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2013 (10) TMI 1480
Issues involved:
The judgment involves issues related to violation of Section 13(1)(c) of the Income-tax Act, 1961 by a charitable institution, denial of benefit under Section 11, advancing money to trustees, computation of income, and application of depreciation while computing income under Section 11.
Violation of Section 13(1)(c):
The Assessing Officer found that the charitable institution violated Section 13(1)(c) by giving funds to interested parties associated with the institution, leading to benefits for them. The denial of benefit under Section 11 was based on these findings.
Advance to Trustees:
The institution had advanced money to a trustee for the purchase of land, but the property purchase did not materialize before the trustee's demise. The Commissioner of Income Tax (Appeals) found that the advance was made for a legitimate purpose, and the intention to purchase the land was clear.
Computation of Income and Depreciation:
The judgment addressed the computation of income for a charitable institution under Section 11, emphasizing the allowance of depreciation as per normal accounting principles. It clarified that there is no double benefit as depreciation is allowed while computing income, and the money spent on acquiring assets is considered an application of funds for charitable purposes.
Judgment Summary:
The Appellate Tribunal ITAT Chennai heard appeals and cross-objections related to the violation of Section 13(1)(c) by a charitable institution for assessment years 2008-09 and 2009-10. The institution, engaged in educational activities, faced scrutiny for providing funds to interested parties, leading to the denial of benefits under Section 11.
In detailed examinations, the Commissioner of Income Tax (Appeals) found that the institution's accounting practices did not violate Section 13(1)(c) and allowed the benefit under Section 11. The advance made to a trustee for land purchase was deemed legitimate, considering the trustee's passing and the subsequent need for legal processes.
Regarding income computation and depreciation, the Tribunal clarified that depreciation allowance is essential while computing income, and the money spent on assets is considered a charitable fund application. There is no double benefit as depreciation is allowed in the first segment of income computation, and asset acquisition is treated separately for charitable purposes.
Ultimately, the Tribunal dismissed the Revenue's appeals and allowed the institution's cross-objections, directing the Assessing Officer to compute income after providing for depreciation and treating asset acquisition expenses as charitable fund applications.
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2013 (10) TMI 1479
Issues involved:
The judgment involves the challenge to the rejection of an application for amendment of a written statement filed in a civil suit after the commencement of trial.
Details of the judgment:
1. The trial court rejected the application for amendment of the written statement after finding that the amendment was not necessary for the adjudication of the suit and could have been raised before the commencement of the trial.
2. The petitioner relied on various decisions, including Rajesh Kumar Agrawal's case, emphasizing that courts should allow necessary amendments to determine the real controversy between the parties without causing injustice.
3. The petitioner argued that amendments in written statements should be allowed liberally at any stage of the suit, distinguishing between amendments in the plaint and written statement.
4. The court analyzed the cited decisions and found that due diligence is crucial for amendments after the commencement of trial, as highlighted in the decision of Walchandnagar Industries Limited v. Indraprastha Developers. The court emphasized that due diligence must be shown to justify post-commencement amendments.
5. Referring to the decision in Vidyabai's case, the court reiterated that without recording a finding on due diligence, the court lacks jurisdiction to allow or reject amendments made after the commencement of trial.
6. The court concluded that the application for amendment lacked due diligence as the necessary facts were known when the original written statement was filed, and the proposed events did not occur during the suit's pendency or after the trial began.
7. The petitioner's argument regarding protecting the rights of a minor through the proposed amendment was dismissed as the plea could have been raised earlier, and no valid case was made in the application for amendment.
In conclusion, the court upheld the rejection of the amendment application, emphasizing the importance of due diligence and the necessity of demonstrating the need for post-commencement amendments in civil suits.
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2013 (10) TMI 1478
Issues Involved:
1. Whether the copies of office notings recorded on the file of UPSC and the correspondence exchanged between UPSC and the Department seeking its advice can be accessed under the RTI Act by the person to whom such advice relates.
Summary:
Issue 1: Fiduciary Relationship
The petitioner, UPSC, contended that there exists a fiduciary relationship between UPSC and the department seeking its advice, making the information exempt from disclosure u/s 8(1)(e) of the RTI Act. The court referred to the Supreme Court's interpretation of 'fiduciary relationship' in *Central Board of Secondary Education vs. Aditya Bandopadhyay* and *Bihar Public Service Commission vs. Saiyed Hussain Abbas Rizwi*, concluding that no fiduciary relationship exists between UPSC and the department in this context. The information provided by the department to UPSC pertains to the employee against whom disciplinary proceedings are initiated and is already available to the concerned employee. Therefore, the plea of fiduciary relationship is not applicable when the information is sought by the employee to whom it pertains.
Issue 2: Personal Information
The petitioner argued that the file notings and correspondences might contain personal information relating to other persons, exempt from disclosure u/s 8(1)(j) of the Act. The court held that exemption under this clause cannot be claimed when the information is sought by the person to whom the personal information relates. If the notings or correspondence contain third-party personal information, it can be excluded while providing the information.
Issue 3: Endangerment of Life or Physical Safety
The petitioner expressed concerns that disclosing the identity of officers who recorded the notings might endanger their life or physical safety, making the information exempt u/s 8(1)(g) of the Act. The court acknowledged the validity of this concern but stated that the objective can be achieved by redacting the name, designation, and any other identifying details of the officers, rather than denying the notings altogether.
Issue 4: Necessity of Notings for Information Seeker
The petitioner contended that the notings are not necessary for the information seeker, who is only concerned with the ultimate advice rendered by UPSC. The court dismissed this argument, emphasizing that the RTI Act does not require the applicant to disclose the purpose for seeking information or to justify its necessity.
Conclusion:
The court directed UPSC to provide the requested information with the following safeguards:
1. Redact the date, name, designation, and any other identifying details of the person recording the notings or writing the letters.
2. Exclude any personal information relating to third parties.
3. Provide the information within four weeks.
No order as to costs.
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2013 (10) TMI 1477
Issues involved: Stay of operation of impugned order passed by Commissioner of Central Excise (Appeals), application for rectification of mistake, dismissal of appeal by Commissioner (Appeals) as time-barred.
Stay Application:
The applicants filed an application for stay of operation of the impugned order passed by the Commissioner of Central Excise (Appeals). The facts of the case reveal that a show cause notice was issued demanding service tax under provisions of Sec.73(2) of the Finance Act. The adjudicating authority confirmed the demand of service tax and imposed penalties. The applicants filed an appeal before the Commissioner (Appeals) against the adjudication order. However, the appeal was dismissed by the Commissioner (Appeals) as time-barred. Subsequently, the applicants filed an application for rectification of mistake before the adjudicating authority, which was also dismissed. The applicants then filed an appeal before the Commissioner (Appeals) against the order passed by the adjudicating authority on the rectification of mistake application. The Commissioner (Appeals) dismissed this appeal as well. The Tribunal found that since the appeal against the adjudication order confirming the demand was already dismissed by the Commissioner (Appeals) and not challenged by the applicants, the application for rectification of mistake did not survive. The Tribunal further noted that seeking a review of the order passed by the adjudicating authority, which was upheld by the Commissioner (Appeals), through a rectification of mistake application was not sustainable. Consequently, the Tribunal found no merit in the appeal and dismissed the stay application.
Conclusion:
The Tribunal dismissed the appeal and the stay application, upholding the orders passed by the adjudicating authority and the Commissioner (Appeals).
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2013 (10) TMI 1476
Issues Involved:1. Relief under Section 9 of the Arbitration and Conciliation Act. 2. Default under the Facility Agreement. 3. Admissibility of unstamped documents. 4. Execution of personal guarantees. 5. Implementation of Corporate Debt Restructuring Scheme. Summary:Relief under Section 9 of the Arbitration and Conciliation Act:By consent of both the parties, both these petitions filed u/s 9 of the Arbitration and Conciliation Act were heard together at the ad interim stage and are being disposed of by a common order. The petitioner seeks an order of deposit, securing the default amount, attachment of properties, appointment of a court receiver, and injunctions against the respondents from finalizing and implementing the Corporate Debt Restructuring scheme. Default under the Facility Agreement:The petitioner and respondent executed a facility agreement on 27th September 2011 for a term loan of Rs. 70,00,00,000, with the respondent liable to repay in 30 equal installments. The respondent committed defaults under the facility agreement, including dishonored cheques and failure to maintain minimum escrow account balances. The petitioner recalled the entire default amount and invoked the arbitration clause on 5th September 2013. Admissibility of unstamped documents:The respondent argued that the agreements were not sufficiently stamped as per the Maharashtra Stamp Act, and thus, no relief u/s 9 could be granted. The petitioner contended that the documents were executed in Hyderabad and stamped accordingly, and under Section 18 of the Maharashtra Stamp Act, they had three months to pay any differential stamp duty upon receipt in Maharashtra. Execution of personal guarantees:The respondent had executed personal guarantees, and the Delhi High Court had previously restrained the guarantor from selling or encumbering properties. The petitioner argued that the respondents failed to disclose the lifting of this interim order, and thus, there was no current injunction against the respondent. Implementation of Corporate Debt Restructuring Scheme:The petitioner argued that the respondent's proposed Corporate Debt Restructuring scheme would dilute the securities given to the petitioner without their consent, which was required under the facility agreement. The respondent contended that under RBI guidelines, they did not need the petitioner's consent and that the scheme was essential for the survival of the company and its employees. Court's Decision:The court found that all the respondent's assets were fully encumbered, and the petitioner had a justified apprehension that the respondent might dilute these securities. The court directed the respondent to furnish a bank guarantee of Rs. 60 crores within three weeks and restrained the respondent from creating further encumbrances or finalizing the Corporate Debt Restructuring scheme without the petitioner's consent. The petitions were disposed of with no order as to costs.
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2013 (10) TMI 1475
Issues Involved:
1. Restraint on trading activities
2. Alleged arbitrary treatment and violation of fundamental rights
3. Alleged non-collection of margin
4. Role of appellants in facilitating illegal transactions
5. Parallel proceedings and their validity
Summary:
1. Restraint on Trading Activities:
The appellants were restrained from buying, selling, or dealing in securities for five years by the respondent u/s 11(4) and 11B of the SEBI Act, 1992 and Regulation 11(1) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. A period of one year and seven months already undergone was to be deducted from the restraint period. The restraint on the appellants' stock broking business imposed by the ad-interim ex parte order dated December 28, 2011, was to continue until the completion of the enquiry proceedings.
2. Alleged Arbitrary Treatment and Violation of Fundamental Rights:
The appellants argued that the respondent acted arbitrarily, violating their fundamental right to carry on trade u/s Article 19(1)(g) of the Constitution. The Tribunal held that the SEBI Act, 1992, and the regulations under it, including the FUTP Regulations and the Broker's Code, were enacted to protect investors and regulate the securities market. The Tribunal found no violation of fundamental rights, emphasizing that the regulatory measures were reasonable and in the interest of the general public.
3. Alleged Non-Collection of Margin:
The appellants contended that the only real case against them was the alleged non-collection of margin. They argued that SEBI's circular dated February 23, 2005, allowed them discretion in collecting margin money. The Tribunal found that the appellants allowed a client, Zala, to trade without any margin, using funds and securities from other clients and their own accounts, exposing the market to significant risk. The Tribunal rejected the appellants' contention, emphasizing the mandatory nature of margin collection as a vital risk management tool.
4. Role of Appellants in Facilitating Illegal Transactions:
The respondent found that the appellants facilitated Zala's trading on the first day of the IPO of TPL, leading to significant losses. The Tribunal noted that the appellants' actions, including using funds and securities from other clients to cover Zala's trades, pointed to their conscious role in the alleged manipulation. The Tribunal upheld the respondent's intervention to prevent potential market manipulation.
5. Parallel Proceedings and Their Validity:
The appellants argued against simultaneous enquiry and adjudication proceedings based on the same facts. The Tribunal held that such proceedings were permissible, noting that the enquiry and adjudication officers acted independently and impartially, and their findings would not be influenced by the impugned order. The Tribunal found no illegality in the parallel proceedings.
Conclusion:
The Tribunal dismissed the appeal, upholding the impugned order dated July 31, 2013, and confirming the restraint on the appellants. The Tribunal emphasized the importance of margin collection and the regulatory measures to protect the securities market.
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2013 (10) TMI 1474
Issues Involved:
1. Relevant date for calculating workmen's dues.
2. Components of workmen's dues to be paid on priority.
3. Entitlement of Badli workers to compensation and benefits.
Summary:
Relevant Date for Calculating Workmen's Dues:
The primary issue was whether the dues of workmen should be calculated up to the date of the winding-up order or the appointment of the Provisional Liquidator. The court concluded that the Companies Act, 1956, specifically u/s 445(3), deems the winding-up order as the notice of discharge for employees unless the business is continued. The court held that the appointment of a Provisional Liquidator does not terminate the services of workmen. Therefore, the relevant date for calculating workmen's dues is the date of the winding-up order, which is 5 September 2005, not the date of the appointment of the Provisional Liquidator.
Components of Workmen's Dues to be Paid on Priority:
The court examined the components of workmen's dues entitled to priority u/s 529A. It upheld the Official Liquidator's decision based on the judgments in *Engineering Workers Association* and *Jubilee Mills*, which construed "wages" with reference to the definition in the Industrial Disputes Act. The court confirmed that bonus is not included in the priority dues. The Official Liquidator was directed to recalculate the dues, including gratuity and retrenchment compensation, up to the date of winding up, 5 September 2005. The court also emphasized that Provident Fund claims should be pursued by the Provident Fund Commissioner, and the Official Liquidator should assist in this process.
Entitlement of Badli Workers to Compensation and Benefits:
The court addressed the entitlement of Badli workers to compensation, referencing the Supreme Court's decision in *Prakash Cotton Mills*, which held that Badli workers, who do not have a guaranteed right to employment, are not entitled to closure compensation. However, the court allowed Badli workers to demonstrate that they had completed the stipulated number of days to be considered as regular employees and directed the Official Liquidator to consider such claims accordingly.
Conclusion:
The court directed the Official Liquidator to recalculate the dues of workmen by considering 5 September 2005 as the date of severance and to include the components as per the judgments in *Engineering Workers Association* and *Jubilee Mills*. The Official Liquidator was also instructed to engage with the Provident Fund Commissioner for the recovery of provident fund dues and to allow Badli workers to present evidence of their service duration. The application was disposed of with no costs.
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2013 (10) TMI 1473
Issues involved: Disproportionate penalty imposed on the courier service provider u/s Customs duty and connivance of the courier with the importer.
The judgment addresses the issue of disproportionate penalty imposed on the courier service provider. The appellant argued that the penalty of &8377; 20 lakhs on the courier was arbitrary and disproportionate, considering the Customs duty imposed on the goods and the penalty on the importer. The order acknowledged that there was no connivance of the appellant with the importer or exporter. The appellant contended that the courier only carried out the instructions given by the importer. The Tribunal found that the courier had a significant role defined by law in ensuring the proper declaration of goods' description and value. The courier is intimately connected with the import process from packing to delivery and is obligated under law to be aware of the contents and implications under Indian law. Despite the appellant facing a substantial penalty, the Tribunal held that the courier cannot be absolved of its duty and responsibility for misdeclaration. The penalty was reduced from &8377; 20 lakhs to &8377; 5 lakhs to prevent recurrence and bring the litigation to an end.
The judgment also deals with the issue of connivance of the courier with the importer. The appellant argued that there was no connivance between them and that the courier simply followed the importer's instructions. The Tribunal considered the courier's duty to disclose the value properly, as couriers are governed by laws defining their responsibilities. The Tribunal noted that the suppression of export value was within the courier's knowledge. Despite the lack of connivance between the appellant and the importer, the Tribunal held that the courier cannot evade responsibility for misdeclaration. The penalty on the courier was reduced to &8377; 5 lakhs from the initial &8377; 20 lakhs, emphasizing the courier's obligation to comply with the law and prevent future violations.
Separate Judgment: No separate judgment was delivered by the judges in this case.
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2013 (10) TMI 1472
Justification of transfer order of case u/s 127 - Centralization of case - exercise of discretion of the authority - scope of the reasons for transfer of case - arbitrary and/or perverse and/or malafide - agreement between CIT Mumbai and CIT Delhi - requirement of co-ordinated Investigation - CIT rejected the objections of the assessee - HELD THAT:- There is no reason as to how the transfer of the petitioners' case from Mumbai to Delhi was required for co-ordinated investigation and assessment, yet it does give reasons for co-ordinated investigation i.e. the petitioners are a part of the Sahara Group of the Companies and the petitioners had substantial transactions and investments in other entities of the Sahara Group particularly-Sahara Adventures Sports (Pvt.) Ltd. which is assessed in Delhi with DCIT, Central Circle-6 to whom the petitioners case is transferred.
Another view is that there is no evidence of any agreement between Commissioner of Income Tax (Central 6) New Delhi, and Commissioner of Income Tax, Mumbai that the petitioners case should be transferred from Mumbai to New Delhi. These proceedings for transfer of the petitioners case was initiated on report instituted by communication dated 30 August 2011 from the Commissioner of Income Tax (Central 6) New Delhi seeking to centralization of the petitioners' case at Delhi. Thereafter by the impugned order dated 7 March 2013, the Commissioner of Income Tax-8, Mumbai has transferred the petitioner's case from Mumbai to New Delhi. Thus, there is an agreement between the Commissioners of Income Tax, New Delhi and Mumbai as required in terms of section 127(2)(a) of the Act was available. Therefore, this objection was not sustainable.
The decision of SAHARA HOSPITALITY LIMITED AND OTHERS VERSUS COMMISSIONER OF INCOME TAX-8 AND OTHERS [2013 (10) TMI 289 - BOMBAY HIGH COURT] was followed.
In view of all the above reasons, Court did not find any reason to entertain this petition.
Accordingly, petition was dismissed with no order as to costs.
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2013 (10) TMI 1471
Misuse of power - Police officers - "At best acts of omission towards official duty" - Unwarranted search - Invading the privacy of the complainant - Insult and Humiliation - Forcible medical examination - Undressing and dragging to police station - unsubstantiated by any lawful justification - "Test of direct and reasonable connection between the official duty of the accused & acts allegedly committed by them" - HELD THAT:- The alleged acts of the respondent cannot, therefore, be said to in discharge of his official duties or in the purported discharge of such duties. Public functionaries cannot under the cloak of purported discharge of official duties resort to harassment and humiliation of the citizens on the pretext of a complaint having been received by them, especially when the same does not disclose the commission of any offence triable by the Executive Magistrate or cognizable by the police; nor was there any other proceeding in connection with which such conduct could be justified in law. The plea of the respondent that the prosecution was barred under Section 197 Cr.P.C. has, therefore, to be rejected.
The decision in this case GENERAL OFFICER COMMANDING VERSUS CBI & ANR. [2012 (5) TMI 612 - SUPREME COURT] followed.
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2013 (10) TMI 1470
Issues Involved:
1. Whether the Official Liquidator should be discharged.
2. Compliance with statutory provisions, specifically the advertisement of the winding-up petition.
3. The interests and claims of various creditors and depositors.
4. The implications of the winding-up proceedings on ongoing litigation and financial settlements.
Summary:
1. Discharge of the Official Liquidator:
The applicant, IDBI Bank, sought the discharge of the Official Liquidator, arguing that all claims by depositors had been settled and no further claims were pending. The Court noted that the third respondent, the Chairman of the company, had settled claims of over 10,000 depositors using personal funds to avoid criminal prosecution. Despite these settlements, the Court found that other creditors, including banks, had not been paid, and the Official Liquidator had not invited claims from all creditors. Therefore, the Court concluded that the Official Liquidator could not be discharged solely based on the settlement with depositors.
2. Compliance with Statutory Provisions:
The Court scrutinized the statutory requirements for advertising the winding-up petition as per Rule 99 and Rule 24 of the Companies (Court) Rules, 1959. It was emphasized that the publication of advertisements is mandatory and failure to comply with this requirement by the petitioning creditor is fatal to the petition. The Court noted that no other creditor or contributory had come forward to prosecute the petition, and the third respondent had not offered to be substituted as the petitioner. Consequently, the Court held that the winding-up petition must be dismissed for non-compliance with the advertisement requirement.
3. Interests and Claims of Creditors:
The Court acknowledged that the winding-up proceedings are intended for the benefit of the entire body of creditors. However, it was highlighted that no other creditors, apart from depositors, had approached the Court during the 12-year pendency of the petition. The Court dismissed the argument that the petition could not be dismissed behind the creditors' backs, noting that the third respondent had settled claims of depositors to avoid criminal prosecution and not out of charity.
4. Implications on Ongoing Litigation and Financial Settlements:
The Court recognized that the applicant-bank's underlying motive was to perfect their title to a property involved in a previous transaction with the company-in-liquidation. The Court clarified that the dismissal of the winding-up petition would not automatically grant the applicant-bank title to the property, as their application for execution of the sale deed was pending before the Supreme Court. The Court also addressed the Official Liquidator's concern about the impact on other financial institutions and creditors, noting that the settlement of depositors' claims had already allowed unsecured creditors to score a march over others.
Conclusion:
The Court allowed the application of IDBI Bank, discharged the Official Liquidator, and dismissed the main company petition. The Official Liquidator was directed to return the funds to the company after deducting administrative expenses.
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2013 (10) TMI 1469
Issues Involved:1. Validity of notice issued u/s. 17 of the Wealth Tax Act. 2. Protective assessment of wealth tax. Summary:Validity of Notice Issued u/s. 17 of the Wealth Tax Act:The assessee HUF, a co-owner of a property in Vadgaon Sheri, Pune, received a notice u/s. 17 of the Wealth Tax Act on 30.03.2005 for the assessment year 1998-99, alleging that certain net wealth chargeable to tax had escaped assessment. The Assessing Officer (AO) considered the land as an 'asset' u/s. 2(e) of the W.T. Act, valued at Rs. 15,00,00,000/-, and issued the notice after recording reasons. The assessee challenged the initiation of proceedings, arguing that the reopening was based on a potential escapement of income, contingent upon the outcome of income-tax proceedings for the same assessment year. The Tribunal found that the AO's belief of escapement was based on a hypothesis or contingency, which is impermissible u/s. 17 of the W.T. Act. Citing the Bombay High Court's judgment in DHFL Venture Capital Fund vs. ITO, the Tribunal quashed the notice and the consequent assessment order, stating that the reopening was not well-founded and suffered from a jurisdictional defect. Protective Assessment of Wealth Tax:The AO made a protective assessment of the land's value, considering the assessee's position that the property was transferred in the assessment year 2002-03. The Commissioner of Wealth Tax (Appeals) upheld the initiation of proceedings but set aside the protective addition, as the capital gain addition for the assessment year 1998-99 was substantively confirmed in income tax proceedings. The Revenue's cross-appeal against the deletion of the protective addition was rendered infructuous as the Tribunal quashed the entire assessment. Conclusion:The Tribunal allowed the assessee's appeal, quashing the notice u/s. 17 of the W.T. Act and the consequent assessment order, while dismissing the Revenue's cross-appeal. The judgment emphasized that reopening an assessment based on a potential future contingency is impermissible. Order pronounced in the open Court on 31st October, 2013.
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2013 (10) TMI 1468
Issues Involved:
1. Deletion of addition of Rs. 40,00,000/- made u/s 68 of the Income Tax Act regarding alleged share application money.
Summary:
Issue 1: Deletion of Addition u/s 68
The Revenue appealed against the CIT(A)'s order deleting the addition of Rs. 40,00,000/- made u/s 68 concerning alleged share application money. The original assessment was framed u/s 115JB, and later reopened u/s 148, alleging accommodation entries from three corporate entities. During reassessment, the assessee provided various documents to justify the share application money, including share application forms, board resolutions, incorporation certificates, PAN details, and bank statements. However, the assessing officer added the amount u/s 68, citing failure to produce directors and lack of substantive evidence of investors' creditworthiness.
The CIT(A) deleted the addition, observing that the share capital was received through cheques from duly registered corporate entities with PAN numbers and regular income tax filings. The CIT(A) noted that the assessing officer did not conduct further inquiries or issue notices u/s 133(6) or 131. The CIT(A) relied on various judicial precedents, including the Supreme Court's decision in CIT vs. Lovely Export, which held that once the identity of shareholders is established, the share capital cannot be added as undisclosed income unless adverse evidence is present.
The Revenue argued that the assessee failed to produce the directors, justifying the addition. They relied on the Delhi High Court's decision in CIT Vs. Nova Promoters. The assessee countered by highlighting the voluminous evidence provided and the lack of inquiry by the assessing officer. The Tribunal noted that the assessing officer did not conduct any inquiry or issue summons/notices, and the evidence provided by the assessee was not rebutted. The Tribunal upheld the CIT(A)'s order, finding no infirmity and dismissing the Revenue's appeal.
Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of the Rs. 40,00,000/- addition made u/s 68, citing the lack of inquiry and adverse evidence by the assessing officer.
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2013 (10) TMI 1467
100% EOU - Review of earlier order - Non-issuance of SCN - Doctrine of Audi Alteram Partem -fundamental right under article 14 - HELD THAT:- no order could be passed against a person without issuing a show cause notice to him/it. Thus, the order passed by the Development Commissioner is in contravention to the principles of natural justice., therefore cannot be sustained.
Matter restored back.
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2013 (10) TMI 1466
Revision petition - Challenged the compulsory retirement - Mercy petition - Departmental inquiry - disciplinary proceedings - HELD THAT:- Once, we find that the revision or second representation to the higher authority was made within prescribed period (in fact within few days of the rejection of representation by the IGP) and such a representation to the higher authority was permissible, it cannot be said in this case that the order of the DGP, Haryana was without jurisdiction i.e. on a representation “which was not permissible” in law. Once, we find this to be the factual position, we are constrained to hold that three years thereafter, the case could not be re-opened and order dated 25.2003 could be interdicted by the successor.
As a result, this appeal is allowed and the order of the High Court is set aside. Result would be to allow the writ petition filed by the appellant before the High Court and quash the orders dated 25.10.2006 passed by the DGP, Haryana.
Since, we have allowed C.A. No. 396 of 2008, the effect thereof is that adverse remarks for the period in question no longer remain in the service record of the appellant and for this period his rating now is “good” to which he was upgraded vide orders dated 2.5.2003. In so far as award of “warning” is concerned, leaned Counsel for the State could not dispute that “warning” is not a punishment prescribed under the Rules. It was not given to him after holding any inquiry. Therefore, such a warning recorded administratively in a service record cannot be the sole basis of compulsory retirement.
The appellant's writ petition has been dismissed by the High Court vide orders dated 26.12.2011. We, thus allow this appeal and set aside the impugned judgment of the High Court. As a consequence, the appellant shall be reinstated in service in the same position on which he was working as on the date of compulsorily retirement with consequential benefits in case he has not already attained the age of superannuation. However, if he has already attained the age of superannuation, he shall be treated as deemed to be in service throughout as if no compulsory retirement orders were passed and will be given consequential benefits including pay for the intervening period and pensionary benefits on that basis.
Mercy petition - In the scheme of things, as provided, it is clear that Rule 16.28 is different from Rule 16.32. While Rule 16.28 deals with Review, Rule 16.32 deals with Revision which is permissible under certain specified circumstances, after the appeal is rejected. It is this provision in Rule 16.32 which talks of Revision on certain grounds namely (a) material irregularity in the proceedings or (b) on provision of fresh evidence.
In the present case, we also find that the mercy petition was not filed within one month. Further, it was not filed on the ground of material irregularity in the proceedings or by producing any fresh evidence. On the contrary, as pointed out above, the DGP while allowing the mercy petition specifically recorded that there was no irregularity in the conduct of departmental proceedings. In spite thereof, he cancelled the order of penalty without giving any cogent reasons. Such a order was palpably illegal and was rightly set right departmentally. We thus do not find any merit in this appeal which is accordingly dismissed.
Thus, we are of the view that the order allowing the mercy petition without reason was clearly untenable and was rightly recalled. We thus, do not find any merit in this appeal either which is accordingly dismissed.
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2013 (10) TMI 1465
Issues Involved:
1. Recovery of balance price of goods.
2. Validity of debit notes raised by the appellants/defendants.
3. Agreement regarding air freight charges.
4. Dispute over the rate difference of goods supplied.
5. Admissibility of computerized ledger accounts.
Summary:
1. Recovery of Balance Price of Goods:
The appeal challenges the judgment and decree dated 5th November 2004, which ordered the appellants/defendants to pay Rs. 17,07,700/- with interest @ 9% per annum on the principal amount of Rs. 10,30,016.97p from the date of filing the suit till realization. The respondent/plaintiff had filed a suit for recovery of Rs. 10,30,016.97p towards the balance price of fabric sold and delivered to the appellants/defendants.
2. Validity of Debit Notes Raised by the Appellants/Defendants:
The appellants/defendants admitted the balance due but claimed adjustments through debit notes amounting to Rs. 10,25,694/-. The court found that the appellants/defendants did not prove the reply to the legal notice and did not file any counterclaim for the alleged due amount. The debit notes were not related to the transactions in question, and the sole witness admitted they were unrelated. Thus, the court held that the appellants/defendants were not entitled to raise debit notes against the respondent/plaintiff.
3. Agreement Regarding Air Freight Charges:
The appellants/defendants contended that the respondent/plaintiff delayed the delivery of fabric and agreed to bear the air freight charges for timely delivery to buyers. However, no written or oral evidence of such an agreement was provided. The court noted that the appellants/defendants did not produce any evidence of incurring air freight charges. Consequently, the debit notes for air freight charges were deemed invalid for adjustment against the dues.
4. Dispute Over the Rate Difference of Goods Supplied:
The appellants/defendants argued a rate difference due to overcutting on delivery challans. The court observed that the appellants/defendants did not produce the originals or copies of the challans. There was no other document to support the claimed rate of Rs. 265/- instead of Rs. 290/-. The court concluded that the correction on the challans could be as per the agreement, and the appellants/defendants failed to prove otherwise.
5. Admissibility of Computerized Ledger Accounts:
The appellants/defendants argued that the respondent/plaintiff did not prove the computerized ledger account as per Section 65B of the Indian Evidence Act. The court held that primary documents like purchase orders, confirmation letters, and delivery challans were sufficient to prove the transaction. The ledger, being secondary evidence, was not crucial for the case.
Conclusion:
The court dismissed the appeal with costs, affirming that the appellants/defendants were not entitled to the adjustments claimed through debit notes and that the principal amount claimed by the respondent/plaintiff was due.
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2013 (10) TMI 1464
Issues involved: Delay in preferring the appeal, exemption of filing a certified copy of the order, increase of total income by the Assessing Officer, jurisdiction of the Appellate Authority to remand the matter.
The appellant filed an appeal with a delay of 34 days, which was originally preferred before the Allahabad High Court but not entertained due to territorial jurisdiction. The High Court allowed the application for condonation of delay as the respondent did not object (u/s 8182 of 2013).
The appellant sought exemption from filing a certified copy of the order appealed against, which became unnecessary as a certified copy was produced in court (u/r 8188 of 2013).
The Assessing Officer increased the total income by &8377;33,60,000 as unexplained income, which was challenged before the Appellate Authority. The Authority considered the submissions of the assessee regarding fund flow, turnover, and maintenance of regular books of account. It directed the assessee to produce cash statements and explained the availability of cash as the source of the deposit in question (Income Tax Appeal No. 17 of 2013).
The Tribunal contended that the Appellate Authority had no jurisdiction to remand the matter of increasing total income. However, the High Court clarified that the Appellate Authority did remand the matter to the Assessing Officer, and the Tribunal's finding was deemed erroneous. The case was remitted back to the Tribunal to determine if the Appellate Authority had the power to remand the matter for reassessment of the increase/addition of total income (Income Tax Appeal No. 17 of 2013).
This summary provides a detailed overview of the judgment, addressing each issue involved in the case.
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2013 (10) TMI 1463
Issues involved:
The judgment involves issues related to the addition of interest accrued on Non-performing assets u/s 43D read with Rule 6EB for the assessment years 2007-08 and 2008-09, and the disallowance u/s 14A for the assessment year 2008-09.
Assessment year 2007-08:
The assessee contested the addition made to the returned income by the Assessing Officer, arguing that interest on Non-performing assets should be calculated based on National Housing Bank guidelines rather than Rule 6EB. The A.O and CIT(A) upheld the addition, citing Rule 6EB. The Tribunal, based on previous decisions, rejected the assessee's claim, emphasizing that real income theory does not override the provisions of Sec. 43D. The Tribunal concluded the issue against the assessee.
Assessment year 2008-09:
The assessee challenged the addition made by the Assessing Officer on the grounds of expenditure in relation to exempt income and interest accrued on non-performing assets. The A.O considered a 24-month period for bad debts, which was incorrect under Rule 6EB. The Tribunal set aside this issue for the A.O to apply the correct provisions. Regarding disallowance u/s 14A, the A.O applied Rule 8D, leading to a disallowance. The Tribunal directed a proper inquiry into the disallowance of interest attributable to exempt income, as no new investments were made during the year. The issue was set aside for further examination by the Assessing Officer.
In conclusion, the appeals for the assessment year 2007-08 were dismissed, while for the assessment year 2008-09, the appeal was partly allowed for statistical purposes.
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2013 (10) TMI 1462
Issues Involved:
1. Jurisdiction of the High Court to hear the appeal after the enactment of the Electricity Act, 2003.
2. Authority of the Commission to issue directions and impose penalties after fixing the tariff.
Summary:
Jurisdiction of the High Court:
The High Court of Himachal Pradesh had jurisdiction to hear the appeal under Section 27 of the Electricity Regulatory Commissions Act, 1998, even after the enactment of the Electricity Act, 2003. The Supreme Court affirmed that the right of appeal is a vested right and such a right is to be governed by the law prevailing at the date of the institution of the suit or proceeding. The Court noted that the 2003 Act did not expressly or by necessary implication take away the vested right of appeal. The Court cited several precedents, including Garikapati Veeraya v. N. Subbiah Choudhry and others, to support the principle that the forum of appeal is a substantive right and not merely procedural. The Supreme Court concluded that the High Court's decision to retain jurisdiction was flawless.
Authority of the Commission:
The Supreme Court addressed the issue of whether the Himachal Pradesh State Electricity Regulatory Commission (the "Commission") had the authority to issue directions and impose penalties after fixing the tariff. The High Court had held that the Commission became "functus officio" after fixing the tariff and could not issue further directions or impose penalties. The Supreme Court disagreed with this view, stating that the Commission had the authority under Section 22(1)(d) of the 1998 Act to promote competition, efficiency, and economy in the activities of the electricity industry. The Court interpreted the wide language of Section 22(1)(d) to include the power to issue directions related to tariff fixation and associated concepts. However, the Court found that the Board had substantially complied with the directions and thus, the imposition of a penalty was not justified.
The appeals were disposed of with the Supreme Court granting liberty to the Commission to proceed under the provisions of the 2003 Act if necessary, but clarifying that the Commission could not take any action arising out of its earlier orders.
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2013 (10) TMI 1461
Whether penalty to be imposed in case of delayed filing of TDS Return - Held that:- assessee is a nationalized bank and committed a technical default by not filing e-TDS return in time - sec. 272A(2)(k) has been newly introduced w.e.f. 1.4.2005 and the Branch Manger was not known about these technical formalities - due to unawareness of knowledge, non-availability of parties PAN, pressure of banks accounting works, long absence of Branch Manager due to unhealthy condition return could not be filed on time - penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation as per the decision of Hon'ble apex Court in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 - [1969 (8) TMI 31] - Thus assessee has reasonable cause for non-filing the e-TDS return in time - also this is a technical breach of law and there is no loss to the revenue - Decided in favor of assessee
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