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2013 (8) TMI 1057
Issues involved: Delay in filing application for substitution, amendment of written statement, application for equitable set-off, interpretation of Order VIII Rule 6.
Delay in filing application for substitution: The Supreme Court allowed the prayer for substitution of appellant No. 2 after condoning the delay in filing the application. The suit was originally instituted by appellant Nos. 1 and 3 along with the predecessor-in-interest of appellant No. 2 for a declaration regarding commissions and incentives payable by the defendants. The defendants filed an application for amendment of the written statement seeking a decree for a specific sum, which was opposed by the plaintiffs.
Amendment of written statement: The learned single Judge rejected the application for amendment, stating that there was no scope for entertaining a counter claim at that stage. The Division Bench upheld this decision, emphasizing that the claim put forth by the defendants could not be legally recoverable at that point in time. The Division Bench clarified that if the set-off claims were found to be barred by limitation at trial, the defendants would only be entitled to a pro-tanto reduction of the plaintiff's claim.
Application for equitable set-off: The main contention revolved around whether the claim of equitable set-off, as put forth by the defendants, was permissible. The court analyzed the requirements of set-off under Order VIII Rule 6, noting that equitable set-off is distinct from legal set-off and is not governed by the Code. The court referred to various legal precedents to establish the principles governing equitable set-off, emphasizing that such a plea is not raised as a matter of right and is subject to the court's discretion.
Interpretation of Order VIII Rule 6: The court clarified that equitable set-off is based on principles of equity, justice, and good conscience. The discretion to allow equitable set-off lies with the court, and it should be exercised in an equitable manner. The Division Bench's decision to treat the claim as a plea in the nature of equitable set-off was upheld, with the understanding that the final determination of the claim's validity would depend on the evidence presented during the trial. The High Court was urged to expedite the disposal of the suit, which had been pending since 1993.
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2013 (8) TMI 1056
Unconscionable and Unexplained delay of about 12 years for completing the proceedings by SEBI - Charge of Manipulation of Scrip Price & Creation of Artificial volumes - Securities and Exchange Board of India Act, 1992 - Merger of 3 Appeals - After prolonged and protracted proceedings, the investigation culminated into the impugned order. Whereby the Respondent has restrained the three Appellants from buying, selling or dealing in the securities market, whatsoever, directly or indirectly for a period of two years. With consent of the learned counsel for the parties concerned, these three appeals were, therefore, heard together and are being disposed of by this common order.
The Respondent-SEBI is stated to have conducted some investigation into dealings in the scrip of the Company and reaching prima facie conclusion that all three Appellants had undertaken synchronized trades and thereby the Appellants are alleged to have manipulated the price of the scrip during relevant time. The Respondent also claims that there were irregular patterns in volumes of trading on the Company's scrip. the SCN was based on the trade and order logs were not supplied to the Appellant, and most of the documents, in legible form, were supplied only after more than 10/11 years of occurrence of the event.
HELD THAT:- The court quashed and set aside the impugned order in each case and allow the three appeals on merit as well as on the ground of unconscionable and unexplained delay of about 12 years in initiating and completing the proceedings against the three Appellants in question. Regarding the abnormality in the volume of the scrip as a result of the Appellants' trades. The court observed that the SCN as well as documents, other material and certain graphs produced by the parties before us. The facts clearly indicate that fluctuations of a similar nature in the volumes of the scrip existed even during the period when the Appellants did not execute any trade. The SCN itself makes it clear that there were ups and downs in the volume during the preceding and subsequent six months of the period of investigation in question. Therefore, we find that the charge of volume manipulation is also hollow and baseless. Also the existence of unnatural and unexplained delay of more than a decade and prejudice caused due to such undue delay is writ large in the matter. Therefore, the impugned order deserves to be quashed on this ground as well.
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2013 (8) TMI 1055
Prayer for transfer the investigation of his case/complaint to CBI - HELD THAT - the power of transferring such investigation must be in rare and exceptional cases where the court finds it necessary in order to do justice between the parties and to instil confidence in the public mind, or where investigation by the State police lacks credibility and it is necessary for having “a fair, honest and complete investigation”. Constitutional powers for transferring an investigation from the State investigating agency to any other independent investigating agency like CBI only in rare and exceptional cases.
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2013 (8) TMI 1054
Issues involved: Interpretation of u/s 28 of the Income Tax Act 1961, treatment of interest on partner's debit balance, applicability of deemed dividend u/s 2(22)(e) of the IT Act.
Interpretation of u/s 28 of the Income Tax Act 1961:
The Revenue contended that the CIT(A) erred in not appreciating the application of section 28 of the IT Act, which states that the value of any benefit or perquisite arising from business or profession is chargeable under the head profit and gain from business or profession. The Revenue argued that interest-free loans to partners resulted in diverting funds, thus falling under section 28. However, the CIT(A) found that taxing income on a notional basis is not sustainable in the eyes of the law, especially when no actual interest was paid or received. The Tribunal upheld this finding, emphasizing that no interest was charged on the partners' debit balance, and the partnership deed did not mandate interest payments, leading to the dismissal of the Revenue's appeal.
Treatment of interest on partner's debit balance:
The Assessing Officer had charged interest on the net debit balance of partners at 12%, resulting in an addition of `20,61,845. The CIT(A) disagreed with this approach, stating that taxing income on a notional basis without actual interest payments is not valid. The Tribunal concurred, highlighting that no interest was charged on the partners' debit balance, and the absence of any provision for interest in the partnership deed further supported the deletion of the addition. The Tribunal emphasized that the charging of interest by the Assessing Officer was merely taxing notional income, leading to the dismissal of the Revenue's appeal.
Applicability of deemed dividend u/s 2(22)(e) of the IT Act:
The Revenue argued that the partners' overdrawn funds should be treated as deemed dividend u/s 2(22)(e) of the IT Act, as these payments were akin to advance or loans benefiting the partners. However, the Tribunal noted that the concept of deemed dividend applies to companies, not partnership firms. As the assessee in this case was a partnership firm, the Tribunal found no merit in the Revenue's appeal and dismissed it.
In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition of interest on the partner's debit balance, emphasizing the absence of actual interest payments and the notional nature of the income. The Tribunal also clarified that the concept of deemed dividend does not apply to partnership firms, leading to the dismissal of the Revenue's appeal.
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2013 (8) TMI 1053
Issues Involved:
1. Whether the R3-company is a quasi-partnership.
2. Allegations of oppression and mismanagement by the respondents.
3. Validity of the Board meeting dated 8th March 2012 and EOGM held on 30th March 2012.
4. Whether the termination of the petitioner as a director amounts to an oppressive act.
5. Allegations of mismanagement committed by the respondents.
6. Appropriate reliefs to be granted to the petitioner.
Summary:
1. Quasi-Partnership:
The petitioner claimed that the R3-company was run as a quasi-partnership. The court examined the facts, including the equal partnership in the initial business, the incorporation of the company, and the joint management. It concluded that the company was indeed in the guise of a partnership, thus applying the principles of quasi-partnership.
2. Allegations of Oppression:
The petitioner alleged several acts of oppression, including the transfer of 100 shares to R2 without consideration, non-payment of provident fund and dividends, and restrictions on accessing financial information. The court found that the transfer of shares after seven years could not be challenged and that the provident fund and dividends issues did not amount to oppression. However, the denial of financial information and the subsequent actions by the respondents were deemed oppressive.
3. Validity of Board Meeting and EOGM:
The petitioner challenged the validity of the Board meeting on 8th March 2012 and the EOGM on 30th March 2012. The court found that the petitioner had participated in the Board meeting and that the notice for the EOGM was properly served. Therefore, the meetings were held according to law, and the resolutions passed were valid.
4. Termination of Petitioner as Director:
The court examined whether the termination of the petitioner as a director was oppressive. It found that the removal was harsh, burdensome, and wrongful, especially considering the petitioner's significant shareholding and contributions to the company. The court held that the removal was an act of oppression and set aside the resolution removing the petitioner as a director.
5. Allegations of Mismanagement:
The petitioner alleged that the respondents were involved in mismanagement, including running a parallel business, acquiring properties with company funds, and filing bogus cases. The court found that the petitioner was denied access to financial information, creating a reasonable doubt about irregularities. Therefore, a case of mismanagement u/s 398 of the Act was established.
6. Reliefs Granted:
The court ordered the reinstatement of the petitioner as a director and directed the sale of his 24% shareholding to R1 and R2 at a fair value to be assessed by an independent valuer. The valuation process and the subsequent transfer of shares were detailed, ensuring that the petitioner would receive fair compensation.
Order:
1. The resolution dated 30th March 2012 removing the petitioner as a director is set aside, and the petitioner is reinstated.
2. The petitioner is directed to sell his 24% shareholding to R1 and R2 at a fair value assessed by an independent valuer.
3. The valuation process will be conducted by V.A. Bapat & Co. if the parties fail to agree on a valuer.
4. The respondents must deposit the valuation amount with the CLB, and the petitioner must transfer his shares upon receipt of the amount.
5. The expenses of the valuer will be borne equally by both parties.
6. Parties are left to bear their own costs, and any interim orders stand vacated.
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2013 (8) TMI 1052
Issues involved:
The judgment involves the consideration of whether the Company Law Board could grant an interim order without deciding the application under Section 8 of the Arbitration Act. Additionally, the maintainability of the appeal without the company filing it is also a key issue.
Details of the Judgment:
*Issue 1: Granting of Interim Order without Deciding Section 8 Application*
The Company Law Board granted an interim order without deciding the application under Section 8 of the Arbitration Act. The appellants argued that the conditions of Section 8 were fully satisfied, mandating a referral to arbitration. However, the respondents contended that the interim order was necessary to protect the petitioners while the Section 8 application was being processed. The High Court, citing Supreme Court decisions, held that once an application under Section 8 is filed, the Board must determine if the conditions are met and refer the parties to arbitration if so.
*Issue 2: Maintainability of the Appeal*
The respondents raised objections to the maintainability of the appeal since the company did not file it. However, the High Court found that the appellants had locus standi to challenge the Board's order. The Court noted that the decision relied upon by the respondents did not apply to the facts of this case. The Court left it to the Company Law Board to decide on objections after examining the applicability of Section 8 of the Arbitration Act.
In conclusion, the High Court set aside the order passed by the Company Law Board and remanded the matter back to the Board with directions to decide the Section 8 application and the prayer for interim relief together. The Board was instructed to record reasons for its decisions regarding Section 8 and interim relief. The Court preponed the hearing date for the application under Section 8 and interim relief before the Company Law Board. The original jurisdiction appeal was allowed with the specified directions and observations, with no order as to costs. Additionally, a related civil application was disposed of accordingly.
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2013 (8) TMI 1051
Issues Involved:1. Whether the impugned judgment passed by the High Court by reversing the judgment and award of the reference court is vitiated on the ground of erroneous finding and also error in law? 2. For what award the appellants are entitled to in this appeal? Summary:Issue 1: Erroneous Finding and Error in LawThe Supreme Court examined whether the High Court's reversal of the reference court's judgment was vitiated by erroneous findings and legal errors. The State of Maharashtra acquired land for industrial development, and the Special Land Acquisition Officer awarded compensation at Rs. 50,000/- per hectare. The appellants sought enhancement of compensation u/s 34 of the Maharashtra Industrial Development Act, 1961. The reference court re-determined the market value based on sale instances of nearby plots, awarding compensation at Rs. 5/- per sq. feet. The High Court set aside this award, relying on judgments such as Saraswati Devi Vs. U.P. Government and Union of India Vs. Zila Singh, which held that small plot sale prices cannot determine the market value of vast land stretches. The Supreme Court found the High Court's reliance misplaced and upheld the reference court's findings that the acquired land had non-agricultural potentiality and was comparable to the plots in the sale deeds. The reference court's judgment was based on cogent and legal evidence, and the High Court's reversal was deemed erroneous both in fact and law. Issue 2: Entitlement to AwardThe Supreme Court affirmed the reference court's award, which included enhanced compensation at Rs. 5/- per sq. feet, 30% solatium, interest, and additional compound interest. The court directed respondent No.3 - M.I.D.C. to issue the Demand Draft in favor of the landowners/appellants or their legal representatives or deposit the same in their bank accounts within six weeks from the date of receipt of a copy of this judgment and submit the compliance report before the reference court. The appeal was allowed with no order as to cost.
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2013 (8) TMI 1050
Issues Involved:
1. Maintainability of the Petition.
2. Allegations of Oppression and Mismanagement.
3. Eligibility of the Petitioner u/s 399 of the Act.
4. Suppression of Material Facts by the Petitioner.
5. Enforcement of Agreement and Allotment of Shares.
6. Validity of Removal and Appointment of Directors.
Summary:
Maintainability of the Petition:
The respondents challenged the maintainability of the petition on the grounds that it was filed in the capacity of a director and not as a shareholder, and the petitioner did not meet the eligibility criteria u/s 399 of the Act. The court found that the petitioner did not hold 1/10th of the total members or issued capital of the company, rendering the petition not maintainable. The petition was dismissed on this ground alone.
Allegations of Oppression and Mismanagement:
The petitioner alleged various acts of oppression and mismanagement by the respondents, including the non-issuance of promised equity shares and illegal removal from the post of director. The court found that the petitioner was not entitled to the relief sought for the allotment of shares and that the removal of the petitioner as a director was in accordance with the law.
Eligibility of the Petitioner u/s 399 of the Act:
The petitioner held only 10 shares of Rs. 100 each and did not meet the threshold of holding 1/10th of the total issued capital or members as required u/s 399 of the Act. The court upheld the respondents' contention that the petitioner was not eligible to file the petition.
Suppression of Material Facts by the Petitioner:
The court found that the petitioner had suppressed material facts and documents, including certain criminal cases pending against him and an alleged agreement and Board resolution. The court held that the petitioner did not approach the court with clean hands and dismissed the petition on this ground as well.
Enforcement of Agreement and Allotment of Shares:
The petitioner sought enforcement of an agreement dated 28th December 2007, for the allotment of 7,200 equity shares. The court found the agreement suspicious and noted that the petitioner failed to make the necessary payments as per the agreement. The court held that the petition was filed for a collateral purpose and not maintainable under sections 397/398 of the Act.
Validity of Removal and Appointment of Directors:
The petitioner claimed his removal as a director was illegal and challenged the appointment of Mr. Narendra Kumar Ambawat. The court found that the petitioner ceased to be a director by operation of law u/s 260 of the Act and that the directorial complaint did not constitute an act of oppression. The court upheld the validity of the removal and appointment of directors.
Conclusion:
The petition was dismissed on multiple grounds, including non-maintainability u/s 399, suppression of material facts, and lack of merit in the allegations of oppression and mismanagement.
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2013 (8) TMI 1049
Issues involved: Allowability of claim of deduction in respect of DEPB income, Condonation of delay in filing the appeal.
Condonation of delay: The appeal was delayed by 1598 days due to rejection of claim by AO based on retrospective amendment to section 80HHC. Assessee filed condonation application citing advice against filing appeal until clarification from Hon'ble Supreme Court. Assessee argued lack of due diligence was not deliberate. Tribunal, after considering the facts, condoned the delay in the interest of justice.
Merits of the case - Deduction u/s 80HHC: Assessee claimed deduction u/s 80HHC for DEPB income of Rs. 3,81,34,020. AO rejected the claim citing Finance Act 2005 amendment. In appeal, CIT(A) upheld AO's decision. Assessee contended that Hon'ble Supreme Court's judgment in Topman Exports Ltd case supported the claim for DEPB income deduction. Tribunal noted conflicting decisions by Tribunal and High Court but followed Supreme Court's decision, directing AO to recompute deduction u/s 80HHC in line with Topman Exports Ltd judgment.
Conclusion: Tribunal allowed the appeal for statistical purposes, setting aside CIT(A)'s order and directing AO to recompute deduction u/s 80HHC for DEPB income based on Hon'ble Supreme Court's decision in Topman Exports Ltd case.
Judges: HON'BLE PRESIDENT SHRI H.L. KARWA AND SHRI RAJENDRA SINGH ACCOUNTANT MEMBER
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2013 (8) TMI 1048
Issues Involved:
1. Whether the petitioner is a money lender under the Bombay Money Lenders Act, 1946.
2. Whether the transaction in question is a money lending transaction.
3. Whether the agreement is insufficiently stamped.
4. Whether the respondent company is commercially solvent.
Summary:
1. Money Lender Status:
The respondent contended that the petitioner is a money lender and the transaction falls within the scope of the Bombay Money Lenders Act, 1946. The court examined Section 2(9) and Section 2(10) of the Act, which define 'loan' and 'money lender' respectively. The court referred to previous judgments, including M/s. Marine Container Services (I) Pvt. Ltd. vs. M/s. Rushabh Precisioin Bearings Ltd., which held that a winding-up petition must be based on a legally recoverable debt. The court concluded that if the petitioner is engaged in the business of money lending without a license, the recovery of the amount would be barred, and thus, the winding-up petition would not be maintainable.
2. Money Lending Transaction:
The court analyzed whether the transaction in question can be considered a money lending transaction. The court noted that the petitioner described itself as being in the business of finance and investments, and the agreement referred to the transaction as a 'loan'. The court examined the petitioner's bank statements and balance sheets, which showed substantial loans and interest income. The court concluded that the petitioner is engaged in systematic money lending activities, and this issue requires detailed evidence, which cannot be resolved in a summary jurisdiction.
3. Insufficiently Stamped Agreement:
The respondent argued that the agreement was insufficiently stamped under the Bombay Stamp Act, 1950. The court noted that the petition is not based on the agreement but on the fact of money advanced and non-return thereof. The agreement is placed on record to show the admissions of the respondent. Thus, prima facie, the bar of Section 35 of the Bombay Stamp Act does not apply. However, this point was not discussed in detail due to the findings on the first two issues.
4. Commercial Solvency:
The respondent claimed that the company is financially sound, with significant investments and current assets. The petitioner disputed this but did not provide substantial evidence to show that the respondent is commercially or financially insolvent. The court concluded that the respondent's financial viability does not necessitate winding up.
Conclusion:
The court found that the respondent raised arguable questions regarding the petitioner's status as a money lender and the nature of the transaction, which require detailed evidence. The petition was rejected, with the court clarifying that the observations made are only to ascertain whether the respondent has a bona fide defense. If the petitioner files a civil suit, those proceedings will be decided on their own merits.
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2013 (8) TMI 1047
Issues involved: Direction to furnish specific documents for replying to a show cause notice u/s Central Excise Act, 1944.
The High Court considered an appeal against a directive to provide copies of 11 specified documents to respondents for responding to a show cause notice issued by the Directorate General of Central Excise Intelligence. The notice pertained to irregular Cenvat credit and Education Cess utilization under the Central Excise Act, 1944.
Details of the Judgment:
1. The interim order required the respondents to submit relevant documents related to the show cause notice issue. While some documents were provided, certain invoices were withheld for adjudication purposes.
2. Despite assurances from the appellant's counsel, the specified 11 documents were not furnished to the respondents. A review petition claiming prior document submission was dismissed by the Single Judge.
3. The Court deliberated on whether the appellant had indeed provided the 11 documents as requested by the respondents and decided that the adjudicating authority should verify this based on available records.
4. Relying on Rule 24A of the Central Excise Rules, 2005, the Court emphasized the return or provision of copies of seized documents not used in the show cause notice. The final decision on document furnishing was left to the adjudicating authority, allowing the respondents to contest non-provision if it affects their case.
5. The appeal was disposed of with a directive to either furnish the specified documents or confirm their prior submission. The respondents were granted the opportunity to challenge non-furnishing, with the adjudicating authority instructed to address objections before proceeding further. The deadline for responding to the show cause notice was set at one month from the judgment date.
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2013 (8) TMI 1046
Issues Involved:
1. Legislative Competence and Doctrine of Occupied Field
2. Applicability of MPID Act, 1999
3. Jurisdiction of MPID Special Court
4. Conflict Between MPID Act and Other Central Laws
5. Factual Issues Regarding Petitioners' Involvement
Summary of Judgment:
1. Legislative Competence and Doctrine of Occupied Field:
The petitioners contended that the MPID Act, 1999 encroaches upon the field occupied by the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, and the Indian Companies Act, 1956. However, the court held that the Honourable Supreme Court in K.K. Baskaran v/s State of Tamil Nadu, 2011 3 SCC 793, has already upheld the constitutional validity of a similar State Act, and the doctrine of occupied field does not apply here. The Supreme Court clarified that the Tamil Nadu Act, and by extension the MPID Act, 1999, aims to protect depositors from fraudulent financial establishments, which is a distinct objective from the central laws.
2. Applicability of MPID Act, 1999:
The petitioners argued that the MPID Act, 1999 should not apply to non-banking financial companies (NBFCs) like KIFL, which are regulated by the Reserve Bank of India (RBI) and the Indian Companies Act. The court rejected this argument, stating that the MPID Act, 1999 is designed to protect depositors and can coexist with central laws. The court emphasized that the MPID Act, 1999 covers fraudulent defaults by financial establishments, including NBFCs, and provides mechanisms for attachment and sale of properties to repay depositors.
3. Jurisdiction of MPID Special Court:
The petitioners contended that the MPID Special Court cannot try offences under the Indian Penal Code (IPC) along with MPID Act offences. The court disagreed, noting that the MPID Act, 1999 does not contain a provision similar to Section 4(3) of the Prevention of Corruption Act, 1988, which allows a Special Judge to try IPC offences. However, the court held that the MPID Special Court has jurisdiction to try offences under the MPID Act, 1999 and can consider related IPC offences.
4. Conflict Between MPID Act and Other Central Laws:
The petitioners argued that the MPID Act, 1999 conflicts with the Indian Companies Act, 1956, particularly regarding the attachment of properties of a company under liquidation. The court held that the MPID Act, 1999 does not usurp the powers of the Company Court or the Official Liquidator. The court clarified that the MPID Act, 1999 and the Indian Companies Act, 1956 can coexist, and the designated court under the MPID Act should consider the orders of the Company Court in winding-up proceedings.
5. Factual Issues Regarding Petitioners' Involvement:
The petitioners claimed that they had resigned from KIFL before the defaults occurred and were not responsible for the company's day-to-day affairs. The court noted these factual issues but stated that they should be raised before the Special Court during the trial. The court emphasized that the factual contentions regarding the petitioners' involvement and the attachment of properties should be addressed in the pending Special Case.
Conclusion:
The court dismissed the writ petitions, holding that the MPID Act, 1999 is constitutionally valid and applicable to the petitioners. The court discharged the rule and continued the interim order for six weeks to allow the petitioners to challenge the judgment in a higher court.
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2013 (8) TMI 1045
Recovery of Possession - Suit filed by a licensor against a gratuitous licensee under Section 41(1) of the Presidency Small Causes Courts Act, 1882 (the PSCC Ac), as amended by the Maharashtra Act No.XIX of 1976 (1976 Amendment Act) is maintainable before a Small Causes Court, Mumbai - Bombay Rents, Hotels and Lodging House Rates (Control) Act, 1947 (the Rent Act) - HELD THAT:- In the instant case, the concept of licence and lease were dealt with by contemporary statutes - Indian Easement Act, Transfer of Property Act and Section 41 of the PSCC Act and, as already indicated, all those statutes were enacted in the year 1882. Therefore, Section 41(1) of the PSCC Act could not have been contemplated any other meaning of the term “occupation with permission” but only the permission as contemplated by Section 52 of the Indian Easements Act. The PSCC Act is a procedural law and as already indicated, the expression “licensor” and “licensee” or “landlord” and “tenant” used in Section 41 of the PSCC Act (as amended by Maharashtra Act No. XIX of 1976) relate to immovable property and Section 52 of the Indian Easements Act which defines a licence has an inseparable connection to immovable property and property law. Legislature was well aware of those contemporaneous statutes, that was the reason, why the expression licence as such has not been defined in the PSCC Act with the idea that the expression used in a contemporaneous statutes would be employed so as to interpret Section 41 of the PSCC Act.
ONE UMBERALLA POLICY High Court has correctly noticed that the clubbing of the expression “licensor and licensee” with “landlord and tenant” in Section 41(1) of the PSCC Act and clubbing of causes relating to recovery of licence fee is only with a view to bring all suits between the “landlord and tenant” and the “licensor and licensee” under one umberalla to avoid unnecessary delay, expenses and hardship. The act of the legislature was to bring all suits between “landlord and tenant” and “licensor and licensee” whether under the Rent Act or under the PSCC Act under one roof. We find it difficult to accept the proposition that the legislature after having conferred exclusive jurisdiction in one Court in all the suits between licensee and licensor should have carved out any exception to keep gratuitous licensee alone outside its jurisdiction. The various amendments made to Rent Act as well the Objects and Reasons of the Maharashtra Act XIX of 1976 would clearly indicate that the intention of the legislature was to avoid unnecessary delay, expense and hardship to the suitor or else they have to move from the one court to the other not only on the question of jurisdiction but also getting reliefs.
That the expression ‘licensee’ in Section 41(1) of the PSCC Act would take a gratuitous licensee as well. The reason for such an interpretation has been elaborately discussed in the earlier part of the judgment. Looking from all angles in our view the expression ‘licensee’ used in the PSCC Act does not derive its meaning from the expression ‘licensee’ as used in Subsection (4A) of Section 5 of the Rent Act and that the expression “licensee” used in Section 41(1) is a term of wider import intended to bring in a gratuitous licensee as well.
We are, therefore, in complete agreement with the reasoning of the Full Bench of the High Court. In such circumstances, the appeals lack merits and are, therefore, dismissed. There is no order as to costs.
Golden Rule is that the words of a statute must be prima facie be given their ordinary meaning when the language or phraseology employed by the legislature is precise and plain. This, by itself proclaims the intention of the legislature in unequivocal terms, the same must be given effect to and it is unnecessary to fall upon the legislative history, statement of objects and reasons, frame work of the statute etc. Such an exercise need be carried out, only when the words are unintelligible, ambiguous or vague.
Noscitur a sociis Principle - “a word or phrase in an enactment must always be construed in the light of the surrounding text. “….words and particularly general words, cannot be read in isolation; their colour and their content are derived from their context.” Noscitur a sociis is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words are intentionally used by the legislature in order to make the scope of the defined word correspondingly wider.
Contemporenea Expositan is the best and most powerful law and it is a recognized rule of interpretation.
PARI MATERIA - to be a right and duty to construe every word of a statute in its context and used the word “context” in its widest sense, including “other statutes in pari materia”. that when two pieces of legislation are of different scopes, it cannot be said that they are in pari materia. this Court held that the Rent Act 1947 and the Bombay Land Requisition Act, 1948 were not held to be the acts in pari materia, as they do not relate to the same person or thing or to same class of persons of things.
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2013 (8) TMI 1044
Issues involved: Compliance with pre-deposit requirements u/s 35F of the Central Excise Act and Section 83 of the Finance Act.
In the present case, the Appellate Tribunal CESTAT, Mumbai heard the appeal regarding the waiver of pre-deposit of dues. The applicant had already deposited an amount of Rs. 12 lakhs as per the order passed by the Commissioner (Appeals). The Tribunal waived the pre-deposit of the remaining amount of dues for the appeal hearing. The Commissioner (Appeals) had dismissed the appeal earlier for non-compliance with the conditions of the stay order. However, the Tribunal found that the appellant had complied with the condition of the stay order by depositing the amount within the stipulated time frame. The Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for a fresh decision after providing an opportunity of hearing to the appellant. The appeal was disposed of by way of remand.
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2013 (8) TMI 1043
Issues involved: The judgment involves appeals by the Revenue against separate orders of the ld.CIT(A)-XV, Ahmedabad for AYs 2006-07 & 2009-10, pertaining to deletion of additions made on account of undisclosed income.
Issue 1: AY 2006-07
The case was reopened u/s.148 and assessment was concluded u/s.143(3) r.w.s.147 of the Act, with additions made on account of peak balance in the undisclosed bank account for F.Y. 2005-06 relevant to A.Y. 2006-07. The ld.CIT(A) confirmed the action of the AO regarding the peak credit balance but allowed the alternative relief claimed by the assessee in respect of incremental peak. The Revenue appealed before the Tribunal challenging the incremental peak adjustment.
The ld.CIT(A) decided to restrict the addition towards peak credit to the incremental amount for the year, excluding the peak credit for the earlier year. This decision was based on the 'Real income' theory and supported by relevant case laws. The incremental peak calculation was crucial to avoid taxing the same income twice. The Tribunal upheld the ld.CIT(A)'s decision, citing precedents and legal principles, and dismissed the Revenue's appeal for AY 2006-07.
Issue 2: AY 2009-10
Similar to the AY 2006-07 appeal, the Revenue challenged the deletion of additions made on account of undisclosed income for AY 2009-10. The grounds raised were identical to the previous appeal, with the only change being in the figures. The Tribunal, considering the consistent view taken in the AY 2006-07 appeal, dismissed the Revenue's appeal for AY 2009-10 as well.
In both cases, the Tribunal upheld the decisions of the ld.CIT(A) regarding the treatment of incremental peak and the deletion of specific additions related to undisclosed income, leading to the dismissal of the Revenue's appeals for both AYs.
This judgment highlights the importance of incremental peak calculations in determining undisclosed income and avoiding double taxation, as well as the significance of legal precedents in supporting such decisions.
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2013 (8) TMI 1042
Issues involved:
Assessment of interest u/s 234A, 234B, and 234C on cash seized by Income Tax Department before due date of advance tax payment for A.Y. 2009-10.
Issue 1: Interest u/s 234A
The assessee challenged the interest charged u/s 234A, contending that taxes were paid before filing returns exceeding the tax payable as per returned income. The Ld. CIT(A) confirmed the interest. The Tribunal noted that the assessee's request to adjust seized cash against tax liability was not specific in the statement u/s 132(4). Relying on precedents, the Tribunal held that the seized cash could be adjusted towards advance tax liability, even before assessment completion, as per Section 132B(1)(i) of the Act. The Tribunal allowed the appeal, citing similar cases where interest was deleted by the Tribunal and High Court, as the seized cash exceeded the total tax payable.
Issue 2: Interest u/s 234B
The assessee disputed the interest charged u/s 234B, arguing that the cash seized was before the due date of advance tax payment for A.Y. 2009-10. The Tribunal found that the seized cash was admitted as income by the assessee and requested to adjust it against tax liability. Relying on legal provisions and precedents, the Tribunal allowed the appeal, stating that the seized cash could be utilized towards advance tax liability before assessment completion.
Issue 3: Interest u/s 234C
The assessee contested the interest charged u/s 234C, stating that the cash seized was before the due dates of advance tax payment for A.Y. 2009-10. The Tribunal observed that the assessee had requested to adjust the seized cash against tax liability. Citing relevant legal decisions, the Tribunal allowed the appeal, emphasizing that the seized cash could be adjusted towards advance tax liability before assessment finalization.
In conclusion, the Appellate Tribunal ITAT Pune allowed the appeal, ruling in favor of the assessee and directing the cancellation of interest charged u/s 234A, 234B, and 234C.
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2013 (8) TMI 1041
Issues Involved:
The judgment involves issues related to transfer pricing methods, adoption of Cost Plus Method (CPM) vs. Transaction Net Margin Method (TNMM), comparables analysis, application of Profit Level Indicator (PLI), interest levy u/s 234B, and endorsement of actions by Dispute Resolution Panel (DRP).
Transfer Pricing Methods - CPM vs. TNMM:
The assessee challenged the rejection of CPM and adoption of TNMM by the Transfer Pricing Officer (TPO) for determining the Arm's Length Price (ALP) of international transactions. The TPO selected comparables from different databases and determined the ALP resulting in an upward transfer pricing adjustment. The co-ordinate bench held that CPM was the most appropriate method and directed the Assessing Officer/TPO to compute the ALP accordingly for the impugned assessment year.
Application of Profit Level Indicator (PLI):
The assessee contested the application of PLI on the total operating cost instead of on the cost relating to international transactions with the Associated Enterprise (AE). The co-ordinate bench directed the Assessing Officer to restrict the adjustment only to the internal transaction while determining the ALP, in line with previous decisions.
Interest Levy u/s 234B and DRP Endorsement:
The levy of interest u/s 234B was challenged by the assessee, but as it is dependent on the final determination of income, it was not adjudicated at that stage. The endorsement of actions by the Dispute Resolution Panel (DRP) was also addressed in the judgment.
This summary provides a detailed overview of the issues involved in the legal judgment, including the challenges faced by the assessee regarding transfer pricing methods, application of PLI, interest levy, and DRP endorsement. The judgment highlighted the importance of selecting the most appropriate method for determining the Arm's Length Price and ensuring adjustments are made only to international transactions.
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2013 (8) TMI 1040
Issues:
The appeal involves the interpretation of Section 10B of the Income Tax Act, 1961 and the imposition of penalty under Section 271(1)(c) for inaccurate particulars of income.
Interpretation of Section 10B:
The appellant contended that the respondent's claim for exemption under Section 10B for interest income from fixed deposits was inaccurate. The Tribunal, however, found the claim to be bonafide and in line with judicial thinking at the time of filing the return of income.
Penalty under Section 271(1)(c):
The Assessing Officer imposed a penalty under Section 271(1)(c) for inaccurate particulars of income, which was upheld by the CIT(A). The Tribunal, on the other hand, cancelled the penalty, stating that the assessee had disclosed all relevant facts regarding the interest income and the claim was debatable at the time of filing the return.
Judicial Findings:
The Tribunal highlighted that the legal position regarding interest income as business income was debatable before the Supreme Court's pronouncement in 2003. The Tribunal emphasized that the mere fact that the Assessing Officer did not accept the claim does not imply inaccurate particulars were furnished. Citing relevant case law, the Tribunal concluded that no penalty should be imposed on the assessee.
Legal Precedent:
The judgment referenced the case of Pandian Chemicals v. CIT and CIT v. Sterling Foods to support the argument that a claim found to be unsustainable does not amount to furnishing inaccurate particulars. The judgment in Commissioner of Income Tax v. Reliance Petro Products (P) Ltd. further clarified that an unsustainable claim in the return does not constitute inaccurate particulars regarding income.
Conclusion:
The appeal was dismissed, ruling in favor of the assessee based on the interpretation of Section 10B and the application of penalties under Section 271(1)(c). The judgment emphasized the importance of disclosing all relevant facts and the bonafide nature of the claim made by the assessee.
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2013 (8) TMI 1039
Levy of penalty u/s.158BFA (2) - Held that:- Facts and circumstances of the case do not warrant levy of penalty u/s.158BFA(2). We, therefore, set-aside the order of the CIT(A) and direct the AO to cancel the penalty levied u/s.158BFA(2) on account of disallowance of interest expenditure.
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2013 (8) TMI 1038
Issues Involved:
1. Validity of NEET for admissions to postgraduate courses.
2. Legality of State Government's decision to cancel NEET-based admissions.
3. Rights of students admitted under NEET vs. those admitted under State Rules.
4. Judicial intervention and High Court's role during the pendency of Supreme Court's decision.
5. Equitable relief for students affected by the State Government's decision.
Summary:
1. Validity of NEET for Admissions to Postgraduate Courses:
The Supreme Court referenced multiple cases to highlight the ongoing judicial scrutiny of medical admissions, including *Convenor, MBBS/BDS Selection Board v. Chandan Mishra* and *Medical Council of India v. Madhu Singh*. The Court noted that the State of Goa had framed the Goa (Rules for admission to Postgraduate degree and diploma courses of the Goa University at the Goa Medical College) Rules, 2004. However, the Government of Goa decided to implement NEET for the academic year 2013-14. Despite the Supreme Court's interim order allowing the conduct but not the declaration of NEET results, the results were eventually declared on 16.5.2013 due to another interim order lifting the bar on result declaration.
2. Legality of State Government's Decision to Cancel NEET-based Admissions:
The Supreme Court criticized the State Government's decision on 25.7.2013 to cancel NEET-based admissions and revert to State Rules-based admissions, calling it an act showing "total lack of prudence." The Court emphasized that the State Government should have adhered to the Supreme Court's protection of NEET-based admissions as stated in its final judgment on 18.7.2013 in *Christian Medical College Vellore v. Union of India*.
3. Rights of Students Admitted Under NEET vs. Those Admitted Under State Rules:
The Supreme Court held that the admissions given on the basis of NEET were protected by its final judgment and could not be canceled by the State Government. The Court directed that the petitioners admitted via NEET should be allowed to continue their studies. Simultaneously, the Court addressed the plight of students admitted under State Rules, acknowledging their provisional admissions and directing that 21 seats transferred to the State quota should be filled by these students based on their inter se merit as per the Rules.
4. Judicial Intervention and High Court's Role During the Pendency of Supreme Court's Decision:
The Supreme Court noted that the High Court of Bombay at Goa should not have entertained the writ petition or passed any interim order while the matter was sub-judice before the Supreme Court. The High Court's interim order had created confusion and led to the cancellation of NEET-based admissions by the State Government.
5. Equitable Relief for Students Affected by the State Government's Decision:
The Supreme Court exercised its jurisdiction under Article 142 of the Constitution to provide relief to students affected by the State Government's decision. The Court directed that 21 seats transferred to the State quota should be filled by students admitted under the 2004 Rules based on their merit. The Court, however, declined to increase seats for the academic year 2013-14 or adjust affected students in the subsequent academic year, citing precedents that prohibit such actions.
Conclusion:
The writ petition was disposed of with directions to allow NEET-based admissions to continue and to fill the transferred State quota seats with students admitted under the State Rules, ensuring no encroachment on the streams already allotted to NEET-qualified students. The Court emphasized adherence to legal and judicial pronouncements by the State Government and public authorities.
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