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2013 (8) TMI 1097
Issues Involved:
1. Whether the mortgagor can induct a person as a tenant in a mortgaged property, to the prejudice of the mortgagee, pendente lite, in violation of Section 52 of the Transfer of Property Act, 1882.
2. Whether the induction of the tenant by the mortgagor during the pendency of litigation is valid under Section 65-A of the Transfer of Property Act, 1882.
3. Whether the tenant inducted during the subsistence of the mortgage is entitled to protection under the Maharashtra Rent Act.
Summary:
Issue 1: Induction of Tenant Pendente Lite
The primary issue was whether the mortgagor could induct a tenant in a mortgaged property during the pendency of litigation, violating Section 52 of the Transfer of Property Act, 1882. The Court noted that Gangabai, the mortgagee, had initiated several legal proceedings to enforce her mortgage rights and had acquired joint possession of the property. Despite this, Respondent Nos. 2 and 3 inducted Respondent No. 1 as a tenant without Gangabai's consent. The Court held that such induction was in violation of Section 52 of the TPA, which prevents a mortgagor from creating any lease during the pendency of a mortgage suit to the prejudice of the mortgagee.
Issue 2: Validity of Lease under Section 65-A of TPA
The Court examined whether the lease granted by the mortgagor during the pendency of litigation was valid under Section 65-A of the TPA. It was concluded that Section 65-A, which deals with the mortgagor's powers to lease, does not override Section 52. Therefore, any lease granted during the pendency of a suit for sale by the mortgagee binds the lessee to the result of the litigation. The Court cited precedents, including Mangru Mahto v. Thakur Math, to support this interpretation.
Issue 3: Protection under Maharashtra Rent Act
The Court addressed whether the tenant inducted during the subsistence of the mortgage could claim protection under the Maharashtra Rent Act. It was determined that a tenant inducted during the subsistence of the mortgage is not entitled to such protection. This position was supported by precedents such as Om Prakash Garg v. Ganga Sahai and Carona Shoe Co. Ltd. v. K.C. Bhaskaran Nair.
Conclusion:
The Court found that the lower courts had erred in their legal interpretation and non-suited the appellant. It was held that the induction of Respondent No. 1 as a tenant was illegal and prejudicial to the mortgagee, Gangabai. Consequently, the judgments of the lower courts were set aside, and the suit was decreed in favor of the appellant, without any mesne profits. The appeal was allowed without any order as to costs.
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2013 (8) TMI 1096
The Supreme Court of India granted permission to the petitioners to add more grounds in the special leave petitions. Leave was granted, and the hearing was expedited. (2013 (8) TMI 1096 - SC Order)
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2013 (8) TMI 1095
The High Court of Delhi dismissed the appeal regarding sales tax liability converted into a loan in the assessment year 2003-04. The assessee is allowed the benefit and deduction under section 43B of the Income-tax Act, 1961 in the relevant year. The circular by the Central Board of Direct Taxes permits such set off when the liability is converted into a loan and the Government order is issued. No substantial question of law arises for consideration.
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2013 (8) TMI 1094
Issues Involved:
1. Disallowance of expenditure u/s 14A r.w. rule 8D of the IT Rules
2. Disallowance of prior period expenses
Disallowance of Expenditure u/s 14A r.w. rule 8D of the IT Rules:
The Revenue challenged the deletion of disallowance of expenditure amounting to Rs. 13,45,968/- under the head "interest" as per rule 8D of the IT Rules read with section 14A of the Income Tax Act. The Tribunal considered the arguments of both parties and reviewed the relevant portion of the impugned order. It was noted that the appellant's own funds exceeded the investment made for generating exempt income, indicating the availability of sufficient interest-free funds. The Tribunal found no nexus between the interest expenditure and the investment. Citing the decision of the Hon'ble Bombay High Court, the Tribunal concluded that the disallowance of proportionate interest was not justified, and thus upheld the order of the learned CIT(A).
Disallowance of Prior Period Expenses:
Another ground raised was the deletion of prior period expenses amounting to Rs. 1,13,568/- by relying on a decision of the Hon'ble Apex Court. The Assessing Officer had disallowed these expenses without recognizing that the liability had crystallized during the year. The Tribunal, after considering the submissions and relevant judicial pronouncements, found no error in the order of the learned CIT(A) and upheld the decision. Consequently, the appeal of the Revenue was dismissed.
This comprehensive judgment by the Appellate Tribunal ITAT Indore addressed the issues of disallowance of expenditure u/s 14A r.w. rule 8D of the IT Rules and disallowance of prior period expenses, providing detailed reasoning and legal analysis for each issue.
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2013 (8) TMI 1093
Issues Involved:
1. Validity of the extension of time for completing the investigation u/s 43D(2) of the UAP Act.
2. Applicability of the UAP Act to the alleged offences committed before the amendment by Act 3 of 2013.
Summary:
1. Validity of the extension of time for completing the investigation u/s 43D(2) of the UAP Act:
The appellant, accused No. 7, was arrested and remanded to judicial custody. The investigation was not completed within ninety days, and the Public Prosecutor filed an application u/s 43D(2) of the UAP Act for an extension of time up to 180 days. The court below allowed this application, overruling the objections raised by the appellant. The appellant contended that the reasons stated for the extension were insufficient and did not satisfy the requirements of the proviso to sub-section (2) of S. 43D of the UAP Act. The court, however, found that the application filed by the Special Public Prosecutor satisfied the necessary requirements for extension of time and that all relevant aspects were considered. The Supreme Court's principles in Hitendra Vishnu Thakur & Ors. v. State of Maharashtra & Ors. (1994) 4 SCC 602 were applied, emphasizing that the Public Prosecutor's report must indicate the progress of the investigation and justify the detention of the accused beyond ninety days. The court concluded that there was no illegality, irregularity, or impropriety in the order passed by the court below.
2. Applicability of the UAP Act to the alleged offences committed before the amendment by Act 3 of 2013:
The appellant argued that financial terrorism was included as an offence under the UAP Act only by the Unlawful Activities (Prevention) Amendment Act, 2012 (Act 3 of 2013), which came into force on 3.1.2013, and that the alleged offence was committed before this date. The court examined S. 15 of the UAP Act before and after its amendment. It was held that even without the insertion of the words 'economic security' in S. 15, the word "security" occurring in S. 15 of the Act before its amendment would cover 'economic security' as well. The definition of "property" in S. 2(h) includes cash, bank accounts, and funds, and any loss caused to the finance of the country by an act with intent to threaten the unity, integrity, security, or sovereignty of India would attract S. 15 of the Act. Therefore, the court concluded that the UAP Act applies to the allegations made by the prosecution, and the extension of the period to complete the investigation was justified. Consequently, the Criminal Appeal was dismissed.
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2013 (8) TMI 1092
Issues Involved:
1. Transfer Pricing Issues
2. Corporate Tax Issues
3. Disallowance under section 43B
4. Disallowance of Post Retirement Medical Benefits
5. Disallowance of Royalty Expenditure
6. Disallowance of Interest u/s 36(1)(iii)
7. Disallowance under section 14A
8. Levy of Interest under sections 234B and 234C
Summary:
1. Transfer Pricing Issues:
The assessee challenged the addition of Rs. 106,44,25,680 on account of the alleged difference in the arm's length price of international transactions related to advertisement, marketing, and sales promotion expenses (AMP expenses). The ITAT upheld the findings of the Special Bench in M/s L.G. Electronics India P. Ltd. Vs. ACIT, determining that the AMP expenses incurred by the assessee constituted an international transaction u/s 92B. The issue was remanded to the Transfer Pricing Officer (TPO) to re-evaluate the comparables and compute the transfer pricing adjustment afresh.
2. Corporate Tax Issues:
The assessee contested several disallowances, including consumer market research expenses of Rs. 9,69,15,622/- u/s 37(1), which the ITAT directed to be allowed as they were considered sales promotion expenses. The ITAT also addressed the disallowance of royalty expenditure, directing the AO to allow the claim of Rs. 55,56,64,000/- as revenue expenditure, rejecting the AO's view that it was capital in nature.
3. Disallowance under section 43B:
The ITAT allowed the assessee's claim of Rs. 32,62,786/- on account of the closing balance lying in the PLA account, following the precedent set in the assessee's own case and other judicial pronouncements. The AO was directed to verify and allow the claim.
4. Disallowance of Post Retirement Medical Benefits:
The ITAT allowed the assessee's claim of Rs. 1.72 crores for post-retirement medical benefits based on actuarial valuation, following the revised Accounting Standard-15 and the precedent set in the assessee's own case.
5. Disallowance of Royalty Expenditure:
The ITAT directed the AO to allow the royalty expenditure of Rs. 55,56,64,000/- paid to GSKAP, considering it as revenue expenditure. The ITAT rejected the AO's view that the expenditure was capital in nature and noted that the expenditure had been allowed in earlier years.
6. Disallowance of Interest u/s 36(1)(iii):
The ITAT deleted the disallowance of Rs. 1,54,76,000/- made by the AO under the proviso to section 36(1)(iii), holding that the interest expenditure was not related to any borrowed funds used for capital work-in-progress (CWIP).
7. Disallowance under section 14A:
The ITAT upheld the disallowance under Rule 8D(iii) for administrative expenses but directed the AO to delete the disallowance under Rule 8D(ii) for interest expenditure, as the assessee had no borrowed funds. The ITAT allowed the assessee to set off the amount of Rs. 6,06,977/- already disallowed by the assessee.
8. Levy of Interest under sections 234B and 234C:
The ITAT noted that the levy of interest under sections 234B and 234C is consequential and dismissed the ground raised by the assessee.
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2013 (8) TMI 1091
Merger of Appeals - Challenging the legality of the proceedings of Judicial Magistrate taken under SARFAESI Act - Conditions for Possession of the secured assets - The first Respondent is a guarantor of the borrower to loan transaction whereby the second Respondent borrowed money from the Appellant .the first Respondent created a mortgage on certain property hereinafter referred to as the "secured asset" owned by him to secure the loan. A notice under Section 13(2)2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the SARFAESI Act") demanding the repayment of the loan amount along with interest within a period of sixty days was issued inter alia to the borrower as well as the guarantor (Respondent Nos. 2 and 1 herein). The first Respondent neither made the payment nor raised any objection to the said demand. Failure to which court appointed an Advocate commissioner to take possession of the secured asset and to handover the same to the Appellant herein.
HELD THAT:- Both the Appeals raised a common question of law, the same are being disposed of by this common Judgment. On the date of the impugned order the law did not oblige the Magistrate to undertake any such exercise. Apart from that court is satisfied on examination of the content of the affidavit that all the basic requirements necessary for granting the request of the Appellant of delivery of the possession of the secured asset are asserted to have existed on the date of application. Therefore, court do not see any illegality in the impugned order. The appeal is allowed. The order of the High Court is set aside.
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2013 (8) TMI 1090
Issues Involved
1. Constitutional validity of Section 12 of the Uttar Pradesh Gangsters and Anti-Social Activities (Prevention) Act, 1986.
2. Alleged violation of Articles 14, 21, 22(4), and 300A of the Constitution of India.
3. Request for quashment of the First Information Report dated 2.5.2010.
Summary of Judgment
1. Constitutional Validity of Section 12 of the Act
The petitioner challenged the constitutional validity of Section 12 of the Uttar Pradesh Gangsters and Anti-Social Activities (Prevention) Act, 1986, claiming it violated Articles 14, 21, 22(4), and 300A of the Constitution of India. The Supreme Court upheld the constitutional validity of Section 12, stating that the provision mandates that the trial under this Act of any offence by the Special Court shall have precedence and be concluded in preference to other cases, which does not violate the right to a speedy and fair trial under Article 21.
2. Alleged Violation of Articles 14, 21, 22(4), and 300A
- Article 21 (Right to Speedy and Fair Trial): The Court held that the provision for precedence of trial under the Act ensures a speedy trial and does not deny fair trial rights. The legislative intent was to prevent simultaneous trials in different courts, which could cause delays.
- Article 14 (Equality Before Law): The Court found that the differentiation between an accused under this Act and those accused under other laws is rational and does not violate the equal protection clause. The Act addresses organized crime, which necessitates a distinct legal approach.
- Article 22(4) (Preventive Detention): The Court rejected the argument that the provision amounts to preventive detention, clarifying that preventive detention and detention for trial under the Act are different.
- Article 300A (Right to Property): There was no specific discussion on this article in the judgment.
3. Quashment of the First Information Report
The petitioner also sought the quashment of the First Information Report dated 2.5.2010. However, the Supreme Court did not find merit in this request and dismissed the writ petition.
Conclusion
The Supreme Court upheld the constitutional validity of Section 12 of the Uttar Pradesh Gangsters and Anti-Social Activities (Prevention) Act, 1986, and dismissed the writ petition, finding no violation of Articles 14, 21, 22(4), and 300A of the Constitution of India.
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2013 (8) TMI 1089
Unaccounted sale - Estimation of income - only profit element is liable to tax - Assessee engaged in business of construction of flats - was collecting unaccounted cash from the purchasers of the flats. - HELD THAT:- entire amount of sale proceeds cannot be regarded as profit of the assessee, the net profit rate had to be adopted for the purpose of addition. Out of entire undisclosed receipt of ₹ 62 lacs, profit of ₹ 26 lacs is taxable for securing the ends of justice.
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2013 (8) TMI 1088
Issues involved:
Appeal against CIT(A)'s order u/s 40A(3) for A.Y. 2008-09.
Summary:
Issue 1: Interpretation of Section 40A(3)
The assessing officer added Rs. 30,63,087 u/s 40A(3) due to cash purchases between two concerns owned by the same assessee. Assessee argued that as the payments were within the same entity, section 40A(3) did not apply. CIT(A) upheld the addition citing the need for payments through banking channels. ITAT Delhi held that for section 40A(3) to apply, there must be a payment to another person, not within the same entity. The section aims to prevent tax evasion and unaccounted money flow, which was not the case here.
Issue 2: Business Expediency
Assessee contended that the two concerns were created for business convenience as per the terms with Godrej company. The transactions were necessary for the distribution agreement with Godrej. ITAT Delhi noted that the transactions were genuine, recorded, and for business expediency. The lower authorities did not allege tax evasion, and the transactions were between two independent concerns of the same assessee. Therefore, the addition u/s 40A(3) was unjustified and deleted.
Conclusion:
Assessee's appeal allowed as the addition u/s 40A(3) was unwarranted due to the absence of transactions with another person and the presence of business expediency for the interse payments.
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2013 (8) TMI 1087
Issues involved: Denial of CENVAT credit of service tax for Renting of Immovable Property Service availed by the appellant in relation to their Sales Office.
Summary:
The appellant's CENVAT credit of service tax for Renting of Immovable Property Service for their Sales Office was denied due to lack of nexus with manufacturing activities. The appellant argued that the office also accommodated various departments and was registered as an input service distributor. They cited precedents where similar credits were allowed. The lower authorities assumed the office was solely a sales office, leading to the denial of credit only up to the place of removal. The Authorized Representative contended that the credit was rightly denied as it was taken only for the sales office. The Tribunal found that the appellant's submissions were not adequately considered by the lower authorities. As the office accommodated various departments, it was deemed to have a relationship with manufacturing activities, making the appellant eligible for the CENVAT credit. The Tribunal also found the cited precedents applicable to the case, leading to the allowance of both appeals.
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2013 (8) TMI 1086
Issues involved: Appeal against disallowance of expenditure u/s 40(a)(ia) of the Income Tax Act, 1961 despite timely TDS deduction and deposit.
Summary:
The Appellate Tribunal ITAT Kolkata heard the appeal by Revenue against the order of CIT(A)-Durgapur regarding the disallowance of expenditure under section 40(a)(ia) of the Act. The assessment for A.Yr. 2008-09 was framed by I.T.O., Ward-1(3), Durgapur u/s 143(3) of the Income Tax Act, 1961. The only issue was the disallowance of the claim of expenditure despite timely TDS deduction and deposit before the due date of filing of return u/s 139(1) of the Act.
The Tribunal considered the facts and the decision of the Hon'ble Calcutta High Court in a similar case. It was noted that once TDS is deducted and paid to the Government Account before the due date of filing of return of income, the issue is in favor of the assessee. The High Court had previously held that the amendment in section 40(a)(ia) by Finance Act, 2010 is remedial and curative, allowing deduction for TDS paid before the due date of filing of return u/s 139(1) of the Act. As the assessee had deducted and deposited TDS before the due date, the Tribunal allowed the claim of the assessee, ruling in favor of the assessee.
Therefore, the appeal of the assessee was allowed, and the order was pronounced in the open court on 06.08.2013.
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2013 (8) TMI 1085
Issues Involved:
1. Estimation of production of bricks.
2. Estimation of gross profit rate.
3. Rejection of books of accounts and application of section 144.
4. Disallowance of interest on capital and remuneration to partners.
Summary:
Issue 1: Estimation of Production of Bricks
The assessee, a partnership firm engaged in the manufacturing and sale of bricks, declared a production of 27.80 lakhs bricks for A.Y. 2009-10. The A.O. estimated the production at 40.04 lakhs bricks and 4.45 lakhs tiles based on the amount of royalty paid and the expenditure on clay. The ld. CIT(A) reduced the estimated production to 35 lakhs bricks, noting that the A.O.'s estimation was based on conjecture and lacked corroborative material. The Tribunal upheld the CIT(A)'s estimation of 35 lakhs bricks, rejecting the A.O.'s higher estimate.
Issue 2: Estimation of Gross Profit Rate
The A.O. adopted a gross profit rate of 22% based on another brick-kiln owner's rates, whereas the assessee declared a net profit rate of 5.13%. The ld. CIT(A) applied a gross profit rate of 22% on the estimated production of 35 lakhs bricks. The Tribunal directed that the net profit rate of 5.82% from the previous year should be applied to the declared sales, subject to interest and remuneration to partners.
Issue 3: Rejection of Books of Accounts and Application of Section 144
The A.O. made the assessment u/s 144 r.w.s. 145(3) due to specific defects in the books of accounts. The ld. CIT(A) upheld the rejection of books of accounts but found the A.O.'s application of section 144 unjustified as the A.O. had issued notice u/s 142(1). The Tribunal agreed with the CIT(A) that the A.O. should have applied the rate declared and accepted in the immediate past year after rejecting the books of accounts.
Issue 4: Disallowance of Interest on Capital and Remuneration to Partners
The A.O. disallowed the interest on capital and remuneration to partners without providing any reasons. The ld. CIT(A) allowed the assessee's claim for interest and remuneration, finding it fair and reasonable. The Tribunal upheld this decision, allowing the deduction of remuneration and interest to partners from the estimated profit.
Conclusion:
- ITA No. 226/Jodh/2013 for A.Y. 2009-10 of the revenue is dismissed.
- ITA No. 243/Jodh/2013 for A.Y. 2009-10 is partly allowed.
- ITA No. 242/Jodh/2013 for A.Y. 2009-10 is allowed.
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2013 (8) TMI 1084
Issues Involved:
The issues involved in this case are related to the deletion of additions made by the Assessing Officer on account of unexplained cash credit and disallowance of interest paid on unsecured loans, interpretation of section 153A of the Income Tax Act, reliance on the second proviso to section 153A(1), adherence to Circular No. 7 of 2003 issued by the CBDT, and the requirement of finding documents during a search operation u/s 132 or 132A.
Assessment Year 2001-02:
The Revenue challenged the deletion of additions by the CIT (A) regarding unexplained cash credit and disallowance of interest paid on unsecured loans. The CIT (A) held that no material was found during the search operation to support the additions. The CIT (A) emphasized that under section 153A, assessments or reassessments should be based on material found during the search. The CIT (A) also referred to Circular No. 7 of 2003 to support the abatement of pending assessments. The CIT (A) concluded that since no income was found to have escaped assessment and no relevant documents were seized during the search, no additions could be made u/s 153A.
Assessment Year 2003-04:
Similar to the previous assessment year, the Revenue contested the deletion of additions by the CIT (A) concerning unexplained cash credit and disallowance of interest on unsecured loans. The CIT (A) reiterated that the additions were not supported by any material discovered during the search. The CIT (A) again highlighted the provisions of section 153A and Circular No. 7 of 2003 to argue against the additions. The CIT (A) emphasized that without the presence of incriminating documents or assets seized during the search, no additions could be justified u/s 153A.
Judgment Summary:
The ITAT Delhi, comprising Shri J. S. Reddy and Shri C. M. Garg, considered the appeals by the Revenue against the CIT (A) orders for assessment years 2001-02 and 2003-04. The ITAT observed that the CIT (A) had granted relief to the assessee based on the absence of material found during the search operation. However, the ITAT noted that the CIT (A) did not address the information received by the Assessing Officer regarding accommodation entries. As per the statutory scheme, the Assessing Officer is not authorized to issue notices u/s 147/148 during proceedings u/s 153A. Therefore, the ITAT remanded the issue back to the CIT (A) for fresh consideration, instructing a reevaluation of the appeals with proper opportunity for the assessee. The ITAT set aside the CIT (A) orders and directed a comprehensive review of all issues without prejudice. The appeals of the Revenue were disposed of accordingly.
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2013 (8) TMI 1083
Legal Judgment Summary:
- Court: Supreme Court
- Citation: 2013 (8) TMI 1083 - SC
- Judges: Mr. Anil R. Dave and Mr. Dipak Misra, JJ.
- Order: The appeal is admitted.
- Tag with C.A. 1218/2006.
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2013 (8) TMI 1082
Issues involved: Appeal against Tribunal's judgment on advertisement expenditure under Section 194C, applicability of circular No.715, and deletion of addition under Section 40(a)(ia) of the Income Tax Act for assessment year 2006-2007.
Advertisement Expenditure under Section 194C:
The High Court considered the appeal challenging the Tribunal's decision on the advertisement expenditure incurred by the assessee company. The Tribunal had found that the nature of the transaction involving T-shirts and payments was primarily for the purchase of goods, not a works contract u/s 194C of the Income Tax Act. Citing the decision in CIT Vs. Dabur India Ltd., the Court upheld the Tribunal's findings, stating that the presence of the assessee's logo on the T-shirts did not alter the transaction's nature. Consequently, the Court declined to admit the appeal.
Applicability of Circular No.715:
Another issue raised in the appeal was the correctness of the Tribunal's ruling that circular No.715 dated 08.08.1995 was not applicable to the case. The Court did not find any reason to interfere with the Tribunal's decision, indicating that the Tribunal had correctly applied the law based on the facts of the case.
Deletion of Addition under Section 40(a)(ia):
The third issue concerned the deletion of the addition made under Section 40(a)(ia) of the Income Tax Act by the Appellate Tribunal. The High Court upheld the Tribunal's decision in this regard, stating that the Tribunal had justified grounds for deleting the addition. Consequently, the Court dismissed the appeal, with no order as to costs.
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2013 (8) TMI 1081
Issues involved:
The issues involved in this case are the determination of fair market value of a property for the assessment year 2006-07, specifically focusing on the valuation of the property as on 01/04/1981 for the purpose of computing capital gains.
Summary of Judgment:
Issue 1: Valuation of Property as on 01/04/1981
- The appellant filed a return of income declaring income from rents, capital gains, and interest income for the assessment year 2006-07.
- The Assessing Officer (AO) selected the case for scrutiny and determined the cost of acquisition based on the sub-registrar's valuation, leading to a tax demand.
- The appellant contended that the market value of the property should be higher than the value considered by the AO.
- The CIT(A) held that the sub-registrar's valuation cannot be considered as the market value and directed the AO to adopt a value of Rs. 350 per sq.yd for determining the cost of acquisition.
- The revenue appealed against the CIT(A)'s order, arguing that the Fair Market Value adopted by the AO should be confirmed.
Issue 2: Consideration of Registered Valuer's Report
- The parties presented arguments regarding the valuation done by a registered valuer and the influence of vested interests.
- The Tribunal emphasized the importance of considering comparable sale instances for determining fair market value.
- References were made to previous cases where the report of a registered valuer was questioned, highlighting the need for a comprehensive evaluation of property aspects and surrounding circumstances.
- The Tribunal directed the AO to consider the registered valuer's report, refer to the District Valuation Officer, and thoroughly examine the property's nature and values provided by different sources before deciding the issue afresh.
Conclusion:
- The Tribunal allowed the revenue's appeal for statistical purposes, emphasizing the need for a detailed assessment of property valuation based on various factors and expert opinions.
- The case was remanded to the AO for a fresh decision after considering all relevant aspects and providing the assessee with a reasonable opportunity to be heard.
This judgment highlights the significance of accurate property valuation for tax assessment purposes and the need for a thorough evaluation process involving expert opinions and comparable instances to determine fair market value effectively.
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2013 (8) TMI 1080
Issues involved: Interpretation of deductions under Section 80P(2)(a)(i) for a Credit Co-operative Society investing in private or public limited companies.
Summary:
1. The appellant, a Credit Co-operative Society, appealed against the order of the Income Tax Appellate Tribunal which upheld the decision of the Commissioner of Income Tax (Appeals) regarding the assessment for the year 2003-04.
2. The appeal was based on the argument that deductions under Section 80P(2)(a)(i) were not available for investments in private or public limited companies. This issue had been addressed in a previous judgment by the Court, and in line with that decision, the appeal was to be allowed in favor of the appellant.
3. The revenue's contention that there was no evidence of the appellant being a Credit Co-operative Society was dismissed. The Court noted that the appellant's name clearly indicated its nature as a Co-operative Credit Society, registered under the Karnataka Co-operative Societies Act, with the primary objective of advancing loans. Therefore, the appeal was allowed in favor of the appellant, rejecting the revenue's argument.
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2013 (8) TMI 1079
Issues involved: Challenge to order of issue process u/s 138 of Negotiable Instruments Act by Judicial Magistrate, First Class (J.M.F.C.) for not following procedure u/s 202 of Criminal Procedure Code (Cr.P.C.) as amended in 2006.
Summary:
The judgment by T.V. Nalawade, J. addressed the challenge to the order of issue process made by the J.M.F.C. in S.C.C. No. 4177/12. The petitioner contended that the J.M.F.C. did not conduct the required inquiry as per the amended provision of section 202 of Cr.P.C., citing the mandatory nature of this provision based on legal precedents. The Court noted that various decisions have held the amended provision of section 202 as mandatory, emphasizing the need for the Magistrate to follow the prescribed procedure to ascertain the truth in the allegations and establish a prima facie case. The scope of inquiry u/s 202 of Cr.P.C. is limited, with certain presumptions under the Negotiable Instruments Act and General Clauses Act to be considered. The judgment concluded that the order of issue process by the J.M.F.C. without following the mandated procedure cannot be sustained, and the matter was remanded back to the J.M.F.C. for reconsideration within two months, emphasizing adherence to the procedure u/s 202 of Cr.P.C. as amended in 2006.
In essence, the judgment highlighted the importance of following the prescribed procedure u/s 202 of Cr.P.C. for issue process in cases involving offenses like those u/s 138 of the Negotiable Instruments Act, underscoring the limited scope of inquiry and the need to establish a prima facie case based on relevant legal provisions and presumptions.
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2013 (8) TMI 1078
Issues Involved:
1. Maintainability of the suit for specific performance without seeking declaratory relief.
2. Legality and validity of the High Court's reversal of the trial court's findings.
3. Grant of decree for specific performance despite Clause 12 of the Agreement of Sale.
4. Conformity of the decree with Section 20 of the Specific Relief Act.
5. Appropriate decree or order to be passed.
Summary:
Issue 1: Maintainability of the Suit
The Supreme Court held that the original suit filed by the plaintiff seeking a decree for specific performance without seeking declaratory relief regarding the termination of the Agreement of Sale is not maintainable. The Agreement of Sale was terminated by the defendants through a notice dated 28.03.1985, and the plaintiff did not seek to declare this termination as invalid. Therefore, the suit for specific performance on the basis of the terminated Agreement of Sale is unsustainable in law.
Issue 2: Legality and Validity of High Court's Reversal
The Supreme Court found that the High Court erred in reversing the trial court's findings on issues 3, 4, and 5. The trial court had correctly concluded that the plaintiff was not ready and willing to perform his part of the contract, as required by Section 16(c) of the Specific Relief Act. The plaintiff failed to pay the balance sale consideration and did not secure the necessary permissions within the stipulated time. The High Court's judgment was based on incorrect appreciation of facts and legal evidence.
Issue 3: Grant of Decree Despite Clause 12
The Supreme Court observed that Clause 12 of the Agreement of Sale provided for compensation in case of non-compliance by either party. The High Court overlooked this clause while granting specific performance. The plaintiff was entitled to compensation rather than specific performance, as the Agreement of Sale had been terminated, and the plaintiff had not fulfilled his obligations.
Issue 4: Conformity with Section 20 of the Specific Relief Act
The Supreme Court held that the High Court did not exercise its discretionary power reasonably under Section 20 of the Specific Relief Act. The plaintiff had breached the terms of the contract, and the Agreement of Sale was terminated. Therefore, granting a decree for specific performance was not justified. The trial court's judgment, which denied specific performance, was in accordance with the law and facts.
Issue 5: Appropriate Decree or Order
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the trial court's judgment, which had denied the decree for specific performance. The trial court's findings and conclusions were deemed correct and legally sustainable.
Conclusion:
The Supreme Court restored the judgment and decree of the trial court, denying the plaintiff's suit for specific performance and granting relief to the defendants. The plaintiff's failure to seek declaratory relief and non-compliance with the contractual terms were pivotal in the decision.
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