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Showing 121 to 140 of 1287 Records
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2014 (11) TMI 1171
Estimation of net profit rate of 5% - Held that:- The accounts of the assessee are undisputedly audited accounts. These were produced before the A.O. The balance-sheet, trading and profit & loss account are required to be necessarily furnished along with the return of income. So, obviously, these were also available before the A.O. Thus, even if the books of account were rejected and an estimate was made, this estimate, as arrived at by the learned CIT(A) on the basis of ‘M/s Bathinda Wine Traders’ for the assessment year 2009-10, in the absence of any other comparable case supporting the estimate of net profit rate of 5%, is squarely applicable and has rightly been applied by the learned CIT(A). - Decided against revenue
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2014 (11) TMI 1170
Delay in payment of employees’ contribution to the Provident Fund - Held that:- As it is noticed that the employees’ contribution to the Provident Fund has been paid before the due date of filing of the return as also before 31st March, 2008, in view of the decision of the Hon’ble Jurisdictional High Court in the case of Vijay Shree Limited [2011 (9) TMI 30 - CALCUTTA HIGH COURT] the disallowance as made by the Assessing Officer and as confirmed by the ld. CIT(Appeals) stands deleted.- Decided in favour of assessee.
Disallowance of 20% of the expenses under the head "carriage inward", "carriage outward", "loading & Unloading expenses" and "labour charges" - independent verification could not be made to find out the authenticity of these expenses - Held that:- No estimated disallowance can be made for inability to make independent verification. If any specific expenditure is unverifiable or is un-vouched, then such specific expenditure is disallowable. Here no such specific identification has been done. In these circumstances, we are of the view that the estimated disallowance as confirmed by the ld. CIT(Appeals) is unsustainable. Consequently the same stands deleted - Decided in favour of assessee.
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2014 (11) TMI 1169
Disallowance u/s 14A - Held that:- Tribunal has erred in law in upholding the order of CIT (Appeals) restricting the disallowance under section 14A from ₹ 2,20,15,787/- to ₹ 5,47,433/- relying on the decision of Godrej & Boyce manufacturing Ltd. vs. CIT (2010 (8) TMI 77 - BOMBAY HIGH COURT)
Disallowance u/s 14A not to be considered for book profit for calculation of book profit u/s 115JB - Held that:- We accept the submission of assessee that the provision of section 115JB in the matter of computation is a complete code in itself and resort need not and cannot be made to section 14A of the Act.
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2014 (11) TMI 1168
Provisional Attachment Order - offence under PMLA - corroborative evidence to conclude that the borrower company is involved in any manner with the proceeds of crime and that the borrower company has not committed any scheduled offence and is not involved in laundering of proceeds of crime of Mr. Madhu Koda - Held that:- Normally if the Adjudicating Authority has power to give an opportunity of hearing to a person whose properties have been attached and to whom the notice under Section 8(1) of the Act has not been given, such a person should normally approach the Adjudicating Authority and show and demonstrate prima facie his rights in the properties which have been attached and thereafter, he will be entitled for hearing as to why the properties which have been attached be released from attachment. Though the connotation of word ‘aggrieved’ under Section 26 may be very wide and may include even the appellant, however, it may not be appropriate to entertain the appeal of the appellant in the facts and circumstances. Therefore, in the present facts and circumstances it is incumbent upon the appellant to approach the Adjudicating Authority to seek the relief claimed by the appellant, in case the appellant has any right on the properties which have been attached by the respondent.
Therefore, the appropriate remedy of the appellant is to invoke the power of Adjudicating Authority to hear the appellant. In case the appellant files an appropriate application before the Adjudicating Authority, the appellant will be liable to prima facie satisfy the Adjudicating Authority that it has the rights in the properties which have been attached. The Adjudicating Authority will determine, in case the appellant approach the Adjudicating Authority, whether the appellant, prima facie has any rights or lien on the properties which are sought to be attached and thereafter on being satisfied about the right of the appellant to give hearing to the appellant as contemplated under proviso to Section 8(2) of the Act.
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2014 (11) TMI 1167
Interest earned on money lent by the assessee - income from "Profit and Gains of Business or Profession" OR "income from other sources" - Held that:- Considering the commonness of the issue involved in the present appeal with that of the issue decided by the Tribunal in assessee‟s own case for the AY 2008-2009 we are of the opinion that the decision of the CIT (A) holding that the interest earned on money lending operation arose from a systematic and organized activity carried on with a motive of profit and hence ought to be taxed under the head "profits and gains of business or profession" is fair and reasonable and it does not call for any interference
Disallowance u/s 14A - Held that:- The disallowance confirmed by the CIT (A) is proper but the same is subjected to the correctness of the calculations as per clause (ii) & (iii) of Rule-8D(2) of the IT Rules, 1962. Assessing Officer may examine the correctness before restricting the disallowance as held by the CIT (A). Therefore, in substance, the order of the CIT (A) does not call for any interference. - Revenue appeal dismissed.
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2014 (11) TMI 1166
Recovery of alleged dues - Whether, in view of these facts, it would be appropriate for the Court to entertain these proceedings under Article 226 by issuing a mandamus for the payment of seven bills stated to be totaling an amount of ₹ 2.65 crores?
Held that: - once a serious matter relating to the evasion of service tax is alleged and drawn to the notice of the first respondent by the revenue authorities and the first respondent has been informed both of the pending investigation as well as to disclose documentary material, it cannot be held that the claim falls within that category where it can be ascertained that there is absolutely no defence or that a mandamus would be warranted - this is not a fit and proper case for exercising the discretion by the Court under Article 226 to entertain a petition seeking a mandamus for the payment of bills and the petitioner ought to be relegated to the ordinary civil remedy.
Petition dismissed.
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2014 (11) TMI 1165
Recognition under Section 80G(5) - proof of charitable activities - examination of extent and nature of activities - Held that:- It is well settled position of law that at the time of granting approval under Section 80G of the Act, what is to be examined is the object of the trust and so far as the aspect of income is concerned, same can be very well examined by the AO at the time of framing assessment. However, in the case on hand, the assessee-Trust was refused recognition only on the ground that the assessee- Trust had not spent 85 per cent of the amount towards the objects of the Trust. The Tribunal, while passing the impugned order, relied on a decision in “CIT VS. SURYA EDUCATIONAL & CHARITABLE TRUST” [2011 (10) TMI 47 - PUNJAB AND HARYANA HIGH COURT ] wherein held that at the stage of registration under Section 12AA of the Act, the extent and nature of activities are not required to be examined and the same is required to be examined in assessment proceedings.
We are of the opinion that the Tribunal committed no error in issuing direction to grant recognition to the Respondent-Trust under Section 80G(5) of the Act. - Decided in favour of assessee
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2014 (11) TMI 1164
Classification of income on sale of agricultural land - whether the assessee engaged himself in any activity which is an adventure in the nature of trading? - Held that:- It is well settled principles of law that for the purpose of finding out the nature of the activity undertaken by the assessee the intention of the assessee at the time of purchase of the property needs to be ascertained. If the assessee purchases the agricultural property as an investment, then naturally profit arising from sale of such land cannot be treated as profit from business. But if the intention is to earn profit by engaging himself in business activity, then naturally it has to be classified as income from business. To find out the actual nature of the activity, the intention of the assessee at the time of purchase of the property has to be ascertained.
The material available on record shows that the assessee purchased the property on 16-08-2006. The assessee himself claims that an amount of ₹ 1,75,000 was incurred for leveling the land before selling. The assessee entered into an agreement for sale with one Falgunan on 22-082007. Ultimately, the sale deed was executed on 20-08-2008 in favour of St. Antony’s timber Depot, Chevoor. During the course of examination the assessee clarified that the land was left idle and there was no income from this land. He also clarified that no cultivation was done. Therefore, it is obvious that immediately after purchase the assessee has incurred about ₹ 1,75,000 for levelling to make the land a good marketable commodity.
If the intention was to retain the land as agricultural land, then there cannot be any necessity for the assessee to level the land by investing ₹ 1,75,000. The very act of levelling the land by spending about ₹ 1,75,000 immediately after purchase establishes that the intention of the assessee at the time of purchase was to indulge in an activity in the nature of trade. Furthermore, Foreign Exchange Management (Acquisition & Transfer of Immovable Property in India) Regulation, 2000, framed by the Reserve Bank of Indi in exercise of its statutory powers conferred u/s 47 of Foreign Exchange Management (Acquisition & Transfer of Immovable Property in India) Act, 1999 prohibits acquisition of agricultural land by an NRI. The intention of the assessee was to trade in agricultural land, therefore, the profit on sale of agricultural land has to be necessarily classified as income from business. - Decided against assessee.
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2014 (11) TMI 1163
Rejection of the books of account u/s. 145(1) - Held that:- Many times expenditure is booked but the assessee may not be in a position to satisfy the Assessing Officer in respect of the nature of the said expenditure as required evidence may not be sufficient. The assessee has not made the provisions in respect of the accounting charges. We find that the Assessing Officer has given more importance to the fact that the assessee is not having any computer. In our opinion a fact also cannot be discarded that many times the assessee may engage professional accountant instead of taking the full liability of the employee and the accountant maintains the account. It is one of the recognized practices in the business or trade. Even if the assessee engaged in the land development and selling of plots but it appears that the said land was owned by the assessee and it was agricultural land which was under cultivation. Except showing minor discrepancy the Assessing Officer has not made out the case for rejection of the books of account by invoking Sec. 145 of the Act. We, accordingly, concur with the finding of the Ld. CIT(A) that the Assessing Officer was not justified in rejecting the books of account of the assessee.
Unexplained expenditure for purchasing hotel - Held that:- CIT(A) has held that the amount of investment in hotel has been recorded by the assessee in the books of account and the source of said investment has also been supported by the sale proceeds of the agricultural land amounting to ₹ 1.16 crores and sale proceeds of the plot amounting to ₹ 2,09,11,282/- during the year. This fact has not been controverted before us. We find no reason to interfere with the order of the Ld. CIT(A) on this issue as the said amount is dully recorded in the books of account and the assessee has also explained the source.
Addition towards alleged cash deposits into bank account - Held that:- It appears that there were deposits ₹ 14,18,736/- in Janlaxmi Bank and ₹ 14,01,090/- in Rajlaxmi Bank which have been recorded by the assessee in the books of account. If the amounts are recorded in the books of account then how the Assessing Officer has made the observation that the bank of account was not appearing in the audited balance sheet. In this case the assessee is in the business of development of agriculture land and sale of plots and he is gradually selling his agricultural land which has been developed and plots are made. The finding of the Ld. CIT(A) has not been controverted before us. The Ld. AR also pointed out that in the balance sheet the said bank accounts are appearing. In our opinion the reasons given by the Assessing Officer are totally erroneous and contrary to the evidence on record. We find no reason to interfere with the order of the Ld. CIT(A).
Addition made on the basis of Department Valuation Officer (DVO) report - Held that:- We find that the difference in the valuation is less than 10% that is between the sale consideration shown by the assessee which is at ₹ 1.61 cores and valuation made the DVO is ₹ 1.76 crores. The Ld. CIT(A) has followed the decision of the ITAT, Pune in the case of Rahul Construction vs. DCIT 38 DTR 19 wherein it is held that if the difference in the valuation made by the DVO and value declared by the assessee is less than 10% then no addition is justified u/s. 50C. As this fact is not disputed before us and also the Ld. CIT(A) has followed the decision in the case of Rahul Construction (2012 (1) TMI 229 - ITAT PUNE), we decline to interfere with the finding of the Ld. CIT(A) for deleting the addition.
Calling the valuation report from the DVO - whether the Ld. CIT(A) can give the directions to the Assessing Officer to get the valuation done by the DVO when admittedly the DVO has given his opinion in respect of the valuation adopted by the assessee for computation of the capital gain? - Held that:- CIT(A) has exceeded his jurisdiction and authority by directing the Assessing Officer to refer the matter to the DVO for ascertaining the fair market value (FMV) of land bearing S. No. 264/1 and 265/1 at Mhasrul as on 01-04-1981. We, therefore, cancel the directions of the Ld. CIT(A) to the extent that the Assessing Officer should ask the DVO to file copies of the valuation report of the lands at S. No. 264/1 and 265/1 valuing the said lands on 01-04-1981. We also cancel the directions of the Ld. CIT(A) that the Assessing Officer should compute the capital gain on the basis of the value of the lands as on 01-04-1981 arrived at by the DVO in his valuation report. At the same time we find that the assessee had already lodged a claimed by filing the valuation report of the Govt. Approved Valuer. We consider it appropriate to give the direction to the Assessing Officer to consider the valuation report of the Approved Govt. Valuer filed by the assessee in respect of the fair mart value of as on 01-04-1981 and accordingly, decide the taxable capital gain as per the provisions of law. We make it clear that we are not expressing anything on merit in respect of correctness of the valuation report obtained by the assessee from the Govt. Approved Valuer. With this direction we allow the Ground Nos. 6 and 7 for the statistical purpose.
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2014 (11) TMI 1162
Applicability of provisions of SICA - effect of direction issued by the BIFR and Applicability of Clause 2(j) of Supply Code - effect of overriding provision in SICA and in Electricity Act - Held that:- Question that whether SICA is a special Act or not, when raised with reference to Companies Act, it is perhaps easier to answer the same. In the present case, attempt was made to urge that Electricity Act is a special Act. It is not possible to agree with this submission. With relation to Electricity Act also, SICA can be said to be special Act. The later Act relates to companies only - rather sick companies - while former Act would apply not only to all kind of companies, including the sick companies, but to every kind of consumer - be it commercial and non-commercial entities. In fact, definition of 'consumer' under the Act includes even the Government. "Any person", it says, who 'receives electricity' comes within the sweep of the definition of 'consumer', while the simple definition of 'sick company', stated in short is, - a company whose accumulated losses of any given financial year exceeds its entire net worth.
In short, while legislative net of consumer under the Electricity Act includes other than company or corporate sector also, while the wings of the SICA does not extend the area outside the sick company - the corporate world itself is much larger than the sick company. It may be noted that the Electricity Act is the only statute operating in the field and dealing with the subject and takes care of all and every kind of consumer, who receives electricity. It is not possible to agree with the submission that Electricity Act is a special Act with reference to SICA. Having said so, we may add that generally saying, neither the test that which of the two Acts are special Act nor the test that which of the two Acts is later in point of time, can be successfully applied in the present case. Both the tests can be more properly applied when both the Acts relate to or operate in, in the same field or the subject of both the Acts is analogous. Since the applicability of either of two tests is doubtful in the present case, we leave the question at that with the observation that if correct view is that, that the special Act versus General Act, test is applicable then application of such test would show that SICA is a special Act.
SICA gives overriding effect not only to its provisions but also to the scheme framed under the special Act. Section 32 itself gives overriding effect to the scheme. Unlike that, Sections 173 and 174 do not refer or include conditions framed by the Board. It may be recalled that Clause 2(j) is framed by the Board i.e. GEB - it may have an effect of law but, so far giving of overriding effect is concerned, neither the conditions framed by the Board contain such provision nor Sections 173 and 174 take care of it. At the time of hearing, attention was not drawn to any such provision in conditions nor Sections 173 and 174 say so. Thus, Section 32 of SICA is apparently wider. When it comes to comparison, Sections 173 and 174 of Electricity Act cannot catch up or compete with Section 32 of the SICA. Further, still, scheme also contains clause giving overriding effect to the scheme. Overriding provision in the scheme has weighed with the learned Single Judge in the judgment under appeal. Learned Single Judge has not committed any error in relying on the said provision while considering the objection raised by the learned advocate for the appellant against the scheme.
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2014 (11) TMI 1161
Disallowances in respect of capital gains - allowable expenditure u/s 48 - legal right in the compensation amount - Diversion By Overriding Title - Held that:- It is an obligation created as part of the agreement and there is no dispute that the amounts are collected from the buyers and paid to the developer. Since, these amounts are included in the sale consideration, assessee can certainly claim the amount in order to arrive at full value of consideration. Since, there is contractual obligation to pay the above amounts, Ld. CIT(A) is correct in allowing the amounts.
Hon’ble A.P. High Court in the case of CIT vs. Manohar Rao, Managing Director [1984 (10) TMI 35 - ANDHRA PRADESH High Court] considered the scope of full value of consideration in a case and held that capital gain had to be computed by taking into account only the amount which was actually received by assessee. In that case, assessee owns 4.27 gts of land, had entered into an agreement to sell the land at ₹ 25,000 per acre. Subsequent to that, the land was acquired by Government and only an amount of ₹ 2,20,220 was received by assessee. As assessee has entered into agreement, assessee paid an amount of ₹ 1,05,220 immediately on receipt of compensation to the agreement holder and offered the balance amount of ₹ 1,20,000 as capital gain. Considering the facts of the case and the fact that there is a legal right in the compensation amount, Hon’ble High Court held that this is a case of diversion of income by overriding title. Since, in assessee’s case also there is contractual right in paying amounts, we confirm the order of Ld. CIT(A) and dismiss Revenue grounds.
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2014 (11) TMI 1160
Winding up petition - Held that:- The Company is unable to pay its debts and deserves to be wound up. The above Company Petition is, therefore, allowed in terms of prayer clause (a) and (b), which are reproduced hereunder :
“(a) that the Respondent Company, i.e. M/s. Indo Bonito Multinational Ltd., be ordered to be wound up by an order of this Hon'ble Court.
(b) that the Official Liquidator, High Court, Bombay be appointed as Liquidator of the Respondent Company with all powers under the Companies Act, 1956 including the power to take possession of all the assets, books of account, stock in trade, cash on hand, movable properties including future and fixtures as well as all immovable properties of the Respondent Company".
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2014 (11) TMI 1159
TPA - comparable selection -Held that:- Assessee provides services in the fields of Software Technology Services, Outsourcing Services and Customized software development services to its AEs, thus companies functionally dissimilar with that of assessee need not to be selected to final comparability list.
Reducing the loss of loss making unit from profit making units for the purposes of section 10A - Held that:- As relying on case of Unilever Ltd. vs DCIT [2010 (4) TMI 206 - BOMBAY HIGH COURT] wherein held the loss of one unit under section 10A of the Act shall be adjusted against the income liable for deduction under the same but in relation to the income from other unit, we direct the AO to recompute the exemption under section 10A
Exclusion of telephone expenses from the computation of exemption under section 10A - Held that:- We set aside the orders of the revenue authorities and direct the AO to delete the disallowance and compute the exemption as per law and keeping in view the decision of the Hon’ble Bombay High Court in the case of the assessee.
Treatment of grant received by the assessee from government - revenue or capital expenditure - Held that:- Respectfully following the decision of Hon’ble Supreme Court in Ponni Sugars (2008 (9) TMI 14 - SUPREME COURT ) we reverse the orders of the revenue authorities and direct the AO to treat the grant as capital in nature and delete the disallowance.
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2014 (11) TMI 1158
Disallowance u/s 14A read with rule 8D - computation of claim - Held that:- As consistent with the view taken by the Tribunal in the earlier year, we also order accordingly. Thus, AO is directed that, so far as the disallowance of interest is concerned in the working of rule 8D, no addition/disallowance should be made. As regards the disallowance on account of indirect expenses, by adopting 0.5% of the average investment, we confirm the disallowance as worked out in accordance with the rule 8D. Lastly, with regard to the disallowance on account of amount invested in share capital of partnership firm, we direct the AO to follow the earlier order of the Tribunal in A.Y. 2008-09 and work out the disallowance. Accordingly ground raised by the assessee is treated as partly allowed.
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2014 (11) TMI 1157
Method of computation of ALV - Held that:- See Smitaben N Ambani vs. CWT [2009 (1) TMI 430 - BOMBAY HIGH COURT] wherein it was held that rateable value of the properties determined by the Municipal Authorities shall be the yard stick. In any case, the percentage of investment in the impugned properties is no basis for arriving at the ALV of the properties. Accordingly, the grounds raised by the Revenue are dismissed.
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2014 (11) TMI 1156
Disallowing the claim for payment of commission made to the two parties on the basis of misconception of law or misreading - Held that:- In the present case there is a binding contract between the parties by which the \recipients of the commission had the right to enforce realisation of commission stipulated between the parties. We also find from the communication between the parties that the payment was duly received by the parties and paid by the assessee by account payee cheques. The revenue has not alleged that the parties to the transactions are related to each other or that the payments are not genuine or that the payments having been made by the assessee to the recipients have found their way back to the assessee some way or the other. Such being the case, we find that the authorities below were not justified in rejecting the claim of the assessee for payment of commission. Since all the ingredients necessary for genuine business transaction exist in this case, we do not find any merit in the addition made by the AO and in the action of the CIT(A) in confirming the same. - Decided in favour of assessee.
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2014 (11) TMI 1155
Addition u/s 68 - Held that:- In all the three creditors, the assessee has proved the identity, genuineness and creditworthiness of the creditors by filing copy of confirmation with PAN number, copy of return, copy of bank statement and admission before the Assessing Officer U/s 131 of the Act. The sources have been explained by the cash creditors, therefore, we uphold the order of the learned CIT(A). The learned CIT(A) has called remand report from the Assessing Officer, therefore, no violation under Rule 46A of the Income Tax Rules, 1962. Appeal of the Revenue is dismissed.
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2014 (11) TMI 1154
Disallowance of expenditure on account of non-compliance with TDS provisions - delay in depositing TDS - Held that:- It is not in dispute that the TDS amount was deposited by the assessee prior to the due date of filing return. An amendment to Section 40[a](ia) of the Act of 1961 was introduced by the Finance Act, 2010 and that was applied w.e.f. 01.4.2010. The Assessing Officer while passing the assessment order impugned was of the view that the TDS was not paid before the due date specified in Sub-Section (1) of Section 139 and amendment to Section 40[a](ia) came into force on 01.4.2010, therefore, no question was there for disallowance of expenditure on account of non-compliance with TDS provisions. - Decided in favour of assessee.
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2014 (11) TMI 1153
Liability on director Petitioner-Smriti Thingbaijam - Held that:- In the facts of the present case, Petitioner-Smriti Thingbaijam had resigned from the Company on 16.02.2013 and the Board of Directors have accepted her resignation on 18.02.2013 and petitioner-Naveen Kumar Aggarwal had tendered his resignation on 21.02.2013 i.e before the cheque was issued. and is full time employee of Bank of America since 11.12.2006. The said change was communicated to the Registrar of Companies in June, 2013.
A photocopy of Form 32 is Annexure P-7 colly. In the case of Smriti Thingbaijam, the Registrar of Companies was informed about her resignation on 16.09.2013 and in the case of petitioner- Naveen Kumar Aggarwal, the Registrar of Companies was informed about his resignation in June, 2013. But this gap would not make the petitioners liable for dishonor of the cheques, which was presented on 27.05.2013 and was dishonored as they had resigned from the post of Directors and their resignation had been duly conveyed to the Registrar of Companies. Thus, they were not involved in day to day affairs of the company and no liability can be thus fastened upon them.
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2014 (11) TMI 1152
Suit for recovery - documents sought to be summoned - Held that:- We not inclined to interfere with the order passed by the Joint Registrar on 6th December, 2012 on the following reasons:-
(a) Firstly, it appears that the present suit is a simple suit for recovery of the amount which was paid by the plaintiff to the defendant. It also appears from the averments made in the application as well as the grounds raised in the appeal that the defendant seeks production of the documents for investigation which is pending against various parties in collateral proceedings. The power of investigation, if any, under Section 11C of the Securities and Exchange Board of India Act, 1992 is with Securities Exchange Board of India.
(b) The operation of the letters issued by the defendant has already been stayed by the Calcutta High Court.
(c) It is also a matter of fact that under Order XLIII Rule 1 of the Code of Civil Procedure, 1908, the impugned order is not an appealable order. Order XLIII CPC does not contemplate an appeal against the order passed in application under Order XVI Rule 1 CPC.
(d) It also appears from the record that the defendant has attempted on many dates to delay the completion of the trial on one pretext or the other. The suit filed by the plaintiff is merely a suit for recovery of the amount. The said fact has not been denied. The said documents cannot be summoned from the plaintiff at the time of cross-examination of the defendant’s witnesses. It is evident that those documents are actually required by the defendant for pending investigation for the purposes of collateral proceedings.
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