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2009 (2) TMI 833
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... ... ..... RDER Delay condoned. Appeal admitted.
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2009 (2) TMI 832
Issues involved: Interpretation of transfer pricing provisions u/s 10A, use of earlier year data for comparability analysis, standard deduction in TP cases, comparability adjustment, selection of comparables with related party transactions, determination of arm's length price.
Issue 34 - Transfer Pricing Provisions u/s 10A:
The Tribunal's decision on invoking transfer pricing provisions when section 10A is availed by the assessee is under scrutiny. The key question is whether the Tribunal erred in its interpretation considering the plain and unambiguous language of the statute.
Issue 36 - Use of Earlier Year Data for Comparability Analysis:
The Tribunal's justification for allowing the use of earlier year data in comparability analysis, contrary to the mandatory requirement of using current year's data as per rule 10B(4), is being examined. Additionally, the restriction on using data available in public databases by the specified date is questioned.
Issue 37 - Standard Deduction in TP Cases:
The Tribunal's ruling on the proviso to section 92C(2) providing for a standard deduction of 5% in all transfer pricing cases is being reviewed for its correctness and applicability.
Issue 38 - Comparability Adjustment:
The Tribunal's decision to allow a flat comparability adjustment of 11.72% without considering important factors like the quality, purpose, and reliability of the adjustment, as required by Rule 10B(3)(ii), is being challenged. The focus is on whether the Tribunal deviated from the prescribed criteria for making adjustments.
Issue 39 - Selection of Comparables with Related Party Transactions:
The Tribunal's stance on excluding companies with any related party transactions from being selected as comparables, while accepting a comparable with significant related party transactions, is being questioned. The consistency and rationale behind this decision are under scrutiny.
Issue 40 - Determination of Arm's Length Price:
The Tribunal's decision to uphold the arm's length price determined by the taxpayer, despite identified defects, and rejecting the TPO's determination based on cogent evidence and correct data analysis is being evaluated. The correctness and reliability of the arm's length price determination process are at the center of this issue.
This summary provides a detailed breakdown of the issues involved in the judgment, highlighting the specific legal questions and challenges raised in each aspect of the case.
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2009 (2) TMI 831
Issues involved: Penalty u/s 272B of the IT Act for non-quoting of Permanent Account Number (PAN) of deductees in TDS statements.
ITA No. 907(BNG.)/2008:
The case involved the penalty u/s 272B for not quoting PAN of deductees in TDS statements. The assessee argued non-availability of PAN as the reason for non-compliance. The AO imposed a penalty of Rs. 10,000 which was upheld by the CIT(A). The assessee contended that it cannot be penalized for something impossible to do. The Tribunal referred to a similar case where penalty was not imposed on the bank for customer's mistake in filling Form No. 60. Following the same reasoning, the penalty in this case was deleted.
ITA Nos. 908 and 909(B)/2008:
Similar issue of penalty for non-quoting of PAN in TDS statements arose in these appeals. Relying on the decision in ITA No. 907(B)/08, the Tribunal deleted the penalties imposed by the AO.
In conclusion, the appeals filed by the assessees were allowed, and the penalties u/s 272B were deleted based on the reasoning that there was no failure on the part of the assessee in complying with the provisions of the IT Act regarding PAN quoting in TDS statements.
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2009 (2) TMI 830
Issues Involved:
1. Validity of the CIT(A) order.
2. Confirmation of Rs. 25,00,000 addition.
3. Confirmation of Rs. 61,743 disallowed car expenses.
4. Confirmation of Rs. 31,903 disallowed telephone expenses.
Summary:
Issue 1: Validity of the CIT(A) order
- The order passed by the CIT(A) was challenged as being "bad in facts and in law" and sought to be quashed. However, this ground was not specifically pressed during the appeal.
Issue 2: Confirmation of Rs. 25,00,000 addition
- The assessee, a civil contractor, filed a return declaring an income of Rs. 16,07,709, accompanied by an audit report and supporting documents. During a survey u/s 133A on 6th March 2002, the assessee surrendered Rs. 25 lakhs, which was later retracted, claiming it was made under pressure and without proper consideration of facts.
- The AO rejected the retraction, emphasizing that the surrender was made voluntarily and without any fear or stress, and that the assessee had not maintained proper books of account or stock register.
- The CIT(A) confirmed the AO's decision, leading to the appeal.
- The assessee argued that the surrender was coerced, no inventory was prepared during the survey, and the trading results were better than the previous year. The assessee's books were audited and accepted by the AO, with no discrepancies found.
- The Tribunal noted that the addition lacked concrete material evidence and relied solely on the surrender statement. The CBDT Instruction dated 10th March 2003 advised against obtaining confessions of undisclosed income during surveys, emphasizing reliance on credible evidence.
- The Tribunal found the retraction valid, as it was made immediately upon filing the return with a note explaining the coercion. The Tribunal cited Paul Mathews & Sons vs. CIT, which held that statements recorded during surveys carry no evidentiary value.
- The Tribunal concluded that the addition based solely on the surrender statement, without supporting evidence, was unsustainable and accepted the assessee's ground.
Issue 3: Confirmation of Rs. 61,743 disallowed car expenses
- The assessee did not press this ground during the appeal, and it was rejected as not pressed.
Issue 4: Confirmation of Rs. 31,903 disallowed telephone expenses
- Similar to Issue 3, this ground was also not pressed during the appeal and was rejected as not pressed.
Conclusion:
- The appeal was partly allowed, with the Tribunal accepting the assessee's ground regarding the Rs. 25,00,000 addition and rejecting the other grounds as not pressed.
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2009 (2) TMI 829
Issues involved: Appeal filed by Revenue regarding deletion of addition of Rs. 14,00,000 representing bad debts written off without specific finding on nature of loan and income, fulfillment of conditions u/s 36(1)(vii) for claiming bad debt deduction, acceptance of money lending business by AO, and applicability of precedent regarding claiming bad debt in later years.
1. Deletion of addition of bad debts:
The appeal was filed by Revenue challenging the deletion of an addition of Rs. 14,00,000 representing bad debts written off without a specific finding on the nature of the loan and any income derived from it. The Tribunal was approached by the Revenue after an order passed by the CIT(A) regarding the bad debts written off during the relevant previous year. The facts revealed that the amount was outstanding in the account of a borrower and was written off as unrecoverable. Despite efforts, including legal action against the borrower, the amount could not be recovered, leading to the decision to write off the debt as bad.
2. Fulfillment of conditions u/s 36(1)(vii) for claiming bad debt deduction:
The conditions mentioned in section 36(1)(vii) were found to be fulfilled by the assessee for claiming the bad debt in the return of income for the assessment year 2005-06. The AO disallowed the claim initially due to the absence of a certified copy of the order of the Metropolitan Magistrate. However, the CIT(A) accepted the position that the conditions for claiming the bad debt deduction had been met, including the debt being in respect of the business carried on by the assessee, the debt becoming bad, and the amount being written off as irrecoverable in the accounts for the relevant accounting year.
3. Acceptance of money lending business by AO:
It was acknowledged by the AO that the assessee was engaged in the business of money lending, which was not disputed. The Madhya Pradesh High Court precedent highlighted that claiming bad debt in the year it became bad is not mandatory, and it can be claimed in a later year when written off in the books of accounts. This position was further supported by a circular issued by the CBDT.
4. Applicability of precedent regarding claiming bad debt in later years:
In line with the precedent set by the Hon'ble Supreme Court in the case of CIT vs. Pandit Lakshmi Kant Jha, where it was held that in money lending business, amounts not recoverable and written off are allowable as bad debts, the Court found no irregularity or substantial question of law to admit the appeal. Consequently, the appeal was dismissed.
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2009 (2) TMI 828
Issues Involved:
1. Validity of reassessment proceedings under Section 148.
2. Genuineness of the transaction involving the purchase and sale of units of J.M. Mutual Fund.
3. Addition made under Section 68 of the Income Tax Act for unexplained cash credits.
Detailed Analysis:
1. Validity of Reassessment Proceedings under Section 148:
The assessee challenged the validity of the reassessment proceedings initiated by the Assessing Officer (AO) under Section 148 of the Income Tax Act. The AO issued a notice on 15th Feb 2005, based on information received that M/s S.K. Garg & Co. was declared a defaulter by the stock exchange and that transactions involving J.M. Mutual Fund were arranged. The CIT(A) upheld the reassessment proceedings, but the assessee contended that the reasons recorded for initiating the proceedings were based on incorrect assumptions and irrelevant material.
The tribunal observed that the belief entertained by the AO must not be arbitrary or irrational and that there must be a direct nexus or live link between the material coming to the notice of the AO and the formation of his belief. The tribunal found that the reasons recorded by the AO were not relevant and did not afford a valid basis for issuing the notice under Section 148. The tribunal quashed the notice and the reassessment proceedings, stating that the reasons to believe must be held in good faith and should have a rational connection and relevant bearing on the formation of the belief.
2. Genuineness of the Transaction Involving the Purchase and Sale of Units of J.M. Mutual Fund:
The AO observed that the transaction involving the purchase and sale of units of J.M. Mutual Fund was a sham and a colorable device to evade taxes. The AO noted that the assessee purchased units of J.M. Mutual Fund for Rs. 2 crores and redeemed them within three days, resulting in a dividend income of Rs. 58,06,451 and a loss of Rs. 63,48,387.10. The AO concluded that the transaction was not genuine and was undertaken to bring undisclosed income into the books as exempt income.
The CIT(A) deleted the addition made by the AO, holding that the transaction was a genuine business transaction. The tribunal upheld the order of the CIT(A), referring to the decision of the Bombay High Court in the case of Wallfort Shares & Stock Brokers Ltd., which approved the genuineness of similar transactions. The tribunal concluded that the dividend received by the appellant on such units would be exempt under Section 10(33), and the resultant loss would be eligible for adjustment against any other income in accordance with the provisions of the Act.
3. Addition Made under Section 68 of the Income Tax Act for Unexplained Cash Credits:
The AO made an addition of Rs. 61,93,275 under Section 68, representing unexplained cash credits received against the sale of shares through M/s S.K. Garg & Co. The AO concluded that the transactions were not genuine, as the broker was declared a defaulter and the assessee could not furnish the requisite information.
The CIT(A) deleted the addition, holding that the transactions were genuine and supported by relevant documentary evidence, including contract notes and sale bills. The tribunal upheld the order of the CIT(A), stating that the SEBI debarred the broker from membership beyond the period under consideration and that the non-availability of the broker at the relevant point of time did not prove the transactions to be bogus. The tribunal emphasized that the burden of proof in reassessment proceedings is on the Revenue to establish that there was income which escaped assessment, and the AO failed to discharge this burden.
Conclusion:
The tribunal dismissed the appeal of the Revenue and allowed the cross-objection of the assessee, quashing the reassessment proceedings initiated under Section 148 and upholding the genuineness of the transactions involving J.M. Mutual Fund and the share transactions with M/s S.K. Garg & Co. The tribunal emphasized the importance of relevant and rational reasons for initiating reassessment proceedings and the burden of proof on the Revenue to establish escapement of income.
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2009 (2) TMI 827
Issues Involved:1. Whether the petitioner is entitled to exemption u/s 10(23C)(vi) of the Income-tax Act, 1961 for the assessment years 2003-04 and 2004-05. 2. Whether the investment made by the petitioner in Shriram Chits Pvt. Ltd. violates the conditions stipulated for availing exemption u/s 10(23C)(vi). Summary:Issue 1: Entitlement to Exemption u/s 10(23C)(vi)The petitioner, an Educational Trust, challenged the order of the Chief Commissioner of Income-tax (CCIT) denying exemption u/s 10(23C)(vi) for the assessment years 2003-04 and 2004-05. The petitioner argued that the institution's primary purpose of imparting education falls within the ambit of section 2(15) of the IT Act as a public utility being charitable in nature. The petitioner claimed that the accumulated income was below the thresholds specified for the respective years, and thus, the conditions for investment in specified securities were not applicable. The petitioner relied on the Supreme Court decisions in CIT v. Andhra Chamber of Commerce and S.RM.M.CT.M. Tiruppani Trust v. CIT. Issue 2: Violation of Conditions for ExemptionThe Revenue argued that the petitioner violated the conditions stipulated in the 3rd proviso to section 10(23C)(vi) by not investing the surplus funds in accordance with section 11(5) of the IT Act. The CCIT found that the petitioner made payments to Shriram Chits Pvt. Ltd., which is not in accordance with section 11(5), thereby violating the conditions for exemption. The court noted that the 3rd proviso to section 10(23C)(vi) requires satisfaction of both limbs (a) and (b), and any investment or deposit of funds in contravention of section 11(5) disqualifies the applicant from exemption. Court's Analysis and ConclusionThe court emphasized that exemption provisions must be construed strictly and in accordance with the legislative intent. The court found that the petitioner's investment in Shriram Chits Pvt. Ltd. violated the conditions stipulated in the 3rd proviso to section 10(23C)(vi), thereby disentitling the petitioner from the claimed exemption. The court dismissed the writ petition, stating that there was no infirmity in the CCIT's order. The decisions cited by the petitioner were found not applicable to the present case. Final OrderThe writ petition is dismissed with no order as to costs. Dr. B.S. Chauhan, C.J. - I agree. Petition dismissed.
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2009 (2) TMI 826
Issues:
1. Calculation of duty and penalty under Section 11 AC of the Central Excise Act, 1944.
2. Imposition and reduction of penalty.
3. Excess amount retained by the Appellant.
4. Scope of CESTAT's power under Section 11 AC.
Analysis:
Issue 1: Calculation of duty and penalty under Section 11 AC of the Central Excise Act, 1944
The judgment revolves around the calculation of duty and penalty under Section 11 AC of the Central Excise Act, 1944. The Respondent had initially deposited a sum of Rs. 5,74,541, and a Show Cause Notice was issued for Rs. 4,21,874. The Assistant Commissioner confirmed the demand duty at Rs. 4,21,874, leading to a penalty of equal amount. However, due to the duty already paid, a penalty of Rs. 1,05,468 was deemed payable. The total recoverable amount was determined to be Rs. 5,27,342, comprising duty and penalty. The duty was later reduced to Rs. 3,62,881, resulting in a penalty of Rs. 90,720. The judgment questions the Commissioner (Appeals)'s decision to impose a penalty of Rs. 2,17,908, which deviated from the calculated penalty under the Act.
Issue 2: Imposition and reduction of penalty
The judgment discusses the imposition and subsequent reduction of the penalty. Initially set at Rs. 1,05,468, the penalty amount was challenged by the Respondent, leading to a reduction to Rs. 90,720. The Respondent further sought a reduction of the penalty by Rs. 50,000, which was partially allowed by the court. The decision highlights discrepancies in the penalty calculation process and emphasizes the need for adherence to the provisions of the Central Excise Act, 1944 in determining the penalty amount.
Issue 3: Excess amount retained by the Appellant
The judgment addresses the excess amount of Rs. 1,20,940 that was found to be lying with the Appellant. Despite the excess amount, the Respondent chose not to seek recovery of this sum. The court ruled that since the Respondent did not claim the excess amount, the Appellant was entitled to retain it. This decision underscores the importance of parties actively pursuing claims for refunds or excess amounts to avoid disputes over entitlement and retention of funds.
Issue 4: Scope of CESTAT's power under Section 11 AC
The judgment briefly touches upon the scope of CESTAT's power under Section 11 AC of the Act. However, due to the Respondent's decision not to seek a refund of the excess amount held by the department, the court did not delve into the question of law concerning CESTAT's authority under the Act. The judgment clarifies that in the absence of a claim for the excess amount, no further orders were necessary, and the appeal was only partially allowed concerning the quantum of penalty.
Overall, the judgment provides a detailed analysis of the calculation of duty and penalty, the imposition and reduction of penalties, the retention of excess amounts, and the limited scope of CESTAT's power under Section 11 AC of the Central Excise Act, 1944.
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2009 (2) TMI 825
Suit seeking declaration of title to the suit properties - hand over possession and to pay past mesne profits - Whether title to the disputed properties passed to the appellant when the sale deed dated 26.6.1983 was registered on October 26, 1983, though admittedly no amount was paid towards consideration to the respondents - execution of the sale deed on June 26, 1983 - instrument was presented for registration on October 21, 1983 and registered on October 26, 1983 - HELD THAT:- We find that the parties intended that ownership of the property would be transferred to the appellant only after receipt of the entire consideration by the vendors, as a condition precedent. The operative portion of the sale deed clearly states that the vendors have agreed to receive ₹ 40,000/- in the presence of the Sub- Registrar on the date of the registration of the sale deed and that in consideration of payment to be so made, the property was being conveyed to the purchaser. This makes it clear that the title was intended to pass only on the payment of balance consideration of ₹ 40,000/- in the presence of the Sub-Registrar. This is also supported by the evidence of DW-1 to DW-4. The Sub-Registrar has also clearly recorded that no amount was tendered or paid by the purchaser to the vendors in his presence. Therefore title in fact did not pass either on execution or registration of the sale deed.
It is admitted that possession of the suit properties purported to have been sold under the sale deed was never delivered to the appellant and continued to be with the respondents. In fact, the appellant, therefore, sought a decree for possession of the suit properties from the respondents with mesne profits. If really the intention of the parties was that the title to the properties should pass to the appellant on execution of the deed and its registration, the possession of the suit properties would have been delivered to the appellant.
All the three courts have also concurrently found that the appellant had pleaded a false case that he had paid a part of the balance consideration, that is, ₹ 25,000/- on July 21, 2003 to the respondents to enable them to purchase lorry. This case of the appellant was disbelieved by the trial court as well as the first appellate court which is the final court of facts. That finding was not challenged by the appellant before the High Court. From the averments made in the plaint it is evident that the appellant was ready and willing to make payment of only ₹ 15,000/- and not ₹ 40,000/-. He had never shown his readiness or willingness to make payment of ₹ 40,000/- which was the balance of the consideration and which had to be paid only in the presence of the Sub-Registrar, as mentioned in the deed. Therefore, the first respondent who was present before the Sub-Registrar on behalf of the respondents on October 26, 1983, was justified in not signing or affixing his thumb mark in the endorsement of registration to be made on the deed, by the Sub-Registrar.
Therefore, we are of the considered view that the parties really intended that title of ownership to the suit properties would pass to the purchaser, only after payment of full consideration by the purchaser to the vendor as a condition precedent. Parties did not intend that there should be transfer of ownership merely on execution and registration of the deed. The trial court and first appellate court having misinterpreted the legal position, the High Court rightly set aside the decree passed in favour of the appellant and dismissed the suit. No ground is made out by the appellant to interfere with the decision of the High Court. Therefore, the appeal, which is devoid of merits, deserves dismissal.
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2009 (2) TMI 824
Shifting of factory - capital goods, inputs and the balance unutilised credit in question have been properly received and accounted for by the assessee in the respective registers - the decision in the case of COMMISSIONER OF CENTRAL EXCISE, PONDICHERRY Versus CESTAT [2008 (7) TMI 116 - HIGH COURT MADRAS] contested, where it was held that rule does not require that the assessee can transfer the credit corresponding only to the quantum of inputs transferred to the new factory, but permits the assessee to transfer the available credits along with inputs and capital goods in stock at the factory to the new location - Held that: - the decision in the above case upheld - appeal dismissed - decided against appellant.
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2009 (2) TMI 823
Issues involved: Notice u/s 143(2) not served within 12 months from the end of the month of filing of return of income.
Summary:
The case involved an appeal and cross-objection directed against the order of the learned CIT(A)-XXIII, New Delhi, for the assessment year 2003-04. The cross-objection filed by the assessee contended that the notice u/s 143(2) was not served within the stipulated time frame. The AO claimed to have issued notices on different dates, but they were not served on the assessee. The assessee argued that service of notice on an unauthorized employee is not valid, citing relevant case laws. The Tribunal found that the notice was not served on any partner of the assessee firm, rendering the assessment order invalid. The Tribunal allowed the assessee's cross-objection based on the lack of valid notice service.
The Tribunal noted that the provisions of s. 292BB were not applicable to the case as they were inserted w.e.f. 1st April, 2008, and hence not retrospective for the assessment year 2003-04. Despite the assessee's participation in the assessment proceedings, the objection regarding the notice service was deemed valid. Consequently, the Tribunal allowed ground No. 1 of the assessee's cross-objection, leading to the partial allowance of the cross-objection and the dismissal of the Revenue's appeal. Other grounds raised were not adjudicated upon due to the decision on the first ground.
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2009 (2) TMI 822
The Supreme Court dismissed Special Leave Petitions (SLP) and a Writ Petition as withdrawn. Other matters were adjourned. (Citation: 2009 (2) TMI 822 - SC Order)
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2009 (2) TMI 821
Issues involved: Interpretation of business expenditure u/s 80G for community assistance program and proximity of welfare measures to manufacturing units.
Interpretation of business expenditure u/s 80G: The Revenue appealed under s. 260A of the IT Act questioning the Tribunal's decision to treat expenditure on community assistance program as business expenditure instead of a deduction u/s 80G. The assessee, engaged in yarn and thread manufacturing, claimed &8377; 5,61,668 as business expenditure for the asst. yr. 1989-90. The AO disallowed it, citing philanthropy over commercial expediency. The CIT(A) upheld the disallowance, but the Tribunal, considering the proximity of welfare measures to manufacturing units, allowed the expenditure based on previous orders. The Division Bench's judgment in CIT vs. Madras Refineries Ltd. (2004) supported this view, emphasizing the evolving concept of business to include community care. The High Court concurred, ruling in favor of the assessee.
Proximity of welfare measures to manufacturing units: The Tribunal's decision to allow the expenditure was influenced by the welfare measures being carried out near the assessee's manufacturing units, benefiting employees. The Division Bench's judgment highlighted the positive impact of such initiatives on local goodwill and business success, especially for polluting industries. The High Court, aligning with this reasoning, upheld the Tribunal's decision, emphasizing the importance of community assistance programs for corporate citizenship and business reputation.
Conclusion: The High Court dismissed the Revenue's appeal, citing the Division Bench's judgment and the evolving concept of business to include community welfare. The expenditure on community assistance programs near manufacturing units was deemed allowable as business expenditure, emphasizing the importance of corporate social responsibility and positive community impact.
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2009 (2) TMI 820
Issues involved: Declaration of nullity of Board resolution, permanent injunction, violation of Companies Act u/s 299, maintainability of suit.
Declaration of nullity of Board resolution: The plaintiff sought a declaration that the Board resolution dated 12.1.2002 passed by the defendant No.1 Company was null and void. The resolution surrendered the property leased by the company to defendant No.5. The plaintiff challenged the validity of this resolution on the grounds that the Directors did not disclose their interests as required by Section 299 of the Companies Act. The plaintiff, being a Director of the company, argued that the resolution was against the law due to lack of disclosure of interests by the Directors who were also co-parceners of defendant No.5. The plaintiff contended that the resolution was passed to further the interests of the Directors and cause grievance to the plaintiffs.
Permanent injunction: In addition to seeking a declaration of nullity of the Board resolution, the plaintiff also sought a permanent injunction restraining the defendants from acting on the resolution and from dispossessing the plaintiffs from the premises. The plaintiff claimed continuous and peaceful enjoyment of the premises for years and challenged the surrender of leasehold rights by defendant No.1 Company, alleging misuse of power by the Directors.
Violation of Companies Act u/s 299: The main contention of the plaintiff was that the Board resolution was in contravention of Section 299 of the Companies Act as the Directors did not disclose their interests in the property. The plaintiff argued that since the relationship between the Directors and the plaintiffs was such that they were all aware of the property being HUF property, there was no need for further disclosure. The plaintiff, being a Director himself, had ratified the resolution at a subsequent meeting, which, according to the plaintiff, did not give him the right to challenge the resolution in a Civil Court.
Maintainability of suit: The Court considered the maintainability of the suit filed by the plaintiffs challenging the Board resolution. The Court observed that the plaintiffs, motivated by self-interest, wanted to retain possession of the company's property without proper rights. The Court found the suit to be frivolous and dismissed it with heavy costs of &8377; 50,000/- to be paid to the defendants equally. The Court held that the suit had been dragged for years without merit and lacked legal basis for challenging the Board resolution.
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2009 (2) TMI 819
Disallowance on claim of travelling expenses - assessee is in the business of liaison work - HELD THAT:- assessee has visited the various foreign countries and as a consequence of this travel as per the statement of the assessee itself in the notes filed, the assessee has purchased machinery and has also imported garments. it is noticed that as a consequence of the travel the assessee has done trading business as also invested in capital asset being plant and machinery. This being so, we are of the view that the expenses incurred by the assessee on his travel to Hong Kong and Germany being two places from where he has imported the machinery, should be treated as capital expenditure and in regard to the other travels, which have resulted in purchase of garments, the same should be treated as revenue expenditure.
Hence, the finding of CIT(A) on the issue is reversed and AO is directed to allow the assessee the portion of foreign travel expenses in relation to the places from where the assessee has purchased the garments as revenue expenditure and the expenditure in relation to the purchase of machinery i.e., from Germany and Hong Kong as capital expenditure. Therefore, the assessee's appeal are partly allowed.
Disallowance of l/10th out of car expenses - HELD THAT:- It is noticed that CIT(A) has been quite reasonable in restricting the disallowance to 1/10th of the expenditure as against 1/8th disallowed by AO. This being so, as no error in the order of CIT(A) has been specifically pointed out and the assessee has not been able to specifically show that all the expenses in regard to the car expenses were business expenses, the finding of CIT(A) on this issue stands confirmed. Therefore, the assessee's appeal stands dismissed.
Levy of interest u/s. 234B - treating the seized cash as advance tax - HELD THAT:- It is noticed that this issue has been considered in the case of K.K. Marketing [2005 (5) TMI 58 - DELHI HIGH COURT] held that on request for adjusting the seized cash against advance tax due, it should be done and no interest u/s. 234B can be charged. We also face with the decision of the Hon'ble Madhya Pradesh High Court in the case of Ramjilal Jagannath & Ors.[1999 (4) TMI 45 - MADHYA PRADESH HIGH COURT], held that such request of the assessee for adjustment of the seized cash cannot be made against advance tax but considering the fact that the decision in the case of K.K. Marketing (supra) is by the Hon'ble jurisdictional High Court, it is held that the assessing authority was wrong in not adjusting the seized cash against the advance tax as requested for by the assessee.
Therefore, respectfully following the decision of Hon'ble jurisdictional High Court in the case of K.K. Marketing, AO is directed to adjust the seized cash as requested by the assessee against advance tax from the date on which the assessee made the request for the adjustment and recompute the levy of interest u/s. 234B accordingly. Hence, appeal is held in favour of the assessee.
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2009 (2) TMI 818
Issues:
- Appeal against judgment of High Court dismissing husband's appeal
- Allegations of cruelty and counter-allegations in marriage
- Examination of evidence by trial court
- High Court's observation on cruelty and irretrievable breakdown of marriage
- Argument for dissolution of marriage based on irretrievable breakdown
- Analysis of provisions of Hindu Marriage Act on divorce grounds
- Court's stance on irretrievable breakdown as a ground for divorce
- Differentiating judicial verdict and legislative function
- Consideration of mutual consent for divorce
Analysis:
The Supreme Court heard an appeal against the judgment of the High Court that dismissed the husband's appeal. The case involved allegations of cruelty and counter-allegations in the marriage. The appellant claimed that the respondent behaved cruelly and avoided staying in the matrimonial home. However, the respondent alleged physical abuse and mistreatment by the appellant and his family members. The trial court concluded that the respondent had been treated cruelly and dismissed the husband's claims of cruelty.
The High Court upheld the trial court's decision, emphasizing that the evidence did not support the husband's allegations of cruelty. The court noted that the wife had demonstrated suffering at the hands of the husband rather than the other way around. The appellant argued for the dissolution of the marriage based on irretrievable breakdown, which is not explicitly mentioned as a ground for divorce in Section 13 of the Hindu Marriage Act, which lists grounds like cruelty, adultery, and desertion.
The Supreme Court clarified that adding irretrievable breakdown as a ground for divorce would be amending the Act, a function reserved for the legislature. The Court highlighted that previous cases dissolving marriages on this ground did not consider this legal position and were not precedents. The Court emphasized that only the Parliament could enact or amend laws, not the judiciary. While mutual consent could have led to divorce under Section 13B of the Act, the respondent was not agreeable in this case.
Ultimately, the Supreme Court dismissed the appeal, stating that granting divorce based on irretrievable breakdown was beyond its jurisdiction and required legislative action. The Court's decision was based on the legal framework provided by the Hindu Marriage Act and the separation of powers between the judiciary and the legislature.
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2009 (2) TMI 817
Issues Involved:
1. Validity of the FIR against the petitioner.
2. Judicial propriety in issuing notices and handling objections.
3. Allegations of conspiracy and demand for bribe.
4. Exercise of revisionary jurisdiction by the High Court.
Summary:
1. Validity of the FIR against the petitioner:
The petitioner argued that the FIR was against Mr. A.K. Shukla and did not mention the petitioner's name. The complainant (auction purchaser) had not requested any action against the petitioner. However, the court noted that the FIR mentioned the petitioner as an associate of Mr. Shukla in demanding a bribe.
2. Judicial propriety in issuing notices and handling objections:
The petitioner contended that he was duty-bound to issue notice to the complainant upon receiving objections from the guarantor, Sh. Subhash Chand Sharma, as per Rule 63 of the IInd Schedule to the Income Tax Act, 1961, and the Income Tax (Certificate Proceedings) Rules, 1962. The petitioner claimed he acted within the judicial parameters and principles of natural justice. However, the court found that the petitioner entertained objections without the mandatory deposit, which was against Rule 60 of the Income Tax (Certificate Proceedings) Rules, 1962.
3. Allegations of conspiracy and demand for bribe:
The CBI alleged that the petitioner conspired with Mr. Shukla to demand a bribe from the auction purchaser, Dr. I.S. Yadav. The investigation revealed that the petitioner had asked the complainant to contact Mr. Shukla, indicating a conspiracy. The court noted that the petitioner's actions, such as summoning the auction purchaser on a non-listed date and entertaining objections without the mandatory deposit, raised grave suspicion of malafide intent.
4. Exercise of revisionary jurisdiction by the High Court:
The court emphasized that revisionary jurisdiction u/s 397 read with section 401 of Cr.P.C. is to correct miscarriages of justice arising from procedural irregularities or legal misconceptions. The court cited the principles laid down by the Apex Court, stating that charges should be framed if the material on record discloses grave suspicion against the accused. The court found no material irregularity or impropriety in the order of the Special Judge, who had rightly framed charges based on the evidence and circumstances.
Conclusion:
The High Court dismissed the petition, upholding the order dated 17.01.2009 by the Special Judge, CBI, New Delhi, in CC No. 19/08, RC No. AC1/2004/A0003 CBI, finding no grounds for interference.
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2009 (2) TMI 816
The Supreme Court dismissed the special leave petition as it found no grounds to interfere. Delay was condoned.
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2009 (2) TMI 815
The High Court of Bombay admitted the case for consideration of the substantial question of law regarding the applicability of sections 113 and 114 of the Customs Act, 1962 to goods exported under the DEPB scheme by misdeclaring the FOB value.
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2009 (2) TMI 814
Classification of imported goods - TFT-LCD modules of sizes 20.1", 26" and 31.5" - classified under Chapter Heading 9013.8010 or under Chapter Heading 8529.9090? - Held that: - Held that: - LCD panels will be classifiable under Chapter Heading 9013.8010 and not under Chapter Heading 8529.9090.
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