TaxTMI Updates e-Newsletter
Jun 29,2021

Reversal of Input Tax Credit - Input Tax Credit - blocked credits - Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples - Loss inherent to the manufacturing process - Interpretation of Section 17(5)(h) of the GST Act - Comparative application of antecedent VAT provision on input tax credit

Reversal of Input Tax Credit - Loss inherent to the manufacturing process - Interpretation of Section 17(5)(h) of the GST Act - Input Tax Credit - blocked credits - Whether reversal of Input Tax Credit under Section 17(5)(h) is permissible in respect of loss of input that is inherent to the manufacturing process. - HELD THAT: - The Court examined the scheme of input tax credit under the antecedent VAT provision and under Section 17 of the GST Act, noting that clause (h) of Section 17(5) enumerates instances of loss which are external, quantifiable or involve disposal by way of gift or free samples. A loss occasioned by consumption or inherent wastage in the manufacturing process is integral to the manufacturing operation and is not one of the situations contemplated by clause (h). The Court relied on the reasoning in Rupa & Co. Ltd. (para 13 of that decision) which recognised that manufacturing processes necessarily involve some consumption or loss of input, and that credit should be available on the original quantity of input used notwithstanding that the finished product may contain a lesser measurable quantity. Applying that reasoning, the Court held that revenue's reversal of ITC on the ground of manufacturing loss was misconceived because such loss does not fall within the ambit of goods "lost, stolen, destroyed, written off or disposed of by way of gift or free samples" as set out in Section 17(5)(h). [Paras 6, 10, 11, 15]

Reversal of ITC under Section 17(5)(h) on account of loss inherent to manufacturing is not permissible; impugned orders to that extent are set aside.

Stock reconciliation - Admission of evidence before appellate/departmental authority - Whether the question of stock reconciliation, where vehicle movement registers were not produced at assessment but have been produced before the Court, should be adjudicated afresh by departmental authorities. - HELD THAT: - The Court observed that the vehicle movement register and related evidence bearing on stock reconciliation were not produced at the time of assessment and have been tendered only at the stage of these proceedings. Given the factual nature of the issue and the late production of evidence, the Court declined to decide the factual controversy and directed that the petitioner may approach the appellate authority by way of statutory appeal so that the departmental authorities can examine the evidence in the first instance. The Court thereby permitted the filing of a statutory appeal within four weeks for determination of the stock reconciliation issue by the appropriate fora. [Paras 2, 3]

Stock reconciliation issue remanded for fresh consideration by the departmental/appellate authority; petitioner permitted to file statutory appeal within four weeks.

Final Conclusion: The challenge to reversal of ITC insofar as it was made on account of loss inherent to the manufacturing process is allowed and the impugned orders are set aside to that extent. The stock reconciliation matter is remitted to the departmental/appellate authority for fresh consideration, with liberty to the petitioner to file a statutory appeal within four weeks. Writ petitions are accordingly allowed in part as indicated; no costs.

Assessment under Section 153A linked to incriminating material found in search - Protection of completed (unabated) assessments from reassessment in absence of incriminating material - Abatement of pending assessments under Section 153A and fresh assessment for abated years - Requirement of nexus between seized material and the particular assessment year

Assessment under Section 153A linked to incriminating material found in search - Requirement of nexus between seized material and the particular assessment year - Protection of completed (unabated) assessments from reassessment in absence of incriminating material - Validity of addition of claimed exempt long-term capital gain under assessment framed under Section 153A when no incriminating material was found at the assessee's premises - HELD THAT: - The Tribunal held that Section 153A is a remedial provision tied to searches/requisitions and, while it mandates issuance of notices for six preceding years, additions for a particular (completed/unabated) assessment year can be made under Section 153A only if there is incriminating material found during the search (or requisition) relatable to that assessment year. The Bench examined coordinate and High Court decisions and the facts on record, observing that the documents relied upon by the Assessing Officer were seized from the premises of a third person (Shirish C. Shah) and not from the assessee's premises; the seized papers were not in the assessee's handwriting, were not signed by her, and no incriminating material was found at the assessee's premises. The Tribunal noted that the Assessing Officer had not shown any live linkage or nexus between the seized material and the assessee's concluded assessment for A.Y. 2011-12, and that reliance on extraneous or post-search material without such nexus cannot sustain additions under Section 153A. In these circumstances the CIT(A)'s deletion of the addition was upheld and the Revenue's appeal dismissed on maintainability grounds; issues on merits were held academic and not addressed. [Paras 11, 12, 19]

Addition of exempt long term capital gain deleted; reassessment under Section 153A in respect of A.Y. 2011-12 is not sustainable in absence of incriminating material found at the assessee's premises.

Principles of natural justice in production of statements relied upon - Admissibility and relevance of documents seized from third parties - Whether reliance on statement(s) and loose papers seized from third party premises without providing copies or opportunity to cross examine the declarants was permissible - HELD THAT: - The Tribunal recorded that the Assessing Officer relied upon statements and loose papers seized from the premises of the third person but did not furnish copies of the statement of Shri Damodar Attal (employee of Shri Shah) to the assessee nor afforded opportunity of cross examination. The CIT(A) had noted that such documents amounted to 'dumb documents' vis a vis the assessee and that their use without establishing nexus and without respecting principles of natural justice was untenable. The Tribunal found that the Revenue did not controvert these findings and therefore the use of such materials could not sustain the addition under Section 153A. [Paras 9, 11]

Reliance on statements/documents seized from third parties without providing copies or opportunity to the assessee is impermissible and contributes to unsustainability of the addition.

Consequences of concurrent and identical orders in co ordinate proceedings - Disposition of the assessee's cross objection and the Revenue's second identical appeal arising from the same search proceedings - HELD THAT: - The Tribunal observed that because the Revenue's appeals were dismissed on the maintainability ground discussed above, the assessee's cross objection became infructuous. The second appeal raising identical issues was dealt with mutatis mutandis and dismissed for lack of any changed circumstance. [Paras 13, 14]

Cross objection dismissed as infructuous; the Revenue's identical appeal dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeals and the assessee's cross objection for A.Y. 2011 12, upholding the CIT(A)'s deletion of the addition of exempt long term capital gain on the ground that no incriminating material was found at the assessee's premises and there was no nexus between seized material from a third party and the concluded assessment, rendering reassessment under Section 153A unsustainable.

Bogus purchases - accommodation entries - standard of proof for disallowance of expenditure - sworn statements and corroboration - unascertained and contingent liability - provision for warranty - interest disallowance on advances - commercial expediency - double addition

Bogus purchases - accommodation entries - sworn statements and corroboration - standard of proof for disallowance of expenditure - Validity of additions treating purchases from five vendors as bogus in the hands of M/s BGR Energy Systems Ltd. for assessment years 2011-12 to 2013-14. - HELD THAT: - The Tribunal upheld the findings of the Assessing Officer and the CIT(A) that purchases recorded from five identified vendors were bogus and amounted to accommodation entries. The conclusion was based on search-recorded bill books/invoices found at the assessee's premises, statements of the alleged suppliers (including admissions of bill trading and returning of cash after RTGS receipt), the assessee's failure to produce delivery challans, goods receipt notes, lorry receipts or witnesses who received the goods, and deviation from the assessee's own SAP based procurement SOP for such transactions. While sworn/confessional statements alone are not conclusive, the Tribunal found abundant corroborative evidence from the search and post search enquiries (including cross examination outcomes and the assessee's voluntary disclosure of additional income) that supported the AO's view. Reliance was placed on the Supreme Court principle that where purchases are held bogus on the material, full disallowance is permissible. Accordingly, the additions made in the hands of the company were sustained. [Paras 13, 17]

Additions on account of bogus purchases from the five vendors for AYs 2011-12 to 2013-14 upheld.

Provision for warranty - unascertained and contingent liability - Allowability of large provisions for warranty as deductible business expenditure. - HELD THAT: - The Tribunal agreed with the CIT(A) that the warranty provisions were not based on a scientific estimation grounded in past experience but were ad hoc and largely unutilised. The pattern of large provisions followed by reversals and very low actual utilisation over several years indicated that the liability was unascertained and contingent rather than an allowable business deduction. The Tribunal distinguished precedents relied upon by the assessee where warranty provisions were demonstrably based on past experience and utilised in practice, and concluded that, on the facts, the provision could not be allowed as a deduction. [Paras 19, 20]

Disallowance of the provision for warranty upheld.

Interest disallowance on advances - commercial expediency - Disallowance of interest on amounts advanced to subsidiaries where no interest was charged. - HELD THAT: - The Tribunal endorsed the CIT(A)'s finding that the assessee failed to demonstrate that the advances to subsidiaries were made out of its own interest bearing funds or were in the commercial interest of the assessee. The assessee did not produce evidence to show commercial expediency or benefit derived from the advances. Earlier departmental and appellate findings in the assessee's own case for prior years were noted. In the absence of proof that the advances were bona fide commercial arrangements conferring advantage to the assessee, the disallowance of interest was held to be justified. [Paras 21, 22]

Disallowance of interest on advances to subsidiaries confirmed.

Double addition - addition already made in hands of company - Whether the Assessing Officer could make identical additions in the hands of the individual assessee where the same amounts had been added in the hands of the company. - HELD THAT: - The Tribunal agreed with the CIT(A) that once additions in respect of the alleged bogus purchases and certain cash found were made in the hands of M/s BGR Energy Systems Ltd. (the company), making identical additions in the hands of the individual assessee would amount to double addition. The AO had not assigned reasons for making duplicate additions against the individual, and on the facts the Tribunal found deletion of the additions in the individual's hands to be correct. [Paras 28, 29]

Deletions of duplicate additions in the hands of the individual assessee upheld; Revenue's appeals dismissed.

Final Conclusion: The Tribunal dismissed the assessee's appeals challenging additions in the company's assessments (upholding findings on bogus purchases, disallowance of warranty provision and interest on advances) and dismissed the Revenue's appeals seeking restoration of identical additions in the hands of the individual assessee; all appeals and cross objections were disposed of accordingly.

Validity of notice under Section 143(2) - Time-bar/limitation of assessment notice - Jurisdictional competence of Assessing Officer - Void ab initio assessment - Admission of additional grounds in appeal - Revision under Section 263 - erroneous and prejudicial to revenue test - Second opinion not permissible under Section 263

Validity of notice under Section 143(2) - Time-bar/limitation of assessment notice - Jurisdictional competence of Assessing Officer - Void ab initio assessment - The notice(s) issued under Section 143(2) and the consequent assessment proceedings were time barred and issued by a non jurisdictional officer, rendering the assessment void ab initio. - HELD THAT: - The Tribunal examined the sequence of notices and filings: the return was filed on 02.09.2015, an initial notice under Section 143(2) was issued on 01.08.2016 by ITO Ward 72(5), and a notice by the jurisdictional officer DCIT, Circle 25(2) was issued on 10.03.2017. The statute permits issuance of the Section 143(2) notice within six months from the end of the financial year in which the return was filed. The Tribunal found that the later notice by the jurisdictional officer fell beyond the prescribed limitation and that the initial notice had been issued by a non jurisdictional AO. As there was no valid change of jurisdiction under the statutory provisions, the notice(s) were held time barred and jurisdictionally defective. Consequently, the assessment framed in consequence of those notices was treated as void ab initio. [Paras 8]

Notice(s) under Section 143(2) were defective on limitation and jurisdictional grounds; the resulting assessment is void ab initio.

Admission of additional grounds in appeal - The additional grounds raising jurisdictional and limitation objections to the assessment were admitted. - HELD THAT: - Although the assessee had not earlier challenged the assessment order (having been assessed at nil), the Tribunal accepted the contention that the assessment was vitiated by defective notice(s). In view of the finding that the assessment itself was void for limitation and jurisdictional defects, the Tribunal allowed the plea to admit the additional grounds and proceeded to consider them. [Paras 8]

Additional grounds contesting jurisdiction and limitation were allowed to be admitted.

Revision under Section 263 - erroneous and prejudicial to revenue test - Second opinion not permissible under Section 263 - Independently on merits, the Principal CIT's revision under Section 263 was not maintainable because the Assessing Officer had verified the claimant's documents and the Principal CIT's contrary view amounted to an impermissible second opinion. - HELD THAT: - The Tribunal reviewed the materials placed before the Assessing Officer, including reconciliation and supporting documents for the claimed long term capital gains and other transaction records submitted on 13.04.2017. The Assessing Officer conducted enquiries and accepted the submissions in the assessment order. The Tribunal reiterated the settled legal test for exercise of jurisdiction under Section 263 - that the order must be both erroneous and prejudicial to the revenue - and concluded that the Principal CIT had not demonstrated a failure of inquiry or verification but had taken a different view. Such a differing view by the Principal CIT constituted a second opinion, which is not a permissible ground for revision under Section 263. [Paras 9]

The Section 263 revision was not sustainable on merits because the AO had made the requisite verifications and the PCIT's contrary conclusion amounted to a prohibited second opinion.

Final Conclusion: The appeal is allowed: the assessment for A.Y. 2015 16 is rendered void ab initio due to defective Section 143(2) notices (limitation and jurisdictional defects); additional grounds contesting those defects are admitted; and alternatively the order under Section 263 is set aside on merits as constituting an impermissible second opinion.

Holding period for long-term capital gains - date of acquisition for immovable property - date of allotment as date of acquisition - occupancy certificate and date of possession - indexation of cost for LTCG - entitlement under section 54 of the Act

Holding period for long-term capital gains - date of allotment as date of acquisition - occupancy certificate and date of possession - indexation of cost for LTCG - entitlement under section 54 of the Act - Whether the holding period (date of acquisition) for computing long-term capital gain on sale of a flat is to be reckoned from the date of allotment or from the date of occupation/registration - HELD THAT: - The Tribunal narrowed the controversy to the temporal point from which acquisition is to be treated for computing long-term capital gain. It noted that the allotment letter in the present case is dated 25.02.1997 and that substantial payments were made by the assessee pursuant to that allotment; the conveyance deed was registered and the occupancy certificate issued in 2000-01. The Tribunal observed that co-ordinate and higher court decisions have held that the date of allotment may be treated as the date of acquisition for determining the holding period and entitlement under section 54 where appropriate facts exist. The Tribunal relied on the decisions of MadhuKaul v/s. CIT and CIT v/s. S.R. Jayshankar , noting that those decisions (followed by the Tribunal in NanditaPatodia v/s. ITO ) support reckoning the holding period from the allotment date rather than from the date of occupation/registration, where the facts show payment and allotment antecedent to occupation. Applying those principles to the admitted facts here (allotment in 1997, substantial payments made at allotment, sale in 2008), the Tribunal concluded that the holding period and consequent indexation for computation of long-term capital gain should be adopted from the date of allotment. [Paras 7, 8]

Allow the appeal; direct the Assessing Officer to adopt the holding period from the date of allotment of the flat for computation of long-term capital gain.

Final Conclusion: Appeal allowed. For AY 2008-09 the Tribunal directs the Assessing Officer to treat the date of allotment as the date of acquisition and to compute long-term capital gain (with indexation) accordingly.

Invocation of section 145(3) of the Income-tax Act and rejection of books of account - trading addition on account of low yield ratio of oil from seeds - ad-hoc addition without specific basis - allowability of business expenditures and ad-hoc disallowances - disallowance under section 40A(2)(b) in respect of commission paid to related persons - precedent and issue estoppel by reason of earlier assessment year decision

Invocation of section 145(3) of the Income-tax Act and rejection of books of account - trading addition on account of low yield ratio of oil from seeds - ad-hoc addition without specific basis - Validity of trading addition made by AO on account of low yield and the application of section 145(3) for A.Y. 2013-14 - HELD THAT: - The Tribunal examined the A.O.'s adoption of preceding year yield ratios and the ld. CIT(A)'s restriction to a portion of the addition. It relied on the coordinate-bench treatment of the assessee's similar issue in A.Y. 2012-13 and on the material showing only a very slight decline in yield (0.31% for groundnut oil and 0.23% for mustard oil) and an improved gross profit rate in the year under consideration. The Tribunal held that where the variance in yield is negligible and can be explained by factors like seed quality and climatic conditions, and where the ld. CIT(A) sustained an addition without stating any specific basis for the quantum, such ad-hoc additions are not justified. Applying those principles, the Tribunal deleted the addition sustained by the ld. CIT(A). [Paras 10]

Trading addition sustained by the ld. CIT(A) for A.Y. 2013-14 is deleted.

Allowability of business expenditures and ad-hoc disallowances - Validity of ad hoc disallowances of telephone, travelling, building repair & maintenance and office expenses for A.Y. 2013-14 - HELD THAT: - The Tribunal noted that under identical facts in the earlier year the coordinate bench had deleted most of the ad hoc disallowances except 10% of building repair and maintenance where lack of documentary support (cash payments and self made vouchers) justified a limited disallowance. Following that precedent and the material on record, the Tribunal deleted the disallowances made by the AO and sustained by the ld. CIT(A) except for the 10% disallowance in respect of building repair and maintenance expenses which was upheld. [Paras 15]

All challenged disallowances are deleted except 10% of building repair and maintenance expenses which is sustained.

Disallowance under section 40A(2)(b) in respect of commission paid to related persons - precedent and issue estoppel by reason of earlier assessment year decision - Sustained disallowance of a portion of commission payments to related parties (restricted to 15%) for A.Y. 2013-14 - HELD THAT: - The Tribunal considered the AO's complete disallowance of commission paid to related persons and the ld. CIT(A)'s restriction to 15% by following the resolution in the assessee's earlier year where the assessee had not challenged the CIT(A)'s restriction before the Tribunal. The ld. CIT(A) had accepted that the commissions were incurred wholly and exclusively for business, were paid by cheque, subject to TDS and declared by the recipients. Given the identical facts and that the earlier CIT(A) decision had attained finality, the Tribunal found no infirmity in applying the same 15% restriction and did not interfere. [Paras 23]

Disallowance in respect of commission to related persons is limited to 15%; the assessee's challenge is dismissed.

Invocation of section 145(3) of the Income-tax Act and rejection of books of account - trading addition on account of low yield ratio of oil from seeds - allowability of business expenditures and ad-hoc disallowances - precedent and issue estoppel by reason of earlier assessment year decision - Applicability of the findings for A.Y. 2013-14 to A.Y. 2014-15 - HELD THAT: - Parties agreed and the Tribunal found that the facts and circumstances for A.Y. 2014-15 are identical to A.Y. 2013-14. Consequently, the Tribunal applied its conclusions in respect of invocation of section 145(3), trading additions, ad hoc disallowances and the commission disallowance mutatis mutandis to A.Y. 2014-15. [Paras 26]

The directions and conclusions in respect of A.Y. 2013-14 apply mutatis mutandis to A.Y. 2014-15; appeal for A.Y. 2014-15 is partly allowed accordingly.

Final Conclusion: Both appeals are partly allowed: for A.Y. 2013-14 the trading addition and most ad hoc disallowances are deleted (except 10% of building repair & maintenance), the commission disallowance to related persons is limited to 15%; identical directions are applied mutatis mutandis to A.Y. 2014-15.

Fair market value - reference to Valuation Officer under section 55A(a) - formation of opinion by Assessing Officer - prospective application of statutory amendment (non retrospective operation) - deletion of addition to long term capital gains

Reference to Valuation Officer under section 55A(a) - formation of opinion by Assessing Officer - prospective application of statutory amendment (non retrospective operation) - fair market value - deletion of addition to long term capital gains - Validity of reference to the Departmental Valuation Officer (DVO) and consequent substitution of cost of acquisition for determination of long term capital gains for a sale effected on 06.09.2011 (relevant to AY 2012-13). - HELD THAT: - The Tribunal held that the amendment to section 55A(a) (substituting the phrase "is at variance with its fair market value") came into force w.e.f. 01.07.2012 and is not retrospective. Transactions effected prior to 01.07.2012 (including the sale here in financial year 2011-12 relevant to AY 2012-13) must be governed by the unamended provision which permitted a reference to the Valuation Officer under clause (a) only where the Assessing Officer forms an opinion that the value claimed by the assessee is less than its fair market value. In the present case the assessee had relied upon a report of a Government registered valuer and had adopted a higher value as on 01.04.1981; the Assessing Officer neither had jurisdiction under the unamended clause (a) to refer the matter where the assessee's claimed value exceeded the DVO value, nor is the amended wording applicable to confer such jurisdiction. The Tribunal further noted that the Assessing Officer had not formed the requisite opinion under the unamended provision before making the reference. The Tribunal followed the binding view of the jurisdictional High Court in CIT v. Gauranginiben S. Shodhan and allied High Court/Tribunal decisions holding the 2012 amendment to be prospective and that references under section 55A(a) prior to 01.07.2012 are maintainable only if the Assessing Officer forms the opinion that the assessee's claimed value is less than FMV. Consequently, in absence of a valid reference to the Valuation Officer, the addition made by the Assessing Officer to the long term capital gains (based on the DVO valuation) was directed to be deleted.

Reference to the DVO under section 55A(a) in the assessment for AY 2012-13 was invalid; the addition made on account of substituting cost of acquisition on the basis of the DVO report is deleted and the appeal is allowed on this ground.

Final Conclusion: The Tribunal, following the jurisdictional High Court and coordinate decisions, held that the 2012 amendment to section 55A(a) does not apply retrospectively; since the Assessing Officer lacked jurisdiction under the unamended provision and did not form the requisite opinion before referring the matter to the DVO, the addition based on the DVO valuation in respect of the sale in FY 2011-12 (AY 2012-13) is deleted and the appeal is partly allowed.

Unexplained cash credit under section 68 of the Income-tax Act - identity, creditworthiness and genuineness of shareholders - onus of proof on assessee and shifting burden to Revenue - proper course to examine source is assessment of the creditor - consequential deletion of related accommodation-entry commission

Unexplained cash credit under section 68 of the Income-tax Act - identity, creditworthiness and genuineness of shareholders - onus of proof on assessee and shifting burden to Revenue - Addition of Rs. 80,00,000 credited as share capital/share premium from M/s Supriya Fincom Pvt. Ltd. treated as unexplained cash credit and added to assessee's income under section 68. - HELD THAT: - The Tribunal examined whether the assessee discharged the onus under section 68 by proving identity, creditworthiness and genuineness of the share applicant. The assessee produced share application forms, allotment receipts, board resolutions, PAN, bank statements, audited financial statements and income-tax acknowledgements and also relied on MCA/ROC records. The Tribunal noted settled precedents that once identity and genuineness through banking channels and relevant records are established, the burden shifts to the AO to disprove the same and, where necessary, the proper course is to enquire and assess the creditor. The Tribunal found the assessee had placed material demonstrating receipt through account-payee cheques, existence of the share applicant as tax-filer and documentary evidence of source and source-of-source. The AO relied on reports of searches and investigation and non-service of summons on some persons, but did not bring on record a persuasive rebuttal displacing the assessee's evidence or evidence of the creditor's returns being rejected by its AO. Applying the principle that section 68 employs permissive wording and onus shifting, the Tribunal concluded the AO's addition was based on conjecture and surmise and not on disproof of the materials placed by the assessee. [Paras 15, 16, 17, 18, 19]

Addition of Rs. 80,00,000 made under section 68 in respect of M/s Supriya Fincom Pvt. Ltd. is deleted.

Consequential deletion of related accommodation-entry commission - Addition of Rs. 24,000 as commission (0.30% on the share capital/share premium) alleged to be payment for accommodation entry. - HELD THAT: - The addition of commission was founded on the AO's finding that accommodation entries were obtained in respect of the share subscription. Having deleted the primary addition under section 68 by holding that the assessee had discharged its onus and the AO failed to disprove the transactions, the Tribunal treated the commission addition as consequential. In absence of sustaining the primary finding of accommodation entry for the Rs. 80,00,000, there was no independent basis to uphold the commission addition. [Paras 6, 19]

Addition of Rs. 24,000 as accommodation-entry commission is deleted as consequential.

Final Conclusion: The Tribunal allowed the appeal for AY 2012-13 by deleting the addition of Rs. 80,00,000 treated as unexplained cash credit from M/s Supriya Fincom Pvt. Ltd. and consequentially deleting the addition of Rs. 24,000 as accommodation-entry commission.

Disallowance under section 14A - cost of acquisition - option under section 55(2)(b)(i) to adopt fair market value as on 1-4-1981 - valuation of unquoted shares - admissibility of revaluation of company assets for FMV - use of wealth tax valuation for Income tax capital gains computation - reverse indexation from subsequent purchase price to determine FMV as on 1-4-1981 - deemed consideration under section 50C and reference to Valuation Officer under section 50C(2) - deduction under section 54F - investment by way of part consideration in kind / escrow arrangement

Disallowance under section 14A - Ground relating to disallowance under section 14A not pressed by the assessee and dismissed as not pressed. - HELD THAT: - The assessee expressly did not press the ground contesting the disallowance under section 14A during hearing and the Revenue raised no objection. The Tribunal recorded that the ground was not pressed and dismissed it on that basis. [Paras 3]

Dismissed as not pressed.

Cost of acquisition - option under section 55(2)(b)(i) to adopt fair market value as on 1-4-1981 - valuation of unquoted shares - admissibility of revaluation of company assets for FMV - use of wealth tax valuation for Income tax capital gains computation - reverse indexation from subsequent purchase price to determine FMV as on 1-4-1981 - Determination of cost of acquisition of 925 shares held prior to 1 4 1981 for computing long term capital gain. - HELD THAT: - The assessee invoked the option under section 55(2)(b)(i) to substitute actual cost by FMV as on 1 4 1981 and submitted a valuation based on revaluation of company assets (including land) and a CA certificate. The Revenue relied on the wealth tax valuation (FMV shown as on 31 3 1979) and the AO adjusted that figure for inflation to arrive at a much lower per share value. The Tribunal agreed that wealth tax valuation cannot be mechanically adopted for Income tax capital gains and that an assessee may adopt FMV as on 1 4 1981 including valuation based on re valuation of assets if properly supported. However, noting that the assessee had also acquired identical shares in 2003 04 at a known price and had not furnished the company balance sheet as on 1 4 1981, the Tribunal found it impractical to accept the revaluation figure relied upon by the assessee. In the circumstances, the Tribunal directed adoption of an FMV on 1 4 1981 arrived at by reverse indexation from the 2003 04 acquisition price (i.e., adopt the 2003 04 purchase price and compute the equivalent 1 4 1981 value by reverse indexation), and directed the Assessing Officer to adopt that value for computing indexed cost. The Tribunal declined to refer the matter to the Valuation Officer at that stage. [Paras 14, 15, 16]

Partly allowed - directed AO to adopt fair market value as on 1 4 1981 computed by reverse indexation from the 2003-04 purchase price (per share value directed to be adopted by the Tribunal).

Deemed consideration under section 50C and reference to Valuation Officer under section 50C(2) - Whether the stamp duty valuation (higher market value) should be treated as full value of consideration under section 50C and whether the matter should be referred to the Valuation Officer. - HELD THAT: - The assessee sold land by registered document on 4 1 2012 and contended that the deal was concluded in December 2011 (when ready reckoner rates were lower) and that stamp authorities applied an increased ready reckoner rate effective 1 1 2012 plus a TDR loading; the assessee sought either adoption of the 2011 ready reckoner or reference to the DVO. The AO took the stamp duty valuation as the deemed consideration under section 50C; the CIT(A) upheld that view. The Tribunal observed that in an immediately adjacent/related transaction (Mahalaxmi Rope Works Ltd.) the matter had been referred to the DVO and the DVO's valuation (without applying TDR) narrowed the difference and the addition was deleted. Given the similarity of facts and that comparable local DVO valuation had been obtained for a neighbouring plot, the Tribunal considered it appropriate in the interests of justice to restore the issue to the file of the Assessing Officer and direct a reference to the Valuation Officer for fresh FMV determination, to be adopted for computing capital gains. [Paras 26]

Issue restored to AO and directed to refer the matter to the DVO; ground allowed for statistical purposes (remanded for fresh valuation).

Deduction under section 54F - investment by way of part consideration in kind / escrow arrangement - Allowability of deduction under section 54F where part consideration for transfer was agreed to be in kind (allotment of flat) and payments stood in an escrow arrangement but allotment was disputed by the builder. - HELD THAT: - The assessee sold land and, by escrow arrangement with the buyer and the builder, was to receive a residential flat as part consideration. The builder later denied allotment and litigation ensued; the assessee produced the escrow arrangement, public notice and interim High Court order restraining the builder from disposing the flat. The AO disallowed section 54F relief for failure to prove purchase/possession within prescribed time. The Tribunal took a pragmatic view: where the assessee has performed his part (funds placed/escrowed and agreement on terms) but the builder's default prevents allotment within statutory time, courts may adopt a liberal approach. The Tribunal held that the assessee had in effect paid the consideration for the flat and was therefore eligible for deduction under section 54F. The Tribunal also sustained the CIT(A)'s direction permitting verification of the Capital Gains Account deposit and left consequences on non utilisation to assessment stage. [Paras 31, 32, 33]

Allowed - deduction under section 54F granted; CIT(A)'s direction to allow deduction against the capital gains account deposit upheld.

Application of decisions to co appellant / consistency of orders - Applicability of Tribunal's findings in the primary appeal to the co appellant (Mrs. Shrilekha Vinay Somani) for identical issues. - HELD THAT: - The Tribunal found the facts and legal issues in the co appellant's appeals materially identical to those decided in the primary appeal: cost of acquisition of the 925 shares and the section 54F claim. Consistent with the view taken in the primary appeal, the Tribunal set aside the CIT(A) orders and partly allowed the co appellant's grounds accordingly. [Paras 36, 38]

Partly allowed - impugned orders set aside and directions consistent with the primary appeal applied.

Final Conclusion: The Tribunal partly allowed the assessee's appeals for AY 2012-13. Ground relating to section 14A was dismissed as not pressed. The cost of acquisition of 925 pre 1981 shares was partly allowed by directing AO to adopt an FMV on 1 4 1981 computed by reverse indexation from the 2003-04 purchase price (as directed). The issue under section 50C was restored to the AO and remitted for reference to the Valuation Officer for fresh FMV determination. The deduction under section 54F was allowed on facts showing escrowed part consideration and builder's default; the CIT(A)'s direction regarding capital gains deposit was upheld. Identical reliefs were extended to the co appellant.

Penalty under Section 271(1)(c) - Concealment of particulars of income - Furnishing inaccurate particulars of income - Validity of show-cause notice under Section 274 - Requirement to specify the limb of penalty - Principle of natural justice - Recording of satisfaction/direction to initiate penalty proceedings

Penalty under Section 271(1)(c) - Validity of show-cause notice under Section 274 - Requirement to specify the limb of penalty - Principle of natural justice - Whether the penalty under Section 271(1)(c) is sustainable when the notice under Section 274 failed to specify whether the charge was for concealment of particulars of income or for furnishing inaccurate particulars of income. - HELD THAT: - The Tribunal examined the show-cause notice dated 26.12.2011 and found that it stated that the assessee had "Concealed the particulars of your income and / or furnished inaccurate particulars of such income," without clearly specifying which limb of Section 271(1)(c) was being invoked. The Court reiterated settled law that imposition of penalty under Section 271(1)(c) requires proof that the assessee either concealed particulars of income or furnished inaccurate particulars, and that the assessee must be made aware of the specific charge so as to meet it. Reliance was placed on the reasoning in the Karnataka High Court decision (CIT v. Manjunatha Cotton and Ginning Factory & Ors) that (i) the existence of conditions in Section 271(1)(c) must be discernible from the assessment or by a clear direction to initiate penalty proceedings, (ii) notice under Section 274 should specifically state whether the penalty is for concealment or for furnishing incorrect particulars, and (iii) a notice that ambiguously pleads both limbs without specification offends the principle of natural justice and vitiates the penalty proceedings. The Tribunal noted that the same view has been approved by the Delhi High Court in Sahara (supra) and, following these precedents, held that the defective notice rendered the penalty unsustainable. Consequently, the Tribunal set aside the penalty order and directed deletion of the penalty. [Paras 5]

Penalty under Section 271(1)(c) is not sustainable because the show-cause notice failed to specify the particular limb (concealment or inaccurate particulars), and the penalty is set aside and deleted.

Final Conclusion: The appeal is allowed; the penalty imposed under Section 271(1)(c) is deleted for want of a valid show-cause notice which failed to specify whether the charge was concealment of income or furnishing inaccurate particulars.

Prior approval under section 153D - Validity of approval under section 153D - Quasi-judicial supervisory function of the approving authority - Vitiation of assessment under section 153A for want of valid approval - Admission of additional legal grounds at appellate stage

Admission of additional legal grounds at appellate stage - Additional grounds challenging validity of assessment under section 153D admitted by the Tribunal. - HELD THAT: - The Tribunal held that the additional grounds raised before it were purely legal in nature, went to the root of the matter, required no new facts and could be decided on materials already on record. The Assessing Officer did not oppose admission in his report. In view of these factors and the principle in NTPC Ltd. v. CIT, the Tribunal exercised its discretion to admit the additional grounds for adjudication. [Paras 6]

Additional grounds admitted.

Validity of approval under section 153D - Quasi-judicial supervisory function of the approving authority - Prior approval under section 153D - Approval accorded under section 153D was invalid as it was granted mechanically without application of mind, rendering the consequent assessment under section 153A/143(3) vitiated. - HELD THAT: - On the facts, the draft assessment, approval and final order were all completed on the same date; a common approval was accorded for multiple assessees on that single day; the approving authority admitted that only broad issues were discussed due to time constraints; and approvals were granted without examination of seized material or application of independent mind to each assessment year. The Tribunal noted that section 153D requires independent, year-wise supervisory scrutiny by the Joint Commissioner (approving authority) and that such approval is not a mere formality but a quasi judicial act requiring discernible application of mind. Following the Coordinate Bench decision in Sanjay Duggal and ors v. ACIT, the Tribunal concluded that the approvals suffered from infirmities and were not in accordance with the statute, with the consequence that assessments framed under section 153A/143(3) stood vitiated. [Paras 7]

Approval under section 153D quashed; assessment passed pursuant to that approval set aside.

Vitiation of assessment under section 153A for want of valid approval - By parity of reasoning, the assessment in the second appeal (AY 2011-12) was quashed for want of valid approval under section 153D. - HELD THAT: - The Tribunal applied the finding on invalidity of the common approval to the second assessee whose assessment relied on the same approval letter dated 28/03/2013. Given that the statutory requirement of valid prior approval was not met, the assessment order for the year of search could not stand and was quashed. [Paras 10]

Assessment for AY 2011-12 quashed for want of valid approval under section 153D.

Final Conclusion: The Tribunal admitted the additional legal grounds and, finding that the prior approvals under section 153D were granted mechanically without application of mind, quashed the approvals and set aside the consequential assessment orders framed under section 153A/143(3) in both appeals; other grounds were rendered academic.

Penalty under section 271(1)(c) - show-cause notice under section 274 - concealment of particulars of income - furnishing inaccurate particulars of income - principles of natural justice - requirement of specificity in notice - distinction between assessment findings and penalty proceedings

Penalty under section 271(1)(c) - show-cause notice under section 274 - principles of natural justice - requirement of specificity in notice - distinction between concealment and furnishing inaccurate particulars - Validity of penalty under section 271(1)(c) where the show-cause notice under section 274 did not specify whether proceedings were initiated for concealment of income or for furnishing inaccurate particulars. - HELD THAT: - The Tribunal held that imposition of penalty under section 271(1)(c) requires that the assessee be specifically made aware of the limb under which penalty is proposed - either concealment of income or furnishing inaccurate particulars - and that such specificity is essential to meet the requirements of natural justice. Reliance was placed on the reasoning of the Hon'ble Karnataka High Court in CIT vs. Manjunatha Cotton and Ginning Factory & Ors , which held that the existence of the conditions for attracting section 271(1)(c) must be discernible and that notice under section 274 should specifically state the grounds mentioned in section 271(1)(c); sending a printed form listing all possible grounds does not suffice. The Tribunal observed that the notice dated 22.02.2013 failed to inform the assessee which specific limb was invoked, thereby depriving it of the opportunity to meet the precise charge. The Tribunal further noted that penalty proceedings are distinct from assessment proceedings and that findings in assessment do not automatically render penalty proceedings valid without compliance with statutory and procedural requirements in the notice. Applying these principles, and following the subsequent approval by the Hon'ble Delhi High Court of the Karnataka view (Sahara India Life Insurance ), the Tribunal concluded that the penalty could not be sustained where the notice lacked the required specificity. [Paras 5, 6]

Penalty under section 271(1)(c) set aside and appeal allowed.

Final Conclusion: The Tribunal set aside the penalty imposed under section 271(1)(c) for Assessment Year 2009- 10 on the ground that the show-cause notice under section 274 did not specify whether proceedings were for concealment of income or for furnishing inaccurate particulars, thereby failing the requirement of specificity and natural justice; the appeal is allowed.

Condonation of delay - sufficient cause - Penalty under section 271(1)(c) - concealment of particulars of income or furnishing inaccurate particulars - Validity of notice under section 274 - requirement to specify the limb of 271(1)(c) - Penalty proceedings distinct from assessment proceedings

Condonation of delay - sufficient cause - Whether the delay in filing the appeal to the Tribunal should be condoned. - HELD THAT: - Having considered the explanations and authorities cited, the Tribunal applied the settled principle that length of delay is immaterial and acceptability of the explanation is the decisive criterion. The assessee's account of misdirected representation, personal and family difficulties, ill-health and unawareness of the appellate order on return to residence was held to constitute sufficient cause. The Tribunal noted precedent that rules of limitation are to be liberally construed to advance substantial justice and, finding no mala fide or deliberate dilatory conduct, exercised its discretion to condone the delay and admit the appeal. [Paras 5]

Delay in filing the appeal is condoned and the appeal is admitted.

Penalty under section 271(1)(c) - concealment of particulars of income or furnishing inaccurate particulars - Validity of notice under section 274 - requirement to specify the limb of 271(1)(c) - Penalty proceedings distinct from assessment proceedings - Whether the penalty under section 271(1)(c) is sustainable where the section 274 notice did not specifically call upon the assessee to explain concealment of particulars or furnishing of inaccurate particulars. - HELD THAT: - The Tribunal held that imposition of penalty under section 271(1)(c) requires that the assessee be made aware of the specific charge-whether it is concealment of particulars of income or furnishing inaccurate particulars. The notice under section 274 must specifically state the grounds relied upon; a generic or omnibus printed form listing all grounds does not satisfy the requirement. Following the reasoning of the Karnataka High Court (as approved by the Delhi High Court), the Tribunal observed that conditions for invoking 271(1)(c) must be discernible and that penalty proceedings are distinct from assessment proceedings. Because the AO's notice did not specifically call upon the assessee to meet the particular limb relied upon, the penalty proceedings were vitiated and the penalty could not be sustained. [Paras 6, 8]

Penalty under section 271(1)(c) is set aside and the AO is directed to delete the penalty as the section 274 notice was defective for not specifying the particular limb of charge.

Final Conclusion: The Tribunal condoned the delay in filing the appeal and on merits set aside the penalty imposed under section 271(1)(c) due to a defective section 274 notice that did not specify whether concealment or furnishing inaccurate particulars was alleged; the appeal is allowed.

Deduction under section 80IA(4)(iii) - interest on deferred/delayed payments as business receipts - nexus between interest receipts and eligible business of development, operation and maintenance of industrial parks - authority to collect and retain levies incidental to allotment

Deduction under section 80IA(4)(iii) - interest on deferred/delayed payments as business receipts - nexus between interest receipts and eligible business of development, operation and maintenance of industrial parks - Interest collected by the assessee on deferred payments for allotment of industrial plots is derived from the eligible business of developing, operating and maintaining industrial parks and is eligible for deduction under section 80IA(4)(iii). - HELD THAT: - The Tribunal upheld the detailed factual findings of the CIT(A) recorded in paragraphs 8 and 9 that the assessee, though not the owner of the land, was authorized by the State to manage, allot and collect payments in respect of industrial parks and that only specified levies were required to be passed to the Government while interest on deferred payments was not demanded to be deposited. The payment schemes and application form demonstrate that allottees contractually deal with the assessee and are bound to pay as per the chosen scheme; deferred payments carry a premium as compensation for delayed receipt. The Tribunal accepted the CIT(A)'s view that such interest is a component of the receipt arising from the business activity (analogous to sales proceeds) and not a separate financing activity, and that the assessee was entitled to retain that portion which was not contractually payable to the Government. The Tribunal also relied on consistent judicial precedents recognizing interest on delayed receipts as business income where it has direct nexus with the business receipts, and found no infirmity in the CIT(A)'s legal conclusion that such receipts fall within eligible income for deduction under section 80IA(4)(iii). The Department did not point to any error of law in the CIT(A)'s reasoning nor successfully controvert the material findings of fact. [Paras 8, 9]

The addition made by the Assessing Officer disallowing interest on deferred payments was held unsustainable; deduction under section 80IA(4)(iii) was allowed in respect of the interest retained by the assessee.

Final Conclusion: The Department's appeal is dismissed and the assessee's cross-objections are allowed; the Tribunal affirms the CIT(A)'s allowance of deduction under section 80IA(4)(iii) in respect of interest on deferred payments for Assessment Year 2012-13.

Reopening of assessment - Change of opinion - Jurisdiction under section 147 - Section 147 proviso - failure to disclose true and full particulars - Reassessment beyond four years - Requirement of fresh tangible material

Reopening of assessment - Change of opinion - Requirement of fresh tangible material - Section 147 proviso - failure to disclose true and full particulars - Reassessment beyond four years - Jurisdiction under section 147 - Validity of notice issued under section 148/assumption of jurisdiction under section 147 for reassessment issued after four years - HELD THAT: - The Tribunal held that reassessment proceedings under section 147 are extraordinary and cannot be invoked merely to correct an error in the original assessment or to effect a change of opinion. The record of original assessment (proceedings under section 143(3)), including the order-sheet, notices under section 142(1) and the assessee's responses, established that the specific issue (claim of exemption under section 10(26BBB)) was fully and explicitly considered during the original assessment. The reasons recorded for reopening did not identify any failure on the part of the assessee to disclose true and full particulars nor did they disclose any fresh tangible material which was not before the assessing officer earlier. In absence of such a demonstration in the reasons, the first proviso to section 147 (permitting reopening beyond four years only where there was failure to disclose true and full particulars) was not satisfied. Reliance was placed on the principle that reassessment cannot be based on mere change of opinion (as explained by the Apex Court and subsequent authorities), and on precedents showing that reopening where the assessee had made full disclosure is impermissible. Applying these principles to the facts, the Tribunal found the notice vitiated both by being founded on a prohibited change of opinion and by failure to comply with the proviso to section 147, as no new material or omission by the assessee was shown. [Paras 5]

Notice under section 148 and consequent reassessment under section 147 quashed; reassessment order under sections 143(3)/147 annulled.

Final Conclusion: The appeal is allowed: the reassessment notice issued after four years is quashed on grounds of impermissible change of opinion and non-satisfaction of the proviso to section 147, and the reassessment order is annulled; consequential merits issues are rendered academic.

Applicability of Section 50C where land is subject to Urban Land Ceiling Act - Validity of adopting SRO (stamp duty) value as deemed consideration - Effect of repeal of Urban Land Ceiling Act on earlier transfers - Referral to Departmental Valuation Officer (DVO) for determination of market value

Applicability of Section 50C where land is subject to Urban Land Ceiling Act - Validity of adopting SRO (stamp duty) value as deemed consideration - Effect of repeal of Urban Land Ceiling Act on earlier transfers - Referral to Departmental Valuation Officer (DVO) for determination of market value - Whether Section 50C can be invoked and SRO value adopted as deemed consideration where the property was subject to the Urban Land Ceiling Act at the time of agreement and sale, and whether the Assessing Officer erred in refusing a DVO reference. - HELD THAT: - The Tribunal upheld the CIT(A)'s finding that the lands were subject to proceedings under the Urban Land Ceiling Act at the time of the agreement (1995) and execution of sale deeds (September 2007), and that the Act was repealed only later (resolution dated 27.3.2008). The CIT(A) relied on documents on record - including ULC proceedings, High Court abatement of ULC proceedings, subsequent government memo and Tahsildar's communication - to conclude that transfers occurred while the ULC regime was operative; consequently the market/SRO value could not be treated as the sale consideration under Section 50C. The Tribunal found no infirmity in that conclusion, rejected the Revenue's contention that repeal in the same year negated the applicability of ULC at the time of transfer, and held that the Assessing Officer's refusal to refer the matter to the DVO did not vitiate the assessment given the factual finding that the land was under ULC at the relevant time. The Tribunal applied the CIT(A)'s reasoning to the protective assessments and dismissed the appeals of the Revenue.

The appeals are dismissed; Section 50C/SRO value not applied because the land was subject to the Urban Land Ceiling Act at the time of transfer, and the Assessing Officer's refusal to refer to the DVO did not warrant interference.

Final Conclusion: The Tribunal dismissed the Revenue's appeals for Assessment Year 2008-09, upholding the CIT(A)'s finding that the land was subject to the Urban Land Ceiling Act at the time of sale and therefore Section 50C (and SRO value as deemed consideration) could not be invoked; protective assessments were similarly disposed of.

Violation of Regulations 11(d), 11(e) and 11(f) of the Customs Broker Licensing Regulations, 2013 - Duty of a customs broker to disclose conflict of interest / relationship with an empanelled chartered engineer - Meaning and scope of a 'qualified neutral party' under CBIC Circular No. 25/2015-Cus dated 15.10.2015 - Acceptance of inspection/appraisement reports of empanelled chartered engineers for valuation of second-hand machinery - Whether adjudicating authority may discard an inquiry report without evidence of bias or incorrect valuation

Violation of Regulations 11(d), 11(e) and 11(f) of the Customs Broker Licensing Regulations, 2013 - Duty of a customs broker to disclose conflict of interest / relationship with an empanelled chartered engineer - Meaning and scope of a 'qualified neutral party' under CBIC Circular No. 25/2015-Cus dated 15.10.2015 - Whether the appellant customs broker contravened Regulations 11(d), 11(e) and 11(f) of CBLR, 2013 by failing to disclose the relationship between the empanelled Chartered Engineer and a related company and thereby warranted revocation of licence, forfeiture of security and penalty - HELD THAT: - The Tribunal examined the facts that the importer engaged the appellant to clear a used tug and that valuation was obtained from an empanelled Chartered Engineer, Shri Anil Vohra, whose report was used for assessment. The Inquiry Officer found the charges unproven. The Commissioner disbelieved the inquiry report and held that the broker failed to disclose that the Chartered Engineer rendered consultancy services to a related company of the broker, concluding a breach of the cited regulations and imposing consequential penalties. Applying CBIC Circular No. 25/2015-Cus, the Tribunal held that the Circular's requirement of obtaining inspection/appraisement reports from a "qualified neutral party" is aimed at ensuring uniform, commercially realistic valuation by accepting reports from chartered engineers empanelled or based in the country of sale or those empanelled by the port of import. The Tribunal found that appointing an empanelled Chartered Engineer for valuation at the port of import was consistent with the Circular and customary practice. The expression "neutral party" in the Circular means a person not connected with the importer or seller in relation to the particular transaction whose value is being determined; it does not extend to disqualify an empanelled chartered engineer merely because he renders consultancy services to another related company of the broker, absent any allegation or evidence that the engineer was biased, that his valuation was incorrect, or that he obtained pecuniary benefit related to the transaction. The adjudicating authority's conclusion was held to be fallacious because there was no finding or material demonstrating bias in the engineer's valuation, no alternative valuation produced by the Revenue, and the inquiry report exonerating the broker was not displaced by evidence. On these determinative points the Tribunal concluded that the charges under Regulations 11(d), 11(e) and 11(f) were not proved and the punitive measures imposed by the Commissioner were unsustainable. [Paras 9, 10, 14, 15]

The finding of contravention of Regulations 11(d), 11(e) and 11(f) is not sustained; the adjudicating order is set aside and the appeal is allowed.

Final Conclusion: The Tribunal set aside the adjudicating authority's order revoking the broker's licence, forfeiting security and imposing penalty, holding that the charges of non-disclosure and breach of Regulations 11(d), 11(e) and 11(f) were not proved and that the empanelled Chartered Engineer's appointment complied with CBIC Circular No. 25/2015-Cus.

Oppression and mismanagement - prejudice to shareholder rights / requirement of conduct to be prejudicial - burden of proof for diversion of business - validity of board resolutions adopted by majority and commercial wisdom - increase in authorized share capital carried out after following procedure - use of company funds for bonus where approved in accounts - compassionate/ancillary relief by adjudicating authority as reasonable relief

Oppression and mismanagement - prejudice to shareholder rights / requirement of conduct to be prejudicial - Whether the conduct of Respondent No. 2 and others amounted to oppression and mismanagement of Respondent No. 1 Company affecting the Appellant's rights as a shareholder. - HELD THAT: - The Tribunal examined the factual allegations-exclusion from management, denial of financial records, diversion of business, unauthorized transfers, and discriminatory payouts-and applied the legal requirement that conduct must be prejudicial to the applicant in her capacity as a shareholder. The Appellant failed to demonstrate that commercial decisions lacked commercial wisdom or were motivated to deprive her of shareholder rights. Documentary material and company performance showed continued growth and legitimate corporate actions. Consequently, the pleaded instances did not establish the statutory test of oppression and mismanagement. [Paras 15, 20, 24, 25, 26]

Allegations of oppression and mismanagement not established; no relief on merits on that ground.

Burden of proof for diversion of business - Whether the incorporation of the new company (Respondent No. 4) amounted to diversion of business from Respondent No. 1 Company to oppress the Appellant. - HELD THAT: - The Appellant alleged that Respondent No. 4 was formed to divert business and reduce Respondent No. 1 Company's value. The Tribunal found no evidence of diversion or transfer of significant business to Respondent No. 4; Respondents' explanation that Respondent No. 4 had no significant business was plausible and went uncontradicted by the Appellant. Absent factual proof of diversion, the allegation fails. [Paras 5, 20]

Incorporation of Respondent No. 4 did not, on the evidence, amount to diversion of business or oppression.

Use of company funds for bonus where approved in accounts - Whether transfers from the company's account to Respondent No. 2's private account were unauthorized misappropriations. - HELD THAT: - Respondent No. 2 explained that a credited sum represented a previously due bonus paid once liquidity permitted; the Appellant had approved and signed the relevant accounts for the year in which this was reflected. No other instances of unauthorized transfers were proven. On those facts, the Tribunal found no substance in the allegation of routine unauthorized transfers. [Paras 21]

No finding of unauthorized appropriation; the credited amount was explained as a bonus and not an act of misappropriation.

Validity of board resolutions adopted by majority and commercial wisdom - Whether variable salaries and other payouts approved by board resolutions amounted to oppression because Appellant was denied supporting documents or her objections were overruled. - HELD THAT: - Minutes and records indicated variable pay was granted on account of employees' and key personnel's contribution to business growth. Resolutions were passed in accordance with the Articles and by majority; mere overruling of the Appellant's objections does not, without more, establish oppression. The Tribunal also noted that some challenged actions fell outside the scope of the original petition as they occurred after the impugned order. [Paras 9, 22]

Board resolutions awarding variable pay and related approvals were valid and did not constitute oppression or mismanagement.

Increase in authorized share capital carried out after following procedure - Whether the resolution to increase the authorized share capital of Respondent No. 1 Company was an act of oppression aimed at diluting the Appellant's shareholding. - HELD THAT: - The Tribunal found that the proposal to increase authorized capital was a corporate action undertaken following proper procedure. Importantly, the formal EGM approval occurred after the impugned NCLT order. Because the increase was effected according to procedure and there was no showing of unfair allotment prejudicing the Appellant, the act could not be branded as oppression. [Paras 10, 23]

Increase in authorized share capital, carried out after procedural compliance, does not amount to oppression.

Compassionate/ancillary relief by adjudicating authority as reasonable relief - Whether the NCLT's grant of residence, monthly salary and perquisites to the Appellant was an appropriate and reasonable relief. - HELD THAT: - Although the Appellant did not establish oppression on merits, the NCLT had granted ancillary relief (residence, salary, car and perquisites) in view of the Appellant's prior position and benefits. The appellate Tribunal observed that the relief was reasonable in the circumstances and that respondents complied with the order. The Tribunal found no reason to interfere with such discretionary relief. [Paras 13, 24, 26]

NCLT's grant of residence, salary and perquisites was reasonable and is upheld.

Final Conclusion: The appellate Tribunal found that the Appellant failed to prove oppression or mismanagement; specific allegations (diversion of business, unauthorized transfers, invalid board resolutions, and dilution by increase of authorized capital) were not established on the material before the Tribunal. The NCLT's order, including the discretionary relief of residence, salary and perquisites to the Appellant, is upheld. The appeal is dismissed and interim applications, if any, are disposed of; no order as to costs.

Intervention / impleadment in ongoing proceedings - locus standi of erstwhile directors during CIRP - rights of Successful Resolution Applicant to seek information for implementation of resolution plan - separation of proceedings against erstwhile management from implementation of resolution plan - relevance of forensic audit and fraud classification to resolution implementation

Intervention / impleadment in ongoing proceedings - locus standi of erstwhile directors during CIRP - rights of Successful Resolution Applicant to seek information for implementation of resolution plan - Application for impleadment and grant of copies of papers in IA No. 1110 of 2021 by an erstwhile director of the Corporate Debtor - HELD THAT: - The Applicant sought to be joined and to be supplied papers in IA No. 1110 of 2021, which was filed by the Successful Resolution Applicant (SRA) seeking, inter alia, the forensic audit report and communications/complaints relied upon by certain financial creditors in classifying the account as 'fraud'. The Tribunal noted that the SRA and the financial creditors may legitimately be concerned with the contents of the forensic audit report and related complaints for purposes of implementing the resolution plan. However, the Tribunal found that the present Applicant, an erstwhile director/promoter, is not concerned with the specific reliefs sought in IA No. 1110 and that the decision in that Application would have nothing to do with him. The Bench observed that proceedings initiated by banks against the erstwhile management pursuant to the forensic audit are separate from proceedings concerning implementation of the resolution plan, and that any right of the SRA to obtain information under the Code does not equate to a right of the erstwhile management to intervene in the SRA's application. The Tribunal also held that the authority relied upon by the Applicant was distinguishable on facts and context. For these reasons, the Tribunal concluded there was no necessity to implead the Applicant or to accede to his request for papers in the earlier application.

Application for impleadment and for supply of papers in IA No. 1110 of 2021 is rejected on contest; no costs.

Final Conclusion: The Tribunal declined to allow an erstwhile director to intervene in an SRA's application for forensic-audit-related information, holding that the applicant was not vitally interested in the reliefs sought and that the matters in IA No. 1110 relate to the SRA and financial creditors; application dismissed with no costs.

Sanction of scheme of amalgamation under sections 230 to 232 of the Companies Act, 2013 - Dispensation of convening meetings where consent affidavits have been obtained - Transfer of assets, liabilities and pending proceedings upon amalgamation - Continuity of employment of staff and workmen on amalgamation - Valuation and share exchange ratio determined by registered valuer - Service on and reporting by regulatory authorities (Regional Director, Registrar of Companies, Official Liquidator, Income Tax Department) - Approval notwithstanding that sanction does not confer exemption from stamp duty, taxes or other statutory liabilities

Sanction of scheme of amalgamation under sections 230 to 232 of the Companies Act, 2013 - Service on and reporting by regulatory authorities (Regional Director, Registrar of Companies, Official Liquidator, Income Tax Department) - No objection as sufficient ground for sanction - Sanction of the Scheme of Amalgamation between Transferor Companies No. 1-9 and Transferee Company. - HELD THAT: - The Tribunal considered compliance with the directions issued on listing (publication, service on Regional Director, RoC, Official Liquidator and Income Tax Department), reports filed by the Regional Director, Registrar of Companies and Official Liquidator, the absence of objections reported to the Registry, and the approvals obtained from creditors in convened meetings. The Income Tax Department's position was addressed by an undertaking from the Transferee Company regarding treatment of profits/losses and meeting statutory liabilities. The valuation report by a Registered Valuer and the annexed statutory auditor certificates and financial statements were on record. On these materials the Tribunal found no impediment to sanction and approved the Scheme, while clarifying that the sanction does not operate as an exemption from payment of any stamp duty, taxes or other statutory charges and does not preclude action for any statutory violations in accordance with law.

Scheme of Amalgamation is sanctioned; there being no objections and statutory compliances in order, the Tribunal approves the Scheme subject to applicable laws and liabilities.

Transfer of assets, liabilities and pending proceedings upon amalgamation - Continuity of employment of staff and workmen on amalgamation - Allotment of shares pursuant to share exchange ratio - Consequences of the sanctioned Scheme regarding vesting of properties, transfer of liabilities, continuation of legal proceedings, transfer of employees and allotment of shares. - HELD THAT: - The Tribunal applied the Scheme's provisions to direct that, upon coming into effect, all properties, rights and powers of Transferor Companies No. 1-9 shall be transferred to and vested in the Transferee Company subject to existing charges; all liabilities and duties shall stand transferred and become the liabilities and duties of the Transferee Company; pending or future proceedings in respect of the Transferor Companies shall be continued by or against the Transferee Company; and staff and employees in service as on the appointed date shall be deemed to have become employees of the Transferee Company without break. The Transferee Company is directed to allot shares to existing members of the Transferor Companies in accordance with the share exchange ratio as provided by the valuation report and the Scheme.

Transferor Companies No. 1-9 stand transferred to and vested in the Transferee Company with assets, liabilities, proceedings and employees continuing as specified; allotment of shares to transferor-company members to be made by the Transferee Company as per the Scheme.

Registrarial compliance and filing of certified copy of the order - Payment directions to regulatory and charitable funds as condition of sanction - Sanction not an immunity from statutory enforcement - Ancillary directions consequent to sanction including deposits, filings and preservation of enforcement rights. - HELD THAT: - The Tribunal directed the Transferee Company to deposit specified amounts with the Pay and Accounts Office in respect of the Regional Director, and to specified funds/associations within a time specified from receipt of certified copy of the order. The petitioner companies were directed to deliver a certified copy of the order to the Registrar of Companies for registration, upon which the Registrar shall consolidate and place records as prescribed in Form CAA-7. The Tribunal expressly stated that the sanction shall not be construed as exempting the parties from payment of stamp duty, taxes or other charges and that the order will not prevent action being taken in accordance with law in case of any deficiency, violation or statutory contravention by concerned persons.

Petitioners to comply with payments and filing directions and to deliver certified copy to RoC; sanction is subject to statutory liabilities and does not bar lawful enforcement action.

Final Conclusion: The Tribunal, after satisfying itself as to compliance with statutory requirements, reports from relevant authorities and absence of objections, sanctioned the Scheme of Amalgamation between Transferor Companies No. 1-9 and Transferee Company; directed vesting of assets and liabilities, continuation of proceedings, transfer of employees, allotment of shares as per the Scheme, prescribed deposits and filing of certified copy with the Registrar of Companies, and clarified that the sanction does not confer exemption from stamp duty, taxes or other statutory liabilities and does not impede action under law for any violations.

Scheme of Amalgamation - sanction under Sections 230 & 232 - dispensing with meetings - compliance with Accounting Standard-14 - statutory compliance and payment of fees - transfer of undertakings and vesting of assets and liabilities on Appointed Date - continuation of pending proceedings against transferee

Scheme of Amalgamation - sanction under Sections 230 & 232 - dispensing with meetings - no objection by regulatory authorities - Sanction of the Scheme of Amalgamation between the two Transferor Companies and the Transferee Company and maintainability of the joint petition. - HELD THAT: - The Tribunal found the joint second motion petition maintainable and, after considering the compliance affidavits, newspaper publications, service on statutory authorities, the certificate/no-objection filed by the Income Tax department, the Registrar of Companies' report and the absence of any pending investigations, concluded there was no impediment to sanctioning the Scheme. The Tribunal also noted that meetings of members and creditors had been dispensed with at the first motion stage and that statutory requirements including filing of the auditor's certificate and audited/provisional financial statements had been placed on record. On this basis the Scheme was sanctioned under Sections 230 and 232 of the Companies Act, 2013, subject to statutory compliance and the conditions recorded in the order. [Paras 1, 9, 12]

Scheme sanctioned under Sections 230 & 232; joint petition held maintainable and sanction granted subject to compliance with statutory requirements.

Compliance with Accounting Standard-14 - statutory compliance and payment of fees - observations of the Regional Director - no fetter on revenue or other statutory action - Directions and conditions imposed while sanctioning the Scheme, including compliance with Regional Director's observations and reservation of action by authorities in case of violations. - HELD THAT: - The Tribunal recorded the Regional Director's observations requesting compliance with the requirement to pay fees under the Act, strict adherence to Accounting Standard-14 and consideration of payment of legal fees/costs to the Central Government. The sanction was expressly made subject to these requirements; the petitioners were directed to comply with Section 232(3)(a) and Accounting Standard-14. The Tribunal clarified that the sanction does not confer any exemption from stamp duty, taxes or other statutory payments and that any deficiency or violation discovered subsequently would not be obstructed by the sanction and action may be taken in accordance with law. The order further directed specified deposits to be made (including amounts to public funds and the Bar Association) as part of the imposed directions. [Paras 9, 11, 12]

Petitioners directed to comply with RD observations, applicable accounting standards and statutory fee/tax obligations; sanction subject to these compliances and without prejudice to action for any future violations.

Transfer of undertakings and vesting of assets and liabilities on Appointed Date - continuation of pending proceedings against transferee - deemed transfer of employees - Operative consequences of the Scheme on and from the Appointed Date including transfer and vesting of assets, liabilities, contracts, licenses, employees and continuation of proceedings. - HELD THAT: - The Tribunal ordered that upon the Scheme becoming effective from the Appointed Date (01.04.2019), all undertakings, properties, rights, licenses, contracts, liabilities, incentives, carried forward benefits and employees of the Transferor Companies shall without further act or deed stand transferred to and vest in the Transferee Company. It further directed that pending proceedings by or against the Transferor Companies shall continue by or against the Transferee Company, allotment of shares to transferor members shall be effected by the Transferee Company and the Transferor Companies shall be dissolved without winding up on filing certified copy of the order with the Registrar of Companies. [Paras 12]

On the Appointed Date the assets, liabilities, contracts, licences and employees of the Transferor Companies stand transferred and vested in the Transferee Company and pending proceedings shall continue against the Transferee Company; Transferor Companies to be dissolved without winding up on registration.

Final Conclusion: The Tribunal held the joint petition maintainable and sanctioned the Scheme of Amalgamation under Sections 230 & 232 of the Companies Act, 2013, subject to compliance with statutory requirements (including the Regional Director's observations and Accounting Standard-14), and recorded the operative consequences of the Scheme from the Appointed Date while preserving the rights of revenue and other authorities to take action for any non-compliance.

Limitation for filing Section 7 application - Effect of recovery certificate/decree on limitation - Acknowledgement extending period of limitation - Applicability of RBI circular dated 12.02.2018 (Dharani Sugars) - Res judicata and binding effect of DRT decrees - Adjudicating Authority's duty to disclose reasons

Limitation for filing Section 7 application - Effect of recovery certificate/decree on limitation - Acknowledgement extending period of limitation - Maintainability of the Section 7 petition in view of limitation and the effect of DRT recovery certificates and subsequent communications - HELD THAT: - The Tribunal held that the Section 7 application was filed on 06.09.2019 based on Recovery Certificates dated 17.10.2017, 04.08.2017 and 08.09.2015 and that those recovery certificates constituted dates from which the Financial Creditor's right to proceed crystallised. The DRT orders and ensuing recovery certificates having attained finality operate as determinative of debt and default for the purposes of initiation of CIRP. The Tribunal further recorded that the letter dated 29.01.2020 from the Corporate Debtor seeking OTS and proposing repayment in instalments amounted to an acknowledgement falling within the period of limitation counted from the recovery certificates, thereby extending or operating within the limitation calculus. Taking these factors together, the Tribunal concluded that the Section 7 petition was within the three year period and therefore not time barred. [Paras 35, 36, 39, 52, 60]

Section 7 application is maintainable and not barred by limitation.

Applicability of RBI circular dated 12.02.2018 (Dharani Sugars) - Limitation for filing Section 7 application - Whether the RBI circular dated 12.02.2018 (and the Supreme Court's decision in Dharani Sugars) vitiates or precludes the Section 7 petition filed by the Financial Creditor - HELD THAT: - The Tribunal examined the relevance of the Dharani Sugars judgment and the RBI circular of 12.02.2018 and noted that the recovery certificates relied upon by the Financial Creditor were issued prior to the circular. The Tribunal observed that Dharani Sugars does not preclude a Financial Creditor from filing a Section 7 petition where the statutory ingredients of Section 7 are otherwise satisfied and where the impugned action predates the circular. On that basis the Tribunal held that the principles in Dharani Sugars (and the challenge to the RBI circular) do not render the present Section 7 petition invalid. [Paras 49, 51, 56]

Dharani Sugars and the RBI circular do not invalidate the Section 7 petition in the present facts; the petition remains competent.

Res judicata and binding effect of DRT decrees - Effect of recovery certificate/decree on limitation - Whether prior DRT decrees and recovery certificates estop the Appellant from contesting default/NPA dates and debt liability - HELD THAT: - The Tribunal held that the orders passed in the three Original Applications before the Debt Recovery Tribunal had attained finality and, absent fraud or want of jurisdiction, an ex parte decree/order and the resulting recovery certificates are binding on the parties. The Tribunal emphasised that once those proceedings became final the Corporate Debtor and other defendants were precluded from reopening the same issues and that the recovery certificates establish the factum of financial debt and default for the purposes of the Section 7 petition. [Paras 36, 37, 47, 58]

DRT decrees and recovery certificates are binding and operate as estoppel; they establish debt and default.

Adjudicating Authority's duty to disclose reasons - Validity of the impugned admission order insofar as the Adjudicating Authority did not explicitly deal with certain contentions - HELD THAT: - The Tribunal observed that while an Adjudicating Authority ought to disclose its reasoning so as to permit effective appellate review and to minimize arbitrariness, the appellate Tribunal examined the limitation and RBI circular contentions itself and found no prejudice to the Appellant. The Tribunal therefore noted the need for reasons but concluded that, on the merits, the impugned admission did not suffer from material irregularity or patent illegality. [Paras 56, 60]

Although reasons are desirable, the admission order does not suffer from material illegality; no interference warranted.

Final Conclusion: The appeal is dismissed. The Section 7 application admitted by the Adjudicating Authority was held to be maintainable: the DRT recovery certificates established debt and default and were within limitation; the post certificate acknowledgement falls within limitation; the RBI circular/Dharani Sugars decision did not vitiate the petition on the facts; no interference with admission was called for.

Sale of corporate debtor as a going concern - extinguishment of existing share capital on going concern sale - distribution of sale proceeds in accordance with Section 53 of the Insolvency and Bankruptcy Code - protection of purchaser from pre sale liabilities and claims - continuation of licences, approvals and statutory registrations post sale subject to payments - power of Adjudicating Authority to grant consequential administrative reliefs on liquidation sale - duty of secured creditors to relinquish encumbrances and hand over title documents

Sale of corporate debtor as a going concern - power of Adjudicating Authority to grant consequential administrative reliefs on liquidation sale - Whether the auction sale conducted by the Liquidator on 18.03.2021 requires separate ratification by the Tribunal and whether consequential administrative reliefs may be granted. - HELD THAT: - The Tribunal recorded that the Liquidator had conducted the e auction in accordance with the Code and the Liquidation Process Regulations and that the auction was completed with the applicants declared successful bidders. Consequently, no specific order of ratification was necessary as the Liquidator's action was in accordance with the statutory scheme. The Tribunal nonetheless exercised its jurisdiction to consider and grant the consequential reliefs sought by the applicants as administrative measures necessary for the effective transfer and operation of the corporate debtor post sale.

No separate ratification of the sale is required; consequential administrative reliefs may be granted and are addressed by the Tribunal.

Distribution of sale proceeds in accordance with Section 53 of the Insolvency and Bankruptcy Code - protection of purchaser from pre sale liabilities and claims - Effect of payment of the purchase consideration on the liabilities of the corporate debtor and on the distribution of proceeds. - HELD THAT: - The Tribunal directed that the liquidator shall distribute the sale proceeds in accordance with Section 53 of the Code. Having received the purchase consideration, the applicants/purchasers shall have no further liability in respect of the corporate debtor's debts prior to the sale, and shall not be responsible for pending or decreed proceedings against the corporate debtor as on the date of the order. This follows the statutory liquidation mechanism where proceeds are to be applied to stakeholders under Section 53 and the purchaser takes assets free of encumbrances arising prior to the sale.

Sale proceeds to be distributed under Section 53; purchasers relieved of pre sale liabilities and not liable for existing cases against the corporate debtor.

Extinguishment of existing share capital on going concern sale - corporate status and filings with Registrar of Companies - reconstitution of board of directors under the Companies Act - Consequences of the going concern sale on share capital, corporate status and management of the corporate debtor. - HELD THAT: - The Tribunal held that the existing share capital shall stand extinguished as a consequence of the going concern sale. The Registrar of Companies was directed to change the company's status from 'Liquidation' to 'Active' in its records. The purchasers have liberty to reconstitute the Board of Directors in accordance with the Companies Act, 2013 and to make the necessary filings with the RoC to effect such changes. These directions implement the transfer of ownership and enable the acquirer to operate the company as a continuing legal entity.

Existing share capital extinguished; RoC to reflect active status; purchasers may reconstitute the board and effect requisite filings.

Continuation of licences, approvals and statutory registrations post sale subject to payments - renewal fees and statutory dues as condition for continuity - Whether licences, approvals, contracts and other entitlements of the corporate debtor continue after the going concern sale and on what terms. - HELD THAT: - The Tribunal held that subsisting licences, approvals, rights, entitlements, benefits, privileges, contracts and leases in which the corporate debtor is entitled or involved shall continue for the benefit of the corporate debtor, subject to payment of statutory dues and renewal fees from the date of the order. The applicants are permitted to review and terminate pre liquidation contracts and to retain benefits available to the company as an MSME. However, exemptions from registration fees, stamp duty and local levies, if sought, must be pursued before the relevant authorities who will decide the issues in accordance with law.

Licences, approvals and contracts to continue subject to payment of statutory dues and renewal fees; applicants may review/terminate pre liquidation contracts and retain MSME benefits; tax/exemption reliefs to be sought from competent authorities.

Duty of secured creditors to relinquish encumbrances and hand over title documents - transfer of assets free of encumbrances - Obligation of secured creditors and transfer of title documents following completion of the auction sale. - HELD THAT: - The Tribunal directed that, as successful bidders, the applicants become owners of the assets specified in the auction process and that secured creditors must hand over title documents of properties covered by the auction by deleting all prior encumbrances. This direction implements the transfer of asset title to the purchaser and removal of security interests in respect of those assets included in the sale package.

Applicants become owners of auctioned assets; secured creditors directed to hand over title documents and delete encumbrances on those assets.

Final Conclusion: The application is allowed. The Tribunal declined separate ratification of the completed auction but granted the consequential administrative reliefs necessary to enable the purchasers to operate the corporate debtor as a going concern, directed distribution of proceeds under Section 53, extinguished existing share capital, ordered Registrar of Companies to mark the company active, permitted board reconstitution, provided continuity of licences subject to dues and renewals, allowed review/termination of pre sale contracts and MSME benefits, left tax and stamp duty exemptions to the appropriate authorities, and directed secured creditors to hand over title documents deleting encumbrances.

Disclaimer of onerous covenants - moratorium on proceedings in CIRP and its termination on liquidation under section 33(5) - scope of section 14 moratorium vis-a -vis post-liquidation proceedings - power of the liquidator to institute proceedings with prior approval of the Adjudicating Authority - adjudication and admitted claims to be dealt with in liquidation process (prematurity of interim disbursement) - provisional handing over of physical possession to prior occupant where ownership/possession is contested

Disclaimer of onerous covenants - Prayer for disclaimer of the premises in favour of the applicant was rejected. - HELD THAT: - The commission agreement relied upon by the applicant, even if taken at face value, imposes an obligation on the corporate debtor to make payments and does not attribute any burden to the property itself. Consequently, there is no basis to direct disclaimer of the premises on the ground of alleged onerous covenants arising from that agreement. [Paras 4]

Prayer (a) for disclaimer of the premises is rejected.

Moratorium on proceedings in CIRP and its termination on liquidation under section 33(5) - scope of section 14 moratorium vis-a -vis post-liquidation proceedings - power of the liquidator to institute proceedings with prior approval of the Adjudicating Authority - Prayer for declaration that the premises is outside the moratorium was rejected. - HELD THAT: - The CIRP moratorium under section 14 ceased upon the liquidation order dated 29.01.2019. Post-liquidation, initiation of suits by or against the corporate debtor is governed by section 33(5), which bars initiation of proceedings by or against the corporate debtor but permits the liquidator to institute proceedings on behalf of the corporate debtor with prior approval of the Adjudicating Authority. Section 33(5) does not bar continuation of pending suits. The applicant has existing civil proceedings before other courts; therefore no declaration from this Adjudicating Authority was required or warranted. [Paras 4]

Prayer (b) is rejected.

Adjudication and admitted claims to be dealt with in liquidation process (prematurity of interim disbursement) - Prayer for disbursement of the claim admitted by the liquidator was rejected as premature. - HELD THAT: - Although the liquidator has verified and admitted the applicant's claim, disbursement cannot be made until the liquidation process is complete and distributions are made in accordance with the statutory scheme governing liquidation. [Paras 4]

Prayer (c) for disbursement is rejected as premature.

Provisional handing over of physical possession to prior occupant where ownership/possession is contested - Prayer for refund of amounts collected from third parties was rejected for want of determination of ownership and possession. - HELD THAT: - A direction to refund amounts collected from Vidhan Fashions requires determination of the ownership and possession rights in respect of the property. Those issues are sub judice before the Hon'ble Calcutta High Court and the city civil court; accordingly, this Adjudicating Authority declined to decide the matter and rejected the prayer. [Paras 4]

Prayer (d) is rejected.

Adjudication and admitted claims to be dealt with in liquidation process (prematurity of interim disbursement) - Prayer for payment of commission in terms of the agreement was rejected as premature. - HELD THAT: - The applicant's contractual claim has been admitted by the liquidator, but implementation (payment) must await completion of the liquidation process and distribution of assets in accordance with law; therefore the request for periodic commission payments during liquidation is premature. [Paras 4]

Prayer (e) is rejected as premature.

Provisional handing over of physical possession to prior occupant where ownership/possession is contested - Prayer for restoration of vacant, peaceful possession has become infructuous. - HELD THAT: - This Adjudicating Authority had earlier directed that, given contesting claims as to ownership and possession, the liquidator should hand over physical possession to the person from whom the corporate debtor had taken possession. The liquidator has complied and handed over possession to the applicant; accordingly the prayer for possession is now infructuous. [Paras 4]

Prayer (f) has become infructuous.

Power of the liquidator to institute proceedings with prior approval of the Adjudicating Authority - Prayer for direction to the liquidator to serve a copy of his application and grant opportunity to file a reply was refused. - HELD THAT: - The liquidator is the applicant in CA (IB) No. 1415/KB/2019 and is the dominus litis. If the present applicant seeks to be heard in that proceeding, the appropriate course is to seek intervention in IA No. 1415/KB/2019. A blanket direction for service and hearing in the present application was therefore refused. [Paras 4]

Prayer (g) is refused; applicant may seek intervention in CA (IB) No. 1415/KB/2019 if so advised.

Final Conclusion: IA (IB) No. 1687/KB/2019 is disposed of. Each of the applicant's prayers is either rejected, refused, or rendered infructuous for the reasons stated: disclaimer was denied, declaration regarding moratorium was refused, disbursement and commission claims were held premature to liquidation completion, refund claim requires determination of ownership/possession by other courts, possession has been handed over to the applicant rendering that prayer infructuous, and the request for service of the liquidator's application was refused with liberty to seek intervention in the pending proceeding.

Service tax determination time-limits under Section 73(4B) of the Finance Act, 1994 - Validity of a notice for hearing issued after expiry of the prescribed period - Right to raise statutory limitation objection before the Authority - Duty of the Authority to decide objections by a speaking order - Relegation to statutory authority for fresh consideration

Service tax determination time-limits under Section 73(4B) of the Finance Act, 1994 - Validity of a notice for hearing issued after expiry of the prescribed period - Objection that the notice for hearing issued on 17.02.2021 is invalid because the period for determining service tax under Section 73(4B) had expired. - HELD THAT: - The petitioner challenged the notice for hearing dated 17.02.2021 on the ground that a show cause notice was issued on 13.03.2013 and a reply was filed, and that, applying Section 73(4B) of the Finance Act, 1994, the time for determination (six months or one year as applicable) had elapsed. The Court noted that the respondents sought to justify the delay but that the specific objection under Section 73(4B) had not been adjudicated by the Authority. Rather than deciding the statutory question on merits, the Court considered it appropriate to remit the grievance to the Authority so that the objection founded on Section 73(4B) may be raised and decided in the first instance. The Authority has been directed to consider the objection within one month and to pass a reasoned, speaking order strictly in accordance with the provisions of the Act and without bias.

The statutory objection under Section 73(4B) is to be raised before and decided by the Authority; the matter is remitted for fresh consideration and a speaking order within one month.

Right to raise statutory limitation objection before the Authority - Duty of the Authority to decide objections by a speaking order - Relegation to statutory authority for fresh consideration - Procedural direction that the petitioner shall raise the objection under Section 73(4B) before the Authority and that the Authority shall decide it by a speaking order. - HELD THAT: - The Court directed that the petitioner may, within one month, raise the objection relating to expiry of the period under Section 73(4B) before the Authority concerned. The Authority is enjoined to first decide this issue on merits by a reasoned speaking order, considering the provisions of the Finance Act, 1994, and to do so impartially. The Court did not resolve the substantive question of whether the notice was invalid; it required the Authority to address and determine the contention in the first instance.

Petitioner to raise the Section 73(4B) objection before the Authority within one month; Authority to decide the objection by a speaking order impartially and in accordance with the Act.

Final Conclusion: Writ petition disposed by remitting the petitioner to the Authority to raise and decide the objection under Section 73(4B) of the Finance Act, 1994 within one month; the Authority to pass a reasoned, unbiased order in accordance with law.

Business Auxiliary Services - commission agent - exemption under Notification No. 18/2009-ST (Sr. No. 2) - limitation of exemption to one per cent of FOB value - requirement to characterize service under the correct head of taxable services

Business Auxiliary Services - commission agent - requirement to characterize service under the correct head of taxable services - Whether charges paid to foreign entities for filing declarations/documents to obtain registration of export products with European regulatory authorities are taxable as "Business Auxiliary Services" as activities of a commission agent. - HELD THAT: - The Tribunal examined the definition of "commission agent" and the nature of services rendered by the foreign entity that filed documents and obtained regulatory registration on behalf of the appellant. The services that consisted of documentation and registration before foreign regulatory authorities did not amount to acting on behalf of the exporter to cause sale or purchase of goods or to perform activities characteristic of a commission agent. The foundational classification of those foreign entities as "commission agents" was therefore misplaced, and the demand framed under the head of "Business Auxiliary Services" could not be sustained in respect of those documentation/registration services. [Paras 6]

Demand under "Business Auxiliary Services" in respect of foreign entities that obtained regulatory registrations on behalf of the appellant is set aside.

Exemption under Notification No. 18/2009-ST (Sr. No. 2) - limitation of exemption to one per cent of FOB value - Whether services of foreign commission agents engaged for sale of exported products are exempt from service tax under Sr. No. 2 of Notification No. 18/2009-ST dated 07.07.2009 and the correct manner of applying the one per cent limit. - HELD THAT: - The Tribunal recorded that the appellant conceded the foreign entity acted as a commission agent for sale of export goods. The notification grants exemption of service tax limited to one per cent of the free on board (FOB) value of the export goods for which the service is used. The correct statutory interpretation is that the exemption applies to the amount of service tax up to one per cent of FOB, not that the exemption is to be calculated as commission paid to the agent. The CBEC clarification was noted as supporting this construction. The Order-in-Original was found to have misapplied the notification by not giving the appellant the benefit correctly; consequently the demand in respect of commission agents could not be sustained. [Paras 6]

Exemption under Sr. No. 2 of Notification No. 18/2009-ST is available as construed (limited to service tax up to one per cent of FOB) and the demand in respect of foreign commission agents is set aside.

Final Conclusion: The impugned order is set aside; the appeal is allowed and the demands of service tax and penalties as challenged are quashed on both grounds - (i) documentation/registration services rendered by foreign entities are not taxable as "Business Auxiliary Services" as commission agent activity, and (ii) exemption under Sr. No. 2 of Notification No. 18/2009-ST applies to commission agents with the one per cent-of-FOB limitation properly construed.

Refund of service tax paid through Cenvat credit - retrospective exemption under section 102 of Finance Act, 1994 - applicability of Rule 6 of the Cenvat Credit Rules, 2004 - applicability of Rule 11(4) of the Cenvat Credit Rules, 2004 - eligibility of Cenvat credit determined at the time of receipt of input service - unjust enrichment - refund of interest paid on refundable tax

Refund of service tax paid through Cenvat credit - retrospective exemption under section 102 of Finance Act, 1994 - eligibility of Cenvat credit determined at the time of receipt of input service - Refund of service tax paid by utilizing Cenvat credit is admissible where output service was retrospectively exempted under section 102. - HELD THAT: - The Tribunal held that section 102 mandates refund of service tax "collected" which includes tax discharged by utilization of Cenvat credit. Where Cenvat credit was validly availed and utilized for payment of service tax on output services during 01/04/2015 to 29/02/2016, that tax has the character of service tax paid and is refundable under section 102. The admissibility of credit must be examined at the time of receipt of the input service; subsequent retrospective exemption of the output service does not retrospectively disentitle an assessee from credit validly taken and utilized. The Tribunal relied on the distinction between Rule 6 (which addresses segregation/reversal when output is exempt at the time of taking credit) and Rule 11(4) (which is concerned with credits lying unutilized when exemption is opted) and found neither provides for recovery of legitimately availed-and-utilized credit in the present facts. Consequently, denial of refund merely because the credit had been used (and thereby the tax paid through credit) had no statutory support.

Appellants entitled to refund of service tax paid through Cenvat credit for the period 01/04/2015 to 29/02/2016.

Applicability of Rule 6 of the Cenvat Credit Rules, 2004 - applicability of Rule 11(4) of the Cenvat Credit Rules, 2004 - eligibility of Cenvat credit determined at the time of receipt of input service - Rule 6 does not apply and Rule 11(4) is inapplicable where Cenvat credit was availed and utilised while the output service was taxable. - HELD THAT: - The Commissioner(Appeals) had found Rule 6 inapplicable on facts; Revenue did not challenge that finding. The Tribunal accepted that where credit was taken and utilised at a time when the output service was taxable, Rule 6 (which concerns segregating credits when output is exempt at the time of availing credit) has no application. Rule 11(4) applies only where credit remains unutilized and inputs are lying in stock or contained in taxable service when exemption is opted; it does not mandate repayment of credit already utilized. Citing precedents (including the Tribunal and High Court decisions in Alembic Ltd. and the principle in Dai Ichi Karkaria), the Tribunal held that legitimately availed credit cannot be recovered merely because the output later became exempt.

Denial of refund by invoking Rule 6 or Rule 11(4) is unsustainable where credit was validly availed and utilised while output service was taxable.

Unjust enrichment - refund of service tax paid through Cenvat credit - retrospective exemption under section 102 of Finance Act, 1994 - The claim for refund under section 102 is not barred by the doctrine of unjust enrichment on the facts of these appeals. - HELD THAT: - The Tribunal held that the specific statutory refund mechanism under section 102 was introduced to refund service tax paid on specified government construction services for the relevant period, and objections based on unjust enrichment cannot defeat that statutory entitlement. In Tarang Construction the Commissioner(Appeals) had already held unjust enrichment did not apply and that finding stood; in other cases the Tribunal examined ledger entries, CA certificates and affidavits showing the appellants bore the incidence of tax and had not passed it to recipients. The Tribunal also relied on precedents recognizing locus of recipients/ purchasers to claim refunds where they bore the economic burden. Given the statutory provision for refund and the factual record that the tax burden was not passed on, refund could not be denied on the unjust enrichment ground.

Unjust enrichment objection rejected; appellants entitled to refund notwithstanding revenue's plea of unjust enrichment.

Refund of interest paid on refundable tax - retrospective exemption under section 102 of Finance Act, 1994 - Interest paid on the refundable service tax is recoverable and refundable to the appellants. - HELD THAT: - Although section 102 expressly refers to refund of service tax, the Tribunal found that interest paid on service tax which is refundable is incidental to and a 'piggy back' on the refundable tax. Retaining interest when the principal tax is held refundable would be unjust; accordingly, interest paid due to delayed payment of the refundable service tax is also eligible for refund.

Appellants entitled to refund of interest paid on the service tax refunded under section 102.

Retrospective exemption under section 102 of Finance Act, 1994 - For eligibility under section 102(1)(c), the date of contract is the date when tender was opened and accepted where no separate subsequent contract was executed. - HELD THAT: - Where the tender was opened and the appellant declared successful and there was no separate contract/agreement subsequently executed, the Tribunal treated acceptance upon opening of tender as the date of contract. Section 102(1)(c) requires the contract to be entered into before 1 March 2015; where the tender opening and acceptance predated that date (28.01.2015 in the cited instance), the contract satisfied the temporal requirement and the refund claim falls within section 102. The Tribunal also noted the phrase 'wherever applicable' in section 102(c) makes stamp duty a conditional qualifier only when applicable; absence of stamp duty where not applicable does not defeat eligibility.

Date of opening of tender and acceptance treated as contract date for section 102(1)(c) eligibility; claim covered where that date precedes 01/03/2015.

Final Conclusion: The appeals are allowed: appellants are entitled to refund of service tax paid (including amounts paid by utilising legitimately availed Cenvat credit) for the period 01/04/2015 to 29/02/2016, together with interest; objections based on Rule 6/Rule 11(4) and unjust enrichment are rejected on the facts, and the contract date for section 102(1)(c) purposes may be the date of tender opening where no later contract was executed.

Levy of Service Tax on construction of residential complex - Remand for decision on merits pending outcome of Nine Member Bench of the Hon'ble Supreme Court - Leviability of Service Tax on maintenance, corpus and other charges collected by promoter under MOFA - Burden of proof regarding statutory collection, segregation and utilisation of maintenance/other charges - Applicability of pre 1.7.2012 definition of taxable service versus amended definition brought by Section 66E(e) - Scope of show cause notice and adjudication limited to allegations therein

Levy of Service Tax on construction of residential complex - Remand for decision on merits pending outcome of Nine Member Bench of the Hon'ble Supreme Court - Whether Service Tax on construction of residential complex for the period October, 2010 to March, 2014 should be adjudicated in view of the pending Nine Member Bench decision. - HELD THAT: - The Tribunal noted that the constitutional and legislative competence challenge to levy of Service Tax on construction of residential complexes is pending before a Nine Member Bench of the Hon'ble Supreme Court and that a consistent approach has been adopted in Kalpataru Ltd.'s case where similar matters were remanded for decision on merits subject to the outcome of the Apex Court reference. In light of the sub judice status of the controlling question of law, the Tribunal held that the adjudicating authority cannot finally decide the issue on merits at this stage and directed remand for fresh decision in conformity with the outcome of the Nine Member Bench. [Paras 7]

Issue remanded to the adjudicating authority for decision on merits in accordance with the outcome of the Nine Member Bench of the Hon'ble Supreme Court.

Leviability of Service Tax on maintenance, corpus and other charges collected by promoter under MOFA - Burden of proof regarding statutory collection, segregation and utilisation of maintenance/other charges - Whether Service Tax is leviable on 'other charges' (Township Corpus Fund, advance maintenance, electric meter, legal and club membership charges etc.) collected by the promoter. - HELD THAT: - The Tribunal applied the principle laid down by the Hon'ble Bombay High Court in Shri Krishna Chaitanya Enterprises that amounts collected as statutory or contractual maintenance/corpus under the Maharashtra Ownership of Flats Act, 1963 are not taxable services if they fall within the statutory framework and are collected/held/utilised as mandated. The Commissioner had recorded that the appellants failed to produce agreements and separate bank account details to demonstrate compliance with MOFA requirements. The appellant contended that such evidence was filed and could be produced. The Tribunal found prima facie merit in the appellants' contention and directed that the adjudicating authority scrutinise the evidentiary materials (both those previously filed and any further documents produced when asked) to determine whether the collections qualify as non taxable receipts under the MOFA based principle. [Paras 8]

Matter remanded to the adjudicating authority to examine the evidence regarding segregation, custody and utilisation of the 'other charges' and determine leviability in accordance with the MOFA principle.

Applicability of pre 1.7.2012 definition of taxable service versus amended definition brought by Section 66E(e) - Scope of show cause notice and adjudication limited to allegations therein - Whether amounts received on account of cancellation of booking during October, 2010 to March, 2012 are taxable as construction service, having regard to the definition of taxable service applicable prior to 1.7.2012 and the contents of the show cause notice. - HELD THAT: - The appellants argued that the demand relates to a period prior to 1.7.2012 when Section 65(105) (pre amendment) governed the definition of taxable services and that the show cause notice referred to post 1.7.2012 Section 66E(e), which is inapplicable to the period in question. The Tribunal observed that the impugned order does not contain a specific finding addressing this contention and that the Commissioner appears to have applied the amended definition retrospectively. Given the remand of the other issues, the Tribunal directed the Commissioner to examine the appellant's contention and record a specific finding on the applicability of the pre 1.7.2012 definition of 'construction service' and whether the show cause notice and adjudication stayed within its scope. [Paras 9]

Adjudicating authority directed to examine and record specific findings on applicability of the pre 1.7.2012 definition and on whether the show cause notice supported the demand; matter remanded for fresh adjudication.

Final Conclusion: The impugned order is set aside to the extent it confirms the contested demands; all three identified issues are remanded to the adjudicating authority for fresh determination in accordance with the observations made, including that the construction service issue be decided in light of the Nine Member Bench's outcome, factual scrutiny of evidences relating to 'other charges' under MOFA, and a specific finding on applicability of the pre 1.7.2012 definition for cancellation of booking receipts.

Non taxability of the goods element in composite contracts - bifurcation of service and goods components in works contracts - works contract as a distinct species of contract - gross amount charged excludes value of goods/materials supplied free by the service recipient - valuation of taxable service to be determined by reference to service element only

Rectification of typographical error in tribunal order - recall of final order and restoration of appeals - Typographical error in the Tribunal's order dated 26.11.2020 recording disposal under the Sabka Vishwas Scheme was rectified and the order recalled; the appeals were restored to their original numbers and taken up for hearing. - HELD THAT: - The Tribunal examined the record and accepted the appellant's submission that the earlier order incorrectly indicated disposal under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The mistake was treated as typographical and the Final Order No. A/85916-85918/2020 dated 26.11.2020 was recalled. The appeals were restored to their original numbers and, in accordance with the appellant's earlier successful application for early hearing, were listed and heard on merits. The Revenue raised no objection to the rectification and restoration. [Paras 5, 6]

The typographical error was corrected by recalling the impugned final order and restoring the appeals for hearing.

Non taxability of the goods element in composite contracts - bifurcation of service and goods components in works contracts - gross amount charged excludes value of goods/materials supplied free by the service recipient - valuation of taxable service to be determined by reference to service element only - Demand of service tax on repair and maintenance services to include value of goods/consumables (including goods supplied free by the recipient) and on the entire contract value was unsustainable; impugned orders confirming differential tax were set aside. - HELD THAT: - Relying on this Tribunal's earlier detailed exposition (in the appellant's own case for 2007 08 to March 2013) and applicable Supreme Court precedents, the Tribunal reaffirmed that where contracts are composite/works contracts the taxation must be confined to the service element after bifurcating the goods element in accordance with established principles. The charging provisions do not permit inclusion of the value of goods supplied free by the service recipient in the 'gross amount charged' for determining service tax; inclusion of such consumables lacks legislative sanction. The Tribunal applied the precedent that the service charging section targets services simpliciter and that the service element must be ascertained by deducting the value attributable to goods (and following the recognized heads of deduction or prescribed methods where accounts are not reliable). No contrary judicial authority was placed by the Revenue and the Tribunal found the impugned demand inconsistent with the settled law. [Paras 10, 11]

Impugned orders confirming the differential service tax were set aside and the appeals allowed with consequential relief as per law.

Final Conclusion: The Tribunal recalled the inadvertent reference to the Sabka Vishwas Scheme, restored and heard the appeals, and on the merits set aside the impugned orders by holding that the goods/consumables element (including free supplies by the recipient) cannot be included in the gross amount charged for service tax; the appeals were allowed with consequential relief.

Service by registered post/speed post with proof of delivery - limitation for refund claims - payment under protest / pre-deposit during investigation - entitlement to interest on illegal/without-authority collection - merger of subsequent demand with earlier adjudication order

Service by registered post/speed post with proof of delivery - limitation for refund claims - Whether the refund claim was barred by limitation because the order-in-appeal dated 28.05.2012 could be presumed served by evidence of despatch in absence of proof of delivery. - HELD THAT: - The Tribunal found that Section 37C(1)(a) required service of orders by registered post or speed post with acknowledgement due or other proof of delivery, and that mere evidence of despatch without proof of delivery is insufficient to deem service. Reliance was placed on earlier High Court and Supreme Court precedents to hold that presumption of service cannot be sustained where proof of delivery is not produced. On the material, the Department did not produce proof of delivery of the order dated 28.05.2012; the envelopes were not returned but that alone does not substitute the mandated proof of delivery. Consequently, the limitation period for filing the refund claim could not be said to have commenced from the date of despatch; the refund application was therefore not time-barred. [Paras 11]

Presumption of service based only on despatch is not sustainable in absence of proof of delivery; the refund claim is not barred by limitation.

Payment under protest / pre-deposit during investigation - entitlement to interest on illegal/without-authority collection - Whether the amount deposited during investigation and adjudication proceedings was a payment "under protest" and whether limitation under Section 11B(1) was thereby inapplicable, with entitlement to interest. - HELD THAT: - The Tribunal held alternatively that the amounts were deposited by the appellant at the investigation stage and the appellant continuously contested the demand in adjudication and appeals, so the deposits were ipso facto payments "under protest". The adjudicating authority had itself accepted existence of payment under protest in the refund order. Citing precedent that amounts collected without authority where liability is later found to be absent must be refunded with interest, the Tribunal held the one-year limitation did not apply. The Tribunal further noted decisions treating pre-deposits during investigation as protest and accepted entitlement to interest on such deposits. [Paras 12]

The deposits were payments under protest; limitation under Section 11B(1) is not applicable and the appellant is entitled to interest on the refundable amount.

Merger of subsequent demand with earlier adjudication order - entitlement to interest on illegal/without-authority collection - Whether the subsequent show cause notice dated 24.01.2018 (demanding the refunded amount on limitation grounds) stood merged with the Commissioner (Appeals) order and whether interest should be awarded and at what rate. - HELD THAT: - The Tribunal held that the later demand notice issued during the departmental appeal merged with the Commissioner (Appeals) order which itself was set aside on the grounds discussed. Having allowed the appeal, the Tribunal directed that interest be awarded on the refunded amount. Relying on precedents and a Division Bench of the Tribunal which enhanced interest on pre-deposits from 6% to 12% following the Apex Court, the Tribunal directed interest at 12% per annum from date of deposit till date of refund, to be paid within two months of receipt/service of this order. [Paras 13]

The subsequent demand notice merged with the impugned order; interest at 12% per annum is payable from date of deposit until refund and must be granted within two months.

Final Conclusion: The appeal is allowed: the refund application is not time-barred because service of the earlier order could not be presumed without proof of delivery; the amount deposited is held to have been paid under protest so limitation does not apply; the subsequent demand notice is merged with the impugned order; and the adjudicating authority is directed to grant refund with interest at 12% per annum from the date of deposit until the date of refund within two months of receipt/service of this order.

Admissibility of cenvat credit on tax paid under reverse charge mechanism - supplementary challan and Rule 9(1)(bb) versus Rule 9(e) of the Cenvat Credit Rules, 2004 - ineligible input service and denial of credit under Rule 9(1)(bb) - effect of payment under reverse charge on classification of credit entitlement - consequence on penalty and confiscation where credit is held admissible on merits

Admissibility of cenvat credit on tax paid under reverse charge mechanism - supplementary challan and Rule 9(1)(bb) versus Rule 9(e) of the Cenvat Credit Rules, 2004 - Service tax credit availed by the assessee in respect of tax paid on reverse charge basis by the service recipient is not hit by Rule 9(1)(bb) and is admissible under Rule 9(e) of the Cenvat Credit Rules, 2004; consequently the impugned demand based on ineligibility was not maintainable. - HELD THAT: - The Tribunal applied the ratio of Nissan Motor India Pvt. Ltd., holding that where the tax was paid under the reverse charge mechanism by the recipient, such payment falls within the ambit of Rule 9(e) rather than Rule 9(1)(bb) of the Cenvat Credit Rules, 2004. The impugned demand recorded by the adjudicating authority treating the credit as ineligible input service under Rule 9(1)(bb) ignored the legal character of payment made under reverse charge. The Tribunal also relied on precedents treating supplementary invoices, challans and analogous documents in context, and on authorities which recognise that payment made consequent to reassessment or under reverse charge is capable of being taken as cenvatable duty under the appropriate clause of the Rules. On that basis the impugned order confirming denial of credit was held unsustainable and set aside.

Impugned order denying credit set aside; appeal allowed and cenvat credit held admissible as falling under Rule 9(e).

Final Conclusion: The Tribunal allowed the appeal, holding that service tax paid under the reverse charge mechanism qualifies for cenvat credit under Rule 9(e) of the Cenvat Credit Rules, 2004 and that the denial of credit on the ground of Rule 9(1)(bb) was unsound; the impugned order was set aside.

Presumption under Section 139 of the Negotiable Instruments Act - Offence under Section 138 of the Negotiable Instruments Act - Rebuttal on preponderance of probabilities - Standard of proof for accused and prosecution - Effect of non-compliance with Section 269SS of the Income Tax Act on recoverability of loan - Revisional jurisdiction under Sections 397/401 Cr.P.C. read with Section 482 Cr.P.C. - Concurrent findings of fact

Presumption under Section 139 of the Negotiable Instruments Act - Rebuttal on preponderance of probabilities - Standard of proof for accused and prosecution - Whether the petitioner rebutted the statutory presumption under Section 139 NI Act and thereby avoided conviction under Section 138 NI Act. - HELD THAT: - The cheque (No. 768427) in favour of the complainant, duly signed by the petitioner, together with the signed acknowledgment receipt dated 18.12.2010 produced by the complainant, establish the basic ingredients attracting the presumption under Section 139. The petitioner relied on his statement under Section 313 Cr.P.C. that the cheque was given as security for an anticipated loan, and that earlier two bearer cheques were encashed and returned to the complainant. The courts below disbelieved the petitioner's account: the receipt and cheque were in the complainant's name, the petitioner did not produce the suggested corroborative witness (Vijay Bhadana) nor other material to make the non-existence of consideration sufficiently probable, and inconsistencies in the petitioner's statements were noted. Applying the settled principle that an accused must produce facts or circumstances which make non-existence of consideration probable on a preponderance of probabilities, the court found that mere ipse dixit and unsupported denial were insufficient to rebut the presumption. The findings of the trial court and the appellate court on these facts are concurrent and not perverse. [Paras 7, 10, 11]

The petitioner failed to rebut the presumption under Section 139; conviction under Section 138 NI Act is sustained.

Effect of non-compliance with Section 269SS of the Income Tax Act on recoverability of loan - Whether alleged violation of Section 269SS IT Act by the complainant renders the alleged loan legally unenforceable and precludes prosecution under Section 138 NI Act. - HELD THAT: - The court observed that non-compliance with Section 269SS may attract penalties under the Income Tax Act but does not, by itself, render a loan amount non-recoverable or defeat a prosecution under Section 138 NI Act. Reliance placed by the courts below on precedent to the effect that infractions of the Income Tax Act are matters between the revenue and the defaulter, and do not entitle a borrower to refuse repayment, was held to be not perverse. Accordingly, the petitioner's contention that nondisclosure in income-tax returns or contravention of Section 269SS absolved him of liability was rejected. [Paras 10, 11]

Alleged contravention of Section 269SS does not make the loan unenforceable and does not rebut the presumption under Section 139.

Revisional jurisdiction under Sections 397/401 Cr.P.C. read with Section 482 Cr.P.C. - Concurrent findings of fact - Whether this Court should interfere with the concurrent findings of fact recorded by the trial court and the Additional Sessions Judge in exercise of revisional jurisdiction. - HELD THAT: - The court reiterated the narrow scope of revisional jurisdiction: it is supervisory and not appellate, and interference is warranted only where there is perversity, glaring error of law, or a manifest miscarriage of justice. The appellate court and trial court recorded concurrent findings of fact after appreciating evidence, including cross-examination, and no such exceptional feature was shown to this Court. Precedents were noted that discourage reappreciation of evidence by a revisional court in presence of concurrent findings. Given that the lower courts' conclusions were supported by material and not perverse, interference was not justified. [Paras 6, 12]

No interference with the concurrent findings of fact; revisional jurisdiction is not to substitute another view where lower courts' conclusions are not perverse.

Final Conclusion: The revision petition is dismissed. The conviction under Section 138 of the Negotiable Instruments Act and the sentence/compensation order affirmed by the courts below are upheld.

Validity of temporary injunction under Order XXXIX Rule 1 CPC - Distinction between Order XXXIX Rule 1 and Order XXXVIII Rule 5 CPC - Application of Section 13 of the Bengal Money Lenders Act, 1940 to advances made by cheque - Prima facie case, balance of convenience and irreparable injury tests for interim relief

Application of Section 13 of the Bengal Money Lenders Act, 1940 to advances made by cheque - Effect of negotiable instrument on definition of loan - Whether Section 13 of The Bengal Money Lenders Act, 1940 bars the court from passing an order in favour of the petitioner where the advance was made by cheque - HELD THAT: - Section 13 prohibits a court from passing a decree or order for recovery in favour of a money lender unless the money lender held an effective licence when the loan was advanced. Section 2(12) of the Bengal Act defines "loan" to include advances repayable with interest but excludes advances made on the basis of a negotiable instrument as provided by the Act. A "negotiable instrument" under the Negotiable Instruments Act includes cheque. The loan in this case was advanced by five cheques drawn on Axis Bank at different times. A conjoint reading of the statutes shows that advances effected by cheque fall outside the Bengal Money Lenders Act's definition of "loan" for the purpose of Section 13. Consequently, the licensing requirement in Section 13 is not attracted to the present transactions made by cheque. [Paras 4, 5, 6]

Section 13 of The Bengal Money Lenders Act does not bar the court from granting relief in respect of the advances made by cheque; the licensing requirement is not attracted.

Validity of temporary injunction under Order XXXIX Rule 1 CPC - Distinction between Order XXXIX Rule 1 and Order XXXVIII Rule 5 CPC - Prima facie case, balance of convenience and irreparable injury tests for interim relief - Whether the petitioner is entitled to an order restraining the respondent from dealing with or alienating specified properties under Order XXXIX Rule 1 CPC - HELD THAT: - Order XXXIX Rule 1 empowers the court to grant temporary injunctions to prevent injury to property in dispute until disposal of the suit; it is distinct from Order XXXVIII Rule 5 which concerns attachment before judgment and securing execution of a decree at a later stage. The petitioner did not seek attachment under Order XXXVIII Rule 5 but a restraining order under Order XXXIX Rule 1. The documentary materials - bank statements showing five RTGS/cheque payments, receipts to the petitioner's account, and Form 26AS entries and TDS reflected as "interest other than interest on securities" - establish a jural relationship and show interest payments by the respondent, supporting the existence of the loan. These facts suffice to make out a prima facie case. The respondent's total denial of the loan and absence of explanation for the interest payments, together with the risk of the petitioner's monetary claim becoming infructuous and the limited nature of the relief (no attachment sought), satisfy the tests of balance of convenience and irreparable injury. Consequently, a temporary injunction restraining the respondent from dealing with, disposing of, alienating or encumbering specified immovable assets and properties without leave of the Court is warranted until final disposal on affidavits or further order. [Paras 7, 8, 11, 13, 15]

A temporary injunction under Order XXXIX Rule 1 is justified; the respondent is restrained from dealing with or alienating the specified immovable assets and properties without leave of the Court until final hearing on affidavits or further orders.

Final Conclusion: The petition succeeds on the issues decided: Section 13 of The Bengal Money Lenders Act is not attracted to advances made by cheque, and on the established prima facie case, balance of convenience and irreparable injury the Court grants a temporary injunction restraining the respondent from dealing with, disposing of, alienating or encumbering the specified immovable properties without leave of the Court until final hearing on affidavits or further orders; affidavit in opposition to be filed within three weeks, reply within two weeks and the matter listed after five weeks.

Dismissal of private complaint under Section 200/203 CrPC - Judicial scrutiny for dismissal when essential ingredients of alleged offences are absent - Civil dispute versus criminal offence - Offences of criminal breach of trust and cheating by dishonest inducement - Proceedings under Section 138 of the Negotiable Instruments Act as an alternative forum - Duty of buyer to inspect goods before purchase and evidentiary burden in private complaint

Dismissal of private complaint under Section 200/203 CrPC - Judicial scrutiny for dismissal when essential ingredients of alleged offences are absent - Civil dispute versus criminal offence - Proceedings under Section 138 of the Negotiable Instruments Act as an alternative forum - Duty of buyer to inspect goods before purchase and evidentiary burden in private complaint - Whether the learned Judicial Magistrate was justified in dismissing the private complaint filed under Section 200 CrPC for lack of ingredients of the alleged offences and on the facts pleaded. - HELD THAT: - The High Court upheld the magistrate's dismissal after reviewing the material on record and the magistrate's reasoning. The Court noted that the petitioner, though he filed a witness list and document list with the private complaint, failed to have documents marked at the time of his sworn statement and did not produce witnesses despite opportunities. The Court observed that the buyer had the duty to inspect the vehicle and that the sale agreement filed did not contain the averment regarding the cheque as alleged in the petition. The petitioner only approached police after receiving notice in the pending Section 138 NI Act proceedings and could contest those proceedings with the averments relied upon. Applying the principle that a complaint may be dismissed where essential ingredients of the offence are absent or the dispute is essentially civil, the Court found that the necessary ingredients of the alleged offences (criminal breach of trust/cheating and related aiding) were not made out on the material before the magistrate and that the matter appeared to be civil in nature. The Court therefore found no ground to interfere with the magistrate's judicial conclusion dismissing the complaint, relying on the established test for dismissal of complaints when continuation would be futile. [Paras 10, 11, 12, 13, 14]

The High Court confirmed the order dismissing the private complaint and found no infirmity in the magistrate's conclusion that the essential ingredients of the alleged criminal offences were absent and that the matter was essentially civil and amenable to contest in the pending NI Act proceedings.

Final Conclusion: Criminal revision dismissed; the High Court confirmed the Judicial Magistrate's order dated 27.07.2016 in Crl.M.P. No.1850 of 2016, holding that the private complaint lacked the essential ingredients of the alleged offences and that the petitioner could address his contentions in the pending Section 138 NI Act proceedings.