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2016 (12) TMI 1898
Reassessment u/s. 148 - addition by estimating the income of the assessee @ 4% in place of 2.2% shown by the assessee - HELD THAT:- As find from the reassessment order framed by the AO that no addition was made by him on the ground of the above reasons recorded but the addition was made by the AO by estimating the income of the assessee @ 4% in place of 2.2% shown by the assessee. Therefore, the decision in the case of Mohd Juned Dadani [2013 (2) TMI 292 - GUJARAT HIGH COURT] & case of jet Airways (I) Ltd. [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] clearly apply to the facts of the assessee’s case.
Thus assuming jurisdiction to frame an assessment u/s. 147 of the Act, what is essential is a valid reopening of a previously closed assessment. If the very foundation of the reopening is knocked out, any further proceedings in respect to such assessment naturally would not survive. Decided in favour of assessee.
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2016 (12) TMI 1897
Re-assessment/deemed assessment - power of re-assessment - change of opinion or not - reasons to believe - Classification of goods - composite pack of mobile phone along with mobile charger and other accessories - taxable at the rate specified for Entry 68 of Part 1 of Schedule-III read with Entry 14 of Part-II of the said Schedule or not - HELD THAT:- It is evident from the provisions of Section 31 of the Bihar VAT Act that sub-section (1) of Section 31 although not very happily worded, but is on the same lines as the earlier provisions of the Income-tax Act, 1961 prior to its amendment in 1987. Taking into account the said Section as a whole including sub-section (2), it is evident that two types of cases are envisaged therein; in both type of cases the prescribed authority must be satisfied that reasonable grounds exist to believe that there has been under assessment or escaped assessment or assessment to tax at a lower rate or any deduction has been wrongly made therein or an input tax credit has been wrongly claimed, in which cases within the statutory period of four years it can make an assessment or reassessment of the tax payable by such dealer - In the first category, such reassessment can be made irrespective of whether the dealer has concealed, omitted or failed to disclose full and correct particulars of such sale or purchase or input tax credit, whereas in the second category there has been such a failure to disclose on the part of the dealer. The same would flow from the harmonious reading of the provisions of sub-section (1) with sub-section (2) of Section 31 of the Act, which obliges the prescribed authority in the second category of cases to impose by way of penalty the sum equal to three times of the amount of tax which is or may be assessed on the turnover of sale or purchase which escaped assessment, whereas in the first category there would be a mere reassessment of the under-assessed or escaped tax, etc.
In the present matter, it is not in dispute at all that there has been no concealment, omission or failure to disclose full and correct particulars by the petitioners. Thus, the only issue is as to whether the assessing officer was justified in making reassessment under Section 31 of the Act with regard to the periods in issue - the provisions of the Act are on similar lines as the unamended provisions of Section 147 of the Income Tax Act and that they provide for two categories of cases; but even the provisions of Section 147 of the Income-tax Act amended in the year 1989 make it clear that there must be reason to believe that there has been under-assessment or escaped assessment, etc. and as has been held in the case of COMMISSIONER OF INCOME TAX, DELHI VERSUS M/S. KELVINATOR OF INDIA LIMITED [2010 (1) TMI 11 - SUPREME COURT] by the Apex Court, it should not be a mere change of opinion, otherwise it would amount to arbitrary exercise of power by the assessing officer to reopen the assessment - The said law emphatically laid down by the Supreme Court in Kelvinator's case is squarely applicable in the present matter also and it has to be held that reassessment cannot be made on a mere change of opinion.
Whether the decision of the Supreme Court subsequent to the assessments can be considered a mere change of opinion? - HELD THAT:- The law on this point is also very much clear, as held in the several decisions cited including that of DY. COMMISSIONER OF INCOME TAX & ORS. VERSUS M/S. SIMPLEX CONCRETE PILES (INDIA) LIMITED [2012 (9) TMI 516 - SC ORDER], a subsequent reversal of legal position by the judgment of the Supreme Court does not authorize the Department to reopen the assessment which stood closed on the basis of law at the relevant time.
It is evident that in the first category of 8 writ petitions assessment/reassessment had been made earlier under the provisions of Section 31 and/or Section 33 of the Act. It is also evident from the notice issued under Section 31 of the Act that the sole reason for initiation of proceedings under Section 31 of the Act is the decision of the Supreme Court in the case of STATE OF PUNJAB & OTHERS VERSUS NOKIA INDIA PVT. LTD. [2014 (12) TMI 836 - SUPREME COURT] - There was no other material which has come into the possession of the Department which was already not known to it. The fact that there had been earlier assessment/reassessment under Section 31 or Section 33 of the Act goes to show that any further issuance of notice under Section 31 of the Act in such matters without anything more, except the decision of the Supreme Court in Nokia's case would, on the same materials, amount to a mere change of opinion by the prescribed authority in the matter. Thus, any action on the said basis would clearly be without jurisdiction and therefore without authority of law.
So far as the remaining eight matters are concerned, admittedly they are cases of deemed assessments on the basis of the provisions of Section 26 of the Act or assessment under Section 27. No doubt under Section 25 of the Act, the prescribed authority is required to look into and scrutinize the return filed under Section 24 (1) and (3) of the Act but that is not the same thing as making a proper assessment. If the assessing authority had no occasion to form an opinion during the course of such deemed assessment of the returns filed by the petitioner, and subsequently a notice was issued under Section 31 (1) of the Act, or assessment made under Section 27, albeit on the ground of decision rendered by the Supreme Court, it could not be said that there has been any change of opinion - so far as the remaining eight cases are concerned, the plea of the petitioners regarding change of opinion is not applicable.
That being the position, considering the fact that various issues of facts, etc. will have to be dealt with before the question of liability can be decided, the writ jurisdiction does not appear to be a proper one to deal with such issues of fact which must be thrashed before the statutory authorities up to the Tribunal - no interference is called for in such cases where that has been no previous assessment/reassessment under Section 31 or Section 33 of the Act - Application allowed.
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2016 (12) TMI 1896
Scope of Service Providers - Whether the Ex-Secretary or the Ex-President or other office bearers of any Cooperative Credit Society fall within the category of the service providers? - HELD THAT:- Section 43 of Delhi Cooperative Societies Act, 2003 and Section 36 of Maharashtra Cooperative Societies Act 1960 which are para materia to section 30 of Punjab Cooperative Societies Act are perused - On bare reading of the above, it is clear that a cooperative society on registration is a rendered body corporate, meaning thereby that it acquires an identity distinct from its member shareholders or the office bearers. Therefore, if a consumer has availed of services of the cooperative credit society for consideration, the cooperative credit society alone would be service provider qua that consumer and the office bearers of the said society who by virtue of being elected to the said position to manage the affairs of the society would have no privity of contract with the consumer and could not be termed as service provider.
Thus, ordinarily Ex-Secretary or the Ex-President or office bearers of any Cooperative Credit Society will not fall within the category of service providers in respect of any contract between the consumer and the cooperative society as they have the identity distinct from the duly registered cooperative credit society. However, there can be cases in which certain individuals may indulge in unfair trade practice or defrauding of the gullible depositors under the cloak of cooperative society - it is clear that if the Ex-Secretary or the Ex-President or office bearers of any Cooperative Credit Society have indulged in misfeasance and fraudulent practice to defraud the people in order to get material gains under the garb of corporate veil they shall also be treated as service providers to the depositors / complainants and held personally responsible for the deficiency in service, if any.
Reference disposed off.
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2016 (12) TMI 1895
Cancellation of result of the examination and debarring him from appearing in any University examination till the end of the Second Semester of the Academic Year 2015-16 and penalty imposed - alleged commission of unfair means in the M.B.B.S. Part 2 examination held in January, 2016 - HELD THAT:- The decision of the Supreme Court in Siddharth Ashvinbhai Parekh [2016 (7) TMI 1674 - GUJARAT HIGH COURT] directly and squarely comes into play. As was noticed from the facts of that case, the said petitioner and the present petitioner, both appeared in the same M.B.B.S. examination in the same paper in the same language. The notice regarding unfair means was given to both on the same day. Both were called by communication dated 15th February, 2016 before the Unfair Means Committee to remain present on 24th February, 2016. The case of the petitioners were considered in the same meeting and in the minutes, present petitioner's case was decided under agenda No. 18 whereas petitioner of Siddharth Ashvinbhai Parekh was under agenda No. 17. The impugned order is of even date in both cases. The present petitioner as well as that petitioner faced similar charges about allegedly conducting themselves to disclose their identity in the answer-book. While in the case of the petitioner the nature of acts alleged for identification revilement were as noted above, in case of the petitioner in the other case, the allegation was that the said petitioner had breached the instructions by doing rough work on a different page number than required as per the instructions and that it was deliberately done to disclose the identity and reap the advantage.
There was no gainsaying that the case of the present petitioner and case of Siddharth Ashvinbhai Parekh had similar and parallel facts and both the petitioners were virtually identically situated. In Siddharth Ashvinbhai Parekh, the set of rival contentions by both the sides were on the similar lines as could be seen from the contents recording the submissions in paragraph 5 to paragraph 13 of the said decision. The Division Bench applied the principle of no evidence to hold that the case against the petitioner was one of 'no evidence'.
Pausing at this stage, the statement recorded on the same day of the present petitioner, if considered (Annexure C, Page 19), it was stated by the petitioner that providing a margin on the right hand side and mentioning page number was his way of writing. He explained that he had done that so that he could see the pages of the entire paper in serially within no time in the concluding moments of the examination time. He stated that it was done to ensure that no question is left untouched. It was stated that he had no intention to commit any unfair means and had not misconducted in any way but it was only his way of presentation the answers. He specifically denied the allegation about he having intention of committing misconduct or revealing identity thereby. Learned advocate for the petitioner struggled in vain, to contend that the facts of both the cases were different. In all respects ranging from nature of allegations to the nature of defence and the statement given by the petitioner, the facts were parallel and went hand-in-hand. It could be successfully submitted that therefore the petitioner being similarly situated, was entitled to the benefit of decision in Siddharth Ashvinbhai Parekh.
By comparing the facts on record, the theory that the present case offers different facts could hardly be countenanced. Nor the aspect of special feature of case hold good. As noticed from the comparison of facts of both the case, they were similar wherein both the students were proceeded in same way on similar nature of charge. The principle of 'no evidence' and the attended reasoning supplied by the Division Bench apply to the present case with equal force.
When the Apex Court does not entertain any Special Leave Petition while observing that it was keeping the question of law decided to be kept open, such question would be treated to have been left open for the Supreme Court only. As far as the High Court is concerned, it would be bound by the judgment not interfered with in the Special Leave Petition as per the law of precedence. In the subsequent case with similar facts and identical issue, the decision not interfered with by the Supreme Court would bind and the different view would be prohibited to be taken on the spacious ground that the question of law kept open, which was the liberty reserved by the Supreme Court for itself only. Therefore, in the instant case when Division Bench judgment in Siddharth Ashvinbhai Parekh was left untouched by the Supreme Court but the question of law was kept open, in the subsequent case considered by this Court where the facts were even otherwise found to be similar and the issue identical, this Court is bound by the decision in Siddharth Ashvinbhai Parekh.
The impugned order dated 08th March, 2016 passed by the respondent University is hereby set aside and the respondents are directed to declare the result of the petitioner forthwith - petition allowed.
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2016 (12) TMI 1894
TP Adjustment - inclusion of reimbursed expenses in the cost base for the purpose of mark-up - Comparable - HELD THAT:- Comparable i.e. whether Lotus Labs's RPT is significant or not deserved to be examined properly for this ay and hence this issue needs to be remitted back to the TPO. As already mentioned, the assessee found that the TPO while recomputing the ALP has wrongly considered recovery of expenses as part of the cost base and hence it sought a rectification u/s 154 but did not get any response from the TPO/AO.
On its objections before the DRP, the DRP directed the TPO/AO to examine the factual position & if the assessee's averments are correct, then to re-compute the mark-up suitably and to dispose the petition u/s 154 within 15 days of receipt of its order. It appears that the TPO/AO has not given effect to the directions of the DRP. In the facts and circumstances, this issue also needs to be remitted back to the TPO for proper examination and due adjudication. Thus, both these issues remitted to the TPO who after affording due opportunity to the assessee would decide them in accordance with law. To this extent, the appeal grounds are treated as allowed.
Expenses by pharma companies - AO has disallowed the impugned claims in the light of the prohibition imposed by Medical Council of India (MCI)I the CBDT Circular dated 1st August 2012 and held that such expenses being prohibited by MCI is not an admissible deduction under section 37(1) - HELD THAT:- The CBDT circular is issued to clarify the allowability of expenses on medical freebies which are prohibited by MCI. Expenses incurred and claimed by an assessee but prohibited by law, cannot be allowed as deduction neither under section 37(1) nor under any other provisions of Act. The CBDT circular only reiterates and clarifies the allowability of expenses prohibited under MCI guidelines. Therefore, CSDT circular is clarificatory and hence it is retrospective in operation. however, the CBDT circular has no application for a period in which the MCI guidelines are not operative.
AO has not disputed the genuineness of the expenses claimed. The only reason for the disallowance is that the impugned expenses are prohibited by MCI guidelines and therefore they are illegitimate. Therefore, the deduction claimed by the assessee other than the cost of samples distributed for the period prior to MC! guidelines, is an admissible deduction and accordingly, the AO is directed to allow them. As held by the DRP in the assessee's own case for a y 2010-11 and ay 2011-12 , the cost of samples distributed is also an allowable claim based on the rationale of the decision of Eskayef [2000 (7) TMI 1 - SUPREME COURT] and accordingly the AO is directed to allow it too. In the result, the grounds of appeal on these issues are allowed.
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2016 (12) TMI 1893
Conspiracy - Unlawful Assembly - training in making and usage of weapons and explosives in order to retaliate against the alleged tortures faced by muslims in India from the other religions, especially from Hindus, the accused formed themselves into an unlawful assembly - HELD THAT:- It is provided under Section 25 (1B) (a) that, whoever acquires or has in possession or carries any firearm or ammunition in contravention of Section 3 shall be punishable with imprisonment for a term which shall not be less than one year, but which may extend to three years and shall also be liable to fine. In the case at hand, evidence adduced by the prosecution would clearly establish that the accused were having possession of th ammunition (Bombs) in contravention of Section 3. Therefore this court is of the opinion that accused 1 to 21 are guilty of offence under Section 25 (1B) (a) of the Arms Act, 1959. Hence we alter the conviction and sentence imposed by the court below under Section 5 (1) (a) read with Section 27 of the Arms Act to one under Section 25 (1B) (a) of the Arms Act.
Whether the conviction and sentence imposed by the court below under Section 4 & 5 of the Explosive Substances Act, 1908, is sustainable or not? - HELD THAT:- The prosecution was successful in proving that the accused 1 to 21 were having possession and control over the material objects which were recovered from the scene. Going by the definition of 'explosive substances' contained in Section 2 (a) of the Act, it includes materials for making any explosive substances and also any material used or intended to be used in causing or aiding in causing any explosion. As per Section 4 (b) of the Act, having possession and control of any explosive substances with the intent to endanger life or to enable any other person by means thereof to endanger life or to cause serious injury to property, is punishable, despite whether any explosion does or does not takes place. Therefore the prosecution has made out a case against accused 1 to 21 making them guilty of offence punishable under Section 4 (b) (i). The prosecution had also succeeded in proving that, accused 1 to 21 were knowingly in possession and control of the explosive substances so as to give rise to a reasonable suspension that such possession and control was not for any lawful object. The accused 1 to 21 had failed to show that they had in possession and control of the explosive substance for any lawful objects - we are inclined to uphold the convictions imposed by the court below under Section 4 & 5 of the Explosive Substances Act, 1908.
Whether the conviction imposed against accused 1 to 21 under Sections 120 B, 143 read with Section 149 of IPC and also the conviction imposed against 1st accused under Sections 153 A and 153 B (1) (c) of IPC are sustainable or not? - HELD THAT:- The prosecution has not established through any convincing evidence the aims and the objectives or the activities of the organizations or regarding the motives and objectives in convening the alleged camp and in imparting training in manufacture and usage of the arms and the explosive substances. Despite the specific allegation that the accused were seen engaged in imparting training in manufacture of Bombs and in usage of arms, no cogent or convincing evidence is forthcoming with respect to any training being conducted at the premises, apart from the possession and control over the incriminating substances. Further, the prosecution has not succeeded in proving through any credible evidence their specific case that, the assembly and the alleged training was with a declared intention to protect members of the particular community from the alleged torture of the other community, especially from hindus. Under such context, this court is of the view that the conviction imposed under Section 18A of UA(P) Act cannot be sustained in any manner.
Whether there was any usage of the Bombs or the Sword for any purposes as contemplated under Section 15 of the UA(P) Act? - whether the demonstration of those materials can be considered as one to strike terror among the people or as one likely to strike terror among the people? - HELD THAT:- In the case at hand, statements given by the accused Nos.1 to 21 under Section 313 Cr.P.C. is to the effect that, at the relevant place and time they were waiting outside at the building at the place of occurrence for having a meeting of a Trust named 'Thanal', for the purpose of collecting funds for completing construction of the building which is owned by the said Trust. It is stated that, the said building was in fact remaining locked from outside at that time and the police authorities have entered the building by breaking open the lock. Even though some of the persons who were present there had left the scene on noticing the act of the police, accused Nos.1 to 18 remained there and the police have called them inside the room and taken them into custody. They have denied of having any connection with respect to the substances alleged to have recovered from the place of occurrence, and also denied the recovery of such material objects from the place.
Whether an adverse inference with respect to guilt of the accused can be drawn, because they have failed in establishing the version put forth by them through the statement made under Section 313 Cr.P.C.? - HELD THAT:- In the case at hand, the prosecution has not conducted any investigation with respect to the source or procurance of the incriminating materials. There is no evidence adduced as to who had purchased those materials or from where it was purchased. The prosecution had also failed in bringing any evidence to prove that the possession and control of the explosive substances or the arms, was intended for the purpose of striking terror or likely to strike terror based on any communal rivalry or violence. Nor they have established that the accused persons were indulging any preparatory activity to commit any terrorist act. Therefore, the trial court has not put any specific question to the accused persons in this respect - In the case at hand, provisions of the law contained in the respective statutes have adequately taken care to meet the situation and to convict the accused under the common law. We are not persuaded to accept that any offence under UA(P) Act has been established by the prosecution to sustain the conviction, in addition to those provisions of law under which conviction is imposed against the accused persons, which were already upheld by this court.
The conviction rendered by the court below with respect to the appellants in Crl.A.147/2016 (Accused Nos. 1 to 21) under Section 120B, 143 read with Sec. 149 of IPC and Sections 4 and 5 of the Explosive Substances Act, 1908, hereby confirmed - Conviction imposed by the court below under section 5 (1)(a) read with Section 27 of the Arms Act will stand altered to Section 25 (1)(B)(a) of the Arms Act, 1959. The conviction and sentence imposed against the accused under Sections 153 A, 153 B(i)(c) of IPC stand set aside. The conviction and sentence under Sections 18 and 18A of the Unlawful Activities (Prevention) Act will also stand set aside.
Application allowed in part.
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2016 (12) TMI 1892
CENVAT Credit of service tax - services not being used in the factory - power plant in the process of generating power has also generated fly ash - HELD THAT:- When the power generated in the power plant was recognized and the process generating fly ash was not ruled out by Revenue, removal of such effluents/waste incurring service tax cannot be treated to be alien to the process. Having nexus to the manufacture, appeal is allowed.
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2016 (12) TMI 1891
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The same rule is not retrospective as it was notified on 24/03/2008 and would be applicable only from AY 2008-09. In Godrej & Boyce Mfg. Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] it has been held that Rule 8 D is not retrospective.
In CIT vs. M/s. Godrej Agrovet Ltd [2014 (8) TMI 457 - BOMBAY HIGH COURT] has held that percentage of the exempt income can constitute a reasonable estimate for making disallowance in the years earlier to the assessment year 2008-09. In the above case it upheld the disallowance to the extent to 2% of the total exempt income. Respectfully following the above decision, we direct the AO to restrict the disallowance to 2% of the total exempt income. Thus the first and second ground are partly allowed.
Treating advance / unearned revenues as the income of the year under consideration - Whether no right to receive the said revenues had accrued to the assessee during the year under consideration and also without appreciating that the method of accounting adopted by the assessee in recognizing revenues was in consonance with AS – 1 read with AS-9 issued by ICAI and notified by the Central Government? - HELD THAT:-There is no merit in the contention of the ld. counsel that the aforesaid advance/unearned revenue has been duly disclosed and offered to tax in the subsequent year. The assessee is free to take remedial measures permissible in law in the A.Y. 2008-09 where it has claimed to have offered the said income.
Hon'ble Supreme Court in Tuticorin Alkali Chemicals & Fertilizers Ltd [1997 (7) TMI 4 - SUPREME COURT] has held 'It is true that this court has very often referred to accounting practice for ascertainment of profit made by a company or value of the assets of a company. But when the question is whether a receipt of money is taxable or not or whether certain deductions from that receipt are permissible in law or not, the question has to be decided according to the principles of law and not in accordance with accountancy practice. Accounting practice cannot override section 56 or any other provision of the Act.
The order of the ld. CIT(A) upholding the addition made by the AO is confirmed. Therefore, the third ground of appeal filed by the assessee is dismissed.
TDS credit - HELD THAT:- We direct the AO to give TDS credit after proper verification and as per the provisions of the Act. The assessee is directed to furnish the details before the AO and the assessee shall be given a reasonable opportunity of being heard on this point. Thus ground number 5.1 is allowed for statistical purpose.
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2016 (12) TMI 1890
Addition u/s.68 - treating the STCG declared by the Assessee as being unexplained cash credits - purchase of the assessee is bogus - CIT-A deleted the addition - HELD THAT:- As gone through the relevant record and impugned order and we find that (a) assessee had purchased concerned shares through “off-market trade” however ISE, BSE and NSE informed AO that no transaction has taken place in the name of assessee. (b) Concerned shares were kept in pool account which shows that such shares were not purchased by assessee. (c) Shri Mukesh Cokshi, director of Mahasagar Securities Pvt. Ltd. (“MSPL”) had admitted in his statement recorded u/s.131 that MSPL is engaged in the business of providing bogus bills for capital gain.
When transactions are “off-market”, it is not possible for stock exchanges to provide details in respect of the same. Further, off-market transactions are not at all illegal at all and concerned share were duly purchased by assessee and it is an undisputed fact that such shares came to the demat a/c of assessee from IL&FS securities. In fact, such shares have been subsequently sold through broker “Krone Research and Brokerage Pvt.Ltd.” Therefore, question of raising doubt as to purchase of shares by assessee is not sustainable.
Shri Mukesh Chokshi stated in his statement that (MSPL) was engaged in providing accommodation entries for speculation/delivery profit. Assessee has only purchased shares from MSPL which has been doubted by AO whereas “sales” have been made through “Krone Research & Brokerage Pvt. Ltd.” which has been accepted. Had the assessee obtained accommodation entries from MSPL as to purchase of shares, concerned shares might have been even sold through MSPL which is not the case.
Assessee has neither been provided with the copy of statement of Shri Mukesh Chokshi based on which impugned addition has been made nor has the assessee been given an opportunity to cross examine Mukesh Chokshi. In absence of cross-examination, no addition could have been made based on statement of Mukesh Chokshi recorded behind assessee’s back.
Assessee has placed on record affidavit of Mukesh Chokshi so as to prove that assessee has genuinely purchased shares form MSPL which has not found to be incorrect by Ld.AO.In absence of cross-examination of deponent with reference to statement made in affidavit, it is not open to the revenue to challenge the correctness of the statement made by the deponent in the affidavit. Same has been held in the matter of “Glass Lines Equipment Co.Ltd [2001 (7) TMI 61 - GUJARAT HIGH COURT]
Shares have been purchased against payment duly supported by the contract notes and shares have been found to be credited in the assessee’s demat a/c and on sale of such shares, the same were debited from demat a/c of the assessee and assessee has received payment through banking channel and sale of shares on the floor of BSE has been found to be genuine and also found to be confirmed by the BSE.
There is nothing in record to even remotely suggest that such shares were never transferred in the name of the assessee. Had it been the case, assessee couldn’t have sold the same from his demat a/c.
Shri Mukesh Choksi himself admits in his affidavit that MSPL had acquired the concerned shares on behalf of the assessee which were later on transferred to assesse’s demat a/c and payment in respect of the same was received from the assessee and particularly the contents have not been controverter by AO, so it can be presumed that whatever have been stated therein in the affidavit of Mukesh Choksi is seems to be credited. So in our considered opinion that CIT(A) has rightly deleted the addition made by the Ld.AO.
Both the appeal of revenue are dismissed.
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2016 (12) TMI 1889
Application seeking to send the same for scientific examination through experts - case of the petitioner is that the signatures and the matter in the promissory note dated 20.2.2010 were filled up on different dates - HELD THAT:- In the absence of the scientific expert, even if the argument of the petitioner was to be considered, on account of the impracticability involved, it would be only a futile exercise. In that view of the matter, the order of the lower Court does not call for any interference. Therefore, this civil revision petition is liable to be dismissed.
This civil revision petition is dismissed.
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2016 (12) TMI 1888
Revision u/s 263 - Deduction u/s 80IB(10) - as per CIT completion of construction of the project has not been done within the stipulated period and therefore, the deduction under section. 80IB (10) of the Act has been wrongly allowed - whether in the facts of the present case, the assessee firm is justified in considering the group of Buildings No.2 & 5 in the ‘Balaji Garden’ complex as a ‘project’ for the purposes of claim of deduction under section 80 IB (10) ? - HELD THAT:- A somewhat similar issue had come-up in the case of M/s. Vandana Propertiesobserved that the expression ‘housing project’ in common parlance would mean constructing building or group of buildings consisting of several residential units. According to the Hon'ble High Court, the provisions of section 80 IB (10) envisage that construction of even one building with several residential units of the size not exceeding 1000 sq.fts would constitute a ‘housing project’ for the purposes of availment of benefits under section 80 IB(10) of the Act.
In the spirit of what has been laid down supra in our considered opinion, assessee is fully justified in considering Buildings No. 2 & 5 in the complex of ‘Balaji Garden’ as a ‘housing project’ for the purposes of claiming deduction under section 80 IB (10) - Clearly on this aspect the CIT misdirected himself and, therefore, in this view of the matter the issue as to whether the other buildings have been completed within the time frame is not at all relevant to evaluate assessee’s claim for deduction under section 80IB (10) of the Act in the instant year.
In so far as the said project comprising of Buildings No.2 & 5 is concerned, the same has been completed on 19/03/2010, when assessee’s architect submitted application to the local authority for issuance of Occupancy Certificate. The aforesaid is clearly born out of the completion certificate issued by the concerned local authority i.e. Kalyan & Dombivali Municipal Corporation, Kalyan dated 17/09/2013 - assessee has referred to the decision of the Court of Joint Civil Judge, Kalyan dated 25/11/2010, wherein it is decreed that the Occupancy Certificate and Completion Certificate as per provisions of Rule-38 of the Kalyan–Dombivili Municipal Corporation Development Control Regulations is deemed to have been obtained in respect of Buildings No.2 & 5 on 19/03/2010, i.e. on the date when requisite application was made by the assessee. Considered in this light, it has to be understood that the completion of construction of the instant housing project is within the period stipulated in section 80 IB (10)(a)(iii) r.w. Explanation (ii) thereof. Thus, on this aspect, we find no reason to uphold the stand of the CIT.
Built-up area of some of the flats comprised in the housing project - The architect has enumerated the ‘built-up area’ of various flats comprised in the Buildings No.2 & 5. He has further certified that such built-up area is as per the sanctioned plan and also that the same is as per the definition of the expression ‘built-up area’ contained in section 80 IB (14) of the Act. Thus, as per the said certificate of the architect, it is quite clear that the area of balconies/projections, as required, has been taken into account in calculating the built-up area. It is also clear that built-up area of none of the flats is exceeding the limit of 1000 sq.fts prescribed in clause (c) of section 80IB (10) of the Act . We have perused the order of the CIT and find that he has merely proceeded on a presumption that the built-up area of some of the flats might exceed 1000 sq.fts., if the area of balcony is added. However, we find not even an iota of evidence with the CIT to suggest that the built-up area shown in the certificate of the architect is without including the area of balcony; whereas the certificate clearly mentions that the built-up area is inclusive of the requisite projections and balconies.
At the time of hearing, the Ld. Representative for the assessee has also made assertion that in the earlier assessment year of 2010-11, the site inspection was carried out by the Assessing Officer and that there was no adverse finding on this aspect. There is no negation to the aforesaid plea of the assessee and, therefore, considering the material on record, we find that the CIT has proceeded on mere doubt to hold that there is a violation of the provision of clause (c) of section 80 IB(10) of the Act.
AO has reproduced in the assessment order a chart which enumerates the various conditions prescribed in section 80 IB(10) of the Act and how the same are complied by the assessee firm. Clearly, it is not a case of any lack of enquiry. In fact, as our aforesaid discussion shows, the CIT has misdirected himself on both the counts namely non-consideration of Buildings No. 2 & 5 as a project for the purposes of section 80 IB(10) of the Act and regarding the built-up area of some of the units as prescribed in section 80IB(10(c) of the Act. Under these circumstances, in our view, there was no justification for the CIT to uphold that the assessment order dated 13/01/2014 is erroneous in so far as it is prejudicial to the interest of the Revenue within the meaning of section 263 of the Act, qua the claim of deduction under section 80IB(10) of the Act allowed by the Assessing Officer.
We hereby set-aside the order of the CIT and restore the assessment order passed by the Assessing Officer under section 143(3) - Decided in favour of assessee.
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2016 (12) TMI 1887
Deduction u/s 80JJAA - whether the new employees, being software engineers, were eligible for the said deduction as they did not come within the ambit of the term ‘workman’? - New workman employed for period of 300 days in relevant previous year are eligible for deduction u/s 80JJAA and no reference to new employees employed in the preceding year is made in the section - HELD THAT:- From the Para re-produced from the order of the Tribunal in assessee’s own case for assessment year 2010-11 [2016 (7) TMI 1012 - ITAT BANGALORE] we find that the Tribunal has followed the earlier Tribunal order in assessee’s own case for the assessment year 2007-08 to 2009-10 and thereafter, the Tribunal has restored the matter back to the file of the AO for fresh decision in accordance with law. Accordingly, in the present year also, we set aside the order of the ld. CIT(A) on this issue and restore this matter back to the file of the AO for fresh decision in accordance with law with same directions as were given by the tribunal in assessment year 2010-11.
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2016 (12) TMI 1886
Smuggling - cocaine - it is alleged that the accused persons procured cocaine from one UC (Uchee) and were indulged in sale of the substances - HELD THAT:- So far the qualitative and quantitative report of impunitive substance seized from the possession of the petitioners is not placed on record by the Investigation Officer. As per the standing instructions 1.18 issued by the Central Government under the N.D.P.S. Act, these reports should have been procured within 30 days. As per the remand application filed by the Investigation Officer, this petitioner is no more required for custody for the purpose of further investigation. In the given circumstances, there is no impediment to allow the petition.
The petitioner is granted bail on executing a self-bond for a sum of Rs.2,00,000/- with one surety for the likesum to the satisfaction of the concerned Court, on the conditions imposed - application allowed.
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2016 (12) TMI 1885
Exemption u/s 11 - scope and amplitude of the definition “charitable purpose” - interpretation of the proviso to Section 2(15) “charitable purpose” includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility - HELD THAT:- It is admitted that the result in these appeals follows the result in Commissioner of Income Tax vs. Improvement Trust Moga [2017 (1) TMI 53 - PUNJAB AND HARYANA HIGH COURT] which was disposed of by a separate order and judgment passed today. Accordingly, for the reasons stated therein, these appeals filed by the revenue are dismissed.
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2016 (12) TMI 1884
None appeared on behalf of the assessee - HELD THAT:- Notice of hearing was sent by Registered Post with Acknowledgement Due to the assessee on 13.10.2016 fixing the date of hearing on 05.12.2016. The said notice has been served upon the assessee on 15.10.2016 as is evident from the postal acknowledgment slip which is placed on record. When the case was called for hearing, none appeared on behalf of the assessee and neither any adjournment application was filed. This shows that the assessee is not interested in pursuing with his appeal. Therefore, in view of the decision in the case of Estate of Late Tukojirao Holkar vs. CWT [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT] and of CIT vs. Multiplan India (Pvt.) Ltd. [1991 (5) TMI 120 - ITAT DELHI-D]. we dismiss the appeal of the assessee in limine.
The assessee may, if so advised, file an application before this Tribunal for restoration of his appeal and hearing on merits by showing reasonable cause for not appearing before the Tribunal on the date of hearing. The Bench, if so satisfied, may recall its order and restore the appeal to its original number for hearing on merits.
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2016 (12) TMI 1883
Dishonor of Cheque - insufficiency of fund - discharge of existing liability or not - time limitation - part payment of cheque is enough to defeat the entire cause of action or not? - bar under Section 29 of the Criminal Procedure Code - Whether the demand notice was defective as because a part payment to the tune of Rs. 1,00,000/- was accepted and that is the departure from the cause of action itself? - HELD THAT:- This Court is of the considered view that simply because Rs. 1 lakh was received by the complainant after issuance of statutory notice is enough to deviate from the cause of action - this Court is satisfied that simply because of Rs. 1 lakh was paid by the accused/revisionist after issuance of the statutory notice that is not enough to take away the right of the holder of the cheque to enforce the cause of action regarding non-payment of the residue amount.
Whether the complaint is barred by limitation? - HELD THAT:- In the instant case before this Court the payment of Rs. 1 lakh was made on 11.03.2000 and according to this court it is the starting time of the period of limitation. The complaint was filed within three days of that that is on 14.03.2000 and as such the complaint was filed perfectly within time. This court reiterates that the complaint is not hit by the period of limitation as prescribed under Sections 138 and 142 of the Act of 1881 - It may not be out of place to mention that it is the admitted position that the relationship between the parties was that of client and advocate and naturally such relationship was fiduciary one and there was nothing wrong on the part of the complainant when he advanced Rs. 2,85,000/-.
Whether the cheque was issued in discharge of existing liability? - HELD THAT:- Regarding the applicability of Section 8 and Section 13 of the West Bengal Moneylenders Act, this Court is of the view that the said act has not barred money lending but it has only regulated the money lending. Thus, even if one person who has no money lending licence cannot be debarred from granting any accommodation loan to his friend or other person on him he has confidence. The opposite party took the accommodation loan and he now cannot take the shelter of the West Bengal money lenders' act to defraud the person who accommodated him - this issue is answered in favour of the appellant.
Whether the part payment of cheque is enough to defeat the entire cause of action? - HELD THAT:- This court has already answered the issue that part payment cannot defeat the entire cause of action. Thus, this point is answered in favour of the appellant.
Whether the learned Trial Court had authority to impose the fine amount to the tune of Rs. 2,85,000/- in view of the bar under Section 29 of the Criminal Procedure Code? - HELD THAT:- It is true that as per Section 29 of the Code of Criminal Procedure, 1993 no Judicial Magistrate of the first class can impose any fine exceeding Rs. 10,000/- but in the instant case before this court the learned Judicial Magistrate imposed fine amount to the tune of Rs. 2,85,000/- and according to this court the learned trial court exceeded its jurisdiction to that extent. The question now is whether the entire finding of the trial court is to be set aside for such careless approach. This superior court has inherent power under Section 482 of the Act of 1973 to cure any irregularity to prevent abuse of process of any court or to secure the ends of justice - It is true that as an advocate who has great esteem in the society that the said accused/opposite party would not have troubled his client who accommodated him during his hard days for as many as 17 long years (from 30.12.1999 till this date) and this court prefers to reduce the substantive sentence to make it simple imprisonment for ten days but at the same time the fine amount is being converted to compensation under Section 357 (3) of the Code of 1973 and the amount is enhanced from Rs. 2,85,000/- to 3,70,000/- in default of such payment the accused/opposite party will suffer simple imprisonment for further one year.
The substantive sentence is reduced from 4 months Simple Imprisonment to 10 days. The fine is converted as compensation but the amount is increased to Rs. 3,70,000/- being double of the amount of Rs. 1,85,000/-. If this amount is not paid then this opposite party accused will have to suffer further Simple Imprisonment for one year more - Such payment of Rs. 3,70,000/- (three lakhs seventy thousand) is to be deposited by the opposite party before the learned trial court by way of demand draft in the name of the complainant appellant within one month from this day. The opposite party/accused must surrender before the learned trial court to serve out the sentence within one month from this day. Failure to comply with this order will entitle the learned trial court to issue warrant of arrest against this accused/opposite party.
This criminal revisional application succeeds in part.
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2016 (12) TMI 1882
Classification as permanent employees - fixation of pay of Petitioners at the minimum of the regular pay-scale attached to the respective posts - whether the Petitioners are also entitled to the increment? - Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 - HELD THAT:- Merely by putting in six months' satisfactory service, an employee can be treated as 'permanent employee'. Rights which would flow to different categories of employees including 'permanent employee' are not stipulated in these Rules or even in the parent Act. It can be gathered from Rule 11 of the said Rules, which relates to termination of employment, that in case of a 'permanent employee' one month's notice or wages for one month in lieu of notice is required when the employment of a 'permanent employee' is to be terminated. On the other hand, no such notice or wages in lieu thereof is needed to be given to any other category of employees. Additional obligation casts on the employer is to record reasons for termination of service in writing and communicate the same to the employee.
The issue came up again in the case of M.P. State Agro Industries Development Corporation Ltd. and Anr. v. S.C. Pandey [2006 (2) TMI 721 - SUPREME COURT] wherein this Court held that only because a temporary employee has completed 240 days of work, he would not be entitled to be regularized in service. The Court also reiterated that the Standing Orders categorize the nature of employment and do not classify individual employees in different post according to the hierarchy created in the Department and thus proviso to Rule 2 does not apply to promotions or regularization in higher grade.
Though a 'permanent employee' has right to receive pay in the graded pay-scale, at the same time, he would be getting only minimum of the said pay-scale with no increments. It is only the regularisation in service which would entail grant of increments etc. in the pay-scale.
Contempt petition dismissed.
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2016 (12) TMI 1881
Assignment of debts - petitioner submits that the said deed was not taken into consideration in the earlier proceeding as the said deed was not registered and having regard to the fact that the said deed is registered, there cannot be any impediment to pray for the reliefs claimed in the petition - HELD THAT:- The prayers as made in the petition cannot affect right of any of the parties since admittedly it appears that at least one of the secured creditors has assigned the debt in favour of the petitioner. The purpose is to formulate a scheme which could be acceptable to all the creditors and would be beneficial for all.
The petitioner shall hold separate meetings of the secured and unsecured creditors including debenture holders, if any, after publishing advertisements once in the English daily “The Times of India”, once in the Bengali daily “Aajkal” and once in the Hindi daily “Dainik Vishwamitra”. Mr. Sondwip Mukherjee, Advocate, Bar Library Club, is appointed as the Chairperson of the meeting of all the creditors at an initial remuneration of 4000 GMs. to be paid by the petitioner. The notice of publication and other details shall be settled by the Chairperson. There shall be an order in terms of prayer (f) of the petition. The matter is made returnable on 30th January 2017.
The interest of the unsecured creditors is not going to be affected in the event a meeting is called of all classes of creditors. However, a copy of the petition has been made over to Ms. Agarwal in court today.
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2016 (12) TMI 1880
Interpretation of Section 9A of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 - whether the stipulation of six months for production of Validity Certificate is only directory? - HELD THAT:- In Central Board of Dawoodi Bohra Community and anr. v. State of Maharashtra and anr. [2004 (12) TMI 350 - SUPREME COURT], the Supreme Court and the Full Bench of this Court have traced the power of the Chief Justice to make reference to the Full Bench to the very position of the Chief Justice being 'Master of the Roster' as also to Clause 36 of the Letters Patent. The Full Bench also makes reference to Rule 7 of Chapter -I of the Bombay High Court Appellate Side Rules, 1960. No provision was pointed out in support of the submission that the power of the Chief Justice to make a reference to the Full Bench can be exercised only when a conflict is noticed between the decisions of two or more coordinate Benches. Rather, the provision in Rule 7 Chapter - I, suggests the absence of any such fetter.
A brief reference to the legislative history will assist in determination of the scope and import of Section 9A. This section has its genesis in the constitution (74th Amendment) which introduced Part - IX A in the Constitution comprising Article 243-P to 243-ZG. Particular reference is necessary to Article 243-T which mandates that seats shall be reserved for scheduled caste and scheduled tribes at election to local bodies. Clause 6 of Article 243-T provides that nothing in Part-IXA shall prevent the legislature of a State from making any provision for reservation of seats in any Municipality or offices of chairpersons in the Municipalities in favour of backward class of citizens.
It is clear that the first proviso enables such person to contest the election. The second proviso provides for consequences where the beneficiary of exception or the concession fails to comply with the conditions subject to which the exception or the concession was availed. It provides that where such person fails to produce Validity Certificate within period of six months, as statutorily provided and as undertaken by him from the date of his election, then, the election of such person shall be deemed to have been terminated retrospectively and he shall be disqualified from being a Councillor.
In the present case also the legislature in enacting Section 9A has provided for a statutory fiction, which is evident from the use of expression "his election shall be deemed to have been terminated retrospectively and he shall be disqualified being a Councilor". The statutory fiction must be allowed to have its full play. No other provision or reason has been pointed out to take the view that consequences prescribed under second proviso to Section 9A are not automatic or would require any further adjudication once it is established that the person elected has failed to produce the Validity Certificate within a stipulated period of six months from the date of his election - the validation of caste claim of the elected Councillor by the Scrutiny Committee beyond the prescribed period would have no effect upon the statutory consequences prescribed under the second proviso to Section 9A i.e. deemed retrospective termination of the election of such Councillor and his disqualification for being a Councillor. The subsequent validation or issue of the Validity Certificate will therefore be irrelevant for the purpose of restoration of the Councillor's election but, such validation will obviously entitle him to contest the election to be held on account of termination of his election and the consequent vacancy caused thereby.
The time limit of six months prescribed in the two provisos to Section 9A of the said Act, within which an elected person is required to produce the Validity Certificate from the Scrutiny Committee is mandatory - in terms of second proviso to Section 9A if a person fails to produce Validity Certificate within a period of six months from the date on which he is elected, his election shall be deemed to have been terminated retrospectively and he shall be disqualified for being a Councillor - Such retrospective termination of his election and disqualification for being a Councillor would be automatic and validation of his caste claim after the stipulated period would not result in restoration of his election.
The questions raised, stand answered accordingly.
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2016 (12) TMI 1879
Disallowance u/s.36(1)(viii) in respect of the interest on mortgaged back security and interest from loans advanced to deposits holders - A.R submitted that only the net interest to be considered for disallowance u/s.36(1)(viii) of the Act and not the gross interest - HELD THAT:- As rightly pointed out by the ld.D.R, provisions of Sec. 36(1)(viii) are applicable only in respect of loans granted for construction or purchase of house in India for residential purpose, as such Ld.CIT(A) rightly confirmed the disallowance. However, while computing the disallowance u/s.36(1)(viii) of the Act, only net interest income to be considered from the activities of mortgaged back security and interest from loans advanced to deposit holders. This ground of appeal is partly allowed.
Disallowance u/s.36(1)(viii) in respect of the interest being the referral fee from insurance companies and other income - HELD THAT:- Getting properties and persons insured is not a mandatory requirement for carrying on the business of providing long term housing finance. Therefore, the income received by way of commission has no direct nexus or its not incidental to the long term housing finance. Accordingly, this issue was decided against the assessee.
CIT(A) had not admitted the additional grounds raised by the assessee - exclusion of income earned on the land loans which were extended by the assessee in the normal course of business, and exclusion of the entire interest income from the computation of eligible profits for the purpose of deduction u/s.36(1)(viii) - HELD THAT:- We have gone through the assessment order for assessment year 2006-07 wherein the AO reworked the deduction u/s.36(1)(viii) of the Act by segregating the profit on the basis of various activities carried on by the company. On the same manner we direct the AO to compute u/s.36(1)(viii) of the Act for this assessment year also.
Interest income on SLR investment is eligible for deduction u/s.36(1)(viii).
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