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2009 (3) TMI 1011
Issues Involved:
1. Legality of the Tribunal's order dispensing with the statutory requirement of pre-deposit of penalty.
2. Determination of whether undue hardship was established by the respondents.
3. Examination of the merits of the adjudicatory findings by the Special Director.
4. Applicability of the Foreign Exchange Regulation Act (FERA) versus the Foreign Exchange Management Act (FEMA).
Issue-wise Detailed Analysis:
1. Legality of the Tribunal's Order Dispensing with the Statutory Requirement of Pre-Deposit of Penalty:
The Special Director of Enforcement challenged the Tribunal's order which unconditionally dispensed with the statutory requirement of pre-deposit of the penalty amount before the respondents' appeal could be heard. The Tribunal reasoned that the proceedings were conducted under FERA and not FEMA, thus Section 19(1) of FEMA was not applicable. The Tribunal also concluded that the appellants had a prima facie strong case and that undue hardship would be caused by the pre-deposit requirement. The High Court found that the Tribunal erred in its understanding that the burden of proof in FERA proceedings was "beyond reasonable doubt," which is incorrect as per the Supreme Court's ruling in Director of Enforcement v. M.C.T. M. Corpn. (P) Ltd. The High Court emphasized that the Tribunal must follow the legislative mandate of pre-deposit unless undue hardship is clearly established.
2. Determination of Whether Undue Hardship Was Established by the Respondents:
The Tribunal granted complete exemption from pre-deposit by concluding that the respondents had a prima facie strong case and that undue hardship would be caused by the pre-deposit. However, the High Court noted that the Tribunal did not properly scrutinize the individual facts to establish undue hardship as required by the Supreme Court's rulings in Benara Valves Ltd. v. CCE and Monotosh Saha -Vs- Special Director, Enforcement Directorate. The High Court emphasized that undue hardship must be shown to be excessive and disproportionate to the nature of the requirement.
3. Examination of the Merits of the Adjudicatory Findings by the Special Director:
The Special Director argued that the respondents failed to establish a prima facie case and did not disclose the source of funds amounting to over Rs. 208 crores. The adjudicatory order relied on statements and documents obtained during search and seizure, which indicated manipulation of foreign exchange by Sterilite and its directors. The Tribunal, however, found that the Special Director's findings were not beyond reasonable doubt and that RBI permissions were available. The High Court noted that the Tribunal's approach was improper as it did not consider the standard of proof required in FERA proceedings, which is not "beyond reasonable doubt" but rather a balance of probabilities.
4. Applicability of the Foreign Exchange Regulation Act (FERA) Versus the Foreign Exchange Management Act (FEMA):
The Tribunal reasoned that the appeal was governed by FERA as the proceedings were initiated under FERA and the appeal was filed before the newly created Tribunal after the abolition of the FERA Board by Section 49(1) of FEMA. The High Court agreed that the appeal should be disposed of under FERA and not FEMA. However, the High Court found that the Tribunal did not properly apply the principles of undue hardship and pre-deposit requirements as mandated by the relevant legal provisions and judicial precedents.
Conclusion:
The High Court concluded that the Tribunal's order was unsustainable as it did not properly address the issue of undue hardship and misapplied the standard of proof required in FERA proceedings. The Tribunal's order was set aside, and the respondents' applications for waiver of pre-deposit requirements were to be heard afresh in accordance with the law. The writ petitions were allowed, and all pending applications were disposed of without any order on costs.
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2009 (3) TMI 1010
Issues involved: Valuation of Copper Anode and Moulds manufactured by the assessee's Tuticorin unit and cleared to their Silvasa unit during specific periods.
Summary:
1) The judgment addresses four appeals arising from two separate Orders-in-Original, each involving one appeal by the assessee and one by the Revenue, all concerning a common issue. The dispute revolves around the valuation of Copper Anode and Moulds manufactured by the assessee's Tuticorin unit and cleared to their Silvasa unit during specific periods.
2) The period in question spans from September '96 to April '97, covered by OIO No.9/2000 and Appeal No. E/386/2001 by the assessee and E/1164/01 by the Revenue, as well as from May '97 to June 2000, covered by OIO No.1/2001 leading to Appeal Nos. E/2251/01 by the assessee and E/301/02 by the Revenue.
3) After considering arguments from both sides, the Tribunal notes a subsequent order in a different period for the same assessee, where the case was remitted to the original authority to apply accounting principles laid down in CAS-4. Following this precedent, the Tribunal sets aside the impugned adjudication orders in the present appeals and remits the case to the adjudicating authority for a fresh decision in accordance with law, including CAS-4 and principles of natural justice. The issue is to be decided expeditiously due to the significant amounts involved.
4) The cross objections filed by the assessee in response to the Revenue's appeals are dismissed. The judgment is dictated and pronounced in open court.
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2009 (3) TMI 1009
Issues involved: Appeal against order of CIT(A) regarding valuation of property for AY 2003-04.
Valuation of property:
The assessee declared sale consideration of land at Rs. 1,51,00,000, but stamp valuation authority assessed it at Rs. 1,81,08,792. Assessee's reasons for lower consideration included financial difficulties and NOC for sale at Rs. 1,49,90,000. Despite objections, AO adopted higher valuation, resulting in capital gain calculation.
Section 50C of IT Act:
AO's rejection of assessee's explanation led to appeal. Counsel argued for reference to DVO as per section 50C(2) for correct valuation based on market rate at date of sale. Tribunal cited Meghraj Baid vs. ITO case, emphasizing DVO referral in case of disagreement on property valuation.
Tribunal's decision:
After analyzing section 50C(2), Tribunal directed AO to refer valuation to DVO for determining accurate consideration of property sold by assessee. CIT(A) order was set aside, and the matter was remanded to AO for valuation as per section 50C(2). Ground No.6 was not pressed during the hearing and was dismissed. The appeal was allowed for statistical purposes.
Conclusion:
The Tribunal's decision highlighted the importance of following section 50C provisions and referring valuation disputes to DVO for accurate property consideration determination. The case serves as a precedent for resolving valuation discrepancies in property transactions.
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2009 (3) TMI 1008
Issues involved: Appeal by Revenue for assessment year 2005-06 against CIT(A) order - set off loss of EOU against profit of other units and deletion of disallowance u/s. 14A.
Set off of loss of EOU against profit of other units:
The Assessing Officer disallowed set off of EOU loss against taxable profits citing section 14A. Assessee argued that section 10A allows deduction, not exemption, and loss can be set off against profits. CIT(A) allowed claim based on precedents and CBDT Circular No. 7/2003. Revenue contended that exempted income u/s. 10A does not form part of gross total income. Assessee argued that deduction under section 10A is part of income computation under "profits and gains of business or profession." Tribunal cited precedents supporting assessee's claim and upheld CIT(A) decision.
Deletion of disallowance u/s. 14A:
Tribunal referred to Special Bench decision in Income Tax Officer vs. M/s Daga Capital Management Pvt. Ltd. holding that section 14A applies to dividend income incidental to trading in shares. Directed Assessing Officer to recompute disallowance u/s. 14A as per Rule 8D. Consequently, the appeal by Revenue was partly allowed.
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2009 (3) TMI 1007
Issues involved: Appeal by revenue against CIT(A) order for A.Y. 01-02 regarding addition to software development cost u/s. 92 of the I.T. Act, 1961.
Summary:
The revenue appealed against the CIT(A) order deleting the addition of Rs. 18,58,960 made by the AO by enhancing the marking up on software development cost from 5% to 10% u/s. 92 of the I.T. Act, 1961. The appellant argued that the AO's decision was supported by the circular of the CBDT no. 12/2001, allowing adjustments within 5% range. However, the respondent contended that the provisions of sec. 92 were not applicable in this case, as evidenced by the CIT(A) order and the absence of a reference to the Transfer Pricing Officer u/s. 92. The respondent also highlighted a successful case in the succeeding A.Y. 02-03 where the TPO accepted a 6.45% margin on software development services. The ITAT noted that the CBDT circular favored the assessee, and since the AO did not refer the case to the TPO, the addition was deemed unjustified. The ITAT upheld the CIT(A) decision, stating there was no evidence of tax avoidance and dismissed the revenue's appeal.
In conclusion, the ITAT dismissed the revenue's appeal, confirming the CIT(A) order.
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2009 (3) TMI 1006
Issues involved: Interpretation of additional depreciation u/s 32(1)(iia) of the IT Act, 1961 for a de-inking plant in a public sector company engaged in newsprint manufacturing.
Summary:
The appeal by the Revenue questioned the Tribunal's decision to uphold the grant of additional depreciation u/s 32(1)(iia) of the IT Act, 1961 for a de-inking plant in a public sector company. The company claimed additional depreciation for the plant, which converts waste paper into pulp. The Revenue argued that since the installed capacity of newsprint remained unchanged, the company was not eligible for additional depreciation. However, the company contended that the increase in installed capacity of pulp, which is a marketable intermediary product, made them eligible for the benefit. The Tribunal found in favor of the company, stating that the increase in installed capacity of the pulp plant due to the de-inking machinery installation qualified them for additional depreciation. The Court agreed with the Tribunal, emphasizing that pulp being a marketable commodity produced by the company justified the claim for additional depreciation, even if it was an intermediary product. The Court dismissed the Revenue's appeal, rejecting their argument that installed capacity should only refer to the final product, newsprint.
In conclusion, the Court upheld the Tribunal's decision, ruling in favor of the company's eligibility for additional depreciation u/s 32(1)(iia) of the IT Act, 1961 based on the increase in installed capacity of the pulp plant, despite the final product remaining unchanged.
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2009 (3) TMI 1005
Issues involved: Determination of whether the process of electroplating and lacquering on imitation jewellery amounts to manufacturing under Chapter 71 of the Central Excise Act, 1944.
Summary:
The case involved a dispute regarding whether the process of gold plating on imitation jewellery constitutes manufacturing. The appellants were engaged in job work of gold plating on jewellery items made of mild steel, copper, and brass. The revenue contended that the process resulted in the emergence of a new article, while the appellants argued that no new product was created, and the process was merely for ornamentation.
The Tribunal considered the arguments presented by both sides and examined the impugned orders. The issue was framed as to whether electroplating and lacquering on base metal articles amounted to manufacturing under Chapter 71 of the Central Excise Act, 1944. The original adjudicating authority held that the process undertaken by the appellants transformed the imitation jewellery into a different marketable product, thereby constituting a manufacturing process.
In its analysis, the Tribunal referred to precedents such as the case of Commissioner of Central Excise, Mumbai v. Clad Material Systems, where it was held that electroplating, which does not result in the emergence of a new commodity, does not amount to manufacturing. Similarly, in CCE, Bangalore v. Divya Cases, it was observed that plating of watch cases did not amount to manufacturing as the cases were marketable without such plating.
The Tribunal distinguished the case from the decision in Hawkins Cookers Ltd. v. State of Kerala, emphasizing that the issue before the Supreme Court in that case was different. It relied on the Allahabad High Court judgment in Swan Bangle Stores v. Assistant Sales Tax Officer to support its conclusion that ornamentation of jewellery does not result in the creation of a new commercial commodity.
Ultimately, the Tribunal found that the gold plating carried out by the appellants was for ornamentation purposes only, and no new product emerged from the process. Therefore, based on the settled law and precedents, the Tribunal accepted the appellants' contention and allowed the appeal, setting aside the impugned order.
*(Pronounced in Court on 2-3-09)*
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2009 (3) TMI 1004
Nationalized banks Voluntary Retirement Scheme 2000 - Whether the employees (having completed 20 years of service) of these banks (Bank of India, Punjab National Bank, Punjab & Sind Bank, Union Bank of India and United Bank of India) who had opted for voluntary retirement under VRS 2000 are entitled to addition of five years of notional service in calculating the length of service for the purpose of the said Scheme as per Regulation 29(5) of Pension Regulations, 1995? - each of the employees had completed 20 years of service - optees have been given retiral benefits by the respective banks under VRS 2000 save and except the benefit of pension under Regulation 29(5) - Their representation in this regard did not yield any result and that necessitated them to approach various High Courts for redressal of their grievance.
The views of High Courts differ. Punjab and Haryana High Court has held that employees are entitled to add a period of qualifying service not exceeding five years in terms of the Regulation 29(5); the total qualifying service rendered by an employee seeking voluntary retirement in any case shall not exceed 33 years. With regard to the amendment in Regulation 28, Punjab and Haryana High Court has held that by the said amendment, the provision contained in Regulation 29(5) of the Regulations does not get affected so as to disentitle the employees the benefit provided therein.
HELD THAT:- Any interpretation of the terms of VRS 2000, although contractual in nature, must meet the test of fairness. It has to be construed in a manner that avoids arbitrariness and unreasonableness on the part of the public sector banks who brought out VRS 2000 with an objective of rightsizing its manpower. The banks decided to shed surplus manpower. By formulation of the Special Scheme (VRS 2000), the banks intended to achieve its objective of rationalizing its force as they were overstaffed. The Special Scheme was, thus, oriented to lure the employees to go in for voluntary retirement. In this background, the consideration that was to pass between the parties assumes significance and a harmonious construction to the Scheme and Pension Regulations, therefore, has to be given.
The amendment to Regulation 28 can, at best, be said to have been intended to cover the employees with 15 years of service or more but less than 20 years of service. This intention is reflected from the communication dated September 5, 2000 sent by the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) to the Personnel Advisor, Indian Banks' Association.
It is pertinent to bear in mind that interpretation clause of VRS-2000 states that the words and expressions used in the scheme but not defined and defined in the Rules/Regulations shall have the same meaning respectively assigned to them under Rules/Regulations. The Scheme does not define the expression `retirement' or `voluntary retirement'.
We have, therefore, to fall back on the definition of `retirement' given in Regulation 2(y) whereunder voluntary retirement under Regulation 29 is considered to be retirement. Regulation 29 uses the expression, `voluntary retirement under these Regulations'. Obviously, for the purposes of the Scheme, it has to be understood to mean with necessary changes in points of details. Section 23 of the Contract Act has no application to the present fact situation.
It was vehemently contended on behalf of the banks that VRS 2000 was a self-contained Scheme and it provided for special benefits in the form of ex-gratia. It was submitted that ex-gratia was not available to the employees claiming voluntary retirement under Pension Regulations and it was because of that, that Scheme did not envisage granting of pension benefits under Regulation 29(5) of the Pension Regulations, 1995, along with the payment of ex-gratia which was a substantial amount.
On behalf of banks it was submitted that the employees, having taken benefits under the scheme (VRS 2000), are estopped from raising any issue that their entitlement to pension would not be covered by amended Regulation 28. It was suggested that the employees having taken benefit of the scheme cannot insist for pension under Regulation 29(5). O.P. Swarnakar [2002 (12) TMI 605 - SUPREME COURT] was relied upon in this regard wherein it has been held that an employee, having taken the ex-gratia payment, or any other benefit under the scheme cannot be allowed to resile from the scheme.
In so far as the present group of appeals is concerned, the employees are not seeking to resile from the Scheme. They are actually seeking enforcement of the clause in the Scheme that provides that the optees will be eligible for pension under the Pension Regulations, 1995. According to them, they are entitled to the benefits of Regulation 29(5). In our considered view, plea of estoppel is devoid of any substance; as a matter of fact it does not arise at all in the facts and circumstances of the case.
We hold, as it must be, that the employees who had completed 20 years of service and were pension optees and offered voluntary retirement under VRS 2000 and whose offers were accepted by the banks are entitled to addition of five years of notional service in calculating the length of service for the purposes of that Scheme as per Regulation 29(5) of the Pension Regulations, 1995. The contrary view expressed by some of the High Courts do not lay down the correct legal position.
Whether the concerned employees are entitled to interest on unpaid pension? - HELD THAT:- Although it has been held by us that the subject employees are entitled to the weightage in terms of Regulation 29(5) of Pension Regulations, 1995, but we are satisfied that any award of interest on unpaid pension would not be in the interest of justice. It is so because different High Courts did not have unanimous judicial opinion on the issue. Punjab and Haryana High Court and the Division Bench of the Kerala High Court upheld the contention of the employees with regard to applicability of Regulation 29(5) to the optees who had completed 20 years of service while the Division Bench of the Calcutta High Court and a single Judge of the Kerala High Court took exactly an opposite view. The stance of the banks, although found not meritorious, cannot be said to be totally frivolous. We, accordingly, hold that the subject employees are not entitled to interest on unpaid pension.
Therefore, the appeals preferred by the banks must fail and are dismissed while the appeals of the employees deserve to be allowed and are allowed accordingly. The respective banks shall now recalculate, within one month from today, the pension payable to the concerned employees by giving them the benefit of Regulation 29(5). However, the employees shall not be entitled to interest on unpaid pension. The pending applications in these appeals stand disposed of. The parties shall bear their own costs.
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2009 (3) TMI 1003
Disallowance of expenditure - purchases of raw material - genuineness of transactions not proved - manufacturer of tractor lights - CIT(A) allowed the appeal and remanded case back to AO for fresh consideration - second round AO allowed the expenses claimed in respect of payments made to five out of the ten parties - remaining five parties it was found that three parties could not be served at given addresses but other two parties who had appeared - Tribunal has accepted the version of the assessee, believing in the genuineness of the transactions namely, purchase of raw material from five parties.
HELD THAT:- The Tribunal took into consideration some other factors as well and the cumulative effect of all these factors clearly established that they were genuine suppliers who had received payment by means of Account Payee cheques. The Tribunal rightly concluded that they were small dealers/job workers and were mainly dealing with the assessee only. It is also pointed out by the Tribunal that transactions were entered into with these suppliers during the financial year ending on 31-3-1996 and an inquiry was conducted in the year 2002 and it was not unusual for such small parties to have left in between. Thus, these two cases are at par with those in respect of which expenditure is allowed.
The reason for disallowing expenditure in respect of other four parties was that when the notices were sent they were not available. we are of the opinion that even in their absence the assessee had produced sufficient material to show payments, namely the bank accounts of such parties. We are constrained to note that if the summons are not issued to those parties or the same could not be served at the given addresses, AO could have obtained their addresses from the banks as the bank statements were produced and could have made an endeavour to serve those parties at the said addresses.
That the finding of fact arrived at by the Tribunal is plausible and based on evidence. There is no perversity in this finding. Hardly any question of law arises which needs to be determined in the present appeal.
We, therefore, dismiss this appeal as being devoid of any merits.
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2009 (3) TMI 1002
Issues involved: The judgment involves the assessment year 2003-04 and addresses the errors in the assessment order made by the Assessing Officer under section 143(3) u/s 263 of the Income Tax Act, 1961.
Issue 1 - Management Incentive/Variable Performance Disallowance: The CIT found the order of the Assessing Officer erroneous and prejudicial to the interest of the Revenue due to the non-consideration of a provision of Rs. 8 crores representing management incentive/variable performance under section 43B. The Tribunal held that the CIT was not justified in invoking jurisdiction as the order was not erroneous and prejudicial to the Revenue's interest.
Issue 2 - Deduction Admissible under Section 10A: The CIT pointed out a mistake in the computation of deduction admissible under section 10A due to the exclusion of certain expenses by the Assessing Officer. The Tribunal found that the Assessing Officer's view was supported by various decisions and was not unsustainable in law. Therefore, the order of the Assessing Officer was not deemed erroneous, and the CIT did not have jurisdiction under section 263.
Issue 3 - Non-Application of Mind by Assessing Officer: The CIT invoked jurisdiction under section 263 on the ground of non-application of mind by the Assessing Officer regarding a vital issue. The Tribunal observed that the CIT did not demonstrate how prejudice was caused to the Revenue and failed to consider the assessee's claim regarding the provision of Rs. 8 crores. As one of the twin conditions under section 263 was not satisfied, the Tribunal held that the CIT's order was not justified and cancelled it.
In conclusion, the appeal of the assessee was allowed, and the Tribunal pronounced the order on 20.03.2009.
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2009 (3) TMI 1001
Issues Involved:1. Classification of income from the sale of agricultural land. 2. Determination of whether the sale should be treated as "Capital gain" or "Profit and gain from business and profession." Summary:The controversy pertains to the assessment year 2005-06, where the respondent-assessee declared taxable income and agricultural income. The return was scrutinized u/s 143(3) of the Income-tax Act, 1961. The main issue is the sale of agricultural land for Rs. 44,75,500, which the Assessing Officer classified as "Profit and gain from business and profession" instead of "Capital gain" due to the substantial profit made from the sale. The respondent-assessee challenged this classification before the Commissioner of Income-tax (Appeals), who ruled in favor of treating the sale as "Capital gain." The revenue's appeal to the Income-tax Appellate Tribunal (ITAT) was dismissed, upholding the CIT's decision. The appellant-revenue contended that the piecemeal sale indicated a business transaction aimed at earning maximum profit. However, the court noted that the land was held for two decades and used for agricultural purposes, with no improvements made to increase its sale value. The court referenced the Supreme Court's guidelines in G. Venkataswami Naidu & Co. v. CIT and Raja Bahadur Kamakhya Narain Singh v. CIT, emphasizing the intention behind the purchase and sale and the nature of the transactions. Applying these principles, the court concluded that the sale of agricultural land should be treated as "Capital gain" and not "Profit and gain from business and profession." Thus, the appeal was dismissed, upholding the CIT and ITAT's decisions.
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2009 (3) TMI 1000
Issues Involved:
1. Allowing of depreciation.
2. Disallowance of transit breakage.
3. Disallowance of brand registration expenses.
4. Employees' contribution to provident fund u/s 43B.
5. Adding unascertained liabilities while computing profit u/s 115JB.
Summary:
1. Allowing of Depreciation:
The first issue pertains to the allowance of depreciation. The assessee did not claim depreciation for the assessment year 2000-01, and it was not allowed by the Assessing Officer. In subsequent years, the assessee claimed depreciation on the WDV as on the opening day of the assessment year 2000-01 without reducing the depreciation allowable but not allowed. The Assessing Officer computed depreciation after reducing the depreciation allowable in the assessment year 2000-01, citing Explanation 5 to section 32, inserted by the Finance Act, 2001, as having retrospective effect. The CIT (Appeals) allowed depreciation on the original WDV, relying on the Supreme Court decision in CIT vs. Mahendra Mills, which held that Explanation 5 was prospective and effective from April 1, 2002. The Tribunal upheld the CIT (Appeals) decision, stating that depreciation should be allowed based on WDV without reducing notional depreciation.
2. Disallowance of Transit Breakage:
The next issue involves the disallowance of transit breakage. The assessee made a provision for breakage at the end of the year, which was reversed on the first day of the next year. The Assessing Officer disallowed the claim, considering it contingent. The CIT (Appeals) allowed the claim for the assessment year 2001-02, noting that the provision was made on a scientific basis and based on past experience. However, the CIT (Appeals) upheld the disallowance for the subsequent three years. The Tribunal found that the provision was excessive and not based on scientific grounds or actual experience, thus reversing the CIT (Appeals) decision for the assessment year 2001-02 and upholding the disallowance for the subsequent years.
3. Disallowance of Brand Registration Expenses:
In the assessment year 2002-03, the assessee incurred Rs. 3,90,000 on brand registration expenses, which the Assessing Officer disallowed as capital in nature. The CIT (Appeals) allowed Rs. 1,90,000 as revenue in nature but confirmed the disallowance of Rs. 2,00,000 due to lack of receipts. The Tribunal upheld the disallowance, as the assessee did not produce any evidence.
4. Employees' Contribution to Provident Fund u/s 43B:
The Assessing Officer disallowed the employees' contribution to the provident fund, citing late payment beyond the 15th of the month. The CIT (Appeals) allowed the employer's contribution but not the employees' contribution. The Tribunal, following the decision in CIT vs. Sabari Enterprises and other precedents, directed the Assessing Officer to allow the deduction if the payments were made before the due date of filing the return u/s 139(1).
5. Adding Unascertained Liabilities While Computing Profit u/s 115JB:
The final issue involves adding unascertained liabilities, specifically provision for bad debts and transit breakages, while computing profit u/s 115JB. The Assessing Officer disallowed these liabilities, and the CIT (Appeals) upheld the decision. The Tribunal directed the Assessing Officer to reduce the provision for bad debts, following the Supreme Court decision in CIT vs. HCL Comnet Systems. However, the Tribunal upheld the disallowance of transit breakages, as the provision was not made on a scientific basis.
Conclusion:
In the result, all the appeals were disposed of as per the above findings.
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2009 (3) TMI 999
EOU - refund of credit on inputs - Tribunal hold that there is nothing in the Cenvat Credit Rules which prohibits 100% EOUs availing Cenvat credit. Rule 5 of the said Rules provides for refund of credit availed by the exporter where they do not utilize the goods as inputs for manufacture of 100% export - decision in the case of COMMISSIONER OF CUSTOMS, BANGALORE Versus ANZ INTERNATIONAL [2008 (6) TMI 155 - KARNATAKA HIGH COURT] contested, where it was held that EOU is entitled to take credit on the duty of the inputs procured indigenously and when they were not in a position to utilize the same, they are entitled for refund - Held that: - decision in the above case upheld - appeal dismissed - decided against appellant.
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2009 (3) TMI 998
Whether the judgment of a learned Single Judge of the Andhra Pradesh High Court directing acquittal of the respondent who was convicted by a learned Special Judge for SPE and ACB Cases for offence punishable under Section 7 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (in short the `Act') is unsustainable?
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2009 (3) TMI 997
Issues Involved:
1. Ownership and Title of the Property
2. Nature of the Sale Deed
3. Relationship Between the Parties (Licensor-Licensee or Otherwise)
4. Admissibility and Interpretation of Evidence under Sections 91 and 92 of the Indian Evidence Act
5. Payment and Recovery of Storage Charges
Issue-wise Detailed Analysis:
1. Ownership and Title of the Property:
The appellant (plaintiff) claimed ownership of the property based on a registered sale deed dated 29.6.1978, executed by the respondent's father. The respondent, however, denied the execution of the sale deed and claimed that neither he nor his father had sold the property. The respondent also contended that the title of the suit property was never transferred to the appellant.
2. Nature of the Sale Deed:
The primary contention was whether the sale deed was a genuine transaction or merely a security for a loan. The respondent argued that the sale deed was a sham document executed as security for a loan of Rs. 50,000 and not intended to transfer ownership. The trial court, first appellate court, and the High Court all considered circumstantial evidence and concluded that the sale deed was executed as a money lending transaction. The Supreme Court, however, emphasized that the sale deed was a registered document, carrying a presumption of genuineness, and that the respondent failed to discharge the burden of proving it was a sham.
3. Relationship Between the Parties (Licensor-Licensee or Otherwise):
The appellant claimed that the respondent's father was given possession of the property as a licensee at a monthly fee of Rs. 1,257.50. The respondent denied any licensor-licensee relationship and contended that no such deed was executed. The trial court and the first appellate court found the appellant's claim of a licensor-licensee relationship unconvincing, citing the excessive monthly charges and lack of regular payment records. The Supreme Court, however, noted that the respondent's father was put in possession on 1.7.1978, and the character of his possession was in dispute.
4. Admissibility and Interpretation of Evidence under Sections 91 and 92 of the Indian Evidence Act:
The appellant argued that the courts below erred in not adhering to the best evidence rule under Sections 91 and 92 of the Indian Evidence Act. The Supreme Court acknowledged that extrinsic evidence could be admitted to determine the true nature of the transaction but found that the respondent failed to provide sufficient evidence to prove the sale deed was a sham. The Court emphasized that the deed of sale was a registered document, and the respondent did not examine himself during the trial, leading to an adverse inference.
5. Payment and Recovery of Storage Charges:
The appellant sought recovery of Rs. 45,270 as arrears of storage charges at the rate of Rs. 1,257.50 per month. The trial court and the first appellate court dismissed this claim, finding the charges excessive and the payment records inconsistent. The Supreme Court did not specifically address this issue in its final judgment, focusing instead on the nature of the sale deed and the respondent's failure to prove it was a sham transaction.
Conclusion:
The Supreme Court set aside the judgments of the lower courts, holding that the plaintiff's suit should have been decreed. The Court found that the respondent failed to discharge the burden of proving the sale deed was a sham and emphasized the presumption of genuineness attached to a registered document. The appeal was allowed with costs, and the respondent was ordered to pay Rs. 50,000 with interest at 6% per annum from 29.6.1978 until realization. The Supreme Court also highlighted the importance of approaching the court with clean hands for equitable relief.
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2009 (3) TMI 996
Supreme Court dismissed the appeal in the case with citation 2009 (3) TMI 996 - SC. Judges were Lokeshwar Singh Panta and B. Sudershan Reddy.
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2009 (3) TMI 995
Issues Involved:
1. Non-operation of the waiting list of RPMT-2008.
2. Admission to MBBS based on PC-PMT of BDS and 10+2.
3. Compliance with MCI Regulations, University Ordinance 272, and Supreme Court judgments.
4. Validity of admissions made by Geetanjali Medical College and Hospital.
5. Role and compliance of the University, State Government, and Medical Council of India (MCI).
Detailed Analysis:
Issue 1: Non-operation of the waiting list of RPMT-2008
The petitioners argued that they were on the merit list of RPMT-2008 but were not admitted due to a lack of seats. When seats became available on 16.09.2008, the list was not operated, and admissions were made from PC-PMT of BDS and 10+2, violating Regulation No. 5 of MCI Regulations, University Ordinance 272, and Supreme Court judgments. This action was deemed contrary to Article 14 of the Constitution of India.
Issue 2: Admission to MBBS based on PC-PMT of BDS and 10+2
The University and State Government stated that the RPMT-2008 notification included Geetanjali Medical College and Hospital, anticipating 150 seats. The admissions made by the institution from PC-PMT BDS and 10+2 were contrary to the established regulations and Supreme Court judgments. The institution was directed to admit students through RPMT-2008 counseling, but it did not comply.
Issue 3: Compliance with MCI Regulations, University Ordinance 272, and Supreme Court judgments
The MCI Regulations, 1997, and Ordinance 272 mandate a common entrance examination for admissions to ensure merit-based selection. The Supreme Court has consistently upheld the necessity of common entrance exams for medical courses to maintain uniform standards. The admissions made by Geetanjali Medical College and Hospital violated these regulations and were deemed illegal.
Issue 4: Validity of admissions made by Geetanjali Medical College and Hospital
The admissions made by the institution from PC-PMT BDS and 10+2 were declared illegal. The institution's actions were found to be arbitrary and violative of Article 14 of the Constitution. The court emphasized that merit determined by competitive examinations should not be sacrificed.
Issue 5: Role and compliance of the University, State Government, and Medical Council of India (MCI)
The University and State Government failed to ensure compliance with the established regulations and Supreme Court judgments. The MCI, aware of the RPMT process, did not direct the institution to admit students from RPMT-2008. The court directed the State to hold counseling from the RPMT-2008 waiting list and admit meritorious students.
Relief Granted:
1. The admissions made by Geetanjali Medical College and Hospital for the 2008 batch against 85% of 150 seats were declared illegal.
2. Interim orders reserving seats for petitioners were made absolute.
3. The State was directed to hold counseling from the RPMT-2008 waiting list and complete the process before RPMT-2009.
4. The State, in consultation with MCI and the University, was instructed to sort out difficulties and run regular courses for the 2008 MBBS batch.
5. No costs were imposed, but the State, University, and MCI were advised to take appropriate action.
Conclusion:
The court emphasized the necessity of adhering to MCI Regulations, University Ordinance 272, and Supreme Court judgments to ensure merit-based admissions in medical courses. The actions of Geetanjali Medical College and Hospital were found to be in violation of these regulations, resulting in the cancellation of the admissions made for the 2008 batch.
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2009 (3) TMI 994
Issues involved: Imposition of penalty u/s Rule 25 of Central Excise Rules for delayed payment of duty, justification of penalty imposition, applicability of Rule 27 of Rules in case of delay in discharge of duty liabilities.
The judgment addresses the issue of penalty imposition u/s Rule 25 of Central Excise Rules for delayed payment of duty. The appellant argued that penalty was unjustified as there was no intention to evade duty, and the delay was due to loss of records in a flood. The appellant cited a previous Tribunal decision to support the contention that penalty under Rule 25 cannot be imposed for delay in discharge of duty liabilities. On the other hand, the JCDR argued that duty and interest were paid after a significant delay and only after being pointed out by an audit. The Tribunal noted that the goods were properly accounted for and cleared under Central Excise invoices, and considering the circumstances of the flood causing record loss, the appellant cannot be faulted for the delay in payment. The Tribunal referred to the decision in the case of Saurashtra Cement Ltd., which held that in cases of delay in payment of duty, Rule 27 should be invoked instead of Rule 25. Accordingly, the penalty was reduced to &8377; 5,000 from the original amount imposed. The appeal was rejected except for the modification in the penalty amount.
The judgment clarifies the applicability of Rule 27 of Central Excise Rules in cases of delay in discharge of duty liabilities. It emphasizes that in situations where there is a delay in payment of duty, Rule 27 should be invoked instead of Rule 25 for penalty imposition. The Tribunal's decision in this case aligns with the precedent set by the Saurashtra Cement Ltd. case, which established that for delays in duty payment, the provisions of Rule 27 should be followed. The reduction of the penalty amount to &8377; 5,000 from the initial penalty imposed further underscores the Tribunal's adherence to the principles outlined in Rule 27 for penalty determination.
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2009 (3) TMI 993
The Gujarat High Court admitted the case and issued notice to the respondent on substantial questions of law regarding the encumbrance created in an agreement dated 27/3/1982 under the Wealth Tax Act, 1957. The questions involved whether the agreement would operate as a restrictive covenant and as a binding document despite asset distribution by the trustees.
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2009 (3) TMI 992
Issues Involved:
1. Whether the State Government is liable to pay the salaries and emoluments of the employees of CAMUL.
2. Whether CAMUL can be treated as a department of the State Government by lifting the corporate veil.
3. The applicability of the principles laid down in Kapila Hingorani cases to the present case.
Detailed Analysis:
1. Liability of the State Government to Pay Salaries and Emoluments of CAMUL Employees:
The respondent, a Trade Union representing CAMUL employees, argued that the State Government had pervasive control over CAMUL and should be responsible for paying the salaries and emoluments of CAMUL employees. The State Government, however, contended that the grant-in-aid provided to CAMUL was for development activities and not for bearing the salaries of its employees. The Supreme Court held that even if CAMUL is considered a "state" under Article 12 of the Constitution, it does not make the State Government liable to pay the salaries of CAMUL employees. CAMUL, being a registered cooperative society under the Assam Cooperative Societies Act, 1949, is an independent juristic entity and cannot be identified with the State Government.
2. Treatment of CAMUL as a Department of the State Government:
The respondent sought to treat CAMUL as a department of the State Government by lifting the corporate veil, citing the State Government's control over CAMUL's management and finances. The Supreme Court rejected this argument, stating that CAMUL, despite being under the control of the State Government, remains a separate legal entity. The Court emphasized that the fact that CAMUL may answer the definition of "state" under Article 12 does not mean that its employees become employees of the State Government.
3. Applicability of Kapila Hingorani Cases:
The respondent relied on the interim orders in Kapila Hingorani v. State of Bihar (2003 and 2005) to argue that the State Government should be liable for the salaries of CAMUL employees. The Supreme Court clarified that the observations in Kapila Hingorani cases were interim and tentative, addressing extraordinary situations involving human rights violations, such as starvation deaths and suicides due to non-payment of salaries. These observations were not intended to establish a general principle that the State Government is liable for the salaries of employees of public sector undertakings or cooperative societies. The Court reiterated that interim orders do not constitute binding precedents and emphasized the principle laid down in Steel Authority of India v. National Union Waterfront Workers (2001), which states that government companies or societies do not become agents of the government for all purposes.
Conclusion:
The Supreme Court allowed the appeal, setting aside the orders of the Division Bench and the learned Single Judge of the Gauhati High Court. The writ petition filed by the respondent was dismissed, without prejudice to the rights of CAMUL employees to seek redressal through appropriate legal channels. The Court also noted that this decision does not prevent the State Government from formulating any scheme or extending any relief to CAMUL employees or similarly situated persons.
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