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2006 (4) TMI 566 - SUPREME COURT
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... ... ..... Judge. We think that in the circumstances seven and a half per cent per annum would be the reasonable rate of interest that could be directed to be paid by the appellant to the respondent, for the period subsequent to the decree. Therefore, while we confirm the decision of the Division Bench upholding the modified award made by the learned single Judge, we reduce the interest awarded by the learned single Judge subsequent to the decree from eleven per cent per annum to seven and a half per cent per annum. In other words, we hold that the amount awarded by the learned single Judge in terms of paragraph 13 of his judgment would bear interest at the rate of seven and a half per cent per annum from the date of that decree (18.08.1998) till the date of final payment and/or realization plus costs of the arbitration proceedings as awarded therein. In the circumstances we direct the parties to bear their respective costs in this Court. 7. The appeal is disposed of on the above terms.
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2006 (4) TMI 565 - SUPREME COURT
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... ... ..... f the rule of continuous service in same and similar posts is to be resorted to, the date of initial appointment would be a relevant criterion therefore. See M. Ramchandran v. Govind Ballabh AIR1999SC3601 , K. Anjaiah v. K. Chandraiah 1998 2SCR35 , Vinod Kumar Sharma v. State of U.P. AIR2001SC1802 and S.N. Dhingra v. Union of India 2001 1SCR770 . xx xx xx xx As the post of Assistant Executive Engineer was not a cadre post, the appellants cannot be said to have been working on a higher post for the purpose of Rule 7 of the 1985 Rules. 31. For the reasons aforementioned, the impugned judgment cannot be sustained, which is set aside accordingly. However, in the event Respondent Nos. 2 to 4 and 6 (intervener) herein intend to question the validity of the notification dated 9/12/2002, it would be open to them to do so, if they are aggrieved thereby. It is made clear that we have not gone into the question of the validity or otherwise thereof. 32. The appeals are allowed. No costs.
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2006 (4) TMI 564 - BOMBAY HIGH COURT
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... ... ..... e licence. 35. In these circumstances, without going into other arguments advanced by the petitioner in the interest of justice we pass the following order a) In the light of the impugned order passed in 2nd appeal on 21/2/03 (Exhibit-W to the petition) the licensing authorities shall not enforce the Bond/bank guarantee executed by the petitioner on 17/6/83 for ₹ 12,14,623/-. b) The JCCI, Bombay shall in exercise of powers conferred under Rule 8 of the Foreign Trade (Regulations) Rules, 1993 shall within six weeks from today amend the Special Imprest Licence No.P/K/2993896 dated 30/5/83 into a licence which may entitle the petitioner to seek regularisation of the imports already made under the said licence at concessional rate of duty if permissible under the Customs Act. c) In view of the above, the request of the petitioner for cash assistance under the Special Imprest Licence would not survive. 36. The petition is disposed of in above terms with no order as to costs.
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2006 (4) TMI 563 - SUPREME COURT
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... ... ..... n on under valuation of the goods imported by the appellant. We do not interfere with such concurrent findings. The civil appeals are dismissed accordingly. No order as to costs.
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2006 (4) TMI 562 - SC ORDER
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... ... ..... arkandey Katju, JJ. ORDER Appeal dismissed.
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2006 (4) TMI 561 - ITAT CHANDIGARH
Deduction u/s 80M - Whether in computing the deduction proportionate management expenses/administrative expenses are to be deducted from the dividend income in computing the deduction u/s 80M - contention of the assessee that only actual expenditure incurred in realizing or in earning dividend income deductible under Section 57 and 58 of IT Act are to be deducted and not proportionate administrative or interest expenditure - Difference Of opinion between learned members - Third member Order - HELD THAT:- In the present case, the assessee was holding shares as a capital investment. The shares were not stock-in-trade of the assessee. The dividend income earned by the assessee might have some connection with business. But this connection is not sufficient to make dividend incomebusiness income. Shares were held by the assessee as a capital investment. Dividend received by the assessee-company can under no circumstances be held to be business income. It is incidental income received by the assessee on account of holding of a capital investment. It cannot have a character different from the character of shares in the hands of the assessee. Shares were not trading assets. Therefore, dividend receipts could only be assessed under the head "Other sources". Out of dividend receipts only expenditure referred to in Section 57 could be deducted, i.e., any sum expended wholly and exclusively for the purpose of making or earning such income (dividend).
Thus, I am inclined to hold that there is no justification on the part of the AO in making a proportionate deduction of expenses. The AO has not placed any material on record to controvert or reject the contention of the assessee that no expenditure was incurred for earning dividend income. No material is available on record to show that assessee actually incurred expenses for earning dividend income and that claim of the assessee to the above effect was erroneous. Without material I see no justification on the part of the AO to deduct proportionate expenses.
The Hon'ble Vice President has laid down the proposition that where dividend income is earned in the course of business or where earning is incidental to the business carried on by the assessee, expenses have got to be apportioned for determining the net component of income included in the total income. In the proposed order, a finding has been recorded that assessee did incur expenses for earning business income and dividend. Expenditure incurred for earning such income are mixed and, therefore, all expenses are to be taken into account for determining net income which is chargeable to tax notwithstanding the fact that such expenditure is not covered under Sections 57 to 59 of the Act. With utmost respect and for reasons given above, I am unable to agree to the above view. In my opinion, there is no legal justification to brand dividend income in these cases as business income for purposes of Section 80M or treat dividend as earned in the course of the business.
The ultimate conclusion of my learned Brother and Hon'ble Vice President is reflected as which is as below: A pertinent question that requires consideration is as to whether establishment expenses are allowable as a deduction in computing the income from other sources.
The question is ultimately answered in the affirmative. With utmost respect, I am unable to subscribe to the view. I have recorded above my reasons for not agreeing with the view taken by my learned Brother, the Hon'ble Vice President. The issue is not res Integra and is fully covered in favour of assessee, as per direct decisions of various High Courts and of Supreme Court including Distributors (Baroda) [1985 (7) TMI 1 - SUPREME COURT].
In my considered opinion, all expenses incurred for earning, making or realizing dividend income are to be deducted while computing dividend income. Only on net dividend deduction u/s 80M is to be allowed. Having regard to the scheme of the Act, one has to determine first the business income of a dealer in shares in accordance with provisions of the Act. If interest has been paid for acquiring shares which are stock-in-trade and on which dividend is also received, the interest is liable to be deducted u/s 36(1)(iii) of the IT Act and not u/s 57 of the IT Act. The reason being that income of a source is required to be computed under the residuary head, i.e., "Other sources" if it is not classified for computation under any other heads mentioned in Section 14 of the IT Act. Therefore, one has first to proceed to compute the income under the head "Business" and see what are the deductions permissible under the said head. If interest paid on borrowed funds for acquiring shares, satisfies the conditions of Section 36(1)(iii), it is to be taken and allowed deduction while computing business income. Secondly, as noted earlier, expression, "for purposes of business" is wider than the scope of expression, "for purposes of earning profit". It is, therefore, imperative that all permissible deduction under the head "Business" are first to be considered. Only left out deduction can be considered under the head "Other sources". However, if on the basis of material, a finding can be recorded that shares were acquired with borrowed funds, with main object of earning dividend, then interest paid on borrowed funds is to be deducted u/s 57 of the IT Act. It is not possible to lay down any rule of universal application. The question has to be determined with reference to facts and circumstances of the case. But facts of a given case are required to be considered in the light of above principles.
Hence, the following propositions emerge: (i) That deduction under Section 80M is to be allowed on net dividend income computed as per provisions of Sections 57 to 59 of the IT Act. The deduction is not to be allowed on gross dividend receipt.
(ii) That net dividend income is to be computed under the head "Other sources" after deduction of expenditure incurred for purposes of earning, making or realizing dividend income.
(iii) The deduction to be allowed out of dividend income are as per specified provision of the statute. These cannot be allowed on general commercial considerations.
(iv) That actual expenditure incurred are to be taken into consideration. There is no question of taking expenditure on estimate or presumption basis while computing dividend income or while allowing deduction u/s 80M of the IT Act.
(v) That where shares are acquired out of borrowed funds, on which dividend is received, deduction of interest paid can be allowed under Section 57, provided loan was taken for making and earning dividend income. There is no question of deduction of any amount paid as interest, to which provisions of Section 36(1)(iii) are applicable, while computing deduction under Section 80M of the IT Act.
Thus, I am unable to agree with the order of the Tribunal for AY 1990-91 to 1992-93 in the case of the assessee. There is no material to hold that assessee spent any amount on earning or making or realizing any dividend. There is further no evidence to show that borrowed funds were utilized for acquiring shares on which dividend was paid to the assessee. No evidence of incurring of any actual expenditure has been shown. In the circumstances, when no expenditure has been shown to have been incurred for earning, making or realizing dividend income, there is absolutely no question of deducting any part of interest or management expenses or expenses allowed as a deduction to the assessee u/s 36(1)(viii) or any other provision of the IT Act, while computing dividend income. I, therefore, direct that deduction u/s 80M be allowed to the assessee as claimed by the assessee in all the assessment years under appeal.
There are grounds other than u/s 80M for AY 1995-96, 1996-97, 1997-98 and 1998-99. These are referred to and discussed by the learned Vice President in the proposed order. Except on question of deduction u/s 80M, on which I have given a separate decision, I agree with my learned Brother on other issues disposed of in the proposed order.
In the result, appeals of the assessee and of Revenue are allowed in terms stated above.
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2006 (4) TMI 560 - BOMBAY HIGH COURT
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... ... ..... ited within the time stipulated above, this petition would stand admitted and thereafter the petitioners to take steps for its advertisement in accordance with the Rules. The petitioners would there upon pay charges as per the rules. 6. In case, if the amount is deposited within the time stipulated above, it would be open for the petitioners to file a suit. However, they must do so within a period of two weeks from the date of intimation of such deposit and thereafter the amount would be transferred to the credit of the said suit and to be dealt with in the light of the directions and orders passed therein. If the suit is not filed within this period, Respondent is entitled to withdraw the amount deposited in this Court. 7. This order is passed only for the purpose of disposal of this petition and, the contentions, in so far as merits of the claim or obligations of the parties under agreement are kept open to be agitated in proper proceedings, in case they are so instituted.
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2006 (4) TMI 559 - SUPREME COURT
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... ... ..... e very same issue. After referring to a number of other authorities, it was held that financial constraints could be a valid ground for introducing a cut-off date while introducing a pension scheme on revised basis. Thus, refusal to make payments of arrears from 1.1.1986 to 28.2.1989 on the ground of financial burden cannot be held to be an arbitrary ground or irrational consideration. Hence, the argument based on Article 14 of the Constitution must fail. 14. We see no other contention justifying the striking down of the Validation Act passed by the competent Legislature. At any rate, none has been pointed out to us. Thus, the only argument in favour of the striking down having been found unacceptable, we are of the view that the impugned judgment of the High Court is erroneous and needs to be interfered with. In the result, we allow the appeal and set aside the impugned judgment of the High Court and declare the constitutionality of the Validation Act. No order as to costs.
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2006 (4) TMI 558 - CESTAT MUMBAI
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... ... ..... company to Indian company on payment of royalty in consideration of such transfer was not service covered under Section 65 of the Finance Act, 1944 and therefore the demand of service tax is not sustainable. Similar decision was given in the case of Turbo Energy Ltd. v. Commissioner of Central Excise - 2006 (3) S.T.R. 678 (T) 2005 (187) E.L.T. 47 (T) wherein it was held that the royalty paid to foreign supplier for transfer of technology not payment for service but only a share of product or profit reserved by owner for permitting another the use of his property. 5. The learned C.D.R. agreed that the royalty/technical assistance fees received for transfer of technology and technical assistance by the appellant was not liable to service tax. 6. We have considered the submission. We find that the appellant’s case are fully covered by the CESTAT decision cited by them. 7. We accordingly allow the appeal and set aside the order of the Commissioner (Appeals).
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2006 (4) TMI 557 - DELHI HIGH COURT
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... ... ..... at site as also the various obligations and counter obligations of the parties under the contract. Learned counsel for the appellant relying upon a judgment of a Division Bench of the Gauhati High Court in Arbitration Appeal No.4/2001 (Union of India v. Major V.P. Ninhawan (Retd.) and another) has contended that the Arbitrator had no power to grant interest. It was contended that the facts of the case decided by the Gauhati High Court in the aforementioned case resemble with the facts of the present case. We have considered the said judgment and, in our view, the above judgment of the Gauhati High Court is not applicable to the facts of the present case and the said decision has been rightly distinguished by the learned Single Judge in the impugned order. FAO(OS) No.187/2006 Page No.2 of 3 In view of the above, we hardly find any infirmity or illegality in the impugned order calling for our interference in exercise of appellate jurisdiction. Hence, this appeal is dismissed.
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2006 (4) TMI 556 - SC ORDER
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... ... ..... dari, JJ. ORDER Appeal dismissed.
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2006 (4) TMI 555 - ITAT DELHI
Reopening of the assessment - assumption of jurisdiction u/s 148 - non-satisfaction of the condition precedent - HELD THAT:- In the present case in appeal, the proforma in which reasons are recorded reveal that the ld CIT has conveyed his satisfaction merely by stating "yes" to the reasons recorded in the same report. No separate reasons disclosing satisfaction of the Assessing Officer for formation of belief that income of the assessee has escaped assessment has been recorded. He appears to have only a vague feeling that the assessee had taken bogus entry of capital gains and did not come to prima facie conclusion that the transactions to which he referred are not genuine transactions. There is however a distinction in the reasons recorded and the report of Assessing Officer seeking approval in the proforma. Thus the requisite satisfaction disclosing reasons envisaged u/s 148 not being available on record and having regard to the judgment of Supreme Court in the case of Chhugamal Rajpal v. S.P. Chaliha [1971 (1) TMI 9 - SUPREME COURT], the initiation of proceedings are held vitiated and notice so issued under section 148 is directed to be quashed and assessment made is annulled. Having annulled the assessment, I do not consider necessary to render any decision in the merits of other grounds in appeals.
In the result, both the appeals stand allowed.
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2006 (4) TMI 554 - SC ORDER
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... ... ..... unsel for the appellant. No Merits. The Civil Appeal is dismissed.
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2006 (4) TMI 553 - SUPREME COURT
Maintainability of the Contempt proceedings - violated the terms of the orders specially the clauses 3(c), (d) and (f) of the consent minutes - HELD THAT:- In the present case, the consent terms arrived at between the parties was incorporated in the orders passed by the Court on 12th December 2001 and 8th January 2002. The decree as drawn up shows that order dated 8th January, 2002 was to be "punctually observed and carried into execution by all concerned". A violation of the terms of the consent order would amount to a violation of the Court's orders dated 12th December 2001 and 8th January 2002 and, therefore be punishable under the first limb of Section 2(b) of the Contempt of Courts Act, 1971. The question whether the respondents should not be held guilty of contempt because of any earlier confusion in the law reflected in the case of Babu Ram Gupta [1979 (4) TMI 164 - SUPREME COURT], is a question which must be left for decision while disposing of the contempt petition on merits. It may be argued as an extenuating or mitigating factor once the respondents are held guilty of contempt. The submission does not pertain to the maintainability of the petition for contempt. The preliminary objection raised by the respondents regarding the non-maintainability of the petition for contempt is, for the reasons stated, dismissed.
The issue as to whether the respondents have in fact acted in violation of the terms of the consent order will now have to be decided on merits. Let the matter be listed for this purpose. Costs of this petition will be costs in the contempt petition.
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2006 (4) TMI 552 - COMPANY LAW BOARD, NEW DELHI
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... ... ..... likelihood of the existence of malpractices envisaged in Clauses (i) to (iii) of Section 237(b) of the Act. To prove this prima-facie case of "intent to fraud" and misfeasance on general public and the other body corporate and conducting the business of the company otherwise for a fraudulent and unlawful purpose, I have no hesitation in granting the petitioners' prayer for ordering investigation under Section 237(b) of the Companies Act, 1956 in view of the foregoing. The facts and circumstances of the case compel me to opine that this is a fit case for ordering investigation under Section 237(b) of the Act. To do substantial justice between the parties, I hereby order that investigation of the respondent companies be carried out by the Central Government under the provisions of Section 237(b) of the Companies Act, 1956 so that the truth can come out about the nature and modus operandi of these transactions. With the above directions, the petitions are allowed.
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2006 (4) TMI 551 - SUPREME COURT
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... ... ..... structions of the testatrix and the non-examination of the Sub-Registrar before whom the Will is said to have been presented for registration. Both the said witnesses could have conclusively proved the facts relating to the preparation, execution and registration of the Will. In the absence of any evidence, we are unable to ascertain as to whether the Will was ever read over and explained to the testatrix before she is said to have executed and presented the same for registration. 22. The cumulative effect of all the circumstances taken together gives rise to a genuine doubt regarding the genuineness of the Will and as to whether the same had, in fact, been executed by the testatrix and, if so, of her own free volition. 23. In the circumstances aforesaid, we see no reason to differ from the view taken by the Division Bench of the Madras High Court. Consequently, the appeal stands dismissed, but in the facts and circumstances of the case the parties will bear their own costs.
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2006 (4) TMI 550 - DELHI HIGH COURT
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... ... ..... 1 is not satisfied and the respondent No. 1 would not be the appropriate Government to exercise jurisdiction under the Industrial Disputes Act in respect of the complaint made by the respondent No. 3. I, Therefore, hold that the respondent No. 1 was not competent to make the order of reference dated 1st April, 2002. The petitioner stood transferred to Kanpur the order of termination of her services at Kanpur was effected after holding disciplinary proceedings at Kanpur. It would be the authorities at Kanpur who would have the jurisdiction to deal with the complaint, if at all made, by respondent No. 3. Accordingly the order dated 1st April, 2002 is quashed. Consequently thereupon the proceedings arising there from is also incompetent and is hereby quashed. 52. Needless to say that the respondent No. 3 shall be at liberty to approach the appropriate Government which would have jurisdiction in the matter in accordance with law. 53. This writ petition is allowed in above terms.
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2006 (4) TMI 549 - SUPREME COURT
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... ... ..... as also the respondent Nos. 2, 3, 5 and 6 should receive proper consideration by the High Court. In Chandi Prasad and Ors. v. Jagdish Prasad and Ors. (2004)8SCC724 , this Court held that when an Appellate court exercises its power and passes a judgment, the same would replace the judgment of the lower court and only its judgment would be treated as final. 6. For the foregoing reasons, the impugned orders cannot be sustained, which are, accordingly, set aside. However, having regard to the peculiar facts and circumstances of this case, we would request the High Court to consider the desirability of disposing of the appeal as expeditiously as possible and preferably within a period of two months from the date of communication of this order. The High Court, indisputably while disposing of the appeal, would take into account the effect of various interim orders passed at different stages. 7. The appeals are allowed with the afore-mentioned observations and directions. No costs.
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2006 (4) TMI 548 - ALLAHABAD HIGH COURT
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... ... ..... of the fact that in the notice, the Assessing Authority has mentioned Section 21(4-A) of the Act. An attempt was made by the petitioner's counsel to buttress his submission that proceedings are in the nature of reassessment proceedings are in the nature of reassessment proceedings. But we find that the said argument is wholly misconceived and does not advance the case of the petitioner. 35. The upshot of the above discussion is that the impugned notices in the writ petitions are simply notices for fresh assessment and they cannot be termed as notices for reassessment under Section 21(1) of the Act. The case of the petitioner, therefore, stands on a different footing, and the reliance placed on National Chemical Products v. State of U.P. 2006 U.P.T.C. 125 which is a case relating to service of notice in reassessment proceedings, is distinguishable and misplaced one. 36. We find no merit in the writ petition. All the writ petitions are dismissed. 37. No order as to costs.
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2006 (4) TMI 547 - MADRAS HIGH COURT
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... ... ..... ance in the phonetic, visual and the basic idea represented in the registered mark and the infringed mark. Further, the learned Judge failed to note that the design, appearance, label, etc. of the products are similar and as erroneously come to the conclusion that the word BOOM is a common word and the applicant cannot have coined the word. As rightly pointed out the registered trademark of the applicant since 1987 of the same word BOOM cannot be allowed to be used / infringed by others by just prefixing SUPER for marketing their products as that of the applicant. Under these circumstances, the common order dated 26.04.2005 made in O.A. Nos. 904 and 905 of 2004 in C.S. No. 862 of 2004 is set aside and there shall be an order of injunction as claimed in both the applications till the disposal for the suit. Both the Original Side Appeals are allowed. No costs. It is made clear that the above conclusion of us is only prima facie, for the disposal of the injunction applications.
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