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2022 (2) TMI 1438 - SUPREME COURT
Eviction Petition - Seeking recovery of possession of a shop room - sub-letting without consent of the landlord - Whether the decision of the High Court in upsetting the order of eviction passed by the Appellate Tribunal suffered from any element of perversity or not - HELD THAT:- We have considered the submissions of the respective counsel and also gone through the decisions of the fact-finding fora and also that of the High Court. At this stage, we cannot revisit the factual aspects of the dispute. Nor can we re-appreciate evidence to assess the quality thereof, which has been considered by the two fact-finding fora. The view of the forum of first instance was reversed by the Appellate Tribunal. The High Court was conscious of the restrictive nature of jurisdiction under Article 227 of the Constitution of India. In the judgment under appeal, it has been recorded that it could not subject the decision of the appellate forum in a manner which would project as if it was sitting in appeal. It proceeded, on such observation being made, to opine that it was the duty of the supervisory Court to interdict if it was found that findings of the appellate forum were perverse.
In our opinion, the High Court in exercise of its jurisdiction under Article 227 of the Constitution of India in the judgment under appeal had gone deep into the factual arena to disagree with the final fact-finding forum. There is no dispute that the three medical practitioners were in occupation of part of the premises in question. The onus, under such circumstances, was on the respondents to establish the degree of control they were maintaining over the said premises for repelling the plea of sub-letting or assignment or parting with possession.
From the passage of the judgment of this Court in the case of Bharat Sales Ltd [1998 (2) TMI 619 - SUPREME COURT] it transpires that it was also the respondents’ obligation to demonstrate that there was no monetary consideration on the basis of which the medical practitioners were allowed to operate from the subject premises. Though, it was a chemist shop, evidence reveals that the portion of the premises of which the three medical practitioners were in occupation consisted of individual cabins and had separate telephone connections.
There was no perversity in the order of the Appellate Tribunal on the basis of which the High Court could have interfered. In our view, the High Court tested the legality of the order of the Tribunal through the lens of an appellate body and not as a supervisory Court in adjudicating the application under Article 227 of the Constitution of India. This is impermissible. The finding of the High Court that the appellate forum’s decision was perverse and the manner in which such finding was arrived at was itself perverse.
Thus, we set aside the judgment of the High Court and restore the Appellate Tribunal’s findings. The appeal stands allowed
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2022 (2) TMI 1437 - SC ORDER
Exercise of jurisdiction under Article 136 of the Constitution against the decision of the High Court - HELD THAT:- Since directions have been issued by this Court in the order dated 12 July 2021 for expeditious disposal of the appeals before the High Court, it is not appropriate for the Court to entertain the Special Leave Petitions at the present stage.
However, it is clarified that the APL Committee would be at liberty to seek such substantive reliefs as may be necessitated to ensure its effective functioning.
SLP disposed off.
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2022 (2) TMI 1436 - SUPREME COURT
Whether the Award passed by a Lok Adalat Under Section 20 of the Legal Services Authorities Act, 1987 can form the basis for redetermination of compensation as contemplated Under Section 28A of the Land Acquisition Act, 1894?
HELD THAT:- The object of the 1987 Act inter alia as can be noticed from the preamble to the Act, also is the organisation of Lok Adalats. It is clear beyond the shadow of any doubt that the jurisdiction of the Lok Adalat Under Section 20 is to facilitate a settlement of disputes between the parties in a case. It has no adjudicatory role. It cannot decide a lis - The scheme of Section 28A of the Act is unmistakably clear from its very opening words. What Section 28A contemplates is a redetermination of compensation under an award passed under Part III. Part III takes in Section 23. Section 23 deals with the matters to be taken into consideration. Various aspects including the market value on the date of the notification Under Section 4(1) are indicated.
A plea founded on estoppel arising out of a consent decree or from an Award passed by a Lok Adalat which can perhaps be even likened to a consent decision cannot be the basis for redetermination of the compensation. What Section 28A indeed insists is on decision by a Civil Court as defined in Section 2(l). In other words what is made the only basis for invoking Section 28A of the Act is an adjudication by the Court as defined in the Act. The plea of estoppel which, ordinarily, arises from a consent decree or Award passed by the Lok Adalat which, as already noticed, does not involve any adjudication by a Court, would hardly suffice. The estoppel which is referred to by this Court applies as between the parties to the consent decree.
In K.N. Govindan Kutty Menon v. C.D. Shaji [2011 (11) TMI 783 - SUPREME COURT], this Court was concerned with the question as to whether Under Section 21 of the 1987 Act, when a case is referred to the Lok Adalat in a criminal case Under Section 138 of the Negotiable Instruments Act and the matter is settled and an award is passed, whether it could be treated as a Decree of a Civil Court and, thus, executable. The Court held There is no restriction on the power of Lok Adalat to pass an award based on the compromise arrived at between the parties in a case referred by a criminal court Under Section 138 of the NI Act, and by virtue of the deeming provision it has to be treated as a decree capable of execution by a civil court.
From the aforesaid pronouncement, the principle that can be culled out is that it is the bounden duty of the court to ascertain for what purpose the legal fiction has been created. It is also the duty of the court to imagine the fiction with all real consequences and instances unless prohibited from doing so. That apart, the use of the term "deemed" has to be read in its context and further, the fullest logical purpose and import are to be understood. It is because in modern legislation, the term "deemed" has been used for manifold purposes. The object of the legislature has to be kept in mind.
Section 28A, undoubtedly, has been introduced by parliament in the year 1984 to bring solace to those land owners or persons having interest in land to claim the just amount due to them even though they have omitted to file application Under Section 18 of the Act seeking enhancement - In Union of India and Anr. v. Hansoli Devi and Ors. [2002 (9) TMI 799 - SUPREME COURT], the Constitution Bench of this Court has held that the right Under Section 28A is available even to the person who has unsuccessfully filed a time barred application Under Section 18, the fact that a land owner has received the compensation awarded by the Land Acquisition Officer with or without protest will not take away his right Under Section 28A.
An Award passed by the Lok Adalat is not a compromise decree. An Award passed by the Lok Adalat without anything more, is to be treated as a decree inter alia - An Award passed Under Section 19 of the 1987 Act is a product of compromise. Sans compromise, the Lok Adalat loses jurisdiction. The matter goes back to the Court for adjudication. Pursuant to the compromise and the terms being reduced to writing with the approval of the parties it assumes the garb of an Award which in turn is again deemed to be a decree without anything more. We would think that it may not be legislative intention to treat such an award passed Under Section 19 of the 1987 Act to be equivalent to an award of the Court which is defined in the Act as already noted by us and made under Part III of the Act. An award of the Court in Section 28A is also treated as a decree. Such an Award becomes executable. It is also appealable.
An application Under Section 28A of the Act cannot be maintained on the basis of an award passed by the Lok Adalat Under Section 20 of 1987 Act. The impugned judgments stand set aside - Appeal allowed.
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2022 (2) TMI 1435 - DELHI HIGH COURT
Application under Section 208 Cr.P.C. filed by the Petitioner herein was disposed off by merely directing for supply of the list of unrelied documents without the supply of the actual documents - HELD THAT:- Reliance can be placed on the judgment of Supreme Court titled as In re: To issue certain guidelines regarding inadequacies and deficiencies in Criminal Trials vs The State of Andhra Pradesh & Ors. Suo Moto Writ (Crl) nos. 1/2017 [2021 (4) TMI 1270 - SUPREME COURT] where it was held that This court is of the opinion that while furnishing the list of statements, documents and material objects under Sections 207/208, Cr. PC, the magistrate should also ensure that a list of other materials, (such as statements, or objects/documents seized, but not relied on) should be furnished to the accused.
In the meanwhile, let the status report/reply be filed by the respondent/Directorate of Enforcement on or before the next date of hearing - List on 7 th March, 2022. Till the next date of hearing proceedings before the trial court are stayed.
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2022 (2) TMI 1434 - SC ORDER
Rejection of petition filed by the appellant under the Insolvency and Bankruptcy Code 2016 - it is latently and patently clear that once the Debt is converted into Capital it cannot be termed as Financial Debt and the Appellant cannot be described as Financial Creditor - HELD THAT:- A substantive appeal is provided against the decision of the NCLT under the provisions of Section 61(1) of the IBC. A further appeal to this Court under Section 62(1) is envisaged on a question of law. Hence, it is necessary for the NCLAT when an appeal is filed under Section 61(1) to evaluate the facts and the submissions independently and to record its reasons. The impugned order does not meet that standard.
The impugned order set aside - appeal allowed.
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2022 (2) TMI 1433 - SUPREME COURT
Cheating - obtaining blank stamp papers from the Respondents and creation of Agreements for Sale by misusing the said blank stamp papers - offences punishable Under Sections 420, 464, 465, 468 and 120-B of the Indian Penal Code - HELD THAT:- Though this Court has cautioned that, power to quash criminal proceedings should be exercised very sparingly and with circumspection and that too in the rarest of rare cases, it has specified certain category of cases wherein such power can be exercised for quashing proceedings - in the present case, though civil suits have been filed with regard to the same transactions and though they are contested by the Respondent No. 2 by filing written statement, he has chosen to file complaint Under Section 156(3) of the Code of Criminal Procedure after a period of one and half years from the date of filing of written statement with an ulterior motive of harassing the Appellants.
This Court has clearly held that, a stage has come where applications Under Section 156(3) of Code of Criminal Procedure are to be supported by an affidavit duly sworn by the complainant who seeks the invocation of the jurisdiction of the Magistrate.
In the present case, the learned Magistrate while passing the order Under Section 156(3) of the Code of Criminal Procedure, has totally failed to consider the law laid down by this Court - From the perusal of the complaint it can be seen that, the complainant/Respondent No. 2 himself has made averments with regard to the filing of the Original Suit. In any case, when the complaint was not supported by an affidavit, the Magistrate ought not to have entertained the application Under Section 156(3) of the Code of Criminal Procedure. The High Court has also failed to take into consideration the legal position as has been enunciated by this Court in the case of Priyanka Srivastava v. State of U.P. [2015 (5) TMI 47 - SUPREME COURT], and has dismissed the petitions by merely observing that serious allegations are made in the complaint.
Thus, continuation of the present proceedings would amount to nothing but an abuse of process of law.
Appeal allowed.
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2022 (2) TMI 1432 - SUPREME COURT
Declining to interfere in the criminal proceedings initiated against the Appellant at the instance of Respondent No. 2/complainant (bother-in-law of the Appellant) - forged marriage or not - HELD THAT:- The exposition of law on the subject relating to the exercise of the extra-ordinary power Under Article 226 of the Constitution or the inherent power Under Section 482 Code of Criminal Procedure are well settled and to the possible extent, this Court has defined sufficiently channelized guidelines, to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
It is no doubt true that the power of quashing of criminal proceedings should be exercised very sparingly and with circumspection and that too in rarest of the rare cases and it was not justified for the Court in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the inherent powers do not confer any arbitrary jurisdiction on the Court to act according to its whims and fancies.
Adverting to the facts of the instant case, there was no material placed on record by the complainant to justify the bald allegations which were made in the complaint on the basis of which FIR was registered. There are undisputed facts on record that the Appellant's marriage was solemnized with late Mohd. Shameem Khan on 11th December, 2016 and from this wed-lock, a male child was born on 23rd September, 2017 and her husband untimely passed away on 8th December, 2017 and until their period of matrimonial relationship, no complaint of any kind was ever made by her late husband (Mohd. Shameem Khan) and after she was paid his terminal benefits and got a compassionate appointment in his place as an A.N.M. by an order dated 19th May, 2018 w.e.f. 28th April, 2018, all sort of issues were raised by the complainant (brother of her deceased husband) of making such false allegations with reference to her marriage and also for the terminal benefits which she received and there was not even prima facie foundation to support the nature of allegations which were made.
In the given circumstances and going through the complaint on the basis of which FIR was registered and other material placed on record, we are of the considered view that no offence of any kind as has been alleged in the FIR, has been made out against the Appellant and if we allow the criminal proceedings to continue, it will be nothing but a clear abuse of the process of law and will be a mental trauma to the Appellant which has been completely overlooked by the High Court while dismissing the petition filed at her instance Under Section 482 Code of Criminal Procedure.
The criminal proceedings initiated against the Appellant in reference to FIR No. 0227 of 2019 dated 9th July, 2019 Under Sections 494, 495, 416, 420, 504 & 506 Indian Penal Code lodged at PS Bazar Khala, District Lucknow, U.P. are hereby quashed and set aside - appeal allowed.
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2022 (2) TMI 1431 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Restraining the Corporate Debtor, its directors, employees, agents, assignees etc. from disposing of their immoveable (Plant & machinery and other fixed assets) and immoveable property - threshold limit involved in Section 9 Application - HELD THAT:- By Notification dated 24.03.2020, the threshold for entertaining an Application under Section 9 has been raised from Rs. 1 Lakh to Rs. 1 Crore. The Notification and the provisions for increasing threshold, shall operate Comp. App. (AT) (Ins.) No. 129 of 2022 prospectively i.e. after 24.03.2020 - In the present case, the Application was filed by the Operational Creditor on 10.08.2020 i.e. subsequent to above Notification raising the threshold. The amount claimed in Section 9 Application only Rs. 39 Lakh hence, it was less than the threshold and Application ought to have been thrown out on this ground. The Adjudicating Authority on 16.02.2021 has noticed the question and has granted time to Petitioner to explain.
When the Application itself was not maintainable by virtue of Notification dated 24.03.2020, there was no necessity to proceed any further or pass any interim order as passed on 29.09.2021 - application not maintainable and deserves to be dismissed - appeal allowed.
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2022 (2) TMI 1430 - MADRAS HIGH COURT
Requirement of pre-deposit for quashing of assessment under section 27(1) of the TNVAT Act, 2006 - mismatch between the value of works contract furnished in Form S and the monthly returns filed in Form 1 - main grievance of the appellant is that when the assessment order is unsustainable and quashed for want of reconsideration, the learned Judge ought not to have directed the appellant to deposit 30% of the disputed tax due as a condition precedent for the same.
HELD THAT:- This court is of the view that the issue involved herein is no longer res integra. A Division Bench of this court in HAVEA HANDLES & COMPONENTS PVT. LTD. NOW KNOWN AS HAVEA FURNITURE & INTERIORS PVT. LTD. REPRESENTED BY ITS DIRECTOR VERSUS THE ASSISTANT COMMISSIONER (CT) (FAC) ROYAPETTAH – II ASSESSMENT CIRCLE CHENNAI [2014 (7) TMI 1367 - MADRAS HIGH COURT] considered the similar issue and held once it has been found that the orders impugned in the writ petitions are unsustainable on account of violation of principles of natural justice, it is wholly unnecessary to impose any condition while remitting the matter for fresh adjudication and in the considered opinion of this court, the direction given to the appellant / writ petitioner to deposit 10% of the tax amount as claimed in the demand notice, as a condition precedent to enquire into the matter, is unsustainable and the said portion of the order is liable to be set aside.
Having regard to the admitted fact that the learned Judge set aside the assessment order and remanded the matter to the respondent for fresh consideration, this court is of the opinion that the pre-condition imposed on the appellant to deposit 30% of the tax amount for consideration of the matter afresh by the respondent, is certainly unwarranted and hence, the same is deleted.
Appeal disposed off.
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2022 (2) TMI 1429 - ITAT AHMEDABAD
Penalty u/s 271(1)(c) - assessee has not filed the original return of income though he had taxable income(interest income) - bonafide belief - As per assessee return of income had not been filed by him since he was under the bona-fide belief that since tax has been deducted at source, there was no need for him to file the return of income - HELD THAT:- If on facts, the assessee is able to demonstrate that he has a reasonable cause for not filing return of income, then the assessee cannot be subject matter of penalty u/s 271(1)(c) of the Act. In order to invoke Explanation 3 to s. 271(1)(c), AO has to establish that there was no ‘reasonable cause’ on part of the assessee for non-filing of return of income. However, if from the facts of the case, it seems that assessee did not file return of income under a bona-fide mistake, then unless the AO brings anything further to the record, it is not a fit case of levy of penalty u/s 271(1)(c) of the Act.
The assessee had earned interest income (being the only source of income for the captioned year) on which taxes had been duly withheld by the payer. Therefore, the assessee is conscious of the fact that the Income Tax Department is aware about his having earned income, but was of the mistaken view that once taxes have been deducted on this income, the assessee was not required to be filed return of income. Therefore, in our view, this is not a fit case for levy of penalty - Decided in favour of assessee.
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2022 (2) TMI 1428 - ITAT MUMBAI
TP adjustment - Addition of corporate guarantee at the rate of 1% made by TPO as against 0.20% charged by the assessee - HELD THAT:- We find that identical issue arose in the case of the assessee for assessment year 2006 – 07 in [2014 (5) TMI 880 - ITAT MUMBAI] deleted the addition of 0.80 percentage made by the learned transfer pricing officer. We also find that the order of the coordinate bench for assessment year 2006-07 has been confirmed by the honourable Bombay High Court [2016 (11) TMI 258 - BOMBAY HIGH COURT]. Furthermore, identical additions were made in the assessment year 2007-08, 2008-09, 2009-10 wherein the coordinate benches following the order of the coordinate bench in assessment year 2006-07 deleted those additions. In view of this, respectfully following the decision of the coordinate bench in assessee’s own case, we also hold that there is no infirmity in the order of the learned CIT-A in deleting the addition of 0.80% on account of corporate guarantee commission - Accordingly, ground number 1 of the appeal of the learned AO is dismissed.
Disallowance on account of non-recovery of service charge for giving letter of comfort to the subsidiary company at the rate of 0.04% as against 0.50% - CIT(A) upheld 20% of the adjustment proposed by the learned transfer-pricing officer i.e. at the rate of 0.20% i.e. 0.04% of the amount of letter of comfort is chargeable - HELD THAT:- We find that identical issue arose in case of the assessee for assessment year 2009-10 [2016 (11) TMI 1123 - ITAT MUMBAI] wherein the coordinate bench on identical facts and circumstances in [2021 (2) TMI 576 - ITAT MUMBAI] has hold that there cannot be any addition in the hands of assessee on account of comfort letter issued. Accordingly, ground number 2 of the appeal of the learned assessing officer is dismissed.
Allowability of expenditure incurred u/s 35 (2AB) with respect to the expenditure disallowed by DSIR for research and development purposes - CIT(A) directed the learned assessing officer to verify the nature of expenditure which has been disallowed by the authority and if on verification the learned assessing officer finds that the such expenditure was incurred for the purpose of research and development - HELD THAT:- We find that identical issue arose in the case of the appeal of the assessee for assessment year 2007 – 08 [2014 (1) TMI 16 - ITAT MUMBAI] wherein as found on verification of the relevant details that even the expenditure is not included in the said certificate was eligible for deduction u/s 35(2AB) in respect of the said expenditure was allowed by the Tribunal. In our opinion, the issue involved in the case of Torrent Pharmaceuticals ltd. thus is similar to the one involved in the present case and this position is not disputed even by the ld. DR at the time of the hearing before us. He, however, has contended that the claim of the assessee of having incurred the expenditure in question on R & D which is eligible u/s 35(2AB) has not been examined either by the AO or by the ld. CIT(A). He has urged that the matter may therefore be restored to the file of AO for giving him an opportunity to verify the same. We find merit in this contention of the ld. DR and since the ld. Counsel for the assessee has also not raised any objection in this regard we restore this issue to the file of the AO with a direction to decide the same afresh after verifying whether the expenditure in question has been incurred by the assessee on research and development which is eligible for deduction u/s 35(2AB). The appeal of the assessee is accordingly treated as allowed for statistical purpose.
Nature of expenditure - expenditure incurred on television advertisement in relation to corporate advertisements - HELD THAT:- As no difference in facts and circumstances, have been pointed out before us, respectfully following the decision of the coordinate bench for assessment year 2008 – 09 [2015 (11) TMI 1745 - ITAT MUMBAI] we also confirmed the order of the learned CIT – A in deleting the television advertisement expenditure with related to brand expenditure holding that the same are revenue expenditure and cannot be held to be capital expenditure as held by the learned assessing officer.
Disallowance u/s 14 A - AO invoked the provisions of rule 8D and computed the disallowance - mandation of recording satisfaction recorded by the learned assessing officer - HELD THAT:- In view of above facts, as no proper satisfaction has been recorded by the learned assessing officer in terms of the provisions of Section 14 A (2) having regard to the accounts of the assessee about the correctness of the claim of the assessee in respect of expenditure in relation to income which does not form part of the total income Under the act. In view of this ground number 5 of the appeal of the learned assessing officer is dismissed.
Additional depreciation at the rate of 10% - Asset put to use it for less than 180 days in a previous year - assessee has already claimed 10% of the additional depreciation in financial year 2008- 2009 (assessment year 2009 – 10) and therefore it claimed that balance 10% of the depreciation should be allowed to the assessee in financial year 2010 – 11 - HELD THAT:- As respectfully following the decision of the coordinate bench in assessee’s own case for assessment year 2009-10 [2016 (11) TMI 1123 - ITAT MUMBAI] ground number 6 of the appeal is dismissed holding that the learned CIT appeal is correct in allowing additional depreciation at the rate of 10% for asset purchased in the earlier year.
TDS u/s 194H - expenditure incurred on trip scheme - non deduction of tds - CIT(A) held that as the payment has been made to various travel agencies the same cannot be said to be a gift or a commission payment to the dealers from the appellant. hence, ld AO misconceived the provisions of Section 194H by making the disallowance - HELD THAT:- As respectfully following the decision of the coordinate bench in assessee’s own case for assessment year 2009-10 [2016 (11) TMI 1123 - ITAT MUMBAI] scheme is closely linked to assessee's business activity. It is also a fact that the assessee has not paid any amount to the dealers and distributors, but amount spent has been paid to SOTC for organizing the trip. It is also a fact on record that the amounts paid to SOTC has been subjected to TDS as per the relevant provision. Therefore, the allegation of the Assessing Officer that the amount has not been subjected to deduction of tax is without any basis. As regards the applicability of section 194H of the Act, by no means, the AO has established on record that dealers/distributors are agents of the assessee. Further, as we find, the trip scheme has been introduced by the assessee from past 20 years and the deduction claimed by the assessee on account of such trip scheme has never been disallowed by the Assessing Officer except for the impugned assessment year. Therefore, even applying the rule of consistency, the expenditure claimed by the assessee has to be allowed.
TP adjustment - long-term capital loss arising on account of buyback of shares - International transaction or not?- HELD THAT:- In case of buy back of shares, shares are tendered to the issuer company; therefore, it fits into the criteria of ‘purchase or sale of marketable securities’. Buy back also results in income or loss in the hands of the assessee. Assessee has claimed such losses in its computation of total income. Further form no 3CEB in clause no 16 speaks about buyback of shares being an international Transaction. In the present case the transaction is chargeable to tax in the hands of Indian assessee company who has already included the same in its computation, therefore, it has an impact on Income of the assessee. Therefore, it is clear and unambiguous that after the amendment by the Finance Act 2012, Buy back of security is an international transaction.
How this international transaction is required to be benchmarked? - In the present case the buyback of the shares by the overseas associated enterprises from the assessee is at par value i.e. one US dollar per share, which is also the face value of that share.
As per explanation assessee applied less weightage to discounted cash flow method and more weightage to NAV method. There is no justification coming from the assessee for giving ¾ weightage to NAV method and ¼ to DCF method.
Therefore, it is apparent that the assessee does not have any benchmarking the buyback of the shares to determine its arm’s-length price. TPO proceeded to value/compute the valuation on his own. He adopted the discounted cash flow method of valuation and thereafter made the addition of the net current assets to arrive at the final equity value. Accordingly, he valued the share at US$ 1.45 per share.
In the present case before us, the assessee has also adopted changing stands and no justification was given for 30 % discount on cash flow claimed TPO also did not allow any discount in the valuation of subsidiaries. There are no details available of the financials of the subsidiary companies and what are the natures of activities carried out by those subsidiaries companies. It is also not clear whether the subsidiary companies have further subsidiaries and how their valuation has been made to arrive at the value of shares of those companies. The annual accounts of all of the subsidiary companies were placed on record. Assessee has justified the valuation made by chartered accountant by merely providing numbers. No assumptions, basis for impairment, basis for discount and weightage is provided. Therefore, this matter needs to set-aside to the file of the learned assessing officer/transfer pricing officer for determination of the arm‘s-length price of the buyback of 41 lakh shares of a foreign subsidiary.
Thus we set-aside this issue back to the file of the learned transfer pricing officer with a direction to the assessee to 1st show the fair market value of the shares bought back by supporting the valuation report along with the assumptions for such valuations. Assessee is also directed to show the nature of activities of the various subsidiaries, their risk factor, geographical discounts, and complete cash flow with revenue and projected expenditure etc.
Dividend distribution tax - applicability of beneficial rate as per the applicable DTAA to the dividend distribution tax (DDT) paid under section 115-O of the Act and has claimed refund of the excess amount - HELD THAT:- No information about the country of residence of those shareholders, whether those shareholders have Tax Residency certificate of that country, there is no submission whether the dividend income is income of shareholders and about how the assessee will claim refund of the taxes , if same is income of the shareholders. Further the host of issues with respect to applicable of DTAA as stated in grounds of appeal by assessee are required to be addressed. Therefore, respectfully following the decision of the coordinate bench in case of assessee itself for assessment year 2009 – 10 we also set-aside this issue back to the file of the learned assessing officer with direction to the assessee to submit its claim with all necessary supporting evidences and certificates and then ld AO to decide in accordance with the law.
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2022 (2) TMI 1427 - ORISSA HIGH COURT
Validity of reopening of assessment - non issue of notice to the assessee u/s 143 (2) - Tribunal quashed the reassessment order on the ground that it was completed without issuing notice to the assessee u/s 143 (2) - HELD THAT:- AO did not issue notice u/s 143 (2) he had issued a letter to the Assessee beyond the time within which the notice should have been issued. This Court is not able to accept that the sending of such letter belatedly constitutes compliance with the mandatory requirement of a notice under Section 143 (2) of the Act.
Consequently, this Court is not inclined to entertain the appeal by framing the question urged by the Revenue. The appeal is accordingly dismissed.
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2022 (2) TMI 1426 - SC ORDER
Attachment order - HELD THAT:- These observations of Division Bench will have no bearing on the question to be decided in the proceedings resorted to by the petitioners against the final attachment order. That be decided on its own merits and in accordance with law. SLP disposed off.
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2022 (2) TMI 1425 - CESTAT MUMBAI
Clearance of equipment without production of certificates prescribed in N/N. 33/2005-CE dated 8th September 2005 and in the absence of evidence of power purchase agreement - benefit of notification denied - demand alongwith interest and penalty - HELD THAT:- The contents of the said certificate is not ambiguous about the goods that are entitled to exemption. The goods have been certified to be of necessary for initial setting up of the project which is eligible for exemption. Neither of the lower authorities has established a contrary position. It is also stated in the said certificate that ‘power purchase agreement’ did exist between the beneficiary of the exemption notification and the energy distribution agency. This fact has also not been controverted by the lower authorities.
The prescribed certificate was in possession of the appellant and, consequently, entitles them to eligibility for exemption. Non-production at the time of clearance is entirely procedural and which has since been made good within a short lapse of time.
A fine distinction has been drawn by the Hon’ble Supreme Court in COMMR. OF CUS. (IMPORTS), MUMBAI VERSUS TULLOW INDIA OPERATIONS LTD. [2005 (10) TMI 502 - SUPREME COURT] holding that it is also well-settled that the Legislature always intends to avoid hardship. In a situation of this nature, the exemption notification cannot be construed in a way which would prove to be oppressive in nature. However, we do not intend to lay down a law that delay on the part of the authorities in granting such certificates would automatically enable an assessee to obtain refund.
There are no reason to deny benefit of exemption notification - impugned order set aside - appeal allowed.
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2022 (2) TMI 1424 - SUPREME COURT
Seeking grant of anticipatory bail - seeking ex-parte ad-interim bail/interim protection during the pendency of the main application - HELD THAT:- It is compelled to disapprove the course adopted by the High Court as a matter of procedure. When an application for anticipatory bail was listed before the learned Single Judge, which was also accompanied by an application for ad-interim relief, the learned Judge should have decided the same one way or the other, so far as the ad-interim prayer or should have taken up for consideration after giving some reasonable time to the State. Even if admitted, the learned Judge should have listed the same for final disposal on a specific date, keeping in view the nature of relief sought in the matter. Not giving any specific date, particularly in a matter relating to anticipatory bail, is not a procedure which can be countenanced.
This type of indefinite adjournment in a matter relating to anticipatory bail, that too after admitting it, is detrimental to the valuable right of a person - the learned Single Judge of the High Court is requested to dispose of the anticipatory bail application, pending adjudication before him, on its own merits and in accordance with law, expeditiously and preferably within a period of two weeks from the date of receipt/production of a copy of this order. If the main application cannot be disposed of for any reason, the I.A. for interim relief be considered on its own merits.
SLP disposed off.
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2022 (2) TMI 1423 - ITAT DEHRADUN
Computation of profits under the presumptive provisions of section 44BB - Receipts on account of VAT & Service tax - AO held that the receipts on account of service tax and VAT are in the nature of royalty/FTS u/s 9(1)(vi)/9(1)(vii) - HELD THAT:- As examined the issue of inclusion of service tax and VAT with reference to the provisions of Section 44BB in the light of the judgment of Mitchell Drilling International Pvt. Ltd [2015 (10) TMI 259 - DELHI HIGH COURT] as held that the purposes of computing the presumptive income of the assessee for the purposes of Section 44BB the service tax collected by the asses see on the amount paid to it for rendering services was not to be included in the gross receipts in terms of Section 44BB(2) read with Section 44BB(1). The service tax is not an amount paid or payable, or received or deemed to be received by the assessee for the services rendered by it.
CIT (A) has not erred in holding that receipts on account of VAT & Service tax are not includible in gross revenue of the assessee for the purpose of computation of profits under the presumptive provisions of section 44BB of the I.T. Act, 1961.
Interest Income taxability - AO taxed the interest on Income Tax Return @40% whereas the assessee pleaded that it should be taxed @15% in terms of Article 11 of Indo-USA DTAA - HELD THAT:- Interest income need not be necessarily business income in nature for establishing the effective connection with the PE because that would render provision contained in paragraph 4 of Article XI redundant Thus, there may be cases where interest may be taxable under the Act under the residuary head and yet be effectively connected with the PE. The bank interest in this case is an example of effective connection between the PE and the income as the indebtedness is closely connected with the funds of the PE.
On going through Article of Indo-US DTAA with regard to interest it can be concluded that interest on income tax refund is not effectively connected with the PE either on the basis of asset-test or activity-test. Hence, it is taxable as per the provisions in the Para No. 2 of Article 11 of Indo-US DTAA.
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2022 (2) TMI 1422 - SC ORDER
Nature of expenditure - expenses has been incurred on advertisement - HELD THAT:- In our opinion, having regard to the concurrent findings recorded by the Tribunal and the High Court, with respect to the purpose for which the expenditure was incurred in the present cases, the impugned judgments are not in error and do not call for any interference.
Special Leave Petitions and the Civil Appeals are, accordingly, dismissed.
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2022 (2) TMI 1421 - PUNJAB AND HARYANA HIGH COURT
Dishonour of cheque - insufficient funds - legally enforceable debt or not - rebuttal of presumption under Section 139 NIA - mention about a friendly loan in his Income Tax Returns or not? - Section 165 of the Indian Evidence Act, 1872 - HELD THAT:- There is a legal presumption of consideration under section 118(a) of NIA. The court shall presume that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated, or transferred, was accepted, indorsed, negotiated, or transferred for consideration. Thus, the burden is on the accused to rebut such presumption.
The accused had rebutted such presumption in the cross-examination of the complainant when he appeared as CW-1. Such presumption was rebutted by putting questions to the complainant and explaining the circumstances under section 313 CrPC. A perusal of the cross-examination reveals that the complainant admitted that he filled the cheque in his hand, and after that, the accused had put his signatures - the burden was primarily on the complainant to prove the debt amount. It was incumbent upon the complainant to tender in evidence some accounts, ledger, statement, or paper on record whatsoever, but he did not do so. He was silent about the loans being advanced at multiple dates. On being cross-examined, he did admit that the loans were not given on any particular date but various dates. The stand of the accused was that he did take loans on various dates, but every month, the complainant would enhance the amount by one lakh. Thus, the stand of the accused appears to be more probable and truthful than the stand of the complainant.
Although under section 118 NIA, there is a presumption of consideration, the presumption would come only when the legal notice and a complaint mention such considerations. The complainant must explain the debt amount and whether it was legally enforceable debt, or other loans, as stated under section 118 NIA - the burden was on the complainant to precisely mention the principal amount and the interest he calculated. The complainant did not mention the said calculations in any of the aforementioned documents. As such, the complaint lacks material particulars, and it deserves dismissal. It was not even worth taking cognizance.
There is no merit in this application seeking special leave to appeal and accordingly, the same is dismissed.
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2022 (2) TMI 1420 - BOMBAY HIGH COURT
Validity of Rule 35 of the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Rules 2018 - ultra vires to Articles 13, 19(1)(a), 19(1)(g) or not - language of the Name Board - HELD THAT:- There is a definite public purpose that is sought to be achieved by Rule 35 if read correctly. What the Petition wholly fails to recognise is that this requirement is not meant to benefit retail traders but is meant for the convenience and benefit of workers and the public who approaches these retail outlets. These are persons who, in the estimation of the State Government and as a matter of policy, are more likely to be familiar with Marathi as written in the Devanagari script.
There are texts that are in Marathi and these are expressed and written in Devanagari. Indeed, and not to put too fine a point on it, even in this High Court, we permit documents to be produced in the original Marathi in Devanagari script although the language of the High Court is English. We do not insist on translations unless required by a particular Bench or Judge. It is the right of every litigant who comes to this Court to place before the Court a document in Marathi. Translations are made available on request for the convenience of the Court. To say, therefore, that there is some sort of invidious discrimination is equally wholly untrue. If any retailer wishes to carry on a trade or business in Maharashtra it must be subject to such conditions that the Government of Maharashtra seeks to impose uniformly on all. Clearly, there is no discrimination under Article 14.
Rights under Article 19(1)(a) are not, as the Petition quite wrongly puts it, absolute or unfettered. There is Article 19(2) to take into consideration.
Because of the wholly inappropriate and deplorable inclusion of paragraphs 12 to 14 in this Petition, this case is deemed appropriate to make an award of costs against the Petitioners, who are directed to pay an amount of Rs. 25,000/- into the Chief Minister's Relief Fund within one week from today - petition dismissed.
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2022 (2) TMI 1419 - ITAT DELHI
Validity of assessment u/s 144C not following the directions of the DRP by the Assessing Officer follow the directions of the DRP by the Assessing Officer - Existence of Permanent Establishment [PE] - Attribution of profit - HELD THAT:- This Tribunal [2021 (12) TMI 545 - ITAT DELHI] has held the impugned assessment orders as non-est it is mandatory to follow the directions of the DRP by the Assessing Officer failing which the assessment order would become non-est. In our considered view, the Assessing Officer passed the impugned final assessment orders not carrying out the binding directions of the DRP which is a clear violation of the binding provisions of section 144C(13) of the Act. Therefore, in our humble opinion, the impugned assessment orders are non-est. We are of the further opinion that once the assessment orders have been held to be non-est, the ld. CIT could not have assumed jurisdiction u/s 263 of the Act over a non assessment order which can never be erroneous and prejudicial to the interest of the Revenue.
Thus this Tribunal held the impugned assessment order as nonest.
Sublato Fundamento Cadit Opus, meaning thereby, that in case the foundation is removed, the super structure falls.
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