COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

nOTE 18: COMMITMENTS AND CONTINGENCIES 

The below commitments and contingencies are in respect of TRAQ Pvt Ltd., and following the transfer of all of the Company’s equity interests in TRAQ Pvt Ltd., to LR under the TSP Agreement, the commitments and contingencies were assumed by LR;

(i) TRAQ Pvt Ltd had applied for compounding of the TDS liability for the assessment year 2014-2015 and 2015-2016 in accordance with Indian Income Tax Laws. However, no amount payable for tax and penalty was confirmed by the Income Tax Department. Further, TRAQ Pvt Ltd has also defaulted for TDS deducted but not paid in time during assessment years 2016-2017 to 2020-2021. Accordingly, there may be a contingent liability in respect of TDS regarding compounding charges, interest, and penalty which is not quantifiable at present, and therefor no effect is given in the Consolidated Financial Statements.

(ii) TRAQ Pvt Ltd was delayed in complying with provisions related to Foreign Direct Investment and Transfer of Shares to Non-resident as per the Master Circulars and notification issued by Reserve Bank of India, therefore, and is therefor liable for imposition of a penalty. Since the amount of the penalty is not ascertainable, no effect was given in the Consolidated Financial Statements.

(iii)

Prior to its acquisition in May 2019, TRAQ Pvt Ltd, had provided a guarantee in favor of State Bank of India for $165,813 on March 22, 2014, for Mira Green Tech Private Limited. As of the execution of the TSP Agreement and the transfer of the Company’s entire equity interests in TRAQ Pvt Ltd, to LR, the State Bank of India was in process of satisfying whether there was any obligation due by TRAQ Pvt Ltd.

(iv)

TRAQ Pvt Ltd has a contingent liability of $246,398 towards income tax department for Assessment year 2018-19, However an appeal was filed against such demand in the income tax department and proceeding is still pending; Accordingly, there may be a contingent liability in respect of Income Tax of such demand amount, interest, and penalty. As of the execution of the TSP Agreement and the transfer of the Company’s entire equity interests in TRAQ Pvt Ltd, to LR, this contingent liability was not quantifiable, and therefor no effect was given in the Consolidated Financial Statements.

The below commitments and contingencies are in respect of Mimo Technologies Pvt Ltd., and following the transfer of all of the Company’s equity interests in Mimo to LR under the MTP Agreement, the commitments and contingencies were assumed by LR;

(i) As of the execution of the MTP Agreement and the transfer of the Company’s entire equity interests in Mimo to LR, Mimo Technologies Pvt Ltd was delayed in complying with provisions related to Foreign Direct Investment and Transfer of Shares to Non-resident as per the Master Circulars and notification issued by Reserve Bank of India, and therefore, is liable for imposition of a penalty. Since the amount of the penalty for the same is not ascertainable, no effect was given in the Consolidated Financial Statements.