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Showing 1 to 20 of 1545 Records
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2017 (2) TMI 1549 - ALLAHABAD HIGH COURT
Validity of additions based on valuation report - Non rejection of books of account before referring to the D.V.O. u/s 142A - HELD THAT:- Question raised in these appeals Shri Udai Chand Chaurasia Shri Ram Road Lucknow [2017 (1) TMI 1832 - ALLAHABAD HIGH COURT] as relying on Sargam Cinema [2009 (10) TMI 569 - SC ORDER] wherein held matter could not refer to the Departmental Valuation Officer without the books of account being rejected. Decided in favour of assessee.
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2017 (2) TMI 1548 - SUPREME COURT
Doctrine of separation of powers - Seeking amendment in the provisions of Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 within a period of ninety days - State Government is aggrieved by the mandamus which has been issued by the High Court to amend the provisions of law - HELD THAT:- The grievance has a sound constitutional foundation. The High Court has while issuing the above directions acted in a manner contrary to settled limitations on the power of judicial review under Article 226 of the Constitution. A direction, it is well settled, cannot be issued to the legislature to enact a law. The power to enact legislation is a plenary constitutional power which is vested in Parliament and the state legislatures under Articles 245 and 246 of the Constitution. The legislature as the repository of the sovereign legislative power is vested with the authority to determine whether a law should be enacted. The doctrine of separation of powers entrusts to the court the constitutional function of deciding upon the validity of a law enacted by the legislature, where a challenge is brought before the High Court under Article 226 (or this Court under Article 32) on the ground that the law lacks in legislative competence or has been enacted in violation of a constitutional provision. But judicial review cannot encroach upon the basic constitutional function which is entrusted to the legislature to determine whether a law should be enacted.
For the Court to mandate an amendment of a law – as did the Himachal Pradesh High Court – is a plain usurpation of a power entrusted to another arm of the state. There can be no manner of doubt that the High Court has transgressed the limitations imposed upon the power of judicial review under Article 226 by issuing the above directions to the state legislature to amend the law. The government owes a collective responsibility to the state legislature. The state legislature is comprised of elected representatives. The law enacting body is entrusted with the power to enact such legislation as it considers necessary to deal with the problems faced by society and to resolve issues of concern. The courts do not sit in judgment over legislative expediency or upon legislative policy. This position is well settled.
In MALLIKARJUNA RAO AND ORS. VERSUS STATE OF ANDHRA PRADESH AND ORS. [1990 (4) TMI 307 - SUPREME COURT], this Court held that the court under Article 226, has no power to direct the executive to exercise its law-making power.
The judiciary is one amongst three branches of the State; the other two being the executive and the legislature. Each of the three branches is co-equal. Each has specified and enumerated constitutional powers. The judiciary is assigned with the function of ensuring that executive actions accord with the law and that laws and executive decisions accord with the Constitution. The courts do not frame policy or mandate that a particular policy should be followed. The duty to formulate policies is entrusted to the executive whose accountability is to the legislature and, through it, to the people. The peril of adopting an incorrect policy lies in democratic accountability to the people. This is the basis and rationale for holding that the court does not have the power or function to direct the executive to adopt a particular policy or the legislature to convert it into enacted law. It is wise to remind these limits and wiser still to enforce them without exception.
The directions issued by the High Court for amending the provisions of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 and the Rules were manifestly unsustainable - appeal filed by the State shall stand allowed.
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2017 (2) TMI 1547 - ITAT MUMBAI
Depreciation on toll road - HELD THAT:- It is noted that since in the appeal filed against the original assessment order, Hon'ble High Court has held vide its judgement [2016 (4) TMI 1184 - BOMBAY HIGH COURT] that claim of depreciation is not allowable to the assessee, the same decision would be applicable upon the issue raised by the Revenue before us. Once Hon'ble High Court has taken a view that depreciation is not allowable, the issue before us stands covered against the assessee.
Cross objection - appellant prays that the entire cost incurred for construction of "Project Road" may be allowed as deduction treating the same as revenue expenditure while computing the total income - As noted that the claims raised before us are alternative to the main claim made by the assessee. Since the main claim of the assessee has been rejected, in all fairness, justice demands that assessee should be given an opportunity to make his alternative claim in accordance with law. Thus, taking into account the totality of facts and circumstances of the case, as have been brought before us, we find it appropriate to send these issues back to the file of the AO. The assessee shall be at liberty to raise all the legal and factual issue before the AO. The AO shall examine all the issues raised in the Cross Objection and decide them after taking into account all the submissions and evidences, as may be placed on record by the assessee. With these directions, the grounds raised in the Cross Objection are restored to the file of the AO for their appropriate adjudication and these may be treated as allowed, for statistical purposes.
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2017 (2) TMI 1546 - KARNATAKA HIGH COURT
Granting payment of revised rates to take care of escalated cost of work executed by the claimant and the work executed beyond the originally stipulated time - whether the quantification of the escalation costs/damages by the arbitrator is arbitrary and contrary to the evidence? - HELD THAT:- Waiting for handing over of site to construct the residential quarters, not putting up with the excavation of work to lay down the foundation for the office building also resulted in delay of completion of the work. Hence, the department cannot be accused for the delay caused. Allowing the claim of escalation of cost sans the satisfactory material evidence placed on record by the claimant is perverse and contrary to the public policy. No cogent evidence was placed before the Arbitrator to justify the claim for damages to the extent of 100%. Awarding of 70% on the balance work of Rs. 5.69 lakhs executed by the claimant beyond the original stipulated time by the Arbitrator is not supported by any material evidence. It is based only on the guess work. Though a stray observation was made by the Arbitrator that schedule of rates of PWD during the year 1992-94 was considered, no material was referred to arrive at a conclusion. The Arbitrator’s finding that the delay caused was only due to the default on the part of the Department in not complying with the terms and conditions of the work order cannot be countenanced. Quantification of damages is unreasonable. It would be a case of misconduct on the part of the Arbitrator amenable to Section 34 of the Act.
The Arbitrator, after having held that there has been a short increase in prices of materials, the Department cannot compel the contractor to carry out the work on the same rates on which he had agreed to the same within the stipulated period, cannot evaluate the ‘short increase’ equal to that of tender amount. Escalation cannot be granted on assumptions and presumptions. Awarding escalation charges/damages of Rs. 14,68,239/- equal to tender amount is not fit to be sustained.
If the entire award is satisfied, the respondents 1 and 2 would have to pay a huge sum of money by way of interest. Considering the totality of the circumstances of the case, interest awarded by the Arbitrator at 18% per annum is excessive, awarding of interest by the court below at 9% per annum on the 25% of tender amount i.e., Rs. 3,71,564/- determined towards the damages is justifiable. No infirmity or irregularity is found in the impugned Judgment and order.
Appeal dismissed.
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2017 (2) TMI 1545 - CALCUTTA HIGH COURT
Payment against the 8 supplementary invoices raised by the Kolkata Port Trust towards reimbursement of service tax - HELD THAT:- The Service Tax Department will be making available to the Kolkata Port Trust the necessary Cenvat Credit for the said sum of Rs. 3,94,34,035/- paid towards service tax on the basis of the supplementary invoices and the original discharge certificate as aforesaid issued by the Service Tax Department as per the statement made in paragraph 3(e) and 3(f) of the affidavit in opposition affirmed on 22nd day of January, 2017 by and on behalf of the Service Tax authority, and thus shall not demand the original discharge certificate from the writ petitioner No.1 for any related or other purpose whatsoever.
Since no affidavit in opposition has been filed the allegations are deemed to have been denied.
Petition disposed off.
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2017 (2) TMI 1544 - SUPREME COURT
Commutation of death sentence of Sheikh Shamsul and Sheikh Gheyas, to imprisonment for life - conviction confirmed - interpretation of Section 172 of Code of Criminal Procedure, 1973 - veracity of the evidence adduced - relevance of overt act in conviction Under Section 149 of the Penal Code - rarest of the rare cases theory for confirming death sentence.
HELD THAT:- While upholding the judgment and order of conviction passed by the Trial Court, the High Court has primarily relied upon the evidence of eye-witnesses, PW14, PW4, PW5 and PW9 who were found to be trustworthy and reliable. The High Court held that the Accused were sharing the common object of doing away the deceased. However, from a perusal of the cross examinations of PW4 and PW5, it appears that there was personal enmity and PW3, PW4, PW14 were made Accused in a case of murder of Asfak, son of Sheikh Samsul, Appellant herein. PW14 had also filed a case Under Section 307 of Indian Penal Code against the Appellants two years prior to the date of the incident which was still pending.
It is seen in the instant case that the witnesses have vividly deposed about the genesis of the occurrence, the participation and involvement of the Accused persons in the crime. The non-examination of the witnesses, who might have been there on the way to hospital or the hospital itself when deceased narrated the incident, would not make the prosecution case unacceptable - prosecution case has been proved by the testimony of the eye-witness since corroborated by the other witnesses of the occurrence.
In the instant case, the witnesses, as the High Court has found and there are no reason to differ, are reliable and have stood embedded in their version and remained unshaken. They have vividly deposed about the genesis of occurrence, the participation and involvement of the Accused persons in the crime and the injuries inflicted on the deceased, and on each of them.
The present appeals are devoid of merits and the judgment passed by the High Court does not warrant interference - Appeal dismissed.
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2017 (2) TMI 1543 - DELHI HIGH COURT
Interpretation of statute - rule of Harmonious Construction - Maintainability of appeal - appealable order under Order XLIII of the CPC or not - Prayer for new documents filed alongwith the affidavits by way of examination-in-chief of new witnesses of the plaintiffs be taken on record.
It was submitted that the proviso to Section 13(1) of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 is clearly applicable and it specifically provides that no appeal shall lie to a Commercial Appellate Division unless the impugned order is not specifically enumerated in Order XLIII CPC.
HELD THAT:- An appeal under the Letters Patent is barred under Section 13 of the said Act, unless an appeal was specifically provided under the Arbitration and Conciliation Act, 1996. In the context of the present case, this would translate to the statement that an appeal under the Letters Patent (or under the Delhi High Court Act, 1966) is barred under Section 13 of the said Act, unless an appeal was specifically provided under the CPC. In that case, the court went on to hold that such an appeal was provided under the said 1996 Act and, therefore, an appeal would be maintainable before the Division Bench. But, in the present case the impugned order is not appealable under the CPC. Therefore, the appeal would not be maintainable.
It is clear that the view that has been taken does not, in any way, militate against the decision of the Supreme Court in Arun Dev Upadhyaya [2016 (9) TMI 1610 - SUPREME COURT]. The said decision recognized the fact that Section 13 bars an appeal under the Letters patent and, consequently, under any other law for the time being in force unless an appeal was specifically provided under the said 1996 Act which, in the present case, would be relatable to the said Act and the CPC. It is clear that from the wordings used in Section 13 that insofar as orders are concerned, appeals shall lie only from such orders that are specifically enumerated under Order XLIII of CPC. Section 13(2) further fortifies the position that no appeal shall lie from any order or decree of a Commercial Division or a Commercial Court otherwise than in accordance with the provisions of this Act.
A provision such as the said Section 10 is expressly excluded by Section 13(2) of the said Act read with the proviso to Section 13(1) which specifically enumerates appealable orders to be those specified in Order XLIII CPC.
The proviso to Section 13(1) explicitly provides that an appeal shall lie from such orders that are specifically enumerated under Order XLIII of CPC. Section 13(2) makes it further clear that no appeal shall lie from any Order or decree of a Commercial Division or a Commercial Court otherwise than in accordance with the provisions of the said Act notwithstanding anything contained in any other law for the time being in force or in a Letters Patent of a High Court. When the provisions of a statute are explicit and the intendment of the legislature is clear, there is no question of trying to resolve an imagined conflict between the provisions by employing the rule of harmonious construction.
Thus, if the interpretation of the appellants were to be accepted then we would have to read Section 13 sans the proviso to Section 13(1) and sans Section 13(2). That, surely, could not have been the intention of the legislature!
Appeal not maintainable and is dismissed.
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2017 (2) TMI 1542 - ITAT JAIPUR
Addition of unexplained investment towards purchase of plot - on money on the purchase of the vacant plot - as per assessee agreement made in respect of plot did not materialise - As per revenue cancellation agreement was found in post search operations and is fabricated document - HELD THAT:- The assessee is an individual. The assessee is in the business of colonization. The assessee purchases agricultural land from farmers and then the formalities of the Rajasthan Land Revenue Act and JDA Act is completed for conversion of land from agricultural to non agricultural use and further colony is planned and map is got approved from JDA. Subsequently, the plots of different size are sold to the customers and development work like construction of road, providing electric line water supply etc are done by the assessee as per the norms of JDA - The assessee filed regular return u/s 139(1).
The seller Shri Subhash Chand Bansal had given a statement on oath that he had received Rs. 65 lacs only. The agreement with construction was cancelled and the cancellation agreement was also seized during the search operation. The seller stated that there was no construction and no water and electric connection which is also established by Google earth Maps and photographs placed in the paper book.
There is no evidence of payment of any on money on the purchase of the vacant plot. No statement of assessee was recorded during search operation while she was present at the time of search. The cancellation agreement was found and seized during search operation itself. Therefore, its authenticity cannot be doubted when the Revenue had not been able to establish otherwise.
Therefore, looking all we find that the lower authorities have erred in confirming the addition of Rs 76.00 lacs on account of unexplained investment in purchase of Plot No. 281, 10B, Gopal Pura Bye Pass, Jaipur. Thus we do not concur with the findings of the ld. CIT(A). Hence ,the ground raised by the assessee are allowed.
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2017 (2) TMI 1541 - CESTAT NEW DELHI
Demand of differential duty alongwith interest and penalty - finalization of assessments or not - importer did not produce any documents to show the fact of final assessment - HELD THAT:- There have been factual mistakes in the impugned order. The impugned order wrongly notes that provisional assessments were finalized and the goods were finally assessed.
When the goods have not been finally assessed, the findings given in the impugned order cannot be sustained - the impugned order is set aside and the matter is remanded to the Commissioner for denovo adjudication within four months of the receipt of this order after giving fresh opportunity of personal hearing and submissions of documents to both the sides.
The appeal is allowed by way of remand.
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2017 (2) TMI 1540 - ITAT AHMEDABAD
Enhancement by CIT(A) - addition under the deeming provisions of Section 50C - CIT(A) not only confirmed action of the AO but also directed the AO to make an addition in respect of cost of acquisition as there was variation in the figures of cost of acquisition as per record vis-a-vis the lease deed - HELD THAT:- A co-ordinate bench of this Tribunal in the case of M/s. Monga Metal Pvt. Ltd[2013 (8) TMI 1179 - ITAT LUCKNOW] has held that such an action of the AO i.e. of proposing enhancement without putting the assessee to specifically notice in this regard is unsustainable in law as provisions of section 251(2) categorically says that the Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Therefore, it is incumbent upon the ld. CIT(A) for affording a reasonable opportunity of showing cause against enhancement to the assessee.
If he fails to afford an opportunity to the assessee, enhancement made by him is not sustainable in the eyes of law. In the light of these facts, enhancement made by the ld. CIT(A) is not sustainable as it was done without issuing a show cause against enhancement to the assessee. We, therefore, find no merit in the additions.
Whether the provisions of section 50C can be invoked in respect of the lease hold property? - As this issue is no longer res integra, there are several decisions of this Tribunal including the case of DCIT vs. Tejinder Singh [2012 (3) TMI 47 - ITAT, KOLKATA], Atul G. Puranik [2011 (5) TMI 576 - ITAT, MUMBAI] in support of the proposition. Hon’ble Delhi High Court in the case of CIT vs. Shri Kishan Das [2014 (2) TMI 897 - DELHI HIGH COURT] has approved this school of thought and inter alia observed strictly construed the letter of Section 50C to say that the conveyance has to be complete in respect of all entitlements to the property. In the present case, the Tribunal has upheld the valuation of the assessee. We notice that apart from the three Benches, decisions of which have been relied on, the Tribunal also considered the distinction made between Section 50C and 54D(1) which specifically provides that capital gains from, transfer by way of compulsory acquisition under any law of capital asset being land, building or any right in the land or building
Section 50C, on the other hand, talks of, transfer by assessee of a capital asset being land or building or both. The contrast in language, given that Section 50C is a specific provision, which seeks to enact a presumption is significant. The valuation of the concerned State agency or the government that the cost of the land is, in the circumstances, higher, is determinative. We notice that in the present case, there has been no such valuation. That apart, the Tribunal adopted an approach which, with respect, appears to be correct, in that it took note of the proportionate transfer of leasehold rights for 54 years. If the Revenue’s contentions were to be conceded, then in the given facts of case, if the leasehold rights for residual period of 3 or 4 years were to be valued at par with the cost of acquisition of the full tenure of the lease of 90 years, absurd and anomalous results would ensue.
Thus both the grievances of the assessee indeed deserve to be upheld. Neither the learned CIT(A) was justified in confirming the action of the Assessing Officer in treating the stamp duty valuation as consideration for transfer for the purpose of computing capital gain, nor was he justified in proposing enhancement of income regarding reduction in the cost of acquisition without putting assessee to notice in this respect. We, therefore, uphold the plea of the assessee.
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2017 (2) TMI 1539 - SUPREME COURT
Scope and purport of Section 173(8) Code of Criminal Procedure - High Court interfered with the order of the Magistrate permitting further investigation by the police in the case and ordered for expeditious disposal of the trial.
Whether it was permissible for the investigating officer or the officer-in-charge of the police station to undertake a further investigation even after the filing of the charge sheet?
HELD THAT:- It noted as well that Under Section 173(2)(i), the officer in-charge, as soon as the investigation is completed, is required to forward to the Magistrate empowered, a report in the prescribed form so as to enable the Court to take cognizance of the offence based thereon. This Court also adverted to Section 190 enumerating the modes of taking cognizance of an offence by a Magistrate, as specified therein, either upon receiving a complaint of facts which constituted such offence or upon a police report of such facts or upon information received from any person other than a police officer or upon his own knowledge that such offence had been committed.
In the conspectus of the provisions of Code of Criminal Procedure traversed, this Court held the view that an informant who lodges the first information report does not fade away therewith and is very much concerned with the action initiated by the officer in-charge of the police station pursuant thereto, so much so, that not only a copy of the said report is to be supplied to him free of cost and in case, no investigation is intended, he has to be notified of such decision. The reason, in the contemplation of this Court, for the officer in-charge of a police station to communicate the action taken by him to the informant and a report to the Magistrate Under Section 173(2) Code of Criminal Procedure was that the informant, who sets the machinery of investigation into motion, was required to know what was the result of the exercise initiated on the basis thereof, as he would be vitally interested therein and hence, the obligations cast by law on the officer in-charge.
This Court recounted its observations in Ram Lal Narang [1979 (1) TMI 241 - SUPREME COURT] to the effect that on the Magistrate taking cognizance upon a police report, the right of the police to further investigate even under the 1898 Code was not exhausted and it could exercise such right often as necessary, when fresh information would come to light. That this proposition was integrated in explicit terms in Sub-section (8) of Section 173 of the new Code, was noticed. The desirability of the police to ordinarily inform the Court and seek its formal permission to make further investigation, when fresh facts come to light, was stressed upon to maintain the independence of the judiciary, the interest of the purity of administration of criminal justice and the interest of the comity of the various agencies and institutions entrusted with different stages of such dispensation.
After referring to Section 156(3) in particular and Section 190 Code of Criminal Procedure, this Court reverted to Section 173 and ruled that a very wide power was vested in the investigating agency to conduct further investigation after it had filed its report in terms of Sub-section (2) thereof. It held on an elucidation of the contents of Section 173(8) that the investigating agency was thus competent to file a report supplementary to its primary report and that the former was to be treated by the Court in continuation of the latter, and that on an examination thereof and following the application of mind, it ought to proceed to hear the case in the manner prescribed. It was elaborated that after taking cognizance of the offence, the next step was to frame charge in terms of Section 228 of the Code unless the Court found, upon consideration of the record of the case and the documents submitted therewith, that there did exist no sufficient ground to proceed against the accused, in which case it would discharge him on reasons to be recorded in terms of Section 227 of the Code - The view of this Court in AMIT KAPOOR VERSUS RAMESH CHANDER & ANR. [2014 (1) TMI 1042 - SUPREME COURT] underlining the obligation of the Court to consider the record of the case and the documents submitted therewith to form an opinion as to whether there did exist or not any sufficient ground to proceed against an Accused was underlined.
From the issues sought to be answered in this decision and having regard to the overall text thereof, it is not possible to discern that the power of the Magistrate, even at the post cognizance stage or after the Accused had appeared in response to the process issued, the suo motu power of the Magistrate to direct further investigation was intended to be expounded thereby. Significantly, the adjudication was essentially related to the pre-cognizance stage.
On an overall survey of the pronouncements of this Court on the scope and purport of Section 173(8) of the Code and the consistent trend of explication thereof, we are thus disposed to hold that though the investigating agency concerned has been invested with the power to undertake further investigation desirably after informing the Court thereof, before which it had submitted its report and obtaining its approval, no such power is available therefor to the learned Magistrate after cognizance has been taken on the basis of the earlier report, process has been issued and Accused has entered appearance in response thereto - the un-amended and the amended Sub-section (8) of Section 173 of the Code if read in juxtaposition, would overwhelmingly attest that by the latter, the investigating agency/officer alone has been authorized to conduct further investigation without limiting the stage of the proceedings relatable thereto. This power qua the investigating agency/officer is thus legislatively intended to be available at any stage of the proceedings. The recommendation of the Law Commission in its 41st Report which manifesting heralded the amendment, significantly had limited its proposal to the empowerment of the investigating agency alone.
The direction for investigation by the Magistrate Under Section 202, while dealing with a complaint, though is at a post-cognizance stage, it is in the nature of an inquiry to derive satisfaction as to whether the proceedings initiated ought to be furthered or not. Such a direction for investigation is not in the nature of further investigation, as contemplated Under Section 173(8) of the Code. If the power of the Magistrate, in such a scheme envisaged by the Code of Criminal Procedure to order further investigation even after the cognizance is taken, Accused persons appear and charge is framed, is acknowledged or approved, the same would be discordant with the state of law - Not only such power to the Magistrate to direct further investigation suo motu or on the request or prayer of the complainant/informant after cognizance is taken and the Accused person appears, pursuant to the process, issued or is discharged is incompatible with the statutory design and dispensation, it would even otherwise render the provisions of Sections 311 and 319 Code of Criminal Procedure, whereunder any witness can be summoned by a Court and a person can be issued notice to stand trial at any stage, in a way redundant.
Appeal dismissed.
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2017 (2) TMI 1538 - DELHI HIGH COURT
Condonation of delay - ITA filed after 613 days and other after 707 days - Revenue aggrieved by the order of ITAT which allowed the assessee’s appeal, holding that the exercise of Section 263 not warranted - HELD THAT:- In both instances, the explanation for the delay is less then convincing; the Revenue states the heavy workload of appellant, which it unable to effectively manage as well as the lack of manpower. The other reason stated is the reorganization of its panel counsel. Both did not constitute “sufficient cause” to enable the Court to condone the delay. The applications and appeals are accordingly dismissed.
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2017 (2) TMI 1537 - DELHI HIGH COURT
TP Adjustments - international transactions in respect of payment of trade mark fee - Selection of MAM - Transactional Net Margin Method (TNMM) OR Comparable Uncontrolled Price Method (CUPM) - HELD THAT:- The following question of law arises for consideration in these appeals:-
“Did the Income Tax Appellate Tribunal (‘ITAT’) fall into error while deleting the Transfer Pricing Adjustments regarding the international transactions in respect of payment of trade mark fee and in applying the Transactional Net Margin Method (TNMM) instead of Comparable Uncontrolled Price Method (CUPM)? ”
TP Adjustments - AMP Expenditure - This Court notices that AMP Expenditure was not subjected to adjustments although it was a part of the Transfer Pricing Exercise for all previous years.
The question of law framed i.e. the payment of trade mark fee and whether it needs to be subjected to adjustments, would cover the issue for the year in question given that AMP Expenditure did not result in any adjustments in respect of the same transactions for all previous years. The other questions of law, therefore, do not arise.
List for hearing on 18.04.2017.
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2017 (2) TMI 1536 - ITAT MUMBAI
Disallowance u/s 14A - AO computed the disallowance in both the years u/r. 8D(2)(iii) of the I.T. Rules at 0.5% of average value of investment - CIT(A) took the view that investments made by the assessee are in the form of strategic investments and accordingly directed AO to compute the disallowance at 5% of the fixed/semi variable expenditure incurred by the assessee - HELD THAT:- As counsel submitted that AO had made identical disallowance in A.Y. 2009-10 also, which was reduced to 5% of the fixed/semi variable expenses by the order passed by the learned CIT(A). Revenue took the matter to the Tribunal and the Tribunal [2014 (11) TMI 1274 - ITAT MUMBAI] has confirmed the order passed by the learned CIT(A) and accordingly dismissed the appeal filed by the Revenue.
AR submitted that the learned CIT(A) has followed its own order passed in A.Y. 2009-10 in the years under consideration also. DR did not controvert the factual aspects presented by learned AR
In view of consistent with the view taken by the coordinate Bench of the Tribunal in A.Y. 2009-10, we confirm the order passed by the learned CIT(A) in the years under consideration also.
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2017 (2) TMI 1535 - ITAT JAIPUR
Accrual of income - Arbitration receipts - assessee has shown arbitration receipts in his books of accounts under the head “Current liabilities” and has not credited the same in the profit/loss account - As per AO arbitration receipts cannot be treated as liability till the order of Supreme Court is received against the assessee and the same receipts was accordingly treated as income of the assessee and brought to tax - HELD THAT:- Where the challenge to the arbitral award ends in favour of the assessee, the Revenue would be entitled to bring the same to tax. Conversely, where the challenge to the arbitral award ends against the assessee, the State of Rajasthan would be entitled to encash the bank guarantee and recover the amount paid to the assessee.
As in the instant case, the amount received by the assessee cannot be regarded as income which has accrued unless and until the proceedings relating to arbitral award attains finality. Besides that, even from well-established accounting principles and accrual system of accounting as followed by the assessee, where the probability of receipts in favour of the assessee is contingent on final outcome of Court’s proceedings, such contingent receipts have rightly been shown as liability and not reflected as taxable receipts in the profit/loss account.
Similar issue was involved in AY 2004-05 wherein as held such interim arbitration receipts pending final outcome as not taxable - Decided against revenue.
Accrued interest on FDRs not declared as income by the assessee - assessee has not shown the interest accrual on FDRs made for giving bank guarantee in his return of income for the year under consideration - AO computed interest @ 7% and brought the same to tax in addition to arbitration receipts - CIT-A deleted the addition - HELD THAT:- CIT(A) has given a finding that the assessee has shown net interest in his profit/loss account which comprises of gross interest received including interest on FDRs and interest paid to Bank. The said finding has not been controverted before us. No infirmity in the order of ld CIT(A) in deleting the addition.
Decided against revenue.
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2017 (2) TMI 1534 - ITAT DELHI
Exemption u/s 11/12 - Receipt in the nature of Fee from Professional/ Technical Services/ Contractual receipts and, therefore, commercial in nature - donation had been given to the assessee to promote the objects of the NASSCOM and not for any charity - As per AO activities were clearly in the nature of trade and commerce and rendering services in relation to trade/ commerce/ business more particularly because assessee had charged service tax on the amount so received by it - As per assessee it was setup with the predominant objective to improve national capabilities by promoting data protection, develop security and privacy codes and standards and encourage implementation of the same - HELD THAT:- Activities undertaken by assessee are in the field of cyber security for increasing level of security and privacy of IT and BPO service providers in public life to ensure that India is secure destination.
Potential of cyber threats is increasingly recognized for their impact on the lives of individuals, as attacks are increasingly targeting critical infrastructure like, utilities, transport, oil and energy and hence the ability to disturb social harmony and interactions, urge to cause unrecoverable damages to businesses and ability to harm national security posture. Admittedly, the assessee is imparting very valuable services in this regard and training officials of police, banking, and other personnel in technical field. The grants received by assessee are mainly from Government.
One of the major objections of Assessing Officer was that assessee was imparting services to NOSSCOM. This objection is devoid of any merit because it is the predominant object of assessee which is to be examined for deciding whether the assessee was carrying on charitable activities or not. The assessee was registered u/s 25 of the Companies Act which clearly shows that it could not carry on any activities for profit purposes. It is well settled law that while carrying on pre-dominant objects, if the assessee is earning some incidental surplus that will not prejudice the assessee’s claim of being charitable in nature - Appeal of the Department is dismissed.
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2017 (2) TMI 1533 - DELHI HIGH COURT
Seeking waiver of the deposit as required in terms of Section 19 of the MSMED Act - Validity of Arbitral Award - competency of FC was to act as an Arbitral Tribunal (AT) notwithstanding the arbitration clause in the contract between the parties - liability of Alstom to pay REPM - liability to pay interest under Section 16 of the MSMED Act.
HELD THAT:- Section 8 of the MSMED Act envisages two possible situations; one is where a unit which has not yet come into existence, and the second is where the unit is in existence. Where a unit is yet to be established, Section 8(1) requires filing of the memorandum in the manner specified by the State or the Central Government, as the case may be. Where a unit has already been established prior to the commencement of the MSMED Act, then the proviso applies and the memorandum has to be applied within 180 days from the date of commencement - It, however, does not mean that a third category i.e., a unit that is established after the commencement of the Act cannot seek registration as a supplier. That could never have been the intention of the legislature as is evident from the Statement of Objects and Reasons of the MSMED Act.
The case on hand falls in the third category where a supplier is already in existence at the time of commencement of the Act but has not obtained any registration till then. It is registered as a supplier beyond 180 days from the date of the commencement of the Act i.e., after 180 days from 2nd October, 2006. Clearly, such a unit can also seek registration as a supplier. That is precisely what has happened in the present case. The certificate issued to the REPM is dated 4th April, 2012, but importantly, it notifies that the date of commencement of the activities as 1st February, 2009.
Whether having been registered on 4th April, 2012, can REPM take advantage of the MSMED Act? - HELD THAT:- The supplies made by REPM to Alstom in terms of the PO dated 8th September, 2009 continued even after REPM's registration as supplier as is evident from the two MoMs dated 1st May, 2013 and 28th December, 2013. The result is that REPM can seek the application of the beneficial provisions of MSMED Act as far as its claims against Alstom arising from the said First PO are concerned.
In the present case, therefore, the Court is satisfied that the MSMED Act to the extent it provides for a special forum for adjudication of the disputes involving a 'supplier' registered thereunder, overrides the Act i.e., the Arbitration and Conciliation Act 1996. The following observations in Snehadeep Structures Pvt. Ltd. v Maharashtra Small Scale Industries Development Corporation Ltd. [2010 (1) TMI 1223 - SUPREME COURT] which dealt with the statute of 1993 preceding the MSMED Act equally applies to the MSMED Act. It was held that the legislative intent behind Section 7 was to target buyers, who, only with the end of pushing off the ultimate event of payment to the small-scale industry undertaking, institute challenges against the award/decree/order passed against them. Such buyers cannot be allowed to challenge arbitral awards indiscriminately, especially when the section requires predeposit of 75% interest even when appeal is preferred against an award, as distinguished from an order or decree.
Likewise, in Edukanti Kistamma (Dead) through LRs. v. S. Venkatareddy (dead) through LRs [2009 (12) TMI 1050 - SUPREME COURT], the Supreme Court explained that a special statute would be preferred over a general one where it is beneficial. It was explained that the purport and object of the Act must be given its full effect by applying the principles of "purposive construction.” The question whether the dispute resolution mechanism under Section 18 of the MSMED Act overrides the arbitration clause under the contract has to be answered in the affirmative.
Thus, the Court negates the plea of the Petitioner that the MSMED Act does not apply. Consequently, the question of the Petitioner seeking a waiver of the requirement of depositing 75% of the amount in terms of Section 19 of the MSMED Act does not arise.
Whether, in terms of the provisions of Section 19 of the MSMED Act, the Court can set any reasonable terms for the deposit to be made? - HELD THAT:- Considering the amount involved, the Court directs that 75% of the amount awarded by the FC in favour of the Respondent should be deposited by the Petitioner in this Court, in four equal instalments with each instalment being deposited before the 10th of every succeeding month hereafter. The amount as and when deposited by the Petitioner shall be kept by the Registry in a fixed deposit initially for a period of six months and kept renewed during the pendency of the petition. The hearing of the main petition will be subject to compliance with the above direction.
Application disposed off.
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2017 (2) TMI 1532 - ITAT JAIPUR
Addition on account of purchases made in contravention of provisions of Section 40A(3) - assessee had purchased in cash gold and silver - assessee has filed his return u/s 44AF - HELD THAT:- From perusal of records, it transpires that the issue under consideration has already been decided by the Coordinate Bench of the ITAT in assessee’s own case [2016 (4) TMI 1440 - ITAT JAIPUR],[2016 (10) TMI 1373 - ITAT JAIPUR] for the assessment years 2006-07 and 2007-08 wherein respectfully following the decision of ITAT Ahemdabad Bench in the case of Gopalsingh R Rajpurohit [2004 (7) TMI 271 - ITAT AHMEDABAD] hold that once the assessee has filed his return u/s 44AF, no further disallowance can be made u/s 40A(3). It is noteworthy that in this case no trading irregularity was found and addition has been sustained only on technical issue of Section 40A(3) of the Act. The presumptive system of tax u/s 44AF starts with nonobstante clause and overrides other provisions. In view thereof, there is no justification in making the addition which is deleted. Since the addition is deleted on merits, there is no need to go into alternative ground. Thus the appeal of the assessee is allowed.
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2017 (2) TMI 1531 - BOMBAY HIGH COURT
Validity of Arbitral Award - fraud or coercion - it is alleged that the Consent Terms were executed under pressure or coercion and were executed by the Petitioner herein on the basis that the Respondent would comply with its obligations under the MOU, which allegedly had not been done by the Respondent herein - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- First and foremost there is no case pleaded of ‘fraud’ having been played upon the Petitioner herein while executing the Consent Terms. The case is one of coercion, which in itself is bereft of any material particulars. It is not enough for a party to simply come to Court and aver coercion. For over four months after passing of the Award, and despite being well aware of the same, no objection was raised by the Petitioner herein to the effect that the Consent Terms were entered into under coercion. In fact, the matter remained pending before the learned Arbitrator only for the purpose of paying fees of the Tribunal. Even as late as on 16th July 2015 the Advocates for the Petitioner herein appeared before the learned Arbitrator and made no attempt to resile from the Consent Terms but simply sought time to seek instructions for making payment of the Arbitrator's fees.
It is alleged by the Petitioner that the Respondent has in fact not complied with the terms of the MOU and on this ground alone, the Consent Terms must fail and the Award ought to be set aside. I cannot accept this submission. As is ex facie evident, the Consent Terms nowhere refer to the MOU. A reading of the Consent Terms shows that the payment terms therein were not conditional or contingent upon compliance with any terms of the MOU. I am not required to go into the question of whether the Respondent complied with the MOU, in as much as even assuming for argument's sake there had been non-compliance of the MOU by the Respondent, the Consent Terms, and accordingly the impugned Award, are not contingent upon the compliance with the MOU.
Pertinently, even the resolution dated 16th March 2015 passed by the Board of Directors of the Petitioner herein authorizing the filing of the Consent Terms and the passing of the Award in terms thereof, makes no reference to the MOU, which in any event came to be executed only subsequently. Even assuming that the Petitioner herein has a grievance about any alleged non-compliance with the MOU, by the Respondent, the remedy of the Petitioner herein lies elsewhere, and this cannot be a ground to set aside the Award passed by consent of parties.
The grounds urged by the Petitioner herein are unsustainable and appear to be an attempt to belatedly renege on the Consent Terms incorporated in the Award dated 18th March 2015 - Petition dismissed.
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2017 (2) TMI 1530 - SUPREME COURT
Jurisdiction of High Court - whether FIR and the consequential proceedings alleging non-compoundable offences could be quashed by the High Court in exercise of its jurisdiction Under Section 482 of Code of Criminal Procedure on the basis of the settlement arrived at between the complainant and the Respondents-accused? - Doctrine of judicial restraint.
HELD THAT:- Since the present case pertains to the crucial doctrine of judicial restraint, we are of the considered opinion that encroaching into the right of the other organ of the government would tantamount clear violation of the Rule of law which is one of the basic structure of the Constitution of India.
Considering the law relating to the continuance of criminal cases where the complainant and the Accused had settled their differences and had arrived at an amicable arrangement, there is no reason to differ with the view taken in Manoj Sharma's case [2008 (10) TMI 690 - SUPREME COURT] and several decisions of this Court delivered thereafter with respect to the doctrine of judicial restraint. In concluding hereinabove, we are not unmindful of the view recorded in the decisions cited at the Bar that depending on the attendant facts, continuance of the criminal proceedings, after a compromise has been arrived at between the complainant and the accused, would amount to abuse of process of Court and an exercise in futility since the trial would be prolonged and ultimately, it may end in a decision which may be of no consequence to any of the parties.
Appeal dismissed.
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