope of reasons recorded under section 148(2), should be admitted. - HELD THAT: - The Tribunal applied the settled principle that additional grounds of a purely legal character and not requiring fresh factual investigation may be admitted at the appellate stage. The additional grounds challenged the validity of the section 143(2) notice and contended that certain additions exceeded the reasons recorded under section 148(2). The Tribunal found these grounds went to the root of the matter, were legal in nature and did not necessitate fresh facts, and therefore admitted both additional grounds for consideration. [Paras 4]

Both additional grounds were admitted.

Final Conclusion: The appeal is allowed: the assessment framed under section 147 read with section 143(3) (assessment dated 28/12/2016) is quashed on the ground that the notice under section 143(2) was issued mechanically on the spot without application of mind; admitted additional legal grounds need not be further adjudicated on merits as the assessment has been set aside.

Disallowance under section 40(a)(ia) - Tax deduction at source on commission under section 194H - Trade discount versus commission - Management fees and distributor/agency payments - Remand for verification of newly raised contentions and additional evidence

Disallowance under section 40(a)(ia) - Tax deduction at source on commission under section 194H - Trade discount versus commission - Management fees and distributor/agency payments - Remand for verification of newly raised contentions and additional evidence - Whether the disallowance under section 40(a)(ia) in respect of payments aggregating Rs. 3,92,864/- should be sustained or whether the matter requires fresh verification in view of new contentions and evidence. - HELD THAT: - The Tribunal recorded that the Assessing Officer made a disallowance under section 40(a)(ia) on the basis that the assessee failed to deduct tax at source on amounts treated as commission. Before the Tribunal the assessee raised for the first time a contention, supported by additional e-mails, that the payments were management fees payable by Vodafone to distributors and that the assessee merely facilitated disbursement/reimbursement; alternatively the assessee contended that the recipients had declared the amounts as income and paid tax thereon. These contentions and the supporting material were not examined by the Assessing Officer or the Commissioner (Appeals). The Tribunal found that the new contentions and evidence require factual and documentary verification by the Assessing Officer and noted that the Departmental Representative did not oppose remand. In view of this, the Tribunal set aside the order of the Commissioner (Appeals) confirming the disallowance and directed that the matter be restored to the file of the Assessing Officer for fresh adjudication after verification of the contentions and evidence now placed on record.

The order of the Commissioner (Appeals) confirming the disallowance under section 40(a)(ia) is set aside and the matter is remitted to the Assessing Officer for fresh decision after verification of the newly raised contentions and additional evidence.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, set aside the impugned order confirming the disallowance under section 40(a)(ia), and restored the matter to the file of the Assessing Officer for reconsideration and verification of the new contentions and evidence placed before the Tribunal.

Arm's length price - comparability analysis - related party transaction filter - turnover filter for comparables - risk adjustment - working capital adjustment - deduction under Section 10A - powers of the Transfer Pricing Officer under section 133(6)

Comparability analysis - turnover filter for comparables - arm's length price - Validity of inclusion or exclusion of identified comparable companies for determining arm's length price under the software development and ITES segments - HELD THAT: - The Tribunal examined the functional profile, assets and risks of the comparables vis-a -vis the assessee and applied precedents and prior decisions in the assessee's own cases. For the software development segment the Tribunal directed exclusion of KALS Information Systems Ltd, Lucid Software Ltd, e Zest Solutions Ltd, Avani Cincom Technologies Ltd, Thirdware Solutions Ltd and Persistent Systems Ltd on grounds of functional dissimilarity, presence of product/licensing income, R&D/intangible ownership or abnormal year-specific profits. For the ITES segment the Tribunal directed exclusion of Vishal Information Technologies Ltd, Eclerx Services Ltd and Mold Tek Technologies Ltd for functional dissimilarity, outsourcing business model, or KPO/high-end engineering profile. Conversely, the Tribunal directed retention of Flextronics Software Systems Ltd in the comparable set (rejected CIT(A)'s exclusion based on 0% RPT). The Tribunal also upheld exclusion of very large public players (Infosys, Wipro, Infosys BPO) from comparables on the established turnover/scale/intangible/brand ground for captive service providers. The Tribunal applied consistent precedents and prior year findings in making these determinations.

Specified companies were excluded or retained as comparables as directed; large turnover companies (Infosys, Wipro, Infosys BPO) to be excluded; Flextronics to be retained.

Related party transaction filter - comparability analysis - Appropriate threshold for related party transactions (RPT) filter to be applied in selecting comparables - HELD THAT: - The Tribunal held that the strict 0% RPT criterion applied by CIT(A) was inappropriate in the circumstances and directed that the AO/TPO should use a 15% threshold for related party transactions when re examining the remaining comparables, having regard to precedents and the assessee's own cases for adjacent years. The Tribunal noted that the TPO had applied a 25% threshold but directed reconsideration with 15% to ensure usable comparable sets while conforming to earlier Tribunal practice.

AO/TPO to keep related party transaction threshold at 15% when reconsidering comparables.

Risk adjustment - working capital adjustment - arm's length price - Need for and manner of computing adjustments (risk and working capital) for selected comparables - HELD THAT: - The Tribunal recognised that the assessee is a low risk captive service provider and that differences in risk profile and working capital computations between the assessee and comparables may affect arm's length margins. It directed the assessee to supply necessary details for all finally selected comparables and remitted the transfer pricing issues to the AO/TPO to compute risk adjustments and correct working capital adjustments in accordance with law, granting the assessee opportunity of representation and requiring a detailed fresh order by the AO/TPO.

Transfer pricing issues remitted to AO/TPO for fresh quantification of risk and working capital adjustments and recomputation of margins.

Deduction under Section 10A - Whether certain expenses excluded from export turnover must also be excluded from total turnover for computing deduction under Section 10A - HELD THAT: - Both parties accepted that the issue is squarely covered by the decision of the Karnataka High Court in Tata Elxsi Ltd. v. CIT, which held that amounts reduced from export turnover should also be reduced from total turnover. The Tribunal found no infirmity in the CIT(A)'s application of that view and upheld the deletion of disallowance under Section 10A as allowed by the CIT(A).

CIT(A)'s allowance on the Section 10A computation is upheld; revenue's challenge dismissed.

Final Conclusion: The Tribunal directed inclusion or exclusion of specific comparables after functional analysis (excluding several listed companies and retaining Flextronics), required the AO/TPO to re examine comparables using a 15% RPT threshold, and remitted transfer pricing matters to the AO/TPO for fresh computation of risk and working capital adjustments and recomputation of margins. The Tribunal upheld the CIT(A)'s deletion of the Section 10A disallowance following the Karnataka High Court decision.

Re-opening of assessment under the Income-tax Act on basis of fresh material/information - reliance on third party investigation and Sales Tax Department reports as fresh material forming reasonable belief of escapement of income - addition of profit element embedded in purchases from alleged bogus/hawala dealers - estimation of undisclosed profit at 12.5% of such purchases as a reasonable and fair yardstick - mere payment by account payee cheque not conclusive proof of genuineness of purchases

Re-opening of assessment under the Income-tax Act on basis of fresh material/information - reliance on third party investigation and Sales Tax Department reports as fresh material forming reasonable belief of escapement of income - Validity of reopening assessment - HELD THAT: - The Tribunal examined the basis on which the Assessing Officer reopened the assessments and found that the AO acted on information received from the Directorate of Investigation (DGIT) and a report of the Maharashtra Sales Tax Department indicating that certain dealers were issuing bogus purchase bills and that the assessee appeared in the list of beneficiaries. The information constituted fresh material capable of forming a reasonable belief of escapement of income. The assessee's challenge to the validity of reopening was therefore rejected. [Paras 5]

The reopening of assessment was valid and the legal ground challenging reopening is rejected.

Addition of profit element embedded in purchases from alleged bogus/hawala dealers - estimation of undisclosed profit at 12.5% of such purchases as a reasonable and fair yardstick - mere payment by account payee cheque not conclusive proof of genuineness of purchases - Validity and quantum of addition on account of alleged bogus purchases - HELD THAT: - The Tribunal noted that the AO made additions by estimating a 25% profit element on purchases from parties alleged to be hawala dealers, while the CIT(A) reduced the estimate to 12.5%. The assessee produced basic records but failed to conclusively establish genuineness to the AO's satisfaction; conversely, the AO had not completed enquiries to a logical conclusion and relied heavily on investigation reports. Having regard to earlier decisions of Coordinate Benches and the High Court accepting estimation of profit in the 10-15% range in similar facts, and since neither authority supported their chosen percentage by definitive evidence, the Tribunal held that the CIT(A)'s adoption of 12.5% as a fair estimate of profit embedded in the accommodation entries was reasonable. The Tribunal also recorded that payment by cheque alone does not prove genuineness when other circumstantial evidence points otherwise. [Paras 6, 7, 8]

The CIT(A)'s estimation of undisclosed profit at 12.5% on the alleged bogus purchases is upheld and the assessee's appeals are dismissed.

Final Conclusion: Both appeals for AY 2009-10 and AY 2011-12 are dismissed: reopening under the Income tax Act was valid on the basis of fresh material, and the CIT(A)'s reduction of the addition to 12.5% of alleged bogus purchases is sustained as a fair estimate.

Unexplained cash deposits - addition as unexplained cash under section 69A - addition as unexplained money under section 69C - explanation by reference to third party source of funds

Unexplained cash deposits - addition as unexplained cash under section 69A - explanation by reference to third party source of funds - Whether the cash deposits of Rs.14,17,000 in the assessee's bank account were explained so as to displace the addition made by the Assessing Officer. - HELD THAT: - The Tribunal examined the remand report and the statement of the assessee's father, who stated that he owned agricultural land and had agricultural income of about Rs.4-5 lakhs per year. The Assessing Officer accepted agricultural income of Rs.4 lakhs per year and noted total cash availability for two years at Rs.8 lakhs. Applying that factual finding, the Tribunal held that cash deposits aggregating to Rs.8 lakhs stood satisfactorily explained by the third party source (the father's agricultural income) and directed deletion of the addition to that extent. For the remaining cash deposits of Rs.2,17,000, no explanation was offered before the Tribunal and no error in the findings of the lower authorities was pointed out; accordingly, the addition in respect of that balance was upheld. [Paras 5, 6]

Addition of Rs.14,17,000 reduced by Rs.8,00,000 (deleted) as explained; balance of Rs.2,17,000 sustained as unexplained income.

Final Conclusion: The appeal is partly allowed: the Tribunal deleted Rs.8,00,000 of the addition relating to cash deposits on account of the assessee's father's accepted agricultural income and upheld the remaining addition of Rs.2,17,000.

Judicial review under Article 226 - appealability under regulation 19 and Section 129 of the Customs Act - availability of statutory alternative remedy by appeal - limitation period for filing appeal - direction for expeditious disposal by the Tribunal

Judicial review under Article 226 - appealability under regulation 19 and Section 129 of the Customs Act - availability of statutory alternative remedy by appeal - Whether the High Court should exercise writ jurisdiction to examine the veracity and genuineness of documents and re-appraise the merits of the impugned refusal of licence-renewal where a statutory appeal lies. - HELD THAT: - The Court held that it cannot, in exercise of Article 226, undertake a merits review of the impugned orders refusing renewal of the customs broker licence where those orders are subject to a statutory appeal under the Regulations (regulation 19) read with Section 129 of the Customs Act. Because a designated appellate remedy exists and the limitation for filing the appeal had not yet expired, the petitioner must be relegated to invoke the statutory appeal. The Court declined to re-appraise factual or evidentiary matters in writ jurisdiction when Parliament has provided an appeal mechanism, and observed that the existence of the alternative remedy militates against extraordinary intervention by the writ court.

Writ jurisdiction under Article 226 will not be invoked to re-examine the veracity or genuineness of documents or the merits of the refusal where a statutory appeal under regulation 19 and Section 129 is available; the petitioner is relegated to file the appeal.

Limitation period for filing appeal - direction for expeditious disposal by the Tribunal - What interim procedural direction should be given pending prosecution of the statutory appeal. - HELD THAT: - Noting that the limitation for filing the appeal had not expired and that no permanent closure of the appellate mechanism was shown, the Court directed that the petitioner may file the statutory appeal and that the Tribunal shall dispose of the appeal expeditiously. The Court fixed a two-month period for disposal by the Tribunal, as contemplated by the Regulations, and granted liberty to the petitioner to seek modification of this order in the event the Tribunal is not functioning so that an appropriate direction can be issued.

Petitioner is directed to file the statutory appeal; the Tribunal is directed to dispose of the appeal expeditiously within two months; petitioner may seek modification if the Tribunal is non-functional.

Final Conclusion: Writ petition dismissed on the ground that statutory appeal is available; petitioner directed to file the appeal under the Regulations/Section 129 and the Tribunal directed to dispose of it expeditiously within two months, with liberty to seek further relief if the Tribunal is non-functional.

Grant of bail - Offence under the Customs Act, 1962 - Personal bond in lieu of sureties during lockdown - Post-lockdown surety requirement - Non-misuse of liberty and cooperation in trial

Grant of bail - Offence under the Customs Act, 1962 - Applicant entitled to be admitted to bail in the case registered under the Customs Act, 1962. - HELD THAT: - The Court, having considered the materials on record and overall facts and circumstances, concluded that the applicant should be released on bail. The order notes that a co-accused had earlier been granted bail by the Court and records that the applicant had been in custody since 11th December, 2019. In light of these factors and the prevailing lockdown, the Court exercised its discretion to admit the applicant to bail subject to conditions.

Bail granted to the applicant.

Personal bond in lieu of sureties during lockdown - Post-lockdown surety requirement - Conditions and modalities for release on bail during the lockdown and subsequent furnishing of sureties were prescribed. - HELD THAT: - Recognising the special circumstances of the lockdown and in accordance with directions of the Court in P.I.L. No. 564 of 2020, the Court ordered that the applicant be enlarged on bail on furnishing a personal bond only to the satisfaction of the jail authorities where he is lodged. The Court further directed that within four weeks from the date of lifting of the complete lockdown in the district and resumption of normal court functioning, the applicant shall furnish two sureties of like amount to the satisfaction of the concerned court along with a certified copy of the order, failing which the bail shall stand cancelled and the applicant must surrender.

Release on personal bond now; requirement to furnish two sureties within four weeks after full lifting of the district lockdown, failing which bail will be cancelled.

Non-misuse of liberty and cooperation in trial - Conduct expected of the applicant while on bail. - HELD THAT: - The Court imposed the usual ancillary conditions that the applicant shall not misuse the liberty granted by bail and shall cooperate in the trial. The Government Advocate was directed to inform the district police leadership for communication to the jail authorities.

Applicant obliged not to misuse bail and to cooperate in trial; administrative directions issued to inform police and jail authorities.

Final Conclusion: Bail application allowed; the applicant is enlarged on bail on furnishing a personal bond to the satisfaction of the jail authorities, subject to the condition to furnish two sureties within four weeks of the complete lifting of the district lockdown and to the usual conditions of non-misuse of liberty and cooperation in the trial.

Transaction value - Customs Valuation Rules - Contemporary import value - Lowest transaction value of identical goods - Natural justice - Remand for re-adjudication - Classification under Customs Tariff Heading

Transaction value - Contemporary import value - Lowest transaction value of identical goods - Customs Valuation Rules - Validity of enhancement of assessable value of imported bitumen from the declared transaction value to a higher contemporaneous value - HELD THAT: - The Tribunal examined whether the declared transaction value at USD 380 PMT could be rejected in favour of higher values (around USD 570 PMT) adopted by the Commissioner (Appeals). The record showed multiple contemporary clearances of identical bitumen 60/70 at ICDs (Jodhpur, Mundra, Ludhiana) where the department itself had accepted USD 380 PMT. The Commissioner (Appeals) enhanced value relying on higher-valued Bills of Entry from a different port (JNCH, Nhava Sheva) but did not address or distinguish the contemporaneous lower-valued imports. The Customs Valuation Rules require a specific statutory drill when declared transaction value is disputed, and Rule 5(3) principles (use of the lowest transaction value where multiple transaction values of identical goods exist) were relevant. On the material before it, and having regard to precedents that the lowest contemporary transaction value must be considered, the Tribunal found no valid basis to reject the declared transaction value merely because some other consignments at a different port showed higher prices. [Paras 8, 9, 10]

The enhancement of value to USD 570 PMT was unwarranted and the transaction value declared at USD 380 PMT cannot be rejected; the impugned Order-in-Appeal is set aside on this ground.

Natural justice - Remand for re-adjudication - Customs Valuation Rules - Adequacy of the show cause notice and compliance with principles of natural justice in re-adjudication ordered by the Tribunal - HELD THAT: - The Tribunal found that although it had earlier remanded the matter for re-adjudication and the Commissioner (Appeals) issued a show cause notice, the notice did not specify legal grounds for rejecting the transaction value nor did the Commissioner address the contemporaneous lower-priced imports relied upon by the appellant. The show cause notice and subsequent order failed to follow the statutory valuation procedure and deprived the appellant of effective opportunity to meet the case, contrary to the Tribunal's remand directions which required a reasoned and speaking order after hearing. Consequently, the appellate order founded on that inadequate process could not be sustained. [Paras 3, 4, 7, 8]

The re-adjudication did not comply with requirements of natural justice and the statutory valuation drill; the appellate order based on that process is invalid and is therefore set aside.

Final Conclusion: The Tribunal allowed the appeals, held that the declared transaction value at USD 380 PMT could not be rejected in view of contemporaneous identical imports accepted at that value and that the Commissioner (Appeals) failed to follow the required valuation procedure and principles of natural justice in re-adjudication; the impugned Order-in-Appeal is set aside.

Limitation under Article 137 of the Limitation Act, 1963 governing Section 9 of the I&B Code - Effect of acknowledgment in writing under Section 18 of the Limitation Act, 1963 - Computation of fresh period of limitation from date of acknowledgment - Maintainability of an application under Section 9 of the I&B Code where claim is time barred

Limitation under Article 137 of the Limitation Act, 1963 governing Section 9 of the I&B Code - Maintainability of an application under Section 9 of the I&B Code where claim is time barred - Application under Section 9 of the I&B Code was barred by limitation and therefore not maintainable. - HELD THAT: - The Tribunal held that an application under Section 9 is governed by the residuary three year period provided by Article 137 of the Limitation Act, 1963 and the Operational Creditor bore the burden of establishing that the Section 9 application was filed within that period. The Operational Creditor's own pleadings (Form 5 and Form 3) admitted that the date of default was 7th October, 2013 while the Section 9 application was filed on 20th April, 2018. A combined reading of the Demand Notice and the Section 9 application thus shows the application was filed beyond the three year period and was therefore time barred. On this basis the admission order under Section 9 could not be sustained. [Paras 6, 9, 14, 15]

The Section 9 application was barred by limitation and the impugned order admitting the petition is set aside.

Effect of acknowledgment in writing under Section 18 of the Limitation Act, 1963 - Computation of fresh period of limitation from date of acknowledgment - Cheques dated 5th December, 2017 issued by the Corporate Debtor did not constitute an acknowledgment in writing within Section 18 so as to revive the time barred claim. - HELD THAT: - Section 18 gives effect to a written acknowledgment of liability made before the expiry of the prescribed limitation period by restarting the limitation period from the date of such acknowledgment. The Tribunal found that the invoices related to supplies up to 2nd September, 2013 and the date of default was 7th October, 2013, so the three year limitation expired in 2016. The six cheques relied upon were dated 5th December, 2017 - after the expiry of the limitation period - and therefore could not operate as an acknowledgment in writing within the meaning of Section 18. Accordingly, the issuance and dishonour of those cheques did not extend or revive the limitation period for filing the Section 9 application. [Paras 11, 12, 13, 14]

The cheques dated 5th December, 2017 do not amount to an acknowledgment in writing within Section 18 and do not revive the time barred claim.

Final Conclusion: The appeal is allowed: the admission of the Section 9 petition was set aside as time barred, all consequent orders (appointment of IRP, moratorium, freezing of accounts and actions taken by the IRP) are declared illegal and set aside, the Section 9 application is dismissed, the Adjudicating Authority to fix and direct payment of the IRP's fees, and the Corporate Debtor is released to function through its Board; no order as to costs.

Operational debt - Default - Demand notice in Form No. 3 - Pre-existing dispute - Limitation - Corporate Insolvency Resolution Process - Moratorium - Interim Resolution Professional appointment - Complete application for initiation of CIRP

Operational debt - Default - Demand notice in Form No. 3 - Existence of an operational debt due from the Corporate Debtor and occurrence of default on the stated dates. - HELD THAT: - The Tribunal found that the Operational Creditor supplied goods to the Corporate Debtor as per tax invoices dated 21-3-2018, 25-3-2018 and 28-3-2018 and claimed unpaid dues aggregating to the amount pleaded in the petition. The Operational Creditor dispatched a Demand Notice in Form No.3 dated 18-6-2019 and no payment or rebuttal to the demand was received. On the materials before it, including invoice dates and the demand notice, the Adjudicating Authority was satisfied that the debt exceeded the statutory minimum, was due, and that default had occurred from 21-3-2018. [Paras 13, 14]

The Tribunal held that an operational debt exists and default occurred on 21-3-2018.

Pre-existing dispute - Limitation - Absence of any pre-existing dispute before filing and compliance with limitation for filing the Section 9 petition. - HELD THAT: - The Adjudicating Authority observed that there was no pre-existing dispute evident on the record prior to filing the application. It also noted that the date of first default was 21-3-2018 and the petition was filed on 16-7-2019; accordingly the application was filed within the limitation period. Although the Corporate Debtor subsequently admitted the debt by affidavit, no board resolution evidencing admission was produced; that factual position, however, did not displace the Tribunal's finding of absence of a pre-existing dispute and timely filing. [Paras 13, 14]

The Tribunal held there was no pre-existing dispute and the petition was filed within the limitation period.

Corporate Insolvency Resolution Process - Complete application for initiation of CIRP - Moratorium - Interim Resolution Professional appointment - Admission of the Section 9 petition, initiation of CIRP, declaration of moratorium and appointment of an Interim Resolution Professional. - HELD THAT: - Having concluded that debt, default and limitation requirements were fulfilled and that the application was complete, the Adjudicating Authority admitted the petition and ordered initiation of the Corporate Insolvency Resolution Process. Consequent to admission, the Tribunal declared the statutory moratorium with effect from the date of the order until completion of CIRP and directed the Interim Resolution Professional to perform duties under the Code, including public announcement of moratorium. As the Operational Creditor had not proposed an IRP, the Tribunal appointed an IRP from the relevant IBBI panel and directed him to file necessary declarations and take steps as mandated by the Code, Rules and Regulations. [Paras 14, 15, 16, 17, 18]

The Tribunal admitted the Section 9 petition, initiated CIRP, declared moratorium and appointed an Interim Resolution Professional.

Final Conclusion: The Section 9 petition was admitted: the Tribunal held that an operational debt existed and default occurred on 21-3-2018, there was no pre-existing dispute and the petition was within limitation, and accordingly initiated CIRP, declared moratorium and appointed an Interim Resolution Professional.

Admissibility of corporate insolvency petition under section 10 read with section 33 of the Code - Liquidation in lieu of Corporate Insolvency Resolution Process (power to initiate liquidation at admission) - Exercise of inherent power under Rule 11 of the NCLT Rules - Appointment of liquidator in place of Interim Resolution Professional - Duties of liquidator including public announcement and adherence to Chapter III of Part II of the Code

Admissibility of corporate insolvency petition under section 10 read with section 33 of the Code - Liquidation in lieu of CIRP - Petition filed under section 10 was admitted and the Corporate Debtor ordered to be liquidated under section 33. - HELD THAT: - The Adjudicating Authority found that the Corporate Debtor had sustained losses for years, had negative net worth as per independent auditors' reports and had suspended operations for over five years. The Corporate Debtor had no financial creditors and substantial operational debt remained unpaid; the holding company which supplied raw materials was not prepared to revive operations. Having considered the pleadings, the auditors' findings as to erosion of net worth and inability to continue as a going concern, and the petitioner's submission seeking liquidation in the first instance under Rule 11, the Authority exercised its powers under section 10 read with section 33 of the Code to admit the petition and order liquidation rather than initiating CIRP, concluding that revival or a viable resolution plan was highly unlikely.

Admission of the petition and order directing liquidation of the Corporate Debtor under Chapter III (Liquidation Process) of Part II of the Code.

Appointment of liquidator in place of Interim Resolution Professional - Eligibility and consent of proposed liquidator - Proposed IRP, who had filed written consent, was appointed as Liquidator. - HELD THAT: - The petitioner proposed Shri Malav Jitendra Ajmera (with stated IBBI registration) and filed his written consent affirming eligibility and absence of disciplinary proceedings. Having accepted the petitioner's submission and the consent, the Authority appointed him as Liquidator subject to terms and conditions in accordance with the extant IBBI provisions.

Appointment of the proposed IRP as Liquidator, subject to applicable terms and conditions.

Obligations of the liquidator including public announcement - Directions to communicate order to Registrar of Companies and to complete liquidation expeditiously - Directions issued to the liquidator to make immediate public announcement, to adhere to the Code and Rules, to proceed expeditiously and to report; Registry directed to notify the ROC. - HELD THAT: - On admitting liquidation, the Authority directed the liquidator to issue an immediate public announcement declaring the Corporate Debtor in liquidation and to strictly follow the Code and IBBI rules in conducting the liquidation. The Authority also directed the Registry to inform the Registrar of Companies, Karnataka, and required the liquidator to take expeditious steps to complete the liquidation process and to report back on a fixed date.

Liquidator directed to make public announcement, comply with statutory provisions and IBBI rules, proceed expeditiously and report; Registry to communicate the order to the ROC.

Final Conclusion: The Tribunal admitted the section 10 petition and, exercising powers under section 33 and Rule 11, ordered liquidation of M/s GNB Technologies (India) Pvt. Ltd.; the proposed Interim Resolution Professional was appointed as Liquidator, directed to make a public announcement, to adhere to the Code and IBBI rules, to proceed expeditiously and to report, and the Registry was directed to inform the Registrar of Companies.

Corporate Insolvency Resolution Process (CIRP) - default of debt - admission under section 7 of the IBC - moratorium under section 14 of the IBC - appointment of Interim Resolution Professional - section 240A(1) of the IBC - post-admission applicability

Default of debt - admission under section 7 of the IBC - The petition under section 7 was maintainable and the existence of debt and default was established, warranting admission of the petition and initiation of CIRP. - HELD THAT: - The Corporate Debtor's affidavit in reply admitted liability and inability to repay, thereby establishing existence of debt and default. The application filed by the Financial Creditor complied with statutory requirements and the default exceeded the monetary threshold prescribed under the Code. There being no contest on disbursement or default under the loan agreement, the Adjudicating Authority found no ground to refuse admission and admitted the petition under section 7, directing initiation of CIRP. [Paras 10, 12]

Petition admitted and CIRP ordered against the Corporate Debtor.

Section 240A(1) of the IBC - post-admission applicability - The Corporate Debtor's plea to be allowed to submit a self-resolution plan under section 240A(1) could not be considered at the admission stage. - HELD THAT: - The Adjudicating Authority noted that the special dispensation under section 240A(1), which exempts certain disqualifications in clauses (c) and (h) of section 29A for resolution applicants in respect of MSMEs, operates in a post-admission context. As such, the request to entertain a self-resolution plan at the stage of admission was not permissible and could not defeat the statutory mandate for admission where default is established. [Paras 11]

Section 240A(1) relief is inapplicable at admission and the plea for self-resolution at that stage was not entertained.

Moratorium under section 14 of the IBC - appointment of Interim Resolution Professional - Upon admission, a moratorium under section 14 was imposed and an Interim Resolution Professional was appointed to manage the CIRP with directions for public announcement, supply of information, and deposit for CIRP expenses. - HELD THAT: - Following admission, the Adjudicating Authority ordered the moratorium specified by section 14 to operate from the date of the order until completion of CIRP or approval of a resolution plan or liquidation. Directions were given preserving supply of essential goods, and permitting exceptions notified by the Central Government. The Financial Creditor's proposed IRP was appointed to perform duties under the Code and Regulations; the Corporate Debtor's management was to vest in the IRP for the CIRP period. Further directions included public announcement, filing of claims, deposit by the Financial Creditor to meet initial expenses, and communication of the order to concerned authorities. [Paras 13, 14]

Moratorium imposed, public announcement and claims process directed, and the nominated Interim Resolution Professional appointed to conduct the CIRP.

Final Conclusion: The Adjudicating Authority admitted the section 7 petition on the ground of established default, initiated CIRP against the Corporate Debtor, held that the section 240A(1) contention cannot be considered at admission, imposed the statutory moratorium, and appointed the named Interim Resolution Professional with concomitant directions for conduct of the CIRP.

Statutory functions - sovereign/public authority - service tax liability on instrumentalities of State - service provider-service recipient relationship - eminent domain - compulsory/statutory levy versus consideration - Circular No.89/7/2006 - statutory/mandatory functions exclusion - taxable service

Statutory functions - sovereign/public authority - service tax liability on instrumentalities of State - service provider-service recipient relationship - compulsory/statutory levy versus consideration - Circular No.89/7/2006 - statutory/mandatory functions exclusion - eminent domain - taxable service - Whether Karnataka Industrial Areas Development Board (KIADB), a statutory body under the KIAD Act, 1966, is liable to service tax for the activities and receipts for the period 1-10-2005 to 31-03-2010. - HELD THAT: - The Tribunal examined the KIAD Act and the nature and scope of KIADB's functions and concluded that KIADB is a statutory body created to secure the establishment and orderly development of industrial areas and to provide industrial infrastructural facilities and amenities. The Board exercises powers under the statute (including acquiring, developing and making available land and providing amenities) and holds its own fund; its activities are mandated by law and performed as statutory obligations. Applying the functional test, the Tribunal found an absence of a true service provider-service recipient relationship, because charges collected by KIADB arise from statutorily fixed/mandated fees or deposits in furtherance of its statutory duties rather than voluntary consideration for services to particular individuals. The Tribunal relied on the Board/Circular No.89/7/2006 clarification that activities performed by sovereign/public authorities in discharge of statutory obligations (where the fee is a compulsory levy under statute) are not taxable services, and on precedents holding that similar development/maintenance activities by state industrial development corporations are statutory and not amenable to service tax. The Tribunal rejected the Revenue's contention that KIADB lacks sovereign character or eminent domain power, noting statutory provisions (including transfer of land and acquisition processes) and apex court authority recognising such instrumentalities as agencies carrying out governmental purposes. Because the core activities were held to be statutory and not taxable services, the Tribunal did not address individual service-head demands or quantification. [Paras 7, 8]

KIADB is a statutory authority discharging statutory/sovereign functions under the KIAD Act and is not liable to service tax for the period 1-10-2005 to 31-03-2010; the impugned order confirming demand and imposing penalties is set aside.

Final Conclusion: The Tribunal allowed the appeal, holding that KIADB performs statutory functions as a public/statutory authority and therefore the service tax demand (and consequential penalties) confirmed by the Commissioner for the period 1-10-2005 to 31-03-2010 is set aside.

Entitlement to Cenvat credit for input service - nexus between input service and manufacture/removal - distinct identifiable service of providing insurance cover - re-adjudication after verification of factual position - remand for fresh consideration - limitation/open question on longer period

Entitlement to Cenvat credit for input service - distinct identifiable service of providing insurance cover - nexus between input service and manufacture/removal - re-adjudication after verification of factual position - remand for fresh consideration - Impugned order set aside and matter remanded to the original adjudicating authority for fresh adjudication on the appellant's claim of Cenvat credit for insurance obtained and reimbursed to buyers. - HELD THAT: - The Tribunal found that the lower authorities did not deal with the appellant's pleaded position that the open insurance policy taken by the appellant constituted a separate, identifiable service through which the appellant provided insurance cover to its buyers and on which the appellant paid service tax. The lower authorities had declined credit on the basis that the insurance was beyond the place of removal, without addressing the appellant's submission that the insurance was not in connection with manufacture or removal but a distinct service for which they paid tax and sought credit. In view of this omission, the Tribunal set aside the impugned order and directed re-adjudication by the original authority with instructions to consider the appellant's submissions and verify the factual position relating to the nature of the insurance service and the claimed credit. The Tribunal expressly left open all other issues, including the question of limitation invoked by the department. [Paras 3]

Impugned order set aside; matter remanded to the original adjudicating authority for re-adjudication after taking into account the appellant's submissions and factual verification, with all other issues (including limitation) kept open.

Final Conclusion: Appeal disposed by setting aside the impugned order and remanding the case for fresh adjudication limited to consideration and verification of the appellant's claim to Cenvat credit on the insurance service; other issues, including limitation, remain open.

Refund claim - Cenvat credit - sanction of refund - time-barred - compliance with appellate order - refund claim under Section 11B of the Central Excise Act, 1944 - interest for delayed refund

Refund claim - sanction of refund - time-barred - compliance with appellate order - Whether the refund claim originally filed on 29.09.2008 and allowed by the Commissioner (Appeals) on 16.03.2016 required a fresh filing and whether rejection of the subsequently filed claim of 31.03.2017 as time barred was permissible. - HELD THAT: - The Tribunal found it to be an admitted fact that the refund claim filed on 29.09.2008 had been decided in favour of the appellant by the Commissioner (Appeals) by order dated 16.03.2016. Once the appellate order allowed the refund, the department was obliged to comply and sanction the refund; the appellant was not required to file a fresh claim. The respondents' contention that a fresh claim under Section 11B was necessary after the appellate order was held to be contrary to law. The authorities below, instead of giving effect to the appellate order within the statutory timeframe, failed to sanction the refund and later treated the claim inadvertently filed on 31.03.2017 as time barred. That rejection was held to be impermissible because the earlier claim had been adjudicated in the appellant's favour and required sanction rather than a fresh filing. [Paras 6, 8]

Impugned order rejecting the claim as time barred is set aside and the authorities below are directed to comply with the Commissioner (Appeals) order dated 16.03.2016 and sanction the refund within 15 days of receipt of this order.

Interest for delayed refund - sanction of refund - Whether the appellant is entitled to interest for the delay in sanctioning the refund and how that contention is to be dealt with. - HELD THAT: - The Tribunal noted that once the appellate order was accepted by the department, the refund ought to have been sanctioned within three months, but the authorities delayed action. The appellant's prayer for interest was recognised as a matter arising from the department's delay in compliance. The Tribunal did not finally adjudicate the quantum or entitlement but directed that the authorities below address the issue of interest when giving effect to the appellate order. [Paras 7]

The question of interest is left to be considered and determined by the authorities below in the course of sanctioning the refund.

Final Conclusion: The appeal is allowed: the order rejecting the refund as time barred is set aside; the authorities are directed to comply with the Commissioner (Appeals) order dated 16.03.2016 and sanction the refund within 15 days, and to consider and decide the appellant's claim for interest arising from the delay.

Clandestine removal - loose papers as evidence - corroborative evidence requirement - stock verification by sectional/eye estimation - admission and payment not conclusive - burden to establish shortages under Rules 9(1) and 173Q of Central Excise Rules, 1944

Clandestine removal - loose papers as evidence - corroborative evidence requirement - stock verification by sectional/eye estimation - admission and payment not conclusive - burden to establish shortages under Rules 9(1) and 173Q of Central Excise Rules, 1944 - Whether the demand for duty, interest and penalties for alleged clandestine removal could be sustained on the basis of loose papers and stock-shortage determined by sectional/eye estimation without further corroborative investigation - HELD THAT: - The Tribunal found that the allegation of clandestine removal rested on recovered loose/rough papers, stock verification by sectional weight/eye estimation and the statement of a director together with payment of duty. The adjudicating authorities did not identify the author of the loose papers, nor did they verify their contents with alleged buyers, transporters or other external sources. The department also failed to investigate several material aspects capable of corroborating clandestine removal, including excess production details, purchase of excess raw materials, dispatch particulars from regular transporters, realization of sale proceeds, receipts from dealers/buyers or abnormal power consumption. Where stock has been ascertained by sectional or eye estimation, errors may creep in and such methodology cannot, without corroboration, form the basis for quantifying clandestine removals. The statements of the director, including explanations about sectional weighment being used for internal records and the loose papers possibly belonging to transporters or brokers, did not amount to an admission of clandestine removal. Mere deposit of duty without protest was held insufficient to constitute conclusive proof of clandestine removal. Applying settled authorities and the requirement that the Revenue discharge its burden under the relevant rules, the Tribunal concluded that the department's case was premised on presumptions and lacked the necessary tangible corroboration to sustain the demand. [Paras 4, 5]

The demand for duty, interest and penalties for alleged clandestine removal based on loose papers and estimated stock-shortage is unsustainable for want of corroborative evidence; the impugned orders are set aside and the appeals are allowed.

Final Conclusion: The Tribunal held that the departmental demand for alleged clandestine removal was founded on presumptions and uncorroborated material; accordingly the adjudication and appellate orders confirming the demand were set aside and both appeals were allowed.

Interest on delayed refund - refund claim and statutory three-month period - adjustment of refund against other demands and its effect on interest entitlement - entitlement to interest upon successful appellate order - reliance on Ranbaxy Laboratories Ltd.

Interest on delayed refund - refund claim and statutory three-month period - adjustment of refund against other demands and its effect on interest entitlement - The appellant is entitled to interest on the refund claim filed on 05.10.2010 from three months after that filing date until actual realisation despite adjustment of the amount against other demands. - HELD THAT: - The Tribunal found that the appellant had filed a refund claim on 05.10.2010 and, although the amount was adjusted against a separate demand, the appellant subsequently succeeded in contesting that demand. Applying the legal principle reflected in the cited precedent, the Tribunal held that adjustment of the refund in separate proceedings did not defeat the statutory entitlement to interest where the claimant ultimately succeeds; consequently interest accrues from three months after the date of filing the refund claim until the date of realisation. This conclusion follows the determinative reasoning recorded by the Tribunal which treats the successful challenge to the contested demand as restoring the appellant's right to the refund and accompanying interest for the period of delay. [Paras 4]

Interest is payable from three months after 05.10.2010 until realisation on the refunded amount.

Entitlement to interest upon successful appellate order - refund claim and statutory three-month period - The appellant is entitled to interest on the deposit/refund claim arising from the successful Tribunal order dated 14.11.2017, from three months after that order until its realisation. - HELD THAT: - The Tribunal recorded that the appellant deposited an amount in relation to another demand and succeeded in the appeal by order dated 14.11.2017. Once the appellate order set aside the demand, the appellant became entitled to refund of the deposit; applying the same statutory principle, interest runs from three months after the Tribunal's favourable order until the date the amount was realised. The Tribunal therefore granted consequential interest for the period of delay following the three-month statutory threshold after the appellate success. [Paras 4]

Interest is payable from three months after 14.11.2017 until realisation on the deposit/refund claim arising from that order.

Final Conclusion: The appeal is allowed; the appellant is entitled to interest on the refunded amounts and on the deposit/refund claim arising from the successful appellate order, to be calculated from three months after the respective claim or appellate order dates until actual realisation, with consequential relief in accordance with law.

Prohibition on Cenvat credit for inputs/input services used for both dutiable and exempted goods where separate accounts are not maintained - Requirement of maintaining separate accounts under Rule 6(2) of CCR, 2004 - Verification/remand to ascertain reversal of Cenvat credit - Recovery of credit in respect of exempted goods under Rule 6(3) of CCR, 2004 - Penalty sustainment consequent upon valid demand

Prohibition on Cenvat credit for inputs/input services used for both dutiable and exempted goods where separate accounts are not maintained - Requirement of maintaining separate accounts under Rule 6(2) of CCR, 2004 - Entitlement to Cenvat credit where common inputs/input services are used for both dutiable and exempted goods but separate accounts required by Rule 6(2) CCR, 2004 are not maintained. - HELD THAT: - The Tribunal held that Rule 6(1) of the Cenvat Credit Rules, 2004 disallows credit where inputs or input services are used for both exempted and dutiable goods unless the conditions in sub rules (2) and (3) are satisfied. The adjudicating authority found, and the appellant did not satisfactorily rebut, that separate accounts as required under Rule 6(2) were not maintained for the period in dispute. A departmental verification report showing maintenance of separate records related to a subsequent period and therefore could not justify credit for the impugned period. In absence of evidence of separate records for the disputed period, the availment and utilisation of Cenvat credit on common inputs amounted to violation of Rule 6, and the demand could be sustained. [Paras 6, 7, 9]

Credit disallowed and demand upheld because required separate accounts for exempted and dutiable goods were not maintained for the impugned period.

Verification/remand to ascertain reversal of Cenvat credit - Recovery of credit in respect of exempted goods under Rule 6(3) of CCR, 2004 - Whether the remand to verify if the entire Cenvat credit was reversed was complied with and whether the adjudicating authority correctly found only partial voluntary reversal. - HELD THAT: - The Tribunal noted that an earlier order of this Tribunal had remanded the matter for fresh adjudication to verify the appellant's claim that the entire credit had been reversed. The adjudicating authority, in compliance, recorded that only Rs. 80,006/- had been reversed voluntarily and found no evidence that the entire credit had been reversed for the impugned period. The Tribunal accepted that the remand's purpose was limited to verification and that the adjudicating authority's finding - that reversal was not of the entire credit - was supported by the record. [Paras 6]

Remand complied with; adjudicating authority correctly recorded that reversal was partial and not entire, supporting recovery for the remaining credit in respect of exempted goods.

Penalty sustainment consequent upon valid demand - Whether penalty imposed on the appellant can be sustained where the underlying demand is upheld. - HELD THAT: - The Tribunal observed that since the demand under Rule 6 was validly sustained due to non maintenance of required records and improper availment of credit, there remained no infirmity in imposing penalty. The Tribunal found no error in the adjudicating authority's imposition of penalty in view of the sustained demand. [Paras 10]

Penalty upheld as consequential to the sustained demand.

Final Conclusion: The appeal is dismissed; the adjudicating authority's order confirming recovery of Cenvat credit for the period 2007-08 to 2011-12 (upto November, 2011) and the penalty imposed are upheld.

Self-assessment - requirement to file Audit Report in Form WW under Section 63 A - classification of turnover between Part B and Part C in Form WW - verification of books of account - assessment officer's subjective satisfaction - remand for verification

Self-assessment - assessment officer's subjective satisfaction - verification of books of account - Validity of the impugned order demanding differential tax without prior physical verification of books of account where assessment was by self assessment - HELD THAT: - The Court found that the assessment for the stated year was completed under the self assessment procedure and that the respondent had not physically verified the petitioner's books of account. The impugned order, which called upon the petitioner to pay the difference in tax based on the Auditor's Form WW, did not disclose reasons sufficient to sustain the assessment in the absence of verification. The Court held that the assessment officer's subjective satisfaction could not be sustained without the opportunity for verification and explanation. Consequently, the impugned order was set aside and the petitioner was directed to produce the books for physical verification by the respondent by a specified date; if the petitioner failed to do so, the impugned order would stand revived. [Paras 3, 5]

Impugned order set aside; petitioner directed to produce books of account for verification on or before 19.06.2020 and respondent directed to verify; impugned order to revive if books not produced by that date.

Requirement to file Audit Report in Form WW under Section 63 A - classification of turnover between Part B and Part C in Form WW - remand for verification - Whether the entries in Part B and Part C of the Auditor's Form WW and the resulting tax differential should be determined after verification - HELD THAT: - The Court accepted the petitioner's contention that an inadvertent error in allocation between Part B and Part C was pointed out and that the petitioner and their Auditor had offered explanations. Rather than decide the tax consequence on the material supplied, the Court remitted the matter for factual verification: the respondent is to examine the petitioner's books and the entries in Form WW, and may issue further notices for clarification; the petitioner may explain the position personally or through the Auditor. The remand is for fresh verification and determination of whether the turnover was correctly classified and whether any additional tax is payable. [Paras 4, 5]

Matter remanded to respondent for verification of entries in Part B and Part C of Form WW and determination of any tax differential after giving the petitioner an opportunity to clarify.

Final Conclusion: Writ petition disposed by setting aside the impugned order and remitting the matter for physical verification of the petitioner's books and the classification in Form WW; petitioner to produce books on or before 19.06.2020, failing which the impugned order shall revive.

Immunity from suit of a court appointed agency - Obligation of reporting to Court Receiver and use of public information portal - Reasonable interest to prevent unjust enrichment - Forensic audit findings upheld as basis for liability - Receiver's authority over sale and transfer of permissible and purchasable FAR - Priority of home buyers' interest in diverted funds and first charge on FAR - Direction to banks to disburse and restructure home buyers' loans notwithstanding NPA status - Reduction of interest on outstanding dues to 8% per annum and restructuring by local authorities

Immunity from suit of a court appointed agency - Obligation of reporting to Court Receiver and use of public information portal - Whether NBCC, appointed by this Court to complete projects, is liable to be impleaded or sued in other courts and what reporting obligations it must discharge. - HELD THAT: - The Court held that NBCC, as Project Management Consultant appointed to complete the projects under the supervision of this Court, shall be immune from being impleaded or subjected to summons in other courts, tribunals or authorities in relation to the projects and shall be answerable only to this Court in the pending proceedings. NBCC is not obliged to respond individually to queries from home buyers; instead it must submit monthly project reports with relevant information and photographs to the learned Receiver, who is requested to make such progress reports available on a blog/website for home buyers. The directions aim to prevent multiplicity of litigation and ensure centralized supervision and communication through the Receiver. [Paras 1, 2, 3, 4]

NBCC granted immunity from suit in other fora and directed to report progress monthly to the learned Receiver, who shall publish updates for home buyers.

Reasonable interest to prevent unjust enrichment - Interest on diverted homebuyers' funds - Whether Royalgolf Link City Projects Pvt. Ltd. is entitled to relief from the Court's order directing repayment with 12% interest. - HELD THAT: - The Court refused to modify the earlier order and declined Royalgolf's plea to waive the 12% interest. It observed that the principal amount represented money of home buyers that had been retained by Royalgolf for a substantial period and that allowing retention without interest would amount to unjust enrichment. The commercial hardships pleaded by the applicant were not sufficient to negate the entitlement of home buyers to refund with a reasonable rate of interest fixed at 12% on the facts of the case. The Court noted that imposition of interest depends on circumstances and that absence of interest in other orders did not preclude its imposition here. [Paras 5, 6, 7]

Application dismissed; Royalgolf directed to deposit interest at 12% within six weeks subject to consequences for non compliance.

Receiver's authority over sale and transfer of permissible and purchasable FAR - Priority of home buyers' interest in diverted funds and first charge on FAR - Whether unused/permissible/purchasable FAR should be released to Noida and Greater Noida Authorities or vested in the Receiver for sale/transfer to realize funds for completion of projects. - HELD THAT: - The Court rejected the Authorities' prayer for release of FAR in their favour. It recalled prior findings that home buyers had paid components of the premium to Authorities and that builders had committed fraud and were not entitled to FAR. Rights in the cancelled leases now vest in the Receiver. The Receiver (and Committee) is authorized to sell or transfer the balance/unused FAR within the sanctioned plan, up to permissible FAR (2.75) and purchasable FAR (beyond 2.75 up to 3.5 where applicable), including any additional FAR arising from developments (e.g., metro). Such sale/transfer by the Receiver is permitted notwithstanding previous dues, and any amounts payable to Authorities in respect of purchasable FAR shall be paid after sale of FAR. Authorities and service departments are directed to cooperate and sanction plans/permissions within fixed timeframes and treat requests of the Receiver as Court directions. [Paras 12, 14, 16, 18, 19]

Prayer for release of FAR to Authorities rejected; Receiver empowered to sell/transfer unused, permissible and purchasable FAR and Authorities directed to facilitate the Receiver's actions.

Forensic audit findings upheld as basis for liability - Whether Vansh Consultants Pvt. Ltd.'s name should be deleted from the Forensic Auditors' summary as a recoverable debtor. - HELD THAT: - After considering submissions and documents, including the Forensic Auditor's enquiries and the applicant's explanations, the Court found no merit in Vansh Consultants' contention that its inclusion as a debtor was an inadvertent error. The Court accepted the Forensic Auditor's findings that the recorded entries in Amrapali Leisure Valley Pvt. Ltd.'s books were not satisfactorily explained, that the agreement between the parties appeared designed to disguise actual transactions, and that the account entries and supporting documents did not inspire confidence. The Court concluded that there was no case to delete the applicant's name from the forensic summary and dismissed the applications. [Paras 23, 24, 25, 26, 27]

Applications dismissed; Forensic Auditors' entries in the judgment, including Vansh Consultants' inclusion, upheld.

Direction to banks to disburse and restructure home buyers' loans notwithstanding NPA status - Whether banks and financial institutions should be directed to disburse sanctioned loans and restructure home buyers' loans in respect of Amrapali projects notwithstanding NPA classification. - HELD THAT: - The Court directed banks and financial institutions to disburse balance sanctioned loan amounts to home buyers whose accounts are regular, notwithstanding their NPA status, and to undertake long term restructuring of loans relating to Amrapali projects. The Court observed that RBI guidelines do not preclude such disbursements in the peculiar facts of the case and that banks are to release funds in a phased manner tied to construction stages and current RBI norms and rates. The direction is intended to facilitate completion of projects and enable recovery by banks once projects are completed. [Paras 28, 29, 30]

Banks and financial institutions directed to disburse sanctioned loans and to restructure home buyers' loans stage wise notwithstanding NPA status.

Reduction of interest on outstanding dues to 8% per annum and restructuring by local authorities - Whether the rate of interest to be realized by Noida and Greater Noida Authorities on outstanding dues should be moderated and whether Authorities should restructure repayment schedules. - HELD THAT: - Noting the fall in market lending rates, the prolonged stall of projects, the hardship to home buyers, and the public interest in completing housing projects, the Court fixed a reasonable rate of interest at 8% per annum to be realized by Noida and Greater Noida Authorities on outstanding premiums and other dues and directed the Authorities to undertake restructuring of repayment schedules so that amounts are paid and projects are completed. The Court observed that the concession is subject to adherence to completion timelines and that failure to pay will result in withdrawal of the concession. The precise time frame for restructuring and repayment is to be considered after further hearing. [Paras 37, 38, 39, 41, 42]

Rate of interest on outstanding dues fixed at 8% per annum; Noida and Greater Noida Authorities directed to restructure repayment schedules and ensure project completion.

Final Conclusion: The Court granted NBCC immunity from being sued in other fora while requiring centralized reporting to the Receiver; dismissed Royalgolf's challenge to the 12% interest charge; rejected Authorities' prayers to release FAR and vested authority to sell/transfer FAR in the Court Receiver; upheld the Forensic Auditors' findings against Vansh Consultants; directed banks to disburse and restructure home buyers' loans notwithstanding NPA status; and fixed the rate of interest recoverable by Noida and Greater Noida Authorities at 8% per annum with restructuring and completion conditions.

Criminal misconduct under the Prevention of Corruption Act - presumption under Section 20 of the Prevention of Corruption Act - reversal of acquittal on appeal only in case of perverse findings - reliability of prosecution witnesses and documentary evidence

Criminal misconduct under the Prevention of Corruption Act - reliability of prosecution witnesses and documentary evidence - Whether the prosecution proved that the respondent was connected with the trust and that donations were given at his instance so as to constitute criminal misconduct. - HELD THAT: - The Court found no material connecting the respondent to the administration of the UPUS trust or showing that he benefitted from the trust funds. The evidence established that the respondent's father was authorised to operate the trust account for convenience and that the trust carried on charitable activities; CBI enquiries in Cuttack satisfied bank officials about the trust's functioning. The bulk of donors and relevant Income Tax officers did not implicate the respondent; the specific witnesses who alleged the respondent's request were held to be unreliable on facts and inconsistencies. In these circumstances the trial court's acceptance of the defence case on these points was not shown to be unreasonable or perverse. [Paras 19, 21]

Prosecution failed to prove that the respondent was connected with the trust or that donations were given at his instance; the trial court's findings on this aspect are upheld.

Presumption under Section 20 of the Prevention of Corruption Act - Whether the statutory presumption under Section 20 operated and, if so, whether the respondent rebutted it. - HELD THAT: - The Court reiterated that the presumption under Section 20 is rebuttable and does not equate to proof beyond reasonable doubt. The accused may discharge the statutory presumption by evidence on the balance of probabilities. Applying that principle to the record, the Court concluded that the respondent had rebutted the presumption by demonstrating the trust's independent functioning, the authorised role of his father in operating the bank account for convenience, absence of incriminating material from searches, and the lack of reliable testimony showing demand or quid pro quo by the respondent. [Paras 22]

The presumption under Section 20, even if invoked, was rebutted by the respondent on the balance of probabilities.

Reversal of acquittal on appeal only in case of perverse findings - Whether this Court should interfere with the trial court's judgment of acquittal. - HELD THAT: - Applying the settled principle that an appellate court should reverse an acquittal only in exceptional circumstances where the trial court's conclusions are perverse or unsupported by evidence, the High Court examined the record and reasoning of the trial court. Given the lack of credible evidence connecting the respondent with any demand or benefit, the presence of documentary material supporting the trust's activities, and the deficiencies in the prosecution case, the Court found no compulsion to disturb the acquittal. [Paras 20, 23]

No interference with the judgment of acquittal; the appeal is dismissed.

Final Conclusion: The High Court affirms the trial court's acquittal: the prosecution failed to prove criminal misconduct by the respondent, the presumption under Section 20 was rebutted on the balance of probabilities, and there is no basis to disturb the acquittal on appeal; the criminal appeal is dismissed.