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2015 (1) TMI 1500
Rejection of books of account u/s 145(3) - applying percentage completion method in place of project completion method followed by the assessee - Addition made on change of method - HELD THAT:- The issue in question is squarely covered by ITAT Jaipur Bench consolidated for assessment year 2003-04 to 2006-07, 2009-10, 2007-08 & 2008-09 and assessment year 2007-08 to 2009-10 wherein the rejection of books of account u/s 145(3) of the Act have been held to be not proper and assessee's method of accounting i.e. project completion method has been upheld by following observations by this Bench of ITAT in its group cases.
Thus we uphold the rejection of books of account of the assessee and method of accounting of percentage completion method as followed by this Bench of ITAT in assessee's group of cases. Thus in the entirety of the facts and circumstances, the additions are deleted and the appeals of the assessee are allowed.
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2015 (1) TMI 1499
Effect of filing of revised return - Disallowing additional loss to be carried forward on account of revised return - as alleged revised return was not filed within time allowed u/s 139(3) - HELD THAT:- The Hon’ble Allahabad High Court in the case of Dhamapur Sugar Mills vs. CIT [1972 (3) TMI 16 - ALLAHABAD HIGH COURT] held that the income tax act contemplates, the filing by the assessee of a correct and complete return of income. The law gives him a right to substitute and bring on record a correct and complete return of income, if he discovers any omission or wrong statement in the return originally filed by him. The law cannot contemplate making of assessment, on the basis of a return, which even the assessee claims contains a wrong statement.
When the assessee files a revised return , he admits that the original return filed by him was not correct or complete and substitutes the same by a revised return which according to him is correct and complete. The effective return for the purpose of assessment is thus the return which is ultimately filed by the assessee, on the basis of which he wants his income to be assessed.
DR could not cite any contrary judgment on this issue. Thus we hold that the findings of the first appellate authority that the return filed u/s 139(5) of the Act is not as per the provisions of law, for the reason that the mistakes were not inadvertent is bad in law. We also observe that, the AO has processed the revised return u/s 143(1)(a). The revised return has not been rejected by him. Under these circumstances, it is not appropriate for the CIT(A) to hold otherwise.
Right of the assessee to carry forward of loss - As relying on Periyar District Co-operative Milk Producers Union Ltd. case [2004 (2) TMI 58 - MADRAS HIGH COURT] we allow the ground of the assessee by holding that the assessee can file a revised return claiming a higher amount of loss u/s 139(3) of the Act.
Amount eligible for deduction u/s 80M - reducing notional interest expenditure from the dividend for calculation of deduction u/s 80M - HELD THAT:- A perusal of the chart demonstrates that the annual internal accruals are much higher than the investments made during that particular year. Under these circumstances the presumption is that the investments have been made from internal accruals and that no borrowed funds have been made for these investments.
As decided in HDFC BANK LTD. [2014 (8) TMI 119 - BOMBAY HIGH COURT]) as relying on RELIANCE UTILITIES & POWER LTD. [2009 (1) TMI 4 - BOMBAY HIGH COURT] as assessee’s capital, profit reserves, surplus and current account deposits were higher than the investments in the tax free securities it would have to be presumed that the investments made by the assessee would be out of interest free funds available with the assessee.
Disallowance of deduction of provisions for doubtful debts - HELD THAT:- After considering rival submissions we find that the issue is covered against the assessee by the judgment of Southern Technologies Limited [2010 (1) TMI 5 - SUPREME COURT] Respectfully following the same this ground of the assessee is dismissed.
Disallowance of adhoc interest out of total interest paid during the year, on account of interest free loans, given to companies - AR contended that the assessee is a financial service company and in order to promote its business further, it had to undertake the entire gamut of financial services, and hence this subsidiary companies are formed, as the existing regulations required separate companies to be set up for this purpose - HELD THAT:- As the propositions based on which we had decided ground No. 3 of the assessee are applicable to the facts of the ground also. The assessee has led evidence to prove his case and hence the decision of the Jurisdictional High Court in the case of Motor General Finance Ltd. [2001 (12) TMI 62 - DELHI HIGH COURT] is not applicable as the facts are different. Thus respectfully following the preposition laid down in Reliance Utilities and Power Ltd.[2009 (1) TMI 4 - BOMBAY HIGH COURT] and the propositions laid down in the case of CIT vs. Bharti Televenture Ltd. [2011 (1) TMI 326 - DELHI HIGH COURT] we allow this ground of the assessee.
Nature of expenditure - Disallowance of a claim of interest and old expenses as claimed as incurred during the year, but had been disclosed as deferred revenue expenditure in the books of the assessee - HELD THAT:- As the expenditure in question is undisputedly in the revenue field we apply the principles laid down in SBI Cards & Payment Services [2015 (1) TMI 202 - DELHI HIGH COURT] and allow the claim of the assessee.
Depreciation in respect of commercial vehicles given on lease - Claim denied on the ground that the assessee is not engaged in the business running trucks on hire - HELD THAT:- Admittedly this issue is covered in favour of the assessee by the decision of Tribunal in the assessee’s own case for the asstt. [2007 (7) TMI 343 - ITAT DELHI-D] The prepositions laid down by the Tribunal in these decisions, are in consonance with, the propositions laid by the Jurisdictional High Court in the case of CIT vs. MGF (India) Ltd [2006 (7) TMI 125 - DELHI HIGH COURT] and M/s. ICDS vs. CIT [2013 (1) TMI 344 - SUPREME COURT]
Disallowance of depreciation on assets which are purchased and leased back - HELD THAT:- Out of the six sale and lease back transaction, except in the case of PSEB and Oswal Sugars Ltd., the AO disallowed the depreciation by questioning the commercial expediency of the transaction. This ground of disallowances is not legally correct. When the genuineness of the transaction is not doubted, disallowance of depreciation is not warranted. The AO does not have the jurisdiction to question commercial expediencies and that too is in a transaction between unrelated parties.
The assessee had filed a valuation report in support of his claim for deduction. The AO without considering the same, rejected the claim of the assessee. Such an act is against the prepositions laid down in the case of Ashwin Vanaspati Industries [2002 (1) TMI 40 - GUJARAT HIGH COURT].
Disallowance of the claim with regard to exclusion from income of principal amount recovered on lease transactions which were earlier considered as finance transactions by the AO - HELD THAT:- In the earlier asstt. years, the assessee had offered to tax, the lease rental received, including the principal portion, by treating the transactions in question as lease transactions. Lease transactions were considered as finance transactions by the AO and the depreciation claimed was disallowed. Consequently the principal portion of the lease transactions, which were offered to tax had to be reversed. The assessee’s claim is that such consequential benefit has to be allowed. The Ld. Counsel submitted that, he is not pressing this ground of appeal. In view of our decision in ground No. 8 where we accepted this claim of the assessee that these transactions are lease transactions. In the result this ground is dismissed.
Finding of FAA that certain disallowance made by the AO and challenged by the assessee before it are not arising from the asstt. order - CIT(A) had held that the issue have not been discussed by the AO and do not emanate from in the asstt. order for the year under consideration. He dismissed the same - HELD THAT:- CIT(A) should have considered the claim of the assessee on merits. Hence we set aside the order to the file of the first appellate authority for fresh adjudication, on merit
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2015 (1) TMI 1498
On money receipts - NP Estimation - rejection of books of accounts - AO applied net profit rate of 16% - CIT(A) restricted the net profit @ 15% and deleted the addition - HELD THAT:- Books of accounts maintained by assessee were not proper and not reliable as complete receipts were not shown. Assessee himself admitted receipt of on money and disclosed an amount as unaccounted income on this account. The statement recorded of one purchaser confirmed the fact that assessee was getting on money. AO was justified in rejecting books of accounts.
Estimation of on money done by AO was not found correct by CIT(A) as figures of on money received in one flat from an NRI buyer cannot be the basis for holding that same on money was received by assessee for all flats and also from the partner to whom 11 flats were given. Net profit rate of 16% applied by Assessing Officer was not found justified by CIT(A).
Drawing the strength from various judicial pronouncements of ITAT Bench, CIT(A) observed that assessee has shown net profit of Rs. 2,00,00,000/- and for this net profit @ 15%, corresponding on money comes to Rs. 13,33,00,000/-.as against on money estimated by AO at Rs. 15,56,12,400/- (including flats given to partner with on-money). He took out the flats given to partner, profit shown by assessee of Rs.2,00,00,000/- was more than the reasonable amount of net profit received on balance flats. Accordingly, addition in question was deleted. This reasoned factual finding of CIT(A) needs no interference from our side. Appeal filed by Revenue is dismissed.
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2015 (1) TMI 1497
Imposition of 'advertisement tax' other than the advertisements published in newspapers under Section 132 (6) (l) of the Madhya Pradesh Municipal Corporation Act, 1956 - HELD THAT:- It cannot be agreed that the scheme propounded by the byelaws is contrary to any of the provisions of the Act of 1956. The fact that collection of tax is made through an agency, which necessarily has to work under the authority of the local body, cannot contravene the provisions of Article 265 of the Constitution. It cannot be agreed that this mode of collection is contrary to the Act of 1956 and the intention of the legislature - Reading of Section 133 of the Act of 1956 will show that it merely deals with the procedure for imposition of tax. The procedure for assessment, collection, remission, refund and recovery of taxes, cesses etc. is provided by the byelaws framed by the Municipal Corporation under Section 427 (3) of the Act of 1956.
In the case in hands, Byelaws have been framed for assessment and collection of tax under Section 427 (3) of the Act of 1956; and thus, the provisions of Sections 173 and 174 of the Act of 1956 would not be applicable - The Byelaws of 1978 are framed under Section 427 of the Act of 1956 and Section 431 of the Act of 1956 provides that all byelaws shall be published in the Gazette and the effect of these provisions is that the Byelaws of 1978 shall become part of the Act of 1956. The Government of Madhya Pradesh has accepted and approved the Byelaws of 1978 framed by the Municipal Corporation, Indore and the same came into force with effect from 18.08.1978.
Thus, no case is made out to quash the Resolution No.167 dated 24.08.2011 and Resolution No.233 dated 13.10.2011 passed by the Mayorincouncil. Nor any case is made out to quash the work order dated 20.10.2011 issued by respondent No.2 – Indore Municipal Corporation in favour of respondent No.3 and the agreement by which respondent No.2 awarded the contract to respondent No.3 for collection of the 'advertisement tax'. Considering the fact that the procedure, as prescribed under the Byelaws of 1978, has not been followed by the Municipal Corporation while directing respondent No.3 – contractor to recover 'advertisement tax' on their behalf, we quash the demand, which are subject matter in this batch of writ petitions and direct the Municipal Corporation to issue fresh demand regarding levy and collection of the 'advertisement tax', as per the rules of Byelaws and when the demand is finalized by the Municipal Corporation, then only the same may be given to respondent No.3 – contractor to recover it.
The writ petitions are allowed in part.
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2015 (1) TMI 1496
Maintainability of Revision - order passed under Section 311 of Cr.P.C. is an interlocutory order or not - prosecution under Section, 311 of, Cr.P.C. to call Dr. Anoop, Verma (P.W. 10) for reexamination - HELD THAT:- Admittedly, application under Section 311 of Cr.P.C. was filed on the date when, the case was fixed for judgment.
It is, made clear that whenever such kind of illegal orders are passed and brought to the notice of the superior court then in the interest of justice such kind of orders, may be interlocutory in nature, can be set aside by revisional court - By invoking inherent, powers under Section 482 of Cr.P.C. such type of mistake committed by passing the illegal order can be corrected by this Court.
The impugned order passed by the courts below are hereby set aside - petition allowed.
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2015 (1) TMI 1495
Prayer for a decree of possession of land and cancellation of the sale deed - plaintiff can be non-suited on the ground of limitation in a suit for possession or not - dismissal of earlier suit filed by Ranjit Singh son of Sohan Singh (respondent in the instant appeal) through his wife Satwinder Kaur will operate as res judicata? - HELD THAT:- Both the Courts below had given a categorical finding that the sale deed was a result of impersonation and the plaintiff had not sold the land. The defendant chose not to file any appeal. The order against him had become final. The sale deed had been held to be invalid. So far as the share of the plaintiff was concerned it was necessary to seek a declaration that the sale deed was invalid. The fact that the plaintiff has sought a declaration with respect to the sale deed is of no consequence. The possession of the property has been taken by the defendant pursuant to a void document and he had no title and has no right to remain in possession. Since the possession has been taken on the basis of void document Article 65 of the Limitation Act would apply and the limitation to file a suit would be 12 years.
In AJUDH RAJ AND ORS. VERSUS MOTI S/O MUSSADI [1991 (5) TMI 258 - SUPREME COURT], it was held that if the order has been passed without jurisdiction, the same can be ignored as nullity, that is, non-existent in the eyes of law and is not necessary to set it aside, and such a suit will be governed by Article 65 of the Limitation Act.
The plaintiff is claiming possession of the property on the basis that he was a co-owner. By way of a registered sale deed, the property had been sold to the defendant by the brother of the plaintiff by impersonation. The possession of the defendant is not authorized. The plaintiff as owner is seeking to recover possession from the defendant. The defendant had relied upon the sale deed as it purported to create some right in him. The document has been held to be void and non-est in the eyes of law.
The defendant had raised a plea of adverse possession and an issue was framed but at the time of arguments the plea was not pressed but a finding was recorded against the defendant. The suit had been filed within 12 years and it is in time, therefore, the finding recorded by the Courts below on the point of limitation is set aside.
Appeal allowed.
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2015 (1) TMI 1494
Appointment of Shri R.G. Kulkarni as Arbitrator - HELD THAT:- Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jurisdiction under Section 11(6) of the Arbitration Act, acceptance of such appointment as a fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law. In the present case, the agreed upon procedure between the parties contemplated the appointment of the arbitrator by second party within 30 days of receipt of a notice from the first party.
The option given to the respondent Corporation to go beyond the panel submitted by the ICADR and to appoint any person of its choice was clearly not in the contemplation of the parties. If that be so, obviously, the appointment of Shri Justice A.D. Mane is non-est in law. Such an appointment, therefore, will not inhibit the exercise of jurisdiction by this Court under Section 11(6) of the Arbitration Act. It cannot, therefore, be held that the present proceeding is not maintainable in law. The appointment of Shri Justice A.D. Mane made beyond 30 days of the receipt of notice by the petitioner, though may appear to be in conformity with the law laid down in Datar Switchgears Ltd. [2000 (10) TMI 873 - SUPREME COURT], is clearly contrary to the agreed procedure which required the appointment made by the respondent Corporation to be from the panel submitted by the ICADR. The said appointment, therefore, is clearly invalid in law.
Shri Justice S.R. Sathe, a retired judge of the Bombay High Court appointed as the Arbitrator on behalf of the respondent Corporation - petition allowed.
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2015 (1) TMI 1493
Validity of arbitration proceedings - grievance is that the Council could not have directed an arbitration to be carried out by an arbitrator appointed by it without reference to the provision under clause 3 that contemplates to such reference only on the failure of the Council to resolve the dispute by itself under clause (2) - HELD THAT:- It is seen through the order and when the Director makes a reference on behalf of the Council to an Arbitrator. It must be taken that it was not possible to conciliate and resolve the dispute itself and therefore, the reference was made. It would make no difference that the reference is made to an institution or centre which will provide for alternative dispute resolution services or a direct reference to the arbitrator itself. There can be really no prejudice at all for the petitioner, for, there is no issue of bias. The provisions of Arbitration Act are sufficient to make possible for any party who is not satisfied with the Arbitrator to take such an issue before him and invite a decision thereon which is still capable of being assailed in higher forums in the manner contemplated under the Arbitration and Conciliation Act.
The counsel says that there is an independent arbitration agreement under the contract and that must allow for the parties to choose the arbitrator in the manner contemplated under the contract. It must be taken only as an additional method of appointment of an arbitrator and cannot exclude the application of the provisions of this Act. This is so in view of the non obstante clause that is set forth under Section 18 which begins with these expressions "notwithstanding anything contained in any other law for the time being in force". A contract that provides for appointment of an arbitrator must be seen as a contract as recognized by law and that provision will stand eclipsed by the non obstante clause that Section 18 provides for.
There are no substantial prejudice for the petitioner to approach this Court for any remedy under Article 226 of the Constitution. The writ petition is dismissed.
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2015 (1) TMI 1492
Levy of service tax - rejection of application for modification of the term imposed as pre-deposit - HELD THAT:- The ends of justice require that the appellant be provided an additional opportunity of hearing on the applications seeking waiver in both the appeals. On the very peculiar facts including the factors which lead the parties to require for opportunity. Thus, taking a lenient view in the matters, the orders impugned in these appeals, i.e., Annexure J and consequential Annexure F orders, are set aside thereby paving way for the CESTAT to consider the applications for waiver of pre-deposit in both the appeals. The appellant is directed to mark appearance before the office of CESTAT South Zonal Bench on 5th February 2015 to obtain appropriate date of listing of the case before CESTAT as may be convenient to the South Zonal Bench.
Appeals are disposed of.
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2015 (1) TMI 1491
Rectification of mistake u/s 154 - Reconsideration of turnover – as per HC what the assessee wants and seeks, by way of rectification, is re-examination of entire bank accounts and re-computation of the turnover - Tribunal made it clear that 0.6% rate of commission would apply to the entire transaction including the transactions which were genuine, i.e. the transactions which were recorded in the stock exchange - this cannot be undertaken in exercise of power u/s 154 - HC said the order passed by the Tribunal rejecting the application u/s 154 cannot be interfered - HELD THAT:- SLP dismissed.
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2015 (1) TMI 1490
Plea of limitation - whether the question of limitation could be considered as preliminary issue Under Section 9A of Code of Civil Procedure, 1908? - HELD THAT:- Section 9A of the Code requires the Court to decide the issue as to jurisdiction before final adjudication on the application for interim relief. The language employed in Section 9A is clear and unambiguous. Section 9A(1) contemplates that when a person makes an objection to jurisdiction of the Court, the Court shall determine such objection on jurisdiction as a preliminary issue before proceeding with the application for interim relief - Section 9A(2) provides that the Court shall have the power to grant interim relief, as it may deem appropriate, pending determination of such preliminary issue regarding jurisdiction before it.
The provision, read in its entirety, neither contemplates nor refers to any circumstance where an objection besides the jurisdiction of the Court may be determined as a preliminary issue. It only contemplates the issue of jurisdiction to be framed and determined as a preliminary issue by the Court.
The expression "jurisdiction" in Section 9A is used in a narrow sense, that is, the Court's authority to entertain the suit at the threshold. The limits of this authority are imposed by a statute, charter or commission. If no restriction is imposed, the jurisdiction is said to be unlimited. The question of jurisdiction, sensu stricto, has to be considered with reference to the value, place and nature of the subject matter. The classification into territorial jurisdiction, pecuniary jurisdiction and jurisdiction over the subject-matter is of a fundamental character. Undoubtedly, the jurisdiction of a Court may get restricted by a variety of circumstances expressly mentioned in a statute, charter or commission. This inherent jurisdiction of a Court depends upon the pecuniary and territorial limits laid down by law and also on the subject-matter of the suit - The law of limitation operates on the bar on a party to agitate a case before a Court in a suit, or other proceedings on which the Court has inherent jurisdiction to entertain but by operation of the law of limitation it would not warrant adjudication.
A perusal of the Statement of Object and Reasons of the Amendment Act would clarify that Section 9A talks of maintainability only on the question of inherent jurisdiction and does not contemplate issues of limitation. Section 9A has been inserted in the Code to prevent the abuse of the Court process where a Plaintiff drags a Defendant to the trial of the suit on merits when the jurisdiction of the Court itself is doubtful - In the instant case, the preliminary issue framed by the Trial Court is with regard to the question of limitation. Such issue would not be an issue on the jurisdiction of the Court and, therefore, the Trial Court was not justified in framing the issue of limitation as a preliminary issue by invoking its power Under Section 9A of the Code. The High Court has erred in not considering the statutory ambit of Section 9A while approving the preliminary issue framed by the Trial Court and thus, rejecting the writ petition filed by the Appellant.
The appeal is allowed.
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2015 (1) TMI 1489
Admission of additional ground raised - disallowing credit for corporate taxes paid by MTPL Singapore, to the extent of dividends received by appellant from MTPL in India - As pointed out that in the present case factual foundation has not been laid down before the AO and relevant facts are not on record, thus this ground should not be admitted - HELD THAT:- It is well settled law that a legal claim can be advanced at any stage of proceeding - we are not inclined to accept the submission of the CIT(DR) to reject the ground taken by assessee on the ground of laches. There is no quarrel with the submissions of Ld. CIT(DR) that if the relevant facts are not there on record then the additional ground should not be admitted - if the basic facts are there on record and those facts have only to be supplemented by obtaining some further information in that respect then in order to determine the correct tax liability of assessee and to advance the cause of substantial justice, the additional ground raised by assessee should be admitted.
In the present case the basic facts necessary for adjudication of additional ground are already on record and at best the AO is to verify those facts and apply the correct provisions of DTAA to the facts. We, therefore, admit the ground raised by the assessee and restore the matter to the file of the AO for allowing the credit of taxes paid in Singapore on the dividend income as per the provisions of DTAA in accordance with law. Additional ground raised by the assessee is admitted and allowed for statistical purposes.
Disallowance u/s 14A r.w.r. 8D - Necessity of recording AO's satisfaction regarding expenditure being incurred for the earning of exempt income on reasonable basis - HELD THAT:- AO as well as Ld. CIT(A), both have confirmed the disallowance applying Rule 8D. Therefore, the order of Ld. CIT(A) cannot be sustained. The issue, therefore, is restored back to the file of the AO for deciding the issue denovo in accordance with the decision in the case of Maxopp Investment Ltd. [2011 (11) TMI 267 - DELHI HIGH COURT] and also after taking into consideration the decision in its own case for asstt. Year 1993-94.
Addition on account of non crediting of sum received as DEPB credit - HELD THAT:- AO in the body of order talks of addition of Rs. 2,73,56,574/- whereas in computation makes addition of Rs. 2,63,38,000/-. Both these additions have different import. Therefore, he needs to clarify the correct amount which he intends to add. We further notice that assessee has returned 3% profit in the year in which the DEPB is sold/auctioned and 97% of the profit is transferred to NINL as per agreement. This was rightly done in view of overriding title in favour of NINL over proceeds of sale/auction of DEPB.
Nature of expenses - expenditure towards annual fees of license issued by Central Electricity Regulatory Commission (CERC) for the period 1.4.2005 to 31.3. 2006 - AO treated this expenditure as capital expenditure on the ground that the same related to activity which was ready to become operational and pertained to an independent activity - CIT(A) deleted this disallowance taking into consideration the fact that the payment was towards annual license fee for trading in electricity - HELD THAT:- The facts as noted by Ld. CIT(A) have not been controverted by the department. It is not disputed that the activity carried out by the assessee resulted into generation and sale of electricity therefore the licence fee paid for trading in electricity was in revenue’s field. We, therefore, confirm the order of the Ld. CIT(A) on this issue.
Penalty u/s 273(2)(a) - CIT(A) noted that inadvertently the assessee company did not claim it as deduction in the computation of total income for the asstt. year under consideration - HELD THAT:- The department has not controverted the facts as recorded by the Ld. CIT(A) . There can be no quarrel with the observation of Ld. CIT(A) that while the payment of penalty, if debited to the profit and loss account is to be disallowed and added back to the computation of total income, the refund thereof, if credited to the profit and loss account, has to be allowed as a deduction in the computation. We, therefore, confirm the order of Ld. CIT(A).
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2015 (1) TMI 1488
Assessment of trust - CIT dismissed the application u/s 12AA - registration has been denied on allegation that ‘’almost in every activity there is a scent of commercialization/ profit motive” - HELD THAT:- The registration cannot be refused on the basis of vague findings like the “scent of commercial activity” and accounts audit being as per state govt. rules and not a CA.
From the verification of the relevant Urban Development Rules, it emerges that assessee carries on various activities which appear to be charitable in nature.
CIT has not appreciated the application for registration in proper perspective, the activities of the assessee can be judged from the documents submitted by it. Thus we are inclined to set aside the issue back to the file of the ld. CIT to decide the same afresh in accordance with law by providing reasonable opportunity of being heard to the assessee expeditiously. Thus the appeal of the assessee is allowed for statistical purposes.
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2015 (1) TMI 1487
Territorial Jurisdiction of High Court - Does the inherent power of this Court, saved under Section 482 of the Code of Criminal Procedure, extend beyond the territorial limits of this Court so as to quash an F.I.R. registered within the territorial limits of another High Court? - civil law concept of cause of action could be imported to criminal law or not - HELD THAT:- From the judgment in Navinchandra N.Majithia case [2000 (9) TMI 925 - SUPREME COURT], it is crystal clear that the Hon'ble Supreme Court has taken the view that the High Court within whose territorial jurisdiction a part of cause of action has arisen has also got jurisdiction to entertain a writ petition in view of Clause 2 of Article 226 of the Constitution of India, though the situs of the authority against whom the writ petition has been filed is outside the territorial jurisdiction of the said High Court - The said view in Navinchandra N.Majithia case has been reiterated subsequently by the Hon'ble Supreme Court in Rajendra Ramchandra Kavalekar Vs. State of Maharashtra [2009 (1) TMI 936 - SUPREME COURT].
Under Section 26 of the Code, subject to the other provisions of the Code, any offence under the Indian Penal Code may be tried by the High Court. From this provision, it is manifestly clear that the High Court can try an offence under the Indian Penal Code if the same has been committed either in full or in part within the territorial limits of the Said High Court. So far as the power of the High Court to entertain an appeal, revision, reference or petition for transfer is concerned, the situs of the Subordinate Court / Magistrate whose proceedings or order which is under challenge gives the jurisdiction to the High Court. So far as the inherent power saved under Section 482 of the Code of Criminal Procedure is concerned, it has not been either expressly or impliedly stated that the power can be exercised beyond the territorial limits of the High Court based on the cause of action.
So far as the territorial jurisdiction under Section 482 of the Code of Criminal Procedure is concerned, it is akin to Article 226 of the Constitution of India as it stood prior to the introduction of Clause 2 of Article 226. When Parliament thought it fit, after the above Constitution Bench judgment, to extend the writ jurisdiction of the High Court beyond the territorial limits of the said High Court, it did not think it appropriate, similarly to amend Section 482 of the Code of Criminal Procedure so as to add provision like Clause 2 of Article 226 of the Constitution of India extending the inherent power of the High Court under Section 482 of the Code of Criminal Procedure beyond the territorial limits of the said High Court based on the fact that the part of offence is committed outside the territorial limits of the said High Court.
So far as the power under Section 482 of the Code of Criminal Procedure for the purpose of quashing the F.I.R. is concerned, the only criteria is the situs of the authority who has registered the case and not the place of commission of the crime either in full or in part. Similarly, the writ jurisdiction of the High Court under Article 226 of the Constitution to quash a criminal case also does not extend beyond the territorial limits of the said High Court if the case is pending on the file of an authority who is located outside the territorial limits of the said High Court.
This conclusion is inescapable, in view of the authoritative pronouncement of the larger Bench of the Hon'ble Supreme Court in Dashrath Rupsingh Rathod [2014 (8) TMI 417 - SUPREME COURT] wherein the Court has held that the concept of "cause of action" which is relevant to Civil Law cannot be imported to Criminal Law.
In the instant case, though it may be true that a part of offence has been committed within the State of Tamil Nadu, since the situs of the authority who has registered the crime falls outside the territorial limits of this Court, this petition is not at all maintainable before this Court.
This petition is dismissed for want of territorial jurisdiction.
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2015 (1) TMI 1486
Nature of expenditure - sales promotion expenses towards obtaining certificate of suitability - revenue or capital expenditure - AO observed that the assessee incurred expenditure for obtaining certificate of suitability for marketing its products there - HELD THAT:- Admittedly the expenditure incurred is not preproduction expenditure. The assessee has been marketing products elsewhere and thus it can be said that the assessee is already in the business of manufacture and sale of drugs. To expand the business in certain countries it has to obtain certificate of suitability as per the FDA Regulations, which is a part of the process of sale of its products. Similar expenditure was considered in Cadila Healthcare Ltd. [2013 (3) TMI 539 - GUJARAT HIGH COURT] wherein it was held that such payments should be considered in the revenue field. No decision of any other High Court, wherein contrary view taken, was placed before us by the Revenue.
Thus hold that the view taken by Hon'ble Gujarat High Court is in accordance with law. In the result, ground No. 1 of the Revenue is dismissed.
MAT credit u/s. 115JA - AO had reduced the MAT credit to Nil due to additions/disallowances made during scrutiny assessment for A.Y. 2006-07 - While computing the tax liability the Assessing Officer set off the amount of MAT credit excluding surcharge and cess from the amount of tax payable after surcharge and cess - HELD THAT:- As appellant has requested for grant of relief in respect of MAT credit, in case, relief is granted by the higher authorities, there is no need to adjudicate upon this request of the appellant as such relief would be automatic. AO shall consider the relief granted by the higher appellate authorities and compute the MAT Credit accordingly and as per law.
Regarding the amount of MAT credit, the amount of MAT credit excluding surcharge and cess cannot be set off from tax payable after surcharge and cess. Thus, following the principle of consistency and justice, the Assessing Officer is directed to give MAT credit which is inclusive of surcharge and cess from the amount of tax payable inclusive of surcharge and cess.
Appeal filed by the Revenue is dismissed.
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2015 (1) TMI 1485
Grant of Bail - failure to comply with the condition, upon which the bail was granted - Failure to make deposit of amount - HELD THAT:- Admittedly, Respondent No. 2 has not deposited the first instalment, but has twice applied for extension of time in the High Court and has been granted extension till 28th February, 2015.
Considering the facts and circumstances of the case including the fact that Respondent No. 2 has been involved in similar cases and apparently owes a large amount of money to various investors, we are of the opinion that the High Court ought not to have granted bail to Respondent No.2.
Bail application dismissed.
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2015 (1) TMI 1484
Cancellation of certain proceedings initiated for sale of the property in question through a private treaty entered into under Rule 8 of Security Interest (Enforcement) Rules, 2002 - whether the petitioner should be relegated to take recourse of the remedy available under under Section 17 and 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?
HELD THAT:- Even though Shri Shekhar Sharma, learned counsel for the petitioner has tried to emphasize that the remedy available under section 17 and 18 of the Act of 2002 is not a efficacious remedy, but we are of the considered view that as the action taken in the matter is nothing but one under Section 13 read with section 14 of the Act of 2002. There is a statutory remedy of appeal avalable under section 17 before the Debt Recovery Tribunal and thereafter further appeal to the Appellate Tribunal under section 18 , all the disputes between the parties arising out of these proceedings have to be agitated and resolved in these statutory proceedings and it is not appropriate for this court to exercise its extraordinary jurisdiction in these proceedings under Article 226 of the Constitution of India to interfere when a statutory Tribunal has jurisdiction to deal with the matter.
Finding existence of statutory remedy of appeal, this petition stands dismissed.
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2015 (1) TMI 1483
Application of filling petition u/s 10(23C) (vi) delayed - condonation of delay - application for relaxation of time in filing the petition under Section-10(23C) (vi) rejected - HELD THAT:- As Income Tax Act is most complicated piece of legislation. The assessee-society is exclusively engaged for the promotion of Hindi language, so amendment was not known to assessee. In the instant case, the assessee-society was already enjoying the benefit under Section-10(22) of the Income Tax Act and was under bona-fide belief that exemption is continuing. The assessee was totally ignorant about the amendment and department is not supposed to take the advantage of the ignorance of the assessee as per CBDT Circular No. 14 (XL-35)/1955 dated 11 April, 1955.
In the circumstances mentioned above, we set-aside the impugned order and condone the delay with a direction to the competent authority to pass afresh order on merit for the above mention assessment years at the earliest, preferably within a period of four months soon after receiving the certified copy of this order.
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2015 (1) TMI 1482
Dishonor of Cheque - age of ink used in the cheque - reference can be made to any expert for ascertaining the age of the ink used on the disputed document/cheque, or not - Section 45 of the Indian Evidence Act r/w Section 139 of the Negotiable Instruments Act - HELD THAT:- Perusal of the impugned order shows that before the Court below, the complainant has been examined. Seven documents have been marked. Four witnesses have been examined and at that stage, application has been filed. Cheque is stated to have been issued on 18.02.2013. As rightly observed by the Court below, petition under Section 45 of the Indian Evidence Act r/w Section 139 of the Negotiable Instruments Act, has been filed after the examination of the accused. There is no competent authority to ascertain the age of the ink and the said facility is stated to be not available in the Forensic Departments in India. There is no illegality in the finding recorded by the Court below, warranting interference.
Criminal revision case is dismissed.
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2015 (1) TMI 1481
Rectification u/s 154 - validity of the proceedings under S.154 on the ground that it is time barred and even on merits, the assessee is eligible to weighted deduction - HELD THAT:- Revenue is contesting only the issues concerning the period of limitation for passing an order under S.154; and also with regard to the exceptions provided for filing an appeal even where there was no tax effect, but the issue concerning validity of initiating proceedings u/s 154 on the renewed interpretation of law was conspicuously absent in the grounds of appeal.
The order of the CIT(A) with regard to the issue concerning validity of proceedings u/s 154 for the reason that the Assessing Officer having applied his mind at the assessment stage, is not entitled to initiate proceedings u/s 154 based on change of opinion, has attained finality. In such an event of the matter, grounds filed before us, even if a decision has to be rendered, are of academic importance. H
We are of the view that the appeals filed by the Revenue deserve to be dismissed on the ground that the issues raised herein are of academic importance, since the order passed u/s 154 has no legs to stand on the limited ground that it is based on change of opinion, and on this aspect of the matter has attained finality.
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