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Calcutta High Court

TDS – Special Bench verdict on S. 40(a)(ia) in Merilyn Shipping is not good law

April 15, 2013 1961 Views 0 comment Print

We already have delivered a judgment on 3rd April, 2013 in ITAT No. 20 of 2013, G.A. No. 190 of 2013 (CIT, Kolkata-XI Vs. Crescent Export Syndicates) holding that the views expressed in the case of Merilyn Shipping & Transports (ITA.477/Viz./2008 dated 20.3.2012) were not acceptable.

SB verdict in Merilyn Shipping on S. 40(a)(ia) tds disallowance is not good law

April 3, 2013 3632 Views 0 comment Print

The key words used in Section 40(a)(ia), according to us, are on which tax is deductible at source under Chapter XVII –B. If the question is which expenses are sought to be disallowed? The answer is bound to be “those expenses on which tax is deductible at source under Chapter XVII –B.

Drawings / designs expressed on a media is classified as good Under Excise / Custom tariff so not liable to service tax

April 1, 2013 6674 Views 0 comment Print

we are of the considered opinion that the designs and drawings which were imported and assessed as ‘goods’, cannot be subjected to Service tax, hence, no Service tax is chargeable on that part of the contract relating to Contract No. CRMP/CON/SPM/03 dated 16-7-1998 attributing towards the value of designs and drawings.

Winding up petition can be admitted In case of fraudulent sale of company assets by promoters & negligible chances of continuance of business in future

March 1, 2013 2668 Views 0 comment Print

No workmen or employee of the company had appeared to resist the order of winding up. The conduct of those in management of the company in fraudulently selling off assets conservatively estimated at Rs. 2,300 crore makes it just and equitable for the company to be wound up. The company had been unable to show any prospects of it carrying on any business in the near or the distant future. The company’s inability to pay its debts is established and no ground is shown for the company court to exercise its discretion to not wind up the company despite its obvious insolvency.

S. 263 CIT can revise Assessment Order to make Disallowance U/s. 14A if AO fails to do so

February 19, 2013 1365 Views 0 comment Print

Assessment Officer in its order dated 28th January, 2005 did not make provision for disallowance of expenditure in terms of Section 14A of the I.T. Act. The assessee has paid interest of Rs.4,49,02,775/- out of which only a sum of Rs.1,33,51,132/- was shown to be relatable to the non-taxable income. The assessee did not maintain any separate accounts for the purpose of the exempt income. The assessee did not give one to one co-relation between the funds available and the funds deployed.

Secured creditors too can file winding up petition despite sufficiency of security

February 13, 2013 3909 Views 0 comment Print

In the instant case, the appellant was a secured creditor. It had the claim for Rs. 500 and above. The creditor also pleaded, the company was insolvent and unable to pay its debts. The appellant also claimed, it was just and equitable that the company should be wound up. The above pleas could only be resisted by the company once they would raise the bona fide dispute meaning thereby, if the creditor has an admitted claim it must be paid, in default that could only be resisted by raising a bona fide dispute. In the instant case, creditor could prove that it had a claim. From the pleading, it would hardly appear that the company could dispute, far to speak of bona fide, that could resist a winding up petition. The Judge did not advert to the said issue.

If company had admitted that it owed a sum to petitioner, winding up petition against it was to be admitted

February 5, 2013 438 Views 0 comment Print

It appears from the company’s admission of January 5, 2011 that it asserted that it owed the petitioner a sum of Rs. 26,08,858/- and it had a claim against the petitioner’s associate concern in the sum of Rs. 22,80,646.05. Even if the letter is taken on face value and the veracity of the assertions therein are not questioned, it appears that there is an unequivocal admission by the company of it being indebted to the petitioner in the sum of Rs. 3,28,211.95 if the two figures of Rs. 26,08,858/- and Rs. 22,80,646.05 are reconciled. It is the same sentiment which is reflected in the company’s affidavit, at paragraph 11 whereof the figures are repeated and the company has questioned the petitioner’s claim only to the extent of the same exceeding Rs. 26,08,858/-.

Creditors cannot seek winding up without 1st issuing statutory notice u/s. 434(1)(a) to company’s registered office

February 5, 2013 10615 Views 0 comment Print

The judgment in Bukhtiarpur Bihar Light Railway Co. Ltd. (supra) instructs that the court must be strict in assessing whether all the conditions laid down in Section 163(1)(i) of the Indian Companies Act, 1913 (Section 434(1)(a) of the Companies Act, 1956 carries the same provision in the successor statute) have all been complied with before the inference of the inability of the company to pay its debts based on the legal fiction therein is drawn. The judgment is the specific recognition, in the context of the identical provision in the predecessor statute as Section 434(1)(a) of the current Act, of the general principle that a deeming provision must be strictly construed and all conditions therein must have been adhered to before the legal fiction thereunder can be seen to operate.

In winding up hearing Counter claim by way of unliquidated sum in damages is no defence to petitioner’s claim which had been admitted by company

February 4, 2013 792 Views 0 comment Print

Since the company’s counterclaim is by way of an unliquidated sum in damages, and the company has no defence to the petitioner’s claim herein, the company is permitted to furnish security to the extent of the petitioner’s claim of Rs.1,41,38,347/- within a fortnight from date whereupon this petition will remain permanently stayed. The company says that it has instituted winding-up proceedings in respect of its claim against the petitioner under the agreement of April 7, 2010.

Court can adjudicate issue of eviction of trespassers from property of Company in liquidation

January 22, 2013 5938 Views 0 comment Print

So far exercise of jurisdiction vested upon the Company Court under Section 446(2) of the Act is concerned, in my view and also in view of the decisions cited by the learned Counsel appearing for the applicant, it is already settled that this Court have ample power to adjudicate and determine all questions that arises in winding up. Such questions include eviction of trespassers from property of the Company (in liquidation) and the Company Court also by a summary order can direct eviction of a trespassers from the Company property. But Company Court must follow the law of the land in regard to such eviction.

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