AI Drafter 
TaxTMI 
TaxTMI 
2020 (10) TMI 870
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....onciliation Act, 1996 ("Act"). By the impugned order, the learned Judge has granted interim relief to the Respondent herein (original petitioner) in terms of prayer clause (b)(i) of the Commercial Arbitration Petition, which requires the Appellants herein to deposit in court Rs. 59,51,08,633/- viz. An amount of Rs. 44,63,71,671 in the case of Jagdish Ahuja & Anr. and an amount of Rs. 14,87,36,936/- in the case of Shree Ahuja Properties & Realtors Pvt. Ltd. 3 The Respondent herein is a Cyprus based company. The Appellant in the companion appeal (COAPP No.11 of 2020) - Shree Ahuja Properties & Realtors Pvt. Ltd., an Indian company, carrying on real estate development business, issued fully convertible debentures (FCDs), which were subscrib....
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....ed into the treasury towards the tax obligation of the seller nor paid directly to the seller towards the price of the FCDs. That is apparently the basis on which the impugned order of deposit of the Holdback Amount into the court was passed by the learned Single Judge. 4 It is difficult to find fault with this order. Mr. Naphade, learned Senior Counsel appearing for the Appellants, submits that, firstly, under Section 205 of the Income Tax Act, once tax is deducted from the amount payable to the seller, it is the purchaser who is obligated to pay the same into the treasury; the assessee seller cannot be called upon to pay the tax himself to the extent of the deduction. In other words, it is submitted that it would then be a claim of the....
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.... Act is very broad; the court has a discretion to grant thereunder a wide range of interim measures of protection "as may appear to the court to be just and convenient", though such discretion has to be exercised judiciously and not arbitrarily. The court is, no doubt, guided by the principles which civil courts ordinarily employ for considering interim relief, particularly, Order 39 Rules 1 and 2 and Order 38 Rule 5; the court, however, is not unduly bound by their texts. As this court held in Nimbus Communications Limited Vs. Board of Control for Cricket in India Decided on 27 February 2012 (Per D.Y. Chandrachud J, as the learned Judge then was), the court, whilst exercising power under Section 9, "must have due regard to the ....
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....elf as part of the price of debentures. In fact, when these two options were posed by the learned Single Judge to the Appellants' counsel, in fairness both conceded that there was no third option. 7 In other words, neither Counsel could point out that the Appellants had any case for retaining the amount. If that is so, there is practically no defence on merits so far as this amount is concerned. Mr. Naphade submits that his client cannot be called upon to deposit this amount in court, since the amount has already been assessed towards the tax liability of the Respondent and in any event, if the Appellants' appeal ultimately goes against them, it would have to be paid by them into the treasury. Learned Counsel submits that the Appellants ....
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.... 9 Mr. Andhyarujina, learned Senior Counsel appearing for the Appellant in the companion petition, whilst adopting Mr. Naphade's submissions, makes an additional point. It is submitted that the Respondent has already had the benefit of tax insofar as the Holdback Amount is concerned and cannot pray for deposit of that amount in court. The submission is incomprehensible. Let us examine it in both scenarios, that is to say, the first where the tax is in fact payable and the second, when it is not payable, as suggested by the Appellants in their appeal. If it is payable and not paid into the treasury by the deductor of TDS, it is not possible for the assessee to take any tax credit of the TDS. If, on the other hand, it is not payable and accor....