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Showing 61 to 80 of 1277 Records
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2014 (11) TMI 1222
Deemed dividend u/s.2(22)(e) - assessee was in receipt of the amount from M/s JMD Marketing Pvt. Ltd. as loan - HELD THAT:- We found that similar issue has been considered by the Hon’ble Punjab and Haryana High Court in the case of Shri Suraj Dev Dada [2014 (5) TMI 625 - PUNJAB & HARYANA HIGH COURT] wherein it was held that assessee having running account with the company, the provisions of Section 2(22)(e) were not attracted as this provisions was inserted to stop the misuse by the assessee by taking the funds out of the company by way of loans advances instead of dividends and thereby avoid tax.
Applying the proposition of law as discussed above to the facts of the present case, we found that assessee was having debit balance only for 17 days out of 365 days. On all other dates, assessee was having credit balance and peak of such credit. It is also a matter of record that assessee has not charged any interest in respect of temporary advance given to the company. Accordingly, we do not find any merit in the action of the lower authorities for bringing such transaction in the net of the Section 2(22)(e) of the Act. - Appeal filed by the assessee is allowed.
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2014 (11) TMI 1221
Bad debts claimed/advances written off - A.O. disallowed on the reason that evidence was not provided to show why the advances/ bad debts had been written off - CIT-A deleted the addition - HELD THAT:- It is not a case where assessee has not furnished the details before A.O. However, A.O. disallowed on the reason that assessee has not justified why the amounts are written off. Ld. CIT(A) examined the details and found that most of them are advances in the course of business paid over to more than 200 people and since the amounts are written off in the books of accounts they are eligible for deduction. Both on facts as well as on law, order of CIT(A) is to be upheld. There is no merit in Revenue grounds.
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2014 (11) TMI 1220
Registration u/s 12A denied - denied the benefit of registration u/s.12A on the ground that some of the objects are not charitable in nature and mainly intended for the benefit of a particular religious community - HELD THAT:- We find the Hon’ble Supreme Court in the case of CIT Vs. Andhra Chamber of Commerce [1986 (3) TMI 1 - SUPREME COURT] has held that an object beneficial to a section of the public is an object of general public utility. The expression “General Public Utility”, however, is not restricted to objects beneficial to the whole of mankind. To serve a charitable purpose, it is not necessary that the object should be to benefit the whole of mankind or even for persons living in a particular country or province. It is sufficient if the intention is to benefit a section of the public as distinct from specific individuals.
We in the case of CIT Vs. Chandra Charitable Trust [2006 (7) TMI 96 - HIGH COURT , GUJARAT] has held that if the objects of the assessee trust are not only to propagate Jainism or help and assist maintenance of temple, Sadhus, Sadhvis, Shraviks and Shravaks and other goals are also set out in the trust deed, the trust is a charitable as well as a religious trust and section 13(1)(b) would not be applicable.
We are of the considered opinion that the assessee trust is entitled to registration u/s.12A of the I.T. Act. We therefore set aside the order of the CIT and direct him to grant registration u/s.12A of the I.T. Act to the assessee trust. Grounds raised by the assessee are accordingly allowed.
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2014 (11) TMI 1219
Restraint on defendant from using the trade mark "LIPU" or any other mark which is similar to it - case of plaintiff is that the sewing machines were imported by them from China, the mark on the machines or in any packaging material relating to them, would normally be the mark of the exporter or manufacturer - HELD THAT:- Having regard to the fact that the invoices were raised by the Chinese manufacturers and that the manufacturing activity had taken place in China, it is very difficult to believe that the trade mark "LIPU" was coined by the plaintiffs and supplied by them to the manufacturers who affixed it on the goods. Particularly when the documents of the plaintiffs depict the plaintiffs to be ordinary retailers in the Central Kolkata District.
The brand "LIPU", if it is to belong to anyone belongs to the Chinese exporter and manufacturer and certainly not to the plaintiffs or the defendant Upto now the plaintiffs have been able to show nothing to establish that the mark has become so identified with them in this country that the people of this country identify it as belonging to them and not to the Chinese manufacturer - What emerges from this is that although both the parties claim to have used "LIPU" for a considerable period of time, the concern to get the mark registered has occurred very recently, in both. The plaintiffs' right to exclusive use of the mark 'LIPU' is not established at this stage. The parties can wait till the outcome of the trial, when the rights of the parties will be finally determined.
There are no justification for passing any interim order restraining the defendant from using the said mark. The prayer for an injunction is refused - application disposed off.
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2014 (11) TMI 1218
Revision u/s 263 - CIT in restricting the partners’ remuneration u/s 40(b) by not treating the surrendered amount as business income - disallowance out of claimed remuneration made deserves to be deleted - HELD THAT:- We find that, in the instant case, CIT(A) vide its order dated 21.10.2010 has already decided the issue which was considered by the CIT in the impugned order purportedly passed u/s 263 - As the order of the AO had already merged with the order of the CIT(A) in respect of the issue of head under which income disclosed in the course of the survey is assessable and consequently allowance of remuneration to partners, in our considered view, the CIT had no justification to decide the very same issue again u/s 263 of the Act. Therefore, the impugned order passed u/s 263 is bad in law and without jurisdiction. We, therefore, cancel the impugned order passed u/s 263 of the Act and allow the appeal of the assessee.
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2014 (11) TMI 1217
Deductible revenue expenditure u/s 37(i) - repairing of the furnace - HELD THAT:- Expenses in question incurred by the assessee on dismantling the old furnace and construction of a new furnace are clearly capital in nature, which is not supported by the factual matrix.
The Apex Court in "CIT VS. SARAVANA SPINNING MILLS P. LTD. [2007 (8) TMI 16 - SUPREME COURT] wherein, the Apex Court held that to decide the applicability of section 31(i) the test is not whether the expenditure is revenue or capital in nature, which test has been wrongly applied by the High Court, but whether, the expenditure is "current repairs". The Apex Court, further, held that the basic test to find out as to what would constitute current repairs is that the expenditure must have been incurred to "reserve and maintain" an already existing asset and the object of the expenditure must not be to bring a new asset into existence or to obtain a new advantage. We are, hence, of the opinion that the present appeal deserves to be allowed. In view of the above discussion, the decision relied on by Mrs. Bhatt in "BRITANNIA INDUSTRIES LTD. VS. CIT & ANR." [2005 (10) TMI 30 - SUPREME COURT] shall not apply to the facts of the case on hand. Present appeal is allowed.
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2014 (11) TMI 1215
Refund claim - reselling the goods back to the high sea sellers - HELD THAT:- Identical issue decided in the case of COMMISSIONER OF CUSTOMS, AHMEDABAD VERSUS M.B. ENTERPRISE [2015 (12) TMI 578 - CESTAT AHMEDABAD] where it was held that there is no condition under N/N. 102/2007-Cus that SAD duty should be initially paid through cash. It has been correctly agitated by the respondents in the cross objections that a right given under an exemption notification can not be taken away by the issue of Departmental Circulars.
There is no reason to deviate from such a view already taken - appeal dismissed - decided against Revenue.
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2014 (11) TMI 1214
Correct head of income - Rental income from letting out of warehouses/godowns - business income or income from house property - HELD THAT:- As decided in own case [2014 (11) TMI 895 - GUJARAT HIGH COURT] Rental income from letting out of warehouses/godowns together with various services rendered to the occupant did not constitute a business activity of the appellant and as such the income arising therefrom was not assessable under sec. 28 of the Income-tax Act, 1961 as business income. We, therefore, answer the questions raised in the present appeal in the affirmative - Decided in favour of the revenue and against the assessee.
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2014 (11) TMI 1213
Rejection of books of account u/s 145(3) - GP estimation - HELD THAT:- The assessee’s turnover increased substantially compared to immediate preceding year. The G.P. has gone down slightly whatever discrepancies pointed out by the learned Assessing Officer without quoting Section 145(3) of the Act are sufficient to reject the book result in case of civil contractor. The various courts held that procedural lapse does not allow to assessee to get benefit on account of default of any procedure. However, the estimation made by the learned CIT(A) appears to higher side as he applied the previous year G.P. rate in current year, therefore, in the interest of justice, we apply 6.5% G.P. rate on total sales as against confirmed by the learned CIT(A) @ 6.79%. Accordingly, the assessee gets relief partly. The Assessing Officer is directed to calculate the income @ 6.5% G.P..
Non-payment of TDS amount - addition u/s 40(a)(ia) - HELD THAT:- The Hon’ble Rajasthan High Court in the case of CIT Vs. Udaipur Dugdh Udpadak Sahkari Sangh Ltd [2014 (8) TMI 677 - RAJASTHAN HIGH held that TDS was deducted and paid before the due date of return is allowable U/s 40(a)(ia) of the Act, Therefore, we delete the addition confirmed by the learned CIT(A)
Characterization of income - Agricultural income or income from other sources - HELD THAT:- The assessee has furnished the relevant agricultural record as well as crop grown on agricultural land. The land belongs to the family members, which was later on gifted to him by his father. It is immaterial whether the assessee has shown any agricultural income or not as it is facts that agricultural income mostly depended on nature. Further the learned Assessing Officer has not discharged his onus to disprove the evidences filed by the assessee, therefore, we delete the addition and Assessing Officer is directed to treat the agricultural income as such. Accordingly, we allow this ground in favour of the assessee and against the revenue.
Addition for household expenses - HELD THAT:- D.R. had not controverted the findings given by the learned CIT(A) and the Assessing Officer also has not brought on record any adverse material that the assessee incurred more than expenses on household withdrawals except made addition on surmises and conjectures, which is not permitted under the law. Therefore, we confirm the order of the learned CIT(A) on this ground.
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2014 (11) TMI 1212
Disallowance on account of belated payment of contributions towards Employees Provident Fund and ESI - HELD THAT:- In the case of CIT V/s. Ghatge Patil Transport Ltd. [2014 (10) TMI 402 - BOMBAY HIGH COURT] after taking into consideration the provisions of S.2(24)(x) read with S.36(1)(va) and S.43B, held that even employees contribution to Provident Fund etc. is allowable as deduction, if the same is deposited before the due date of filing of the return of income for the relevant year. Respectfully following the said decision of the Hon'ble Bombay High Court, we uphold the impugned order of the learned CIT(A) allowing the deduction claimed by the assessee on account of payment of employees’ contribution towards Provident Fund and ESI made by the assessee, after the due dates prescribed in the respective statutes, but before the due date of filing of the return of income for the year under consideration and dismiss the appeal of the Revenue.
TDS u/s 194J - Disallowace u/s 40(a)(ia) - non-deduction of tds on payment made on account of audit fee - HELD THAT:- Restore this issue to the file of the Assessing Officer for the limited purpose of verifying as to whether the assessee company is treated as an assessee in default under S.201(1) of the Act for its failure to deduct tax at source from the payment made on account of audit fee. If it is found on such verification that no order under S.201(1) is passed to this effect, the Assessing Officer is directed to delete the disallowance made under S.40(a)(ia) on account of audit fee. Grounds No.2 and 3 of the assessee’s appeal are accordingly treated as allowed for statistical purposes.
Disallowance on account of depreciation on Xerox copiers, LCD TV, colour copier and LCD screens - assessee has filed a written note explaining the usage or application of the relevant items/assets in support of its case that they form an integral part of the computer/computer systems used by the assessee - HELD THAT:- Referring to note filed by the assessee explaining the usage or application of the relevant items/assets as well as the orders of the authorities below, we find that the submissions explaining the usage or application of the concerned items/assets are being made by the assessee for the first time before the Tribunal, and no such explanation was offered either before the Assessing Officer or before the learned CIT(A). We therefore, consider it fair and proper and in the interests of justice to restore this issue to the file of the Assessing Officer for deciding the same afresh, after taking into consideration the explanation offered by the assessee regarding the usage or application of the concerned items/assets in the light of the judicial pronouncements discussed above. Grounds No.4 to 7 of the assessee’s appeal are accordingly treated as allowed for statistical purposes.
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2014 (11) TMI 1211
TP Adjustment - rejecting comparable companies on the ground of exceptionally large scale of operations - HELD THAT:- Tribunal dealt at length with each of such companies and found on the basis of earlier Tribunal decisions that the companies were not comparable to the assessee. These findings purely turned on fact and no question of law, much less a substantial question of law, arises for consideration.
Deleting Ishir Infotech as comparables ignoring the fact that the said company satisfies the employee cost filter - HELD THAT:- Nothing is placed on record to show that the earlier Tribunal decisions which were relied upon were set at naught. We therefore find no reason to interfere in so far as this issue is concerned.
Tribunal (ITAT) deleting the comparable on functional difference ground ignoring the information obtained u/s 133(6) and also not giving opportunity to Transfer Pricing Officer (TPO) to examine the new facts, brought for the first time before the Hon’ble Tribunal (ITAT) - HELD THAT:- Tribunal relied on the judgment of the High Court in Gemplus Jewellery [2010 (6) TMI 65 - BOMBAY HIGH COURT] and the Special Bench decision of the Income Tax Appellate Tribunal at Chennai in ITO vs. Sac Soft Limited [2009 (3) TMI 243 - ITAT MADRAS-D]
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2014 (11) TMI 1210
Penalty u/s 271D - contravention of the provisions of Section 269 SS - HELD THAT:- The assessee is an educational institution. They had paid the entire amount to KHB to revive the cancelled allotment and they were in tremendous pressure to pay stamp duty and registration charges and in those circumstances they have raised cash loan, deposited the amount in the bank, obtained the demand draft and handed over the same to KHB immediately and they have also arranged for registration of sale deed in the name of the allottee.
We are satisfied even the amount of ₹ 8.08. lakhs raised by the assessee is for the purpose of stamp duty and registration and as there was urgency, they could not have obtained said amount by way of cheque or demand draft or as otherwise the investment they have made in getting lapsed allotment revived would have been in jeopardize. The authorities were not justified in ignoring these admitted facts on record and merely because there is a gap of more than 15 days between the date of revival and date of registration, their understanding that the assessee would have arranged funds by way of Cheques/demand drafts is unacceptable. As on 14th allotment was revived, 15th they were informed, 16th was a Saturday, 17th was a Sunday and 18th they had to make the payment, they have made the payment. Therefore the substantial questions of law are answered in favour of the assessee and against the revenue
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2014 (11) TMI 1208
Penalty u/s 271(1)(b) - no compliance was made by the assessee in response to the notice issued u/s 142(1) - HELD THAT:- AO sought a reply to detailed questions No -34 giving only six days time to the assessee. The record does not show as to when notice issued on 19.11.2012 was actually served upon the assessee as the relevant information is found to be missing in the penalty order. A perusal of the assessment orders further shows that it is not a case of non-cooperation by the assessee with the AO during the assessment proceedings as the assessments are concluded u/s 143(3).
In these circumstances being guided by the precedent laid down by the Co-ordinate Bench in Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust vs ADIT [2007 (8) TMI 386 - ITAT DELHI-G] wherein it was held that in the case where assessments were made u/s 143(3) and not u/s 144, it means that subsequent compliance in assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO which view has been followed by Co-ordinate Benches of the ITAT in the orders relied upon by the assessee and brought to our notice. Considering the peculiar facts and circumstances and being satisfied by the explanation offered impugned orders deserved to be set aside and the penalty orders deserve to be quashed. The said order was pronounced in the open Court at the time of hearing in the presence of the parties. - Decided in favour of assessee.
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2014 (11) TMI 1207
Validity of interim order - HELD THAT:- List after three weeks - Interim order shall remain in operation till the next date of listing.
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2014 (11) TMI 1206
Suit for cancellation of sale deed - fraud and misrepresentation - agricultural property - HELD THAT:- Learned counsel for the revisionist could not point out any illegality, material irregularity or jurisdictional error in the impugned order so as to warrant interference of this Court.
Revision dismissed.
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2014 (11) TMI 1205
Attack on appellant's house - right of the Appellant herein to lead an independent and peaceful life - HELD THAT:- The law on nuisance is well settled. Nuisance in any form as recognized in the law of Torts-whether private, public or common which results in affecting anyone's personal or/and property rights gives him a cause of action/right to seek remedial measures in Court of law against those who caused such nuisance to him and further gives him a right to obtain necessary reliefs both in the form of preventing committing of nuisance and appropriate damages/compensation for the loss, if sustained by him, due to causing of such nuisance.
The Constitution, inter alia, casts a duty on the State and their authorities to ensure that every citizen's cherished rights guaranteed to him under the Constitution are respected and preserved, and he/she is allowed to enjoy them in letter and spirit subject to reasonable restrictions put on them, as dreamt by the framers of the Constitution. Intervention of the Court is called for at the instance of citizen when these rights are violated by fellow citizens or by any State agency.
Appeal allowed in part.
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2014 (11) TMI 1204
Addition u/s.14A r.w. Rule 8D - HELD THAT:- Since there is a categorical finding by the AO that the assessee company has used funds from the cash credit account for investment in shares, the dividend of which has been shown as exempt, therefore, we find no infirmity in the order of the CIT(A) upholding the action of the AO in disallowing interest u/s.14A r.w. Rule 8D. Accordingly, this ground by the assessee is dismissed.
Disallowance of Cost of Diesel Generator Set - HELD THAT:- We find force in the submission of the assessee that the cost of duration of the procurement and commissioning of a new generator set which is about 10 months would have affected the production schedule of the assessee company. The submission of the assessee before the lower authorities that both the companies are managed by separate Board of Directors has not been disputed.
Since undisputedly both the companies which are listed public companies and are falling in the 30% tax bracket, therefore, the apprehension that such transfer was to reduce the tax liability is also not correct. Further, the AO has also not ascertained the market value of a 10 to 15 years old generator set of similar capacity purchased by the assessee from Kirloskar Oil Engines Ltd. CIT(A) was not justified in upholding the action of the AO in invoking Explanation 3 to section 43(1). We accordingly set-aside the order of the CIT(A) on this issue and direct the AO to allow the depreciation as claimed by the assessee.
Disallowance of commission paid to Non-Executive Director - as per DR since the assessee has not substantiated with evidence the services rendered by the non-executive directors, therefore, the CIT(A) was not justified in deleting the addition - HELD THAT:- The audited accounts of the assessee company show the meetings attended by the non-executive directors in the Board meeting as well as meetings of the Audit committee. Further, similar payments made in the past have not been disallowed. The payment of commission has also been approved by the Board of Directors and within the permissible limit of the Companies Act. No infirmity in the order of the Ld.CIT(A) deleting the disallowance being commission paid to non-executive directors. Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed.
Set off unabsorbed depreciation pertaining to A.Y. 1999-2000 against the income of the current year - HELD THAT:- As decided in GENERAL MOTORS INDIA PVT. LTD VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [2012 (8) TMI 714 - GUJARAT HIGH COURT] there is current depreciation for such succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year. We are of the considered opinion that any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. - Decided against revenue
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2014 (11) TMI 1203
Reopening of assessment u/s 147 - HELD THAT:- Assessee has requested in its written submissions before the CIT(A) for copy of reasons recorded by the AO while reopening assessment under section 147 of the Act, and the same were not given to the assessee. In these facts and in the light of the decision of the Hon’ble Gujarat High Court SAHKARI KHAND UDYOG MANDAL LTD. VERSUS ASSTT. COMMISSIONER OF INCOME TAX [2014 (6) TMI 149 - GUJARAT HIGH COURT] relied upon by the assessee, we are of the view that the copy of the reasons recorded while reopening the assessment u/s 147 has to be issued to the assessee, and accordingly, the issue in the grounds of the appeal of the assessee is restored to the file of the AO with direction to frame de novo assessment in accordance with law, after issuing the copy of the reasons recorded while reopening the assessment under section 147, and after allowing the assessee reasonable opportunity of hearing. - Appeal of the assessee is allowed for statistical purpose.
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2014 (11) TMI 1202
Nature of expenditure - Software Expenses allowability - capital or revenue expenses - admission of additional evidence - HELD THAT:- Following this decision of the co-ordinate bench of this Tribunal in the assessee's own case for Assessment Year 2007-08 [2013 (9) TMI 189 - ITAT BANGALORE] , we also deem it proper to restore this issue back to the file of the Assessing Officer to examine and reappraise the additional evidence filed by the assessee in respect of expenditure incurred on purchase of software of ₹ 10 lakhs and above and decide the issue in accordance with the decisions of the Hon'ble High Court of Karnataka in the case of Toyota Kirloskar Motors P. Ltd. [2013 (2) TMI 108 - KARNATAKA HIGH COURT] and Amway India Enterprises [2011 (11) TMI 4 - DELHI HIGH COURT]
Penalty u/s.271(1)( c) - HELD THAT:- This ground of appeal is premature as no order levying penalty u/s.271(1)(c) of the Act has been passed by the Assessing Officer. In this view of the matter, as no cause of action / grievance arises to the assessee by mere issue of the said notice, this ground is not maintainable and is accordingly dismissed.
Deduction claimed u/s.80 JJA - AO disallowed the assessee's claim for deduction under section 80 JJA of the Act as the assessee could not substantiate the claim, particularly with respect to the definition of “workmen” as it appeared in the Industrial Disputes Act, 1947 - HELD THAT:- Following the above referred decision of the co-ordinate bench of this Tribunal in the assessee’s own case for A.Y. 2007-08 (supra), we are of the considered view that it would be just and fair to restore this issue, of deduction u/s. 80 JJA of the Act, back to the file of the A.O. with the direction to re-examine and re-adjudicate this issue by passing a reasoned and speaking order; only after affording the assessee adequate opportunity of being heard and to file required details. The assessee is also hereby directed to co-operate in the matter by producing / filing the details / explanations called for by the A.O. It is ordered accordingly.
Deduction u/s.10A - excluding the expenditure on telecommunication charges and provision of technical services abroad in foreign currency both from export turnover as well as total turnover - HELD THAT:- Issue is covered in favour of the assessee by the decision of the Hon'ble High Court of Karnataka in the case of Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] as held that for the purposes of computing deduction under section 10A of the Act, when the Export Turnover is to be arrived at by excluding expenses incurred on telecommunication charges, etc. incurred in foreign currency, the same expenses should be excluded from total turnover also. Decision cited supra is applicable to the case on hand and accordingly direct the Assessing Officer to recompute the deduction under section 10A of the Act for Assessment Year 2008-09 by accordingly excluding the expenditure on telecommunication charges and provision of technical services abroad in foreign currency both from export turnover as well as total turnover.
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2014 (11) TMI 1201
Oppression and mismanagement - illegal allotment of shares - maintainability of petition - time limitation - lack of qualification in terms of the provisions contained in Section 399 of the Act - HELD THAT:- Respondent Nos. 1 to 8 have failed to discharge their onus to prove the fact that the consideration was paid to the Petitioners for transfer of the shares-in-question, as contended by them. It is further an established law that transfer of shares without consideration is unlawful, ultra vires and void. In addition to the above, it is pertinent to mention here that, the Petitioners have filed a copy of Register of Members of the company as Annexure 'A-6' to the Petition, which clearly shows that the Petitioners' name still exist in the Register of Members of the Company. The Annual Returns filed by the Respondents with the ROC further confirm the said fact. Lastly, non-compliance of Section 108(1) of the Act clearly establishes that the Petitioners never transferred or intended to transfer the shares held by them in the Company - the Petitioners are eligible to file the present petition under Section 397/398 read with Section 402 of the Act in terms of the provisions contained in Section 399 of the Act.
Whether the Petition is barred by law of limitation? - HELD THAT:- According to the Ld. Counsel, to the Respondents did not file the Annual Statement with the ROC timely and as soon as the Petitioners came to know about the wrong doings deliberately committed by the Respondents depriving the Petitioners' right as the shareholders, the Petitioners immediately, without any delay, approached the Court for redressal of their grievances and hence, the questions of in-ordinate delay and laches on their part, do not arise as contended by the Respondents.
It is established that the Respondents actions are harsh, unfair and prejudicial towards the Petitioners. They lack in probity. There are series of acts of oppression as narrated above, the effect of which is still continuing on the rights of the Petitioners being shareholders of the Company. It is an established law that once the CLB gives a finding that the acts of oppression have been established, winding up of the Company on just and equitable grounds becomes automatic and the reliefs sought under Section 402 of the Act could be granted - In the present petition, in view of the proved arts of oppression and mismanagement in the conduct of the affairs of the Company, though it is a fit case for winding up of the Company, the winding up order would clearly prejudice the interest of the Petitioners and the other shareholders.
It is the right of the shareholders to receive notices of General Body Meetings and if a Company deliberately does not sent notices the shareholders have right to complain of oppression and mismanagement. In this case, the complaint of non receipt of notices by the Petitioners, being the shareholder-members of the Company, is a valid complaint, and therefore the Meeting held without notices to the Petitioners has to be declared as invalid, as also the Resolutions passed thereat. In my opinion, the Petitioners are right in contending that the allotment of additional shares was made only with an oblique motive of ensuring the entire control over the affairs of the Company to the exclusion of the Petitioners.
The main allegations of the Petitioners are found to have been established that the EOGM held on 30/5/2005 is invalid on account of non-receipt of the Notices thereof by the Petitioners and consequently the decision to increase the authorized share capital is also invalid. Once the increase in the authorized share capital is invalid, then the consequent allotment of the additional shares is also invalid. It has also been established that the allotment of additional shares was only with a view to push the Petitioners from minority to super-minority and thereafter further transfer of shares to their own persons by the Respondent No. 2 was with a purpose to get majority of members to enable him to make decisions according to his choices, I am, therefore, of the view that the EOGM held on 30/5/2005 and the Resolutions passed thereat deserve to be declared as null and void.
The Petitioners have successfully established their allegations regarding the acts of oppression and mismanagement.
Application disposed off.
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