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2011 (3) TMI 1743
Issues involved: Challenge to order of Appellate Committee dismissing appeal against order-in-original regarding clearance of cotton yarn in Domestic Tariff Area (DTA) by a 100% Export Oriented Unit (EOU).
Details of the judgment:
Issue 1: Challenge to order of Appellate Committee dismissing appeal against order-in-original dated 8th June, 2009.
The Petitioner, a 100% EOU, sought permission to clear cotton yarn in DTA. Development Commissioner granted permission up to &8377; 12.64 crores. Subsequently, a show cause notice was issued seeking to recover excise duty on goods cleared in DTA sale. Adjudication order confirmed demand and imposed penalty. Appeal was dismissed by the Appellate Committee on 8th September, 2010. The present Petition challenges this order.
Issue 2: Application of precedent from a similar case.
In a previous case (Writ Petition No. 1718/2003), the Court held that once permission is granted for DTA sale and goods are sold accordingly, the Development Commissioner cannot review his own order without specific power to do so. The issues raised in the present petition are similar to the previous case, where the Commissioner sought to rectify his order after implementation, without any fraud or misrepresentation by the Petitioner.
Decision:
The impugned order-in-original dated 8th June, 2009 and the order of the Appellate Committee dated 8th September, 2010 are quashed and set aside. The rule is made absolute with no order as to costs.
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2011 (3) TMI 1742
Issues involved: Appeal against the order of CIT(A)-Jalpaiguri confirming Gross Profit rate based on previous three years u/s 143(3) of the Income Tax Act, 1961 for Assessment Year 2003-04.
Summary:
Issue 1: Confirmation of Gross Profit rate based on previous three years
The assessee appealed against the CIT(A)'s decision to confirm the addition of alleged sales of suppressed tea production by applying the average production rate of preceding 3 years. The assessee argued that there were no defects in the audited books of account and the production was accepted by Excise and sales Tax authorities. The CIT(A) also erred in confirming the addition of alleged extra production/sales of suppressed tea despite the explanation filed by the assessee and the Auditor's Report confirming no defects in the books of account.
The Tribunal noted that the Assessing Officer did not reject the books of accounts and the CIT(A) did not address this issue either. The Tribunal held that the first proviso to section 145(1) or section 145(2) can only be invoked if the elements attracting those provisions exist, and a clear finding along with supporting material must be provided by the Assessing Officer before estimating the Gross Profit rate without rejecting the books of account. Since there was no finding or rejection of books of account in this case, the Tribunal concluded that the lower authorities erred in applying the gross profit rate based on earlier years. Therefore, the Tribunal allowed the claim of the assessee and allowed the appeal.
In conclusion, the appeal of the assessee was allowed by the Tribunal, and the order was pronounced in open court on 11th March 2011.
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2011 (3) TMI 1741
Issues Involved:
1. Allegation of collusion to create artificial volume in the scrip.
2. Validity of the show cause notices issued to the appellants.
3. Examination of the evidence and material collected during the investigation.
Summary:
1. Allegation of Collusion to Create Artificial Volume in the Scrip:
The appellants were accused of colluding with other entities to create volumes in the scrip of Oasis Media Matrix Ltd. and off-loading their shares in off-market transactions. The purchasers allegedly sold these shares in the market, leading to a spurt in volumes and price. The Securities and Exchange Board of India (SEBI) issued show cause notices to the appellants alleging violation of regulation 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.
2. Validity of the Show Cause Notices Issued to the Appellants:
The Tribunal found that the show cause notices were vague and did not make out a clear case of violation of regulation 4. For Appellant No. 1, the notice alleged collusion with other entities to create volumes but did not specify the entities involved. The notice also mentioned off-loading shares in the market, which by itself is not an irregularity. Similarly, for Appellant No. 3, the notice alleged that he sold shares in off-market transactions, which is permissible in law, and there was no clear connection to any fraudulent activity.
3. Examination of the Evidence and Material Collected During the Investigation:
The Tribunal examined the material collected during the investigation and found that the allegations did not substantiate a violation of regulation 4. The transactions conducted by the appellants were within legal bounds, and there was no evidence of fraudulent or unfair trade practices. The Tribunal emphasized the importance of precise and unambiguous notices, as highlighted by the Supreme Court in Canara Bank and Ors. v. Debasis Das and Ors. (2003) 4 SCC 557, stating that a party should be put on notice of the case before any adverse order is passed against them.
Conclusion:
The appeal was allowed, and the impugned order was set aside. The Tribunal concluded that the show cause notices were vague and did not establish a case of violation of regulation 4 against the appellants. The parties were directed to bear their own costs.
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2011 (3) TMI 1740
Issues involved: Appeal against order of ld. CIT(Appeals)-III, Kochi for assessment year 2005-06 u/s.153A r.w.s.153C & 143(3).
Summary:
Issue 1: Addition of unexplained investment based on seized papers
The appeal concerns the addition of cash consideration as unexplained investment chargeable to tax u/s.69C of the Act, arising from a search u/s.132 of the I.T.Act,1961. The Assessing Officer added the cash consideration mentioned in the seized paper, which was challenged by the assessee in appeal before the ld. CIT(Appeals) and subsequently before the Tribunal. The ld. counsel for the assessee contended that the Assessing Officer did not detect any unaccounted source for the alleged payment to the vendors. The Tribunal, after considering precedents and the nature of the seized document, held that the Assessing Officer was not justified in making the addition and allowed the appeal of the assessee.
Issue 2: Legal principles governing addition towards capital gain
The Tribunal referred to legal principles governing the addition towards capital gain, emphasizing that the price of the land should be based on the sale consideration reflected in the registered sale deed. Citing relevant case law, the Tribunal highlighted that unless it is established on record, the Department has no right to make any addition. The Tribunal further noted that the seized document lacked evidentiary value as it bore no signature and was not seized from the custody of the assessee. Relying on previous decisions, the Tribunal concluded that the Assessing Officer's addition was unjustified and set aside the orders of the authorities below, allowing the claim of the assessee.
This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the arguments presented by the parties and the Tribunal's decision based on legal principles and precedents.
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2011 (3) TMI 1739
Issues involved: Estimation of profits after rejection of books of account.
I.T.A.No.5927/M/09 (Revenue's appeal): The Revenue challenged the estimation of Gross Profit (GP) at 3% on tainted purchases, arguing that it should be 4.5% on the entire turnover. The Tribunal noted a similar issue in a previous case and upheld the estimation of profit at 3% for tainted purchases, deeming it fair and reasonable based on the specific circumstances. Consequently, the Tribunal dismissed the Revenue's appeal.
C.O.116/M/10 (Assessee's cross objection): The Assessee objected to the rejection of book profit and the estimation of GP at 3%. They argued that the rejection was unfounded as transactions were through proper banking channels and had quantitative tally. The Tribunal upheld the estimation of profit at 3% for tainted purchases, considering the low profit margin in the Assessee's line of business. Following the precedent set in a previous case, the Tribunal confirmed the action of the Commissioner of Income Tax (Appeals) and dismissed the Assessee's cross objection.
In conclusion, the Tribunal upheld the estimation of profit at 3% for tainted purchases, considering it fair and reasonable based on the specific circumstances of the case. Both the Revenue's appeal and the Assessee's cross objection were dismissed in light of the Tribunal's findings and the precedent set in a previous case.
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2011 (3) TMI 1738
Issues involved: Appeal filed by Revenue regarding deduction u/s 54F of Income-tax Act, 1961.
Summary:
1. The Revenue contested the allowance of deduction u/s 54F to the assessee by CIT(Appeals), claiming non-utilization of proceeds before the return filing due date and failure to deposit in 'Capital Gains Account Scheme'.
2. The assessee reported long term capital gain, later enhanced due to re-assessment. Deductions claimed under Sections 54EC and 54F were partially allowed by Assessing Officer. Assessee argued that the investment in NABARD bonds covered the capital gains requirement, hence Section 54F claim was unnecessary. Assessee constructed a residential house within the stipulated time frame but did not deposit unutilized balance in a 'Capital Gains Account Scheme'.
3. CIT(Appeals) acknowledged the assessee's compliance with the intention of Section 54F, emphasizing the purpose of encouraging residential construction. The assessee's deposit in a Savings Bank account was deemed equivalent to a 'Capital Gains Account Scheme' deposit, as funds were used solely for house construction within the specified period.
4. The Revenue challenged CIT(Appeals) decision, arguing that non-compliance with the deposit provision would render Section 54F unworkable, citing a previous Tribunal decision. The assessee cited another Tribunal decision supporting deduction if the ultimate purpose of Section 54F was fulfilled.
5. The Tribunal noted the factual compliance by the assessee in constructing a house within the specified period and utilizing funds solely for construction, despite not depositing in a 'Capital Gains Account Scheme'. The Tribunal differentiated the present case from previous decisions where no utilization or investment occurred before the return filing due date.
6. The Tribunal upheld CIT(Appeals) decision, emphasizing the substantial compliance by the assessee with Section 54F requirements, despite the absence of a specific account deposit. The appeal filed by the Revenue was dismissed on 25th February, 2011.
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2011 (3) TMI 1737
Claim for long-term capital gains - Income from undisclosed sources - The assessee claimed deduction u/s 054E. The Assessing Officer was not satisfied with the explanation of the assessee and, therefore, he treated the long-term capital gains shown by the assessee to be the income from other sources by holding that the assessee could not prove the sale of shares and genuineness of the receipt of money. The assessee went in appeal before the CIT(A). The CIT(A) deleted the addition.
HELD THAT:- Considering the facts and circumstances and evidence on record, I am of the considered view that the action of the CIT(A) was not correct in confirming the assessment of ₹ 12,19,538/- as the income from undisclosed sources as against the sale consideration of shares declared by the assessee. The CIT(A) was not justified in rejecting the claim of Long Term Capital Gain of the assessee from sale of shares. I accordingly direct the AO to assess the income declared from the sale of shares under the head income from Long Term Capital Gain.
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2011 (3) TMI 1736
Cross-objection of the assessee - invoking of the provisions of s. 148 - reopening of the assessment - HELD THAT:- The Hon'ble apex Court in the case of Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007 (5) TMI 197 - SUPREME COURT] has held that intimation and assessment are different. The reassessment proceedings can be initiated on the basis of the reasons recorded for reopening of the assessment. The AO has received information from Investigation Wing which showed that the documents found during the course of search in the case of M/s Ashish International Group, showed substantial unaccounted sales to the retailers. The assessee was one of the parties to whom that group has made unaccounted sales. The AO therefore, had reason to believe that the assessee has made unaccounted purchases. Hence, from the reasons recorded by the AO, it is clear that he has sufficient material for holding that there is an escapement of income and therefore, the AO has rightly issued the notice u/s 148 of the Act.
disallowance of telephone expenses - HELD THAT:- The AO has disallowed 50 per cent of the telephone expenses. The disallowance made by the AO is excessive. After considering both the parties, we feel that it will be fair and reasonable to restrict the disallowance of telephone expenses to the extent of 1/6th.
disallowance of 1/4th expenses of petrol/diesel expenses, car insurance, repairs and maintenance of vehicle and depreciation expenses - HELD THAT:- After hearing both the parties, it will be fair and reasonable to restrict the disallowances to the extent of 1/6th of the expenses.
In the result, the appeal of the Revenue as well as the cross-objection of the assessee both are partly allowed.
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2011 (3) TMI 1735
Application filed u/s 254(2) - rectification of errors - It is the plea of the revenue that in the present case, the facts necessary for adjudication of the additional ground of appeal are not available on record and therefore the Tribunal ought to have refused to admit the additional ground of appeal. The revenue has prayed that the above mistake in the order of the tribunal should be suitably rectified.
HELD THAT:- There is no averment in the application that the issue sought to be raised by the AO in the present application was argued when the appeal was heard and the tribunal has failed to consider such argument. We have already extracted the order of the Tribunal on the admissibility of the additional ground of appeal. A perusal of the same would show that the only argument raised by the learned D.R. when the appeal was heard was that a claim not made by way of a revised return of income cannot be entertained and he placed reliance on the decision of the Hon’ble Supreme Court in the case of Goetz (India) Ltd.[2006 (3) TMI 75 - SUPREME COURT] . The learned counsel for the Assessee relied on the decision of the Hon’ble Delhi High Court in the case of Jai Parobolic Springs Ltd. [2008 (4) TMI 3 - DELHI HIGH COURT] wherein the Hon’ble Delhi High Court after considering the decision of the Hon’ble Supreme Court in the case of NTPC [1996 (12) TMI 7 - SUPREME COURT] and Goetz (India) held that power of the tribunal to entertain additional ground is not in any way restricted by the ruling of the Hon’ble Supreme Court in the case of Goetz (India) Ltd. In these circumstances, it is not open to the revenue to raise by way of an application u/s.254(2), a new argument which was never advanced when the appeal was heard. It is not open to the revenue to urge an argument by way of application u/s.254(2) of the Act, which was never urged when the appeal was heard. On this short ground the application u/s.254(2) is liable to be dismissed.
Where the Tribunal has overlooked the relevant material on record, there would be an error apparent from record which can be rectified by setting aside the order for fresh consideration. Where a material fact brought to the notice of the Tribunal has been lost sight of, the Tribunal has the power to rectify the mistake so committed; provided the material fact has an important bearing on the ultimate decision. The mistake pointed out in the application u/s.254(2) by the revenue in the present case cannot be said to fall in either of the above categories.
we are of the view that the present application u/s.254(2) of the Act is devoid of merits and deserves to be dismissed and is hereby dismissed.
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2011 (3) TMI 1734
Issues involved: The only issue raised in the appeal is the addition made u/s 40A(3) of the IT Act, 1961.
Summary:
The Appellate Tribunal ITAT Kolkata heard three appeals filed by the assessee against separate orders of the CIT(A)-XX, Kolkata for Assessment Years 2003-04, 2004-05, and 2005-06, all related to the addition made u/s 40A(3) of the IT Act, 1961. The AO disallowed 20% of payments made by the assessee through bearer cheques, invoking Section 40A(3). The CIT(A) confirmed the disallowance, stating that the case was not covered by CBDT Circular No.8 of 2006. The assessee contended that they were covered by the circular and requested deletion of the addition. After hearing both parties, the Tribunal observed that a certificate relied upon by the assessee was not available with the CIT(A) and remanded the matter for fresh consideration, directing to segregate cash withdrawals for day-to-day needs from the disallowance u/s 40A(3). The appeals of the assessee were allowed for statistical purposes.
This judgment primarily dealt with the interpretation and application of Section 40A(3) of the IT Act, 1961, concerning the disallowance of payments made through bearer cheques. The Tribunal considered the arguments presented by both parties and emphasized the importance of complying with relevant circulars and providing necessary documentation to support claims, ultimately remanding the matter for further review based on the additional certificate provided by the assessee.
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2011 (3) TMI 1733
Issues:
Violation of Rule 57CC of the Central Excise Rules, 1944; Recovery of duty at 8% on exempted final products; Applicability of Rule 57CC; Machinery provisions for recovery of duty; Benefit of relaxation of Modvat credit on exempted goods.
Analysis:
1. The judgment deals with a case where the assessee, engaged in manufacturing trailers, availed credit on inputs used in regular trailers but removed special trailers to a specific organization without payment of duty, contravening Rule 57CC of the Central Excise Rules, 1944. The dispute arose when the authorities initiated proceedings to collect duty at 8% on the exempted final products and imposed penalties due to the common use of inputs in both exempted and dutiable trailers.
2. The Commissioner (Appeals) noted the absence of machinery provisions for recovery of duty under Rule 57CC, leading to the setting aside of the Assessing Officer's order. The Revenue appealed to the Customs, Excise and Service Tax Appellate Tribunal, which upheld the Commissioner's decision, emphasizing the inability to enforce the demand at 8% due to the lack of recovery provisions.
3. The Revenue challenged the Tribunal's decision, raising substantial questions of law regarding the conditional benefits granted, the retrospective effect of certain rules, and the sufficiency of Rule 57CC to recover wrongly availed credits. The Court considered precedents and relevant amendments to the Central Excise Rules, highlighting the need for a comprehensive review of the applicability of Rule 57CC and the impact of subsequent amendments on the case.
4. Upon review, the Court found that the Commissioner and the Tribunal did not adequately address the assessee's argument regarding the applicability of Rule 57CC. Consequently, the Court set aside the Tribunal's order and remanded the case to the Commissioner (Appeals) for a thorough reconsideration of the issues, including the applicability of Rule 57CC and the impact of relevant amendments on the matter.
5. The Court referred to previous decisions and directed the Commissioner (Appeals) to evaluate the case in light of the relevant legal provisions and precedents, emphasizing the need for a comprehensive examination of the applicability of Rule 57CC and the implications of the relaxation of Modvat credit on exempted goods. The judgment concluded by disposing of the civil miscellaneous appeal without costs.
This detailed analysis of the judgment provides a comprehensive overview of the legal issues involved, the arguments presented by the parties, and the Court's decision to remand the case for further consideration based on the specific legal provisions and precedents cited.
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2011 (3) TMI 1732
Issues Involved:
1. Applicability of Rule 22 of the Punjab Liquor Permit and Pass Rules, 1932 to industrial/denatured spirit.
2. Validity of notification enhancing permit fee for denatured spirit.
3. Competence of the State to levy permit fees on denatured spirit.
4. Refund of permit fees collected under the amended Rule 22.
Issue-Wise Analysis:
1. Applicability of Rule 22 of the Punjab Liquor Permit and Pass Rules, 1932 to industrial/denatured spirit:
The petitioner challenged the applicability of Rule 22 of the Punjab Liquor Permit and Pass Rules, 1932 (the Rules) to industrial/denatured spirit. The court examined the provisions of the Excise Act and the Rules, noting that Rule 22 prescribes different forms for permits for possession of various types of spirits, including denatured spirit. The court found that a permit for possession of denatured spirit for business purposes is granted in Form L.42-A and is subject to a fee as per the provisos of sub-clause (d) of Rule 22.
2. Validity of notification enhancing permit fee for denatured spirit:
The petitioner sought to quash notification No. G.S.R. 25/P.A. 1/14/Ss. 334 and 59/Amd.(22)/2004, dated 29.3.2004, which increased the permit fee for denatured spirit from 30 paisa per bulk litre to 60 paisa per bulk litre. The court noted that the notification was issued under the powers conferred by Sections 34 and 59 of the Excise Act. However, the court found that the imposition of such a fee by the State was beyond its legislative competence, as industrial alcohol is not fit for human consumption and thus falls outside the purview of the State's regulatory power.
3. Competence of the State to levy permit fees on denatured spirit:
The court addressed the issue of whether the State of Punjab had the competence to levy permit fees on denatured spirit. It referred to the 7-Judge Bench judgment of the Supreme Court in Synthetics and Chemicals Ltd. v. State of U.P., which held that industrial alcohol, not being fit for human consumption, cannot be regulated by the State. The court reiterated that the State's power to regulate is limited to alcoholic liquor for human consumption, and industrial alcohol falls under the exclusive control of the Union Government as per Entry 52 of List I of the Seventh Schedule of the Constitution.
4. Refund of permit fees collected under the amended Rule 22:
The petitioner also sought a refund of the permit fees collected under the amended Rule 22. The court, having found the levy of permit fees on denatured spirit to be beyond the State's competence, directed the respondents to refund the permit fees collected from the petitioner. The court emphasized that any tax or fee levied without jurisdiction amounts to unjust enrichment and must be refunded.
Conclusion:
The court allowed the writ petition, holding that the imposition of permit fees on denatured spirit by the State of Punjab under Rule 22 of the Rules was invalid. The notification enhancing the permit fee was quashed, and the respondents were directed to refund the collected permit fees to the petitioner.
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2011 (3) TMI 1731
Issues involved: Appeals against Commissioner of Income-tax (A) orders u/s 143(3) for assessment year 2006-07 regarding addition of deposits in bank accounts.
In the judgment by Appellate Tribunal ITAT CHANDIGARH, two separate assessees appealed against Commissioner of Income-tax (A) orders u/s 143(3) for assessment year 2006-07. The appeals raised identical issues regarding additions made on account of non-verifiable deposits in bank accounts. The first assessee explained the sources of cash deposits from withdrawals made from the bank account, providing evidence to support the explanation. The Tribunal found no merit in the authorities' decision to treat the deposits as unexplained income u/s 68 of the Income-tax Act, directing the deletion of the addition based on the furnished explanation and evidence. The second assessee's case mirrored the first, with cash withdrawals being the source of subsequent cash deposits. Following the same reasoning as in the first case, the Tribunal deleted the addition made in this case as well. Consequently, both appeals were allowed, and the additions were deleted.
In summary, the judgment addressed the issue of additions made on account of non-verifiable deposits in bank accounts for two separate assessees appealing against Commissioner of Income-tax (A) orders u/s 143(3) for assessment year 2006-07. The Tribunal, after considering the explanations and evidence provided by the assessees regarding the sources of the cash deposits from bank withdrawals, found no merit in the additions and directed the Assessing Officer to delete the additions.
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2011 (3) TMI 1730
Issues involved: The only issue raised in this appeal is whether the CIT(A) is justified in confirming the disallowance made by the AO for the claim of Rs. 67,20,695/- being the debt issue expenses incurred and unamortized by the assessee during the assessment year 2005-06.
Summary:
Issue 1: Disallowance of debt issue expenses
The appellant, a wholly owned subsidiary of Standard Chartered, UK, engaged in borrowing and lending money, contested the disallowance of Rs. 67,20,695/- for debt issue expenses. The CIT(A) upheld the disallowance, citing the appellant's accounting treatment to amortize the expenses over the period of the debt instrument's rating. The Tribunal noted that expenses like stamp duty, registration fees, and legal fees for obtaining loans are revenue expenditures under section 37 of the Act. The Tribunal distinguished the case from Madras Industrial Investment Corporation Ltd V/s CIT, emphasizing the need to examine the nature of expenses and relevant documentation. The matter was remitted to the AO for further verification and decision in accordance with the law.
In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the AO to verify the facts and decide the issue as per law. The decision was pronounced on 25th March 2011.
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2011 (3) TMI 1729
Issues Involved:
1. Euthanasia and its legal implications.
2. Determination of "brain death" and "persistent vegetative state" (PVS).
3. Legal procedure for withdrawing life support in India.
4. Role of the High Court in approving withdrawal of life support.
5. Doctrine of Parens Patriae.
Detailed Analysis:
Euthanasia and its Legal Implications:
Euthanasia is categorized into active and passive euthanasia. Active euthanasia involves the use of lethal substances to end a person's life and is illegal in India under sections 302, 304, and 306 IPC. Passive euthanasia, which entails withholding or withdrawing medical treatment to let a patient die naturally, is considered legal under certain conditions and safeguards. The court distinguished between voluntary euthanasia (with patient consent) and non-voluntary euthanasia (without patient consent, e.g., in cases of coma or PVS).
Determination of "Brain Death" and "Persistent Vegetative State" (PVS):
The court examined the medical condition of Aruna Shanbaug, who has been in a PVS for 37 years. The medical report indicated that she had some brain activity, could respond to stimuli, and did not require a heart-lung machine. The court concluded that Aruna was not brain dead but in a PVS, making her eligible for considerations regarding passive euthanasia.
Legal Procedure for Withdrawing Life Support in India:
The court laid down the legal procedure for passive euthanasia, stating that a decision to withdraw life support should be taken by the patient's parents, spouse, close relatives, or next friend, or by the doctors attending the patient. However, such a decision must be bona fide and in the patient's best interest. The court emphasized the need for High Court approval to prevent misuse and ensure that the decision is in the patient's best interest.
Role of the High Court in Approving Withdrawal of Life Support:
The High Court, under Article 226 of the Constitution, has the power to approve the withdrawal of life support for an incompetent person. The Chief Justice of the High Court should constitute a Bench of at least two judges to decide on such cases. The Bench should seek the opinion of a committee of three reputed doctors and issue notices to the State and close relatives of the patient. The High Court should give its decision speedily, assigning specific reasons based on the principle of the patient's best interest.
Doctrine of Parens Patriae:
The court invoked the doctrine of Parens Patriae, which implies that the State has a duty to protect those who cannot protect themselves. The court, as a representative of the State, must take the ultimate decision regarding the withdrawal of life support for an incompetent person, giving due weight to the views of close relatives, next friend, and medical practitioners.
Conclusion:
The Supreme Court dismissed the petition for euthanasia for Aruna Shanbaug, emphasizing that the decision to withdraw life support should be taken by the KEM Hospital staff, who have been caring for her for 37 years, or by the High Court if the hospital staff changes their mind in the future. The court laid down detailed guidelines for the legal procedure to be followed in cases of passive euthanasia, ensuring that such decisions are made in the best interest of the patient and are subject to judicial oversight to prevent misuse.
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2011 (3) TMI 1728
Issues involved: Determination of whether the income from sale of shares should be classified as business income or capital gains.
Summary:
Issue 1: Grounds of appeal not pressed
The appellant did not press ground nos. 1 and 2 of the appeal, leading to their dismissal.
Issue 2: Classification of income
The main issue was whether the income of Rs. 19,12,858/- on sale of shares should be considered as business income or capital gains. The appellant argued that the transactions were delivery-based, supported by documentary evidence, and no loans were taken for investments. The Assessing Officer treated the amount as business income based on CBDT Circular No. 4 of 2007. The Commissioner of Income Tax (Appeals) upheld this decision, leading to the appeal before the Tribunal.
Decision:
After considering the submissions and evidence, the Tribunal analyzed the nature of the transactions. The appellant's trading volume and frequency indicated a substantial trading activity, leading to the conclusion that the appellant was a trader and not just an investor. The Tribunal found that the appellant's intention was to earn profits through regular trading in shares, supporting the classification of income as business income. The Tribunal also referred to similar cases and a CBDT Circular to support its decision. Consequently, the appeal of the assessee was dismissed, affirming the decision of the Commissioner of Income Tax (Appeals).
This summary provides a detailed overview of the issues involved in the judgment and the Tribunal's decision on each issue, maintaining the legal terminology and key points from the original text.
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2011 (3) TMI 1727
Issues involved: Application for interim relief u/s 11 of the U.P. Trade Tax Act, 1948 challenging the Trade Tax Tribunal's order.
Summary:
The applicant, engaged in manufacturing gutka, challenged the Trade Tax Tribunal's order rejecting their books of account based on machine utilization. The Additional Commissioner stayed 50% of the disputed tax, later modified by the Tribunal to 70%. The applicant filed revisions, arguing financial stringency was not considered. Citing legal precedents, the applicant contended that the power of stay should be judiciously exercised. The Tribunal's decision was criticized for not adequately considering financial aspects. Relying on various judgments, the applicant emphasized the importance of assessing prima facie merit and financial conditions when granting waiver cum stay. The Court, considering the case's circumstances, modified the Tribunal's order, staying 90% of the disputed tax and requiring a 10% deposit within fifteen days, along with providing security to the assessing authority.
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2011 (3) TMI 1726
Issues involved: Challenge to orders for recovery of entry tax and interest u/s 8 of Act of 1993 and Section 39(4) of Act of 2005 for HDPE/Plastic Containers imported for packaging Lichi Pulp.
Judgment Summary:
The petitioner, a dealer challenging recovery orders u/s 8 of Act of 1993 and Section 39(4) of Act of 2005 for entry tax on HDPE containers imported for packaging Lichi Pulp, raised three main contentions. Firstly, lack of notice before assessment u/s 25 of Act of 2005, secondly, the containers being HDPE not plastic, and lastly, containers not consumed in Bihar as packed product exported. Additionally, challenge on interest recovery as Act of 1993 doesn't provide for it.
The Court analyzed the legal framework, noting the continuity of powers u/s 8 of Act of 1993 from Act of 1981 even after its repeal. It held that whether containers were plastic or HDPE is immaterial for tax liability. As containers were used for packaging in Bihar, they were deemed consumed there, attracting entry tax u/s 3 of Act of 1993.
Regarding interest recovery, the Court agreed with petitioner's argument that Act of 1993 doesn't authorize it. Thus, the petition was partially allowed, upholding entry tax assessment but quashing interest recovery orders. The assessing authority was directed to modify orders within two months in line with the judgment.
In conclusion, the petition was allowed partially, with each party bearing their own costs.
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2011 (3) TMI 1725
Issues involved: Valuation of inventory items during a survey operation u/s 133A of the IT Act for assessment year 2007-08.
Summary:
The cross appeals by the assessee and the Revenue arose from the order of the Ld. Commissioner of Income Tax (Appeals) regarding the valuation of inventory items during a survey operation u/s 133A of the IT Act. The survey team conducted the operation in the presence of the main Director of the assessee company, valuing the inventory at Rs. 7,02,39,612. The assessee disputed the valuation of certain items, contending discrepancies in the recording and pricing by the department. The Assessing Officer disagreed with the assessee's contentions and made additions to the valuation. Upon the assessee's appeal, the Ld. Commissioner of Income Tax (Appeals) extensively analyzed the issue and determined a revised valuation based on the arguments presented.
The Ld. Commissioner of Income Tax (Appeals) considered the contentions of both parties and concluded that an estimate was necessary due to discrepancies in the inventory and the failure of the assessee to reconcile the differences promptly. After evaluating the rates proposed by the Assessing Officer and the assessee, the Ld. Commissioner of Income Tax (Appeals) settled on a revised rate of Rs. 37.96 per meter for the inventory items. This decision aimed to strike a balance between the conflicting valuations provided by the parties. The Appellate Tribunal upheld the order of the Ld. Commissioner of Income Tax (Appeals), dismissing the appeals filed by both the assessee and the Revenue.
In conclusion, the Appellate Tribunal affirmed the revised valuation determined by the Ld. Commissioner of Income Tax (Appeals) based on the evidence and arguments presented, emphasizing the need for a reasonable estimate in the absence of conclusive proof. The appeals by both parties were consequently dismissed, and the order was pronounced on 31/03/2011.
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2011 (3) TMI 1724
Issues Involved:
1. Determination of the nature of surplus earned on the sale of shares.
2. Disallowance of agricultural income.
Summary:
Issue 1: Determination of the nature of surplus earned on the sale of shares
In all the appeals, the primary issue is whether the surplus earned by the assessees on the sale of shares should be treated as long-term capital gains or as income from other sources. The Assessing Officer (AO) treated the surplus as 'income from other sources' for all groups except the Nagori Group, where it was treated as short-term capital gains. The AO argued that the assessees used the purchase and sale of shares to convert unaccounted money into accounted money, attracting a lower tax rate of 10%.
The Tribunal found that the shares were purchased at prevailing prices, held in De-mat form, and sold through stock exchanges with proper documentation. The search conducted u/s 132 did not yield any incriminating materials against the assessees. The Tribunal held that the AO's findings were based on presumptions and hypotheses without substantial evidence. Therefore, the surplus should be treated as long-term capital gains, and the orders of the lower authorities were vacated. The AO was directed to consider the claim of exemption u/s 54F for the Mehta Group.
Issue 2: Disallowance of agricultural income
For Vimala Devi Chajjer of the Chajjer Group, the AO disallowed a portion of the returned agricultural income for the assessment years 2001-02 to 2006-07, treating it as income from other sources. The Tribunal upheld the AO's disallowance, finding it just and proper.
Conclusion:
The appeals filed by all assessees, except Vimala Devi Chajjer, were allowed. In the case of Vimala Devi Chajjer, the appeal was partly allowed regarding the surplus on the sale of shares but dismissed concerning the partial disallowance of agricultural income.
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