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2012 (7) TMI 1075
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... ... ..... r, Adv., Mr. A.K. Srivastava, Adv., Ms. Anil Katiyar, Adv. For the Respondent Mr. Rahul Sateeja, Adv., Ms. Husnal Syali, Adv. O R D E R Delay condoned. The special leave petitions are dismissed.
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2012 (7) TMI 1074
Issues involved: Appeal against impugned orders due to delay in filing appeals u/s 249(2) of the Act.
Summary:
The judgment by the Appellate Tribunal ITAT Indore involved three appeals by different assessees challenging impugned orders due to a delay of 48 days in filing the appeals. The crux of the arguments revolved around the condonation of the delay, with the assessees contending that the delay was due to the mistake of the counsel and should not result in penalization, while the ld. CIT(DR) argued against condoning the delay.
Upon considering the submissions and perusing the record, it was noted that the assessment orders were passed on a specific date, and the assessees were required to file the appeals within the prescribed time u/s 249(2) of the Act. However, u/s 249(3), the first appellate authority could admit the appeal after the prescribed period if satisfied with the cause presented by the assessee for the delay. The impugned orders revealed that petitions for condonation of delay were filed, citing inadvertent mistakes by the counsel's office, supported by an affidavit and judicial pronouncements.
The first appellate authority expressed skepticism regarding the claim of inadvertence by the counsel's office, but the Tribunal, upholding the principle of natural justice, decided to condone the delay. The direction was given to the first appellate authority to hear the appeals on merit and allow the assessees an opportunity to present evidence to support their claims. The appeals were allowed in part for statistical purposes only.
The judgment was pronounced in the open court in the presence of representatives from both sides on 17th July 2012.
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2012 (7) TMI 1073
Issues involved:
The sanction of a Scheme of Arrangement u/s 391 to 394 of the Companies Act, 1956 between two companies - PARIDHI PROPERTIES LIMITED (Transferor Company) and LUMINAIRE TECHNOLOGIES LIMITED (Transferee Company).
Details of the Judgment:
1. The Petitioners have complied with all requirements as per court directions and filed necessary affidavits of compliance. They undertake to comply with statutory requirements under the Companies Act, 1956 and its Rules.
2. The Official Liquidator's report states that the affairs of the Transferor Company have been properly conducted and recommends its dissolution.
3. The Regional Director raised concerns regarding the Scheme, including the treatment of reserves, extension of the approval period, and compliance with changes in the Memorandum of Association of the Transferee Company.
4. The Petitioner/Transferee Company undertakes to address the Regional Director's concerns by styling the reserve as "Capital Reserve," extending the approval period, and filing the amended Memorandum of Association with the Registrar of Companies.
5. The Scheme is deemed fair, reasonable, compliant with the law, and not against public policy, with no opposition from any party involved.
6. Both Company Scheme Petitions are made absolute, and the Petitioner Companies are directed to lodge a copy of the order and the Scheme for stamp duty adjudication and file them with the Registrar of Companies within specified timelines.
7. The Petitioners are directed to pay costs to the Regional Director and the Official Liquidator, with a dispensation of filing and issuance of the drawn-up order.
8. All authorities are instructed to act on the order and authenticated Scheme provided by the Company Registrar, High Court (O.S.), Bombay.
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2012 (7) TMI 1072
The Gujarat High Court admitted a Tax Appeal and framed a substantial question of law regarding the liability of service tax on prepayment charges collected by appellants from borrowers. The court issued notice to the respondent and directed submission of Paper Books within three months.
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2012 (7) TMI 1071
Issues Involved:1. Classification of income from the sale of shares as short-term capital gain or business income. Summary:Issue 1: Classification of Income from Sale of SharesThe primary issue in the revenue's appeal is whether the income from the sale of shares amounting to Rs. 67,87,654/- should be classified as short-term capital gain or business income. The CIT (A) held that the income was correctly declared as short-term capital gain by the assessee, while the Assessing Officer (AO) classified it as business income. The CIT (A) granted relief by noting that the assessee provided complete transaction details, showing a total income of Rs. 1,87,37,259/- under three heads: business income (Rs. 4,29,169/-), long-term capital gain (Rs. 1,09,41,612/-), and short-term capital gain (Rs. 67,87,654/-). The assessee also earned dividend income, claimed as exempt. The AO argued that the assessee was trading in shares regularly, but the assessee distinguished between shares held as investment and stock in trade, relying on CBDT Instruction No.1827. The CIT (A) found that the shares were valued at cost price, indicating they were treated as capital assets, not stock in trade. The assessee did not engage in intra-day trading and earned substantial dividend income, supporting the claim that shares were held as investments. The average holding period of shares varied between 4 to 12 months, further supporting the investment intent. The revenue's representative argued that the company's main objects included acting as stock and share brokers, and the frequent transactions indicated trading activity. However, the assessee's representative countered that the company surrendered its NSE Ticket in May 2001 and primarily derived income from capital gains, interest, and dividends since then. The shares were held as investments, valued at cost, and reflected as such in the balance sheet. The assessee's representative cited several case laws supporting the classification of shares as investments. The Tribunal noted the distinction between shares held as investment and stock in trade, emphasizing the treatment in the books of account. The shares were valued at cost, not at the lower of cost or market price, indicating they were investments. However, the Tribunal also considered the frequency and volume of transactions, suggesting a profit motive. The total dividend income was Rs. 9,45,281/-, but it was unclear if this was from the shares sold for short-term capital gain. The Tribunal deemed it necessary to verify the source of dividend income to determine the true character of the shares. The issue was restored to the AO for verification. In conclusion, the Tribunal partly allowed the revenue's appeal, directing the AO to verify the source of dividend income and the nature of transactions to ascertain if the shares were held as investments or trading assets. Order pronounced in open court on this 13th day of July, 2012.
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2012 (7) TMI 1070
The Karnataka High Court set aside an order under Section 264 of the Income Tax Act, 1961, directing the petitioner to file an application for condonation of delay in filing the revised return for reconsideration by the Commissioner.
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2012 (7) TMI 1069
The Supreme Court of India dismissed special leave petitions 17002/2012 and 17216/2012. Special leave petitions 17919/2012 and 18103/2012 were adjourned for two weeks.
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2012 (7) TMI 1068
Issues involved:
The judgment involves the interpretation of Section 8(1)(d) of the Right to Information Act, 2005 regarding the disclosure of information related to complimentary air tickets issued by Air India in 2006.
Details of the Judgment:
Issue 1: Denial of Information by Air India
The respondent sought information regarding complimentary air tickets issued by Air India in 2006. Air India denied the information under Section 8(1)(d) of the RTI Act, citing commercial interests and competition in the aviation industry. The Central Information Commission (CIC) upheld the denial, stating that disclosing details of complimentary tickets may affect Air India's commercial interests. However, the CIC directed Air India to provide rules/regulations for issuing such tickets.
Issue 2: Judicial Review
The respondent filed a writ petition challenging the denial of information. The Single Judge held that the information sought did not constitute commercial confidence or trade secrets under Section 8(1)(d) as it pertained to Air India itself. The Judge directed Air India to disclose the names of persons who received complimentary tickets in 2006, emphasizing transparency and accountability in public authorities' functioning.
Issue 3: Disclosure of Information
During the appeal, Air India resisted disclosing the information, claiming it could reveal trade secrets and benefit competitor airlines. However, the Court found no basis for confidentiality and emphasized the RTI Act's purpose of promoting transparency. The Court noted that public funds support Air India, making the issuance of complimentary tickets a matter of public interest. The Court ruled that the information was not exempted under Section 8(1)(d) and directed Air India to disclose details of the complimentary tickets issued in 2006.
Conclusion:
The Court dismissed the appeal but directed Air India to provide information on the 706 complimentary tickets issued in 2006. Air India was given one week to confirm if information on remaining tickets had been destroyed. No costs were imposed on Air India in this regard.
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2012 (7) TMI 1067
Issues involved:
The judgment involves the issue of entitlement for exemption u/s 80P(2)(a)(i) and 80P(2)(a)(iv) of the Income-tax Act, 1961 for two cooperative societies engaged in banking activities and providing credit facilities to members for agricultural purposes.
Summary:
Issue 1: Entitlement for exemption u/s 80P(2)(a)(i) and 80P(2)(a)(iv)
The appeals were filed by the revenue against the order of the Learned CIT(Appeals) granting exemption to the cooperative societies under section 80P(2)(a)(i) and 80P(2)(a)(iv) of the Income-tax Act, 1961. The societies were engaged in banking activities and providing credit facilities to members for agricultural operations. The Assessing Officer denied the exemption, stating that the societies had accepted deposits from non-members and circulated the funds through members, generating income. However, the first appellate authority allowed the appeals based on similar decisions in previous assessment years. The ITAT upheld the order of the Learned CIT(Appeals) for the assessment year 2008-09, emphasizing that income generated was only from members and not from non-member deposits. The ITAT concluded that the societies were entitled to exemption under section 80P(2)(a)(i) and 80P(2)(a)(iv) as per the relevant provisions of the Act.
Decision:
Both appeals were dismissed, affirming the entitlement of the cooperative societies for exemption under section 80P(2)(a)(i) and 80P(2)(a)(iv) of the Income-tax Act, 1961.
This summary highlights the issues involved in the judgment and provides a detailed explanation of the decision for each issue, maintaining the legal terminology and key points from the original text.
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2012 (7) TMI 1066
Issues involved:
The judgment deals with the issue of the Revenue being aggrieved by the first appellate authority's decision to allow a claim of Rs. 7,95,38,030/- as set off brought forward losses, even though the assessee had not claimed such set off in its return.
Summary:
Issue 1: Allowance of Claim of Set Off Brought Forward Losses
The Revenue contested the first appellate authority's decision to allow the claim of Rs. 7,95,38,030/- as set off brought forward losses, arguing that the assessee had not claimed such set off in its return. The learned CIT(A) had correctly computed the total income at nil figure based on the appellant's return of income and accompanying documents. The A.O. had not provided any justification for not allowing the set off of brought forward losses against the income of the current year. The learned CIT(A) emphasized the limitations of the A.O.'s powers under section 143(1)(a) of the Act, stating that prima facie adjustments are permissible only for claims that are prima facie incorrect. The A.O. was directed to allow the impugned claim by deleting the unlawful prima facie adjustment. The Tribunal found that the assessee had correctly mentioned the amount of brought forward losses to be set off and that the impugned claim was not prima facie incorrect. The Revenue failed to point out any specific infirmity in the stand of the learned CIT(A), leading to the dismissal of the appeal.
In conclusion, the Tribunal affirmed the decision of the learned CIT(A) to allow the claim of set off brought forward losses and dismissed the appeal of the Revenue.
This judgment highlights the importance of adhering to the provisions of the Income Tax Act and the limitations of the Assessing Officer's powers under section 143(1)(a) when making adjustments to claims in the return of income. The decision emphasizes the need for proper justification and notice before disallowing claims, especially when they are not prima facie incorrect.
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2012 (7) TMI 1065
Issues Involved:
1. Whether the Company Law Board (CLB) was justified in dismissing the petition u/s 397/398 of the Companies Act, 1956.
2. Whether the CLB had the power to direct the appellant to purchase the shares of the respondents despite no finding of oppression or mismanagement.
3. Whether the CLB's order was fair and in the interest of the company.
Summary:
1. Dismissal of Petition u/s 397/398:
The appeal was filed u/s 10F of the Companies Act, 1956, challenging the CLB's judgment dated 12th January 2012, which dismissed the appellant company's petition Co. Pet. 95/ND/2010. The CLB observed that directorial complaints cannot be entertained in a petition u/s 397/398 unless it is a composite complaint in the nature of a quasi-partnership. The R-1 Company was not found to be a quasi-partnership as there was no equal shareholding, no equal representation on the Board, nor any oral or written understanding to that effect.
2. CLB's Power to Direct Purchase of Shares:
The appellant argued that in the absence of a finding of oppression and mismanagement, the CLB could not direct the appellant to purchase the shares of respondents No.1 to 6. The Court held that the CLB's power is of extremely wide amplitude u/s 402 of the Act, which allows it to regulate the conduct of the company's affairs, purchase shares, and make any just and equitable provision. The Court cited Supreme Court judgments, including Needle Industries (India) Ltd. and M.S.D.C. Radharamanan, which upheld the CLB's jurisdiction to pass orders in the interest of the company even without a finding of oppression.
3. Fairness and Interest of the Company:
The Court noted that all three groups of shareholders had filed separate petitions alleging oppression and mismanagement, indicating a lack of confidence and trust among shareholders. The Court opined that pending disputes would hinder the respondent company from fully exploiting its valuable land at Karol Bagh. The Court found the CLB's order to be fair, doing substantial justice between the parties, and in the company's interest. Consequently, the appeal was dismissed with no order as to costs.
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2012 (7) TMI 1064
Issues Involved:
1. Liability to pay Education Cess on imports under the D.E.P.B scheme.
2. Validity of demand notices issued without show-cause notice or adjudication.
Summary:
Issue 1: Liability to Pay Education Cess on Imports under the D.E.P.B Scheme
The petitioners challenged the demand notices for Education Cess on imports made under the D.E.P.B scheme. The Court referred to its previous decision in the case of Gujarat Ambuja Exports Ltd. & Anr. vs. Government of India & Ors., which held that Education Cess is not leviable on imports under the D.E.P.B scheme. The Court explained that Education Cess, introduced by sections 81 to 85 of the Finance Act, 2004, is levied on the aggregate of duties of customs. However, imports under the D.E.P.B scheme are exempt from customs duty as per Notification No.45/2002 issued u/s 25 of the Customs Act, 1962. The Court emphasized that the exemption from customs duty under the D.E.P.B scheme is intended to neutralize the customs duty on the import component of export products. Therefore, since no customs duty is levied and collected on such imports, Education Cess cannot be levied either. The Court also noted that the Ministry of Finance had clarified that Education Cess is not leviable on goods fully exempt from customs duty.
Issue 2: Validity of Demand Notices Issued Without Show-Cause Notice or Adjudication
The Court found that the impugned demand notices were issued without any show-cause notice or adjudication, making them liable to be quashed. The Court allowed the department to proceed with the adjudication of the show-cause notices while bearing in mind the conclusions and observations made in this judgment.
Conclusion:
The petition was allowed, and the impugned demand notice at Annexure-H was quashed. The department was permitted to proceed with the adjudication of the show-cause notices at Annexure-I, considering the Court's conclusions. The rule was made absolute with no costs.
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2012 (7) TMI 1063
Issues Involved:
1. Suppression of Material Facts and Falsehood
2. Pre-closure of Fixed Deposits
3. Fraud and Negligence by Bank Officials
4. Maintainability of Writ Petition
5. Entitlement to Fixed Deposit Proceeds
Summary:
1. Suppression of Material Facts and Falsehood:
The petitioner alleged suppression of material facts and falsehood by the respondent bank. The court found that the bank officials acted negligently and fraudulently, leading to the unauthorized withdrawal of the petitioner's fixed deposits. The court stated, "The second and third respondents are guilty of pleading falsehood, suppression of material facts and misleading the court."
2. Pre-closure of Fixed Deposits:
The petitioner contended that he did not authorize the pre-closure of his fixed deposits, whereas the bank claimed the pre-closure was done based on the petitioner's request. The court noted, "It is the bounden duty of the bank to prove that after following the proper procedure, the pre-closure was done." The court found discrepancies in the bank's documentation, including differences in the bank's logo on the FDRs and missing signatures of the supervisor/manager.
3. Fraud and Negligence by Bank Officials:
The court highlighted the fraudulent and negligent acts of the bank officials, stating, "The bank officials acted in violation of norms and without proper authorization letter and without verification about the genuineness of the fixed deposits." The court observed that the bank officials failed to verify the authenticity of the authorization letters and FDRs, leading to the fraudulent withdrawal of funds.
4. Maintainability of Writ Petition:
The respondent bank argued that the writ petition was not maintainable and that the petitioner should approach the civil court. However, the court held that the writ petition was maintainable, citing precedents where the Supreme Court allowed writ petitions in cases involving public sector banks. The court stated, "The writ petition is maintainable against the respondent bank."
5. Entitlement to Fixed Deposit Proceeds:
The court concluded that the petitioner was entitled to the proceeds of the fixed deposits, stating, "The petitioner is entitled to get the proceeds of the 7 FD receipts from the second respondent bank." The court directed the bank to pay the amount due under the fixed deposits along with interest, conditioned upon the petitioner furnishing an indemnity bond pending the CBI investigation.
Order:
The court allowed the writ petition and directed the second respondent bank to pay the amount payable under the seven fixed deposit receipts, treating the amount as if it is continuing in fixed deposits till the date of payment, with the same rate of interest. The petitioner was directed to hand over the original FDRs. The court also imposed an exemplary cost of Rs. 50,000 on the second respondent bank for pleading falsehood and suppressing material facts.
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2012 (7) TMI 1062
Issues involved: The correctness of the order of the Ld. CIT(A)-21, Mumbai for the assessment year 2007-08 is questioned by the Revenue, raising concerns regarding the allowance of expenditure as revenue expenditure and the entitlement for depreciation on assets at the rate of 30%.
Expenditure allowed as Revenue Expenditure:
The assessee, engaged in the hiring of earthmoving equipments, faced scrutiny assessment for the year, with the Assessing Officer questioning the expenditure under the head "Repairs & Maintenance." Despite the assessee's explanation that the expenditure was for current repairs and not capital in nature, the AO disallowed a significant amount as capital expenditure. However, the Ld. CIT(A) allowed the expenditure considering the nature of the business and the necessity for maintenance of heavy machineries used for rental purposes. The Tribunal upheld this decision, emphasizing that the expenditure was for maintenance and not for creating new assets, in line with the Supreme Court's ruling in CIT Vs Saravana Spinning Mills Pvt. Ltd. (2007) 293 ITR 201 (SC).
Depreciation Claim at 30%:
The dispute over claiming depreciation at the rate of 30% on certain assets like Transit Mixers, Concrete pump, JCB holder, and Mobile crane arose when the AO held that the assets did not qualify for the higher rate of depreciation. The assessee justified the claim based on the nature of the business involving hiring out heavy commercial vehicles. The Ld. CIT(A) accepted this explanation, allowing the higher rate of depreciation. The Tribunal supported this decision, citing relevant IT Rules and judicial precedents that upheld similar claims for vehicles used in businesses like that of the assessee. The Tribunal found no reason to interfere with the Ld. CIT(A)'s decision, ultimately dismissing the Revenue's appeal.
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2012 (7) TMI 1061
Issues involved: Assessment based on project completion method vs. percentage completion method for builder/developer for AY 2008-09.
The appeal was filed by the Revenue against the order of Ld. CIT(A)-39, Mumbai for AY 2008-09, regarding the assessment of a builder/developer following project completion method. The Assessing Officer (AO) applied percentage completion method, resulting in additions to the income declared by the assessee.
The assessee contended that they have consistently followed the project completion method, which was accepted in previous assessment years u/s. 143(3) of the Act. The Ld. CIT(A) agreed with the assessee, directing the AO to delete the additions made based on percentage completion method.
The Revenue appealed against the Ld. CIT(A)'s order, arguing in favor of the application of the percentage completion method. The assessee relied on a previous ITAT order in their own case for AY 2007-08, supporting their consistent use of the project completion method.
The Tribunal considered the legal position that an assessee can choose a recognized accounting method as long as it is consistently followed. It noted that the projects in question were not completed during the relevant assessment year.
Reviewing the past assessment history of the assessee, the Tribunal found that project completion method was consistently accepted in previous years. The Tribunal also examined specific details of the projects in question, concluding that there was no reason to overturn the Ld. CIT(A)'s decision.
Ultimately, the Tribunal dismissed the Revenue's appeal, confirming the decision to allow the assessee to use the project completion method for the assessment year in question.
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2012 (7) TMI 1060
The Calcutta High Court judgment in CP No. 166 of 2012 states that the company will pay Rs. 5 lakh in ten monthly instalments to settle the petitioner's claim. If payments are made as agreed, the petition will be permanently stayed. In case of default, the petition will be advertised in newspapers. No costs ordered at this stage.
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2012 (7) TMI 1059
Issues involved: The judgment deals with the disallowance of deduction claimed by the assessee towards gratuity fund under section 36(1)(v) of the Income Tax Act, and the applicability of section 37 for such deductions.
Summary:
Issue 1: Disallowance of deduction claimed towards gratuity fund under section 36(1)(v):
The Revenue appealed against the order of the Commissioner of Income-tax(Appeals) disallowing the deduction of &8377; 9,32,697 claimed by the assessee towards gratuity fund for the assessment year 2008-09. The Assessing Officer (AO) disallowed the deduction on the grounds that the assessee did not satisfy the conditions of section 36(1)(v) of the Act. However, the CIT(A) allowed the claim by relying on a Tribunal decision in a similar case. The Tribunal noted that the issue had been previously considered in the assessee's own case for other assessment years, where the Tribunal had ruled in favor of the assessee. The Tribunal upheld the CIT(A)'s decision based on the precedent and dismissed the Revenue's appeal.
Issue 2: Applicability of section 37 for deduction towards unapproved gratuity fund:
The main contention was whether the payment made by the assessee towards an unapproved gratuity fund could be allowed under section 37 of the Income Tax Act. The Revenue argued that since the group gratuity scheme was not approved by the Commissioner of Income Tax, it could not be allowed. However, the assessee cited judgments of the Madras High Court and the jurisdictional High Court to support their claim. The Tribunal examined the judgments and held that even if a payment is made to an unapproved gratuity fund, it should be allowed under section 37. By following the binding judgment of the jurisdictional High Court, the Tribunal upheld the CIT(A)'s decision to allow the deduction under section 37.
In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to allow the deduction towards the gratuity fund and confirming the applicability of section 37 for such deductions.
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2012 (7) TMI 1058
Issues involved: Discrepancy in the percentage of duty deposit ordered by the Tribunal compared to a similar case involving M/s. Supreme Glazes Private Ltd.
Summary:
The High Court of Gujarat heard arguments from both parties and proceeded with the case for final disposal. The petitioner contended that the Tribunal had ordered a higher percentage of duty deposit in their case compared to M/s. Supreme Glazes Private Ltd. where only 8% of the total duty was required to be deposited. The Tribunal's order in the M/s. Supreme Glazes case involved a demand for waiver of pre-deposit of a substantial amount confirmed as duty, interest, and penalties. The issue revolved around the demand of duty on the appellant due to under-valuation of finished goods 'Frit' and clandestine removal, along with exceeding the SSI exemption limit. The Tribunal directed the appellant to make a further pre-deposit of a specified amount within a set timeframe, with the balance amounts being waived subject to compliance. The High Court noted the discrepancy in the duty percentage demanded from the present petitioner compared to M/s. Supreme Glazes Private Ltd. and directed the petitioner to deposit a specific amount within a specified period, modifying the Tribunal's order accordingly. The petition was disposed of, and notice was discharged.
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2012 (7) TMI 1057
Issues involved: Interpretation of provisions of the Bombay Entertainment Duty Act, 1923 regarding the classification of a Trade Show as entertainment and the Addl. Collector's failure to follow the court's direction.
The High Court of Bombay addressed the issue of whether a Trade Show organized by the petitioner constitutes entertainment under the Bombay Entertainment Duty Act, 1923. The court noted that despite its previous direction to the Addl. Collector to decide this question, the Addl. Collector issued an order directing the petitioner to pay Entertainment Tax without considering the essential question. The court set aside the Addl. Collector's order and instructed a fresh decision after proper adjudication on whether the Trade Show falls under the definition of entertainment as per the 1923 Act. The court emphasized the importance of following its directives and ensuring a fair hearing for the petitioner. The Addl. Collector was directed to provide a personal hearing to the petitioner and to issue a new order based on merits and in compliance with the law by a specified date.
In conclusion, the High Court of Bombay made the rule absolute in the terms mentioned, with no specific order regarding costs, and kept all contentions open for further consideration.
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2012 (7) TMI 1056
The High Court of Karnataka dismissed the writ petitions filed by the petitioner, granting leave to withdraw them and file a fresh petition challenging the circular, notice, and order dated 28.06.2012. The registry was instructed to return all annexures to the petitioner's counsel.
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