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Showing 21 to 40 of 863 Records

• 2008 (2) TMI 956
  
  The Supreme Court of India dismissed the appeals as they were devoid of merit. The question of law is kept open. The special leave petition was dismissed due to delay and lack of merit.

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• 2008 (2) TMI 955
  
  Issues involved: Prosecution under Section 138 of the Negotiable Instruments Act, application for acquittal due to complainant's absence, appeal before the High Court challenging acquittal, interpretation of Section 256 of the Code of Criminal Procedure.
  
  Prosecution under Section 138 of the Negotiable Instruments Act:
  The appellant was prosecuted in the Court of Metropolitan Magistrate for an offence under Section 138 of the Negotiable Instruments Act based on a complaint petition. Witnesses for the prosecution were examined, and the complainant closed her case. The appellant filed an application for cross-examination of the complainant, which was rejected. The appellant then applied for acquittal due to the complainant's absence, leading to the Metropolitan Magistrate acquitting the accused under Section 256 of the Code of Criminal Procedure.
  
  Appeal before the High Court:
  An appeal was filed before the High Court challenging the acquittal, which was allowed based on a previous court decision. The High Court did not serve notice upon the appellant before passing the order and appointed a legal aid counsel. The appellant appealed to the Supreme Court, arguing that the High Court erred in not considering his presence and submissions.
  
  Interpretation of Section 256 of the Code of Criminal Procedure:
  The respondent argued that the Magistrate could not have acquitted the accused under Section 256 as the matter was adjourned for examining defense witnesses. Section 256 provides for acquittal if the complainant does not appear, but in this case, the defense witnesses were yet to be examined, making the complainant's presence unnecessary at that stage.
  
  Conclusion:
  The Supreme Court acknowledged the delay in the case but directed the Trial Judge to proceed expeditiously. Both the accused and complainant were instructed to appear in court within two weeks. While disagreeing with the High Court's handling of the appeal, the Supreme Court dismissed the appeal, emphasizing the need for timely resolution of the case in accordance with the law.

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• 2008 (2) TMI 954
  
  Issues Involved:
  1. Legitimacy of the Detention Order dated 27.12.2007.
  2. Compliance with Article 21 and Article 22(5) of the Constitution of India.
  3. Impact of previous Detention Order on the current Detention Order.
  4. Competence of the authority filing the Counter Affidavit.
  5. Potential revocation and reissuance of the Detention Order.
  
  Summary:
  
  1. Legitimacy of the Detention Order dated 27.12.2007:
  The Petitioner sought annulment of the Detention Order dated 27.12.2007 issued against her husband to prevent future smuggling. The Detenu was arrested on 29.10.2007 u/s 104 of the Customs Act, 1962, and would have been entitled to bail u/s 167(2) Cr.PC after sixty days. The Detention Order was issued to prevent his release on bail, which was acknowledged by the Detaining Authority.
  
  2. Compliance with Article 21 and Article 22(5) of the Constitution of India:
  Article 21 ensures no person is deprived of life or personal liberty except according to the procedure established by law. Preventive Detention, an inroad into Fundamental Rights, is permissible under Article 22(5), which mandates communication of grounds for detention and opportunity for representation. The Supreme Court has guarded against the misuse of Preventive Detention, emphasizing strict adherence to procedural law.
  
  3. Impact of previous Detention Order on the current Detention Order:
  The Detaining Authority considered the previous Detention Order, which was quashed by the Court, in the current Detention Order. The Court opined that reliance on a quashed Detention Order could render the new order illegal. The Detaining Authority's subjective satisfaction was influenced by the previous order, despite its annulment. The Court noted that while reference to the previous order is necessary, it should not affect the decision-making process.
  
  4. Competence of the authority filing the Counter Affidavit:
  The Counter Affidavit was filed by Ms. Kameswari Subramanian instead of Ms. Rashida Hussain, the Detaining Authority, who was on leave. The Court emphasized that the Detaining Authority should file the affidavit, especially when the legitimacy of the Detention Order is questioned, to explain the subjective satisfaction.
  
  5. Potential revocation and reissuance of the Detention Order:
  The Court suggested the Respondents consider revoking the Detention Order u/s 11 of the COFEPOSA Act and issuing a fresh order, removing errors in the current one. The Court set aside the Detention Order, granting liberty to the Government to pass a fresh order on the same facts if deemed necessary.
  
  Conclusion:
  The writ petition was allowed, the Detention Order was set aside, and the Detenu was ordered to be released unless wanted in another case. The Government was granted liberty to issue a fresh Detention Order on the same facts if necessary. No orders as to costs were made.

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• 2008 (2) TMI 953
  
  Issues Involved:
  1. Exemption from property tax for charitable hospitals u/s 123(e) of the Tiruchirappalli City Municipal Corporation Act.
  2. Validity of the demand notice for property tax issued by the appellant Corporation.
  3. Relevance of exemption granted u/s 80G of the Income Tax Act in claiming property tax exemption.
  
  Summary:
  
  Issue 1: Exemption from property tax for charitable hospitals u/s 123(e) of the Tiruchirappalli City Municipal Corporation Act
  The respondent Hospital claimed exemption from property tax u/s 123(e) of the Tiruchirappalli City Municipal Corporation Act, asserting that it is a public charitable institution recognized by the Income Tax Department. The appellant Corporation contested this, arguing that the hospital operates with a profit motive, collects rent and fees, and thus does not qualify for the exemption.
  
  Issue 2: Validity of the demand notice for property tax issued by the appellant Corporation
  The appellant Corporation issued a demand notice for property tax, which was challenged by the respondent Hospital. The single Judge quashed the demand notice, relying on precedents and the exemption granted u/s 80G of the Income Tax Act. However, the Division Bench clarified that the exemption u/s 123(e) is not automatic and must be substantiated with evidence to the assessing authority.
  
  Issue 3: Relevance of exemption granted u/s 80G of the Income Tax Act in claiming property tax exemption
  The Court held that the exemption u/s 80G of the Income Tax Act, which pertains to donations, does not automatically entitle the respondent Hospital to property tax exemption u/s 123(e) of the Act. The hospital must demonstrate that it meets the criteria for exemption as specified in the proviso to Section 123(e).
  
  Conclusion:
  The Court set aside the single Judge's order and directed the respondent Hospital to submit a representation to the appellant Corporation within sixty days, providing relevant materials to support their claim for exemption. The appellant Corporation must then pass appropriate orders based on the materials and in accordance with the law. The respondent Hospital was also directed to pay one-third of the arrears of the impugned demand, subject to the final order by the appellant Corporation. The writ appeal was disposed of accordingly, with no costs.

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• 2008 (2) TMI 952
  
  Issues involved: Interpretation of income tax provisions regarding addition of unexplained income u/s 68 of the Income Tax Act, 1961 based on a deposit in a foreign bank account.
  
  In the judgment, the High Court of Delhi considered an appeal by the revenue challenging an order by the Tribunal regarding the addition of a deposit of US $1,00,000 in the assessee's Wells Fargo Bank account to her income for the assessment year 1997-98. The Foreign Tax Division of the CBDT conducted an enquiry and obtained a report from American authorities confirming the source of the deposit. Despite this report, the assessing officer added an equivalent amount in Indian rupees to the assessee's income. The Commissioner (Appeals)3, after considering the report, concluded that the transaction was genuine. The revenue appealed to the Tribunal, which upheld the Commissioner's decision. The High Court, in an appeal u/s 260A of the Income Tax Act, held that the revenue cannot add the amount to the assessee's income without substantial material, especially considering the inter-Governmental exchange resulting in a report confirming the transaction's legitimacy. The Court found no substantial question of law due to the concurrent finding of fact regarding the genuineness of the transaction, and thus dismissed the appeal.

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• 2008 (2) TMI 951
  
  Issues Involved:
  1. Non-compliance of Section 42 of the NDPS Act.
  2. Non-compliance of Sections 50 and 57 of the NDPS Act.
  3. Whether the customs counter at the airport is a "public place".
  
  Summary:
  
  Issue 1: Non-compliance of Section 42 of the NDPS Act
  The appeal was filed against the judgment of the Designated Court u/s 21 and 23 r/w Section 28 of the NDPS Act, where the respondent was acquitted due to non-compliance with the mandatory provisions of Section 42 of the NDPS Act. The trial court found that the Search Officer did not reduce the information into writing nor gave any written intimation to his immediate superior, which is a mandatory requirement u/s 42. The court concluded that the area where the accused was intercepted was not a "public place" and thus, Section 42 was applicable.
  
  Issue 2: Non-compliance of Sections 50 and 57 of the NDPS Act
  The trial court found no non-compliance with Sections 50 and 57 of the NDPS Act. The provisions of Sec. 50 were explained to the accused through an interpreter, and the search was conducted in the presence of panch witnesses. The panchnama was prepared on the spot, and the case property was deposited with the SDO Arrival.
  
  Issue 3: Whether the customs counter at the airport is a "public place"
  The trial court relied on the testimony of the Search Officer and another witness, concluding that the customs counter at the airport was not accessible to the public at large and entry was restricted. This conclusion was supported by a previous decision of the Delhi High Court in "Richard Thomas Wrigley v. Customs and Anr." where it was held that the customs counter at the airport is not a public place as it is not open to the general public without due permissions.
  
  Conclusion:
  The High Court upheld the trial court's judgment, finding no perversity in the reasoning that the search was not conducted at a public place and the mandatory requirements of Section 42 were not complied with. The appeal was dismissed, affirming the acquittal of the respondent.

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• 2008 (2) TMI 950
  

  Suit for specific performance of contract - Pendency of the first suit - permission for filing another suit on the same cause of action - agreement of sale entered into by and between the parties - HELD THAT:- It is no doubt true that ordinarily an endeavour should be made by the court to give effect to the terms of the agreement but it is also a well settled principle of law that an agreement is to be read as a whole so as to enable the court to ascertain the true intention of the parties. It is not in dispute that no plan was prepared. A purported sketch mark was attached with the plaint, which was not proved. Evidences brought on record clearly lead to the conclusion that the appellant was not the tenant in respect of the entire house. She, in her deposition, even did not claim the same. Another tenant was occupying some rooms in the same premises. Appellant herein in her evidence also admitted that no map was attached to the agreement.

  The very fact that the premises sought to be transferred could not adequately be described; a plan was sought to be attached. According to the appellant herself, she had been residing only in the ground floor, along with open land on the northern side and had been using two rooms, a Patore alongwith open land of the upper portion.

  She had not received the possession of the disputed house. It is, therefore, evident that she did not claim herself to be a tenant in respect of the entire house and, thus, the same was not agreed to be sold.

  An agreement of sale must be construed having regard to the circumstances attending thereto. The relationship between the parties was that of the landlord and tenant. Appellant was only a tenant in respect of a part of the premises. It may be that the boundaries of the house have been described but a plan was to be a part thereof. We have indicated hereinbefore that the parties intended to annex a plan with the agreement only because the description of the properties was inadequate. It is with a view to make the description of the subject matter of sale definite, the plan was to be attached. The plan was not even prepared. It has not been found that the sketch of map annexed to the plaint conformed to the plan which was to be made a part of the agreement for sale. The agreement for sale, therefore, being uncertain could not be given effect to.

  Thus, we do not find any infirmity in the judgment of the High Court. The appeal is dismissed.

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• 2008 (2) TMI 949
  
  The petitioner sought a direction for the Tribunal to refer the question of law regarding the confiscation of silver and imposition of penalty. The Department accepted that the issue is covered by instructions dated 11-6-1990, where no action is needed if the silver quantity is less than 100 kilograms. The case was dismissed as not pressed based on these instructions.

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• 2008 (2) TMI 948
  
  Issues Involved:
  1. Legality and propriety of the High Court's quashing of the FIR and charge-sheet.
  2. Examination of the material collected during the investigation.
  3. Application of Section 120B (Criminal Conspiracy) and Section 193 (False Evidence) of the Indian Penal Code.
  4. Scope and ambit of High Court's powers under Section 482 of the Code of Criminal Procedure.
  
  Detailed Analysis:
  
  1. Legality and Propriety of the High Court's Quashing of the FIR and Charge-sheet:
  The CBI challenged the High Court's judgment that quashed the FIR and charge-sheet against the accused-respondent under sections 120B and 193 of the IPC. The High Court quashed the FIR on the grounds that the evidence and material collected did not justify the charges. The Supreme Court, however, found that the High Court did not critically evaluate whether the allegations in the FIR and charge-sheet, taken at face value, constituted an offence prima facie.
  
  2. Examination of the Material Collected During Investigation:
  The CBI argued that the High Court failed to consider the material collected during the investigation properly. The investigation revealed inconsistencies in the respondent's explanation regarding the recovery of Rs. 36 lacs from his son's residence. The CBI found that the explanations and documents provided were false and fabricated. The Supreme Court noted that the High Court should have examined whether the allegations, taken at face value, justified the charges.
  
  3. Application of Section 120B and Section 193 of the IPC:
  The Supreme Court analyzed sections 120B (Criminal Conspiracy) and 193 (False Evidence) of the IPC. The CBI's investigation suggested that the respondent conspired with his son to fabricate false evidence to legitimize the Rs. 36 lacs recovered. The Supreme Court found that the ingredients of these sections were clearly made out in the case, justifying the registration of a case and investigation.
  
  4. Scope and Ambit of High Court's Powers under Section 482 Cr.P.C.:
  The Supreme Court reiterated the principles governing the exercise of inherent powers under Section 482 Cr.P.C., emphasizing that these powers should be used sparingly and with caution. The Court referred to various judgments, including Inder Mohan Goswami v. State of Uttaranchal and State of Haryana v. Bhajan Lal, to highlight that the High Court should not quash proceedings if the allegations disclose a cognizable offence. The Supreme Court concluded that the High Court erred in quashing the FIR and charge-sheet, as the allegations warranted a trial.
  
  Conclusion:
  The Supreme Court set aside the High Court's judgment, allowing the CBI to proceed with the prosecution. The Court emphasized that the High Court should not have quashed the FIR and charge-sheet without a thorough evaluation of the allegations and evidence. The appeal was allowed, and the case was remanded for trial, ensuring both parties have the opportunity to present their evidence and arguments.

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• 2008 (2) TMI 947
  
  Issues Involved:
  1. Legality of the notifications prohibiting the import of palm oil through Kerala ports.
  2. Request for extending the ban on palm oil imports to other South Indian ports.
  
  Detailed Analysis:
  
  1. Legality of the Notifications Prohibiting the Import of Palm Oil Through Kerala Ports:
  
  The challenge to the impugned notifications is based on the plea that there is no power to issue such notifications prohibiting the import of goods through any particular port. The petitioners argue that the imposition of the ban on import, initially in Kochi and later through all the ports in Kerala, is without jurisdiction in terms of Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992, and that they are irrational and hence arbitrary, resulting in hostile discrimination due to unintelligible differential treatment. They contend that the materials available with the Central Government and DGFT do not reveal that the recommendation of the Coconut Development Board (CDB) was for prohibition of the import of palm oil through the southern States as a whole. Additionally, they argue that the import of coconut oil and other coconut produce had been a matter of great concern for the CDB in controlling the price of coconut and coconut oil, and the imposition of import on palm oil without any restriction on the import of coconut oil is unreasonable and illegal.
  
  The court examined the statutory provisions under Sections 3 and 5 of the Act, which allow the Central Government to make provisions for prohibiting, restricting, or otherwise regulating the import or export of goods. The Foreign Trade Policy (F.T. Policy) also empowers the DGFT to notify item-wise export and import policy as specified in ITC(HS), as amended from time to time. The court upheld the power to issue the impugned notifications, stating that the power to regulate import includes the power to prohibit, and the existence of the power with the DGFT to issue the notifications is sustained.
  
  The court noted that the impugned notifications were issued after the Chairman of the CDB wrote to the Department of Agriculture and Co-operation in the Ministry of Agriculture, furnishing details and disclosing the requirement to impose a ban on import of palm oil through the southern ports. The Chief Minister of Kerala also addressed the Prime Minister of India, espousing the cause of farmers and stating specific reasons for the necessary ban. The court found that the policy under consideration was drawn on the basis of relevant materials and hence, the challenge on the ground of lack of material fails.
  
  2. Request for Extending the Ban on Palm Oil Imports to Other South Indian Ports:
  
  WP(C).35648/2007 was filed seeking the issuance of a writ of mandamus directing the Central Government and the DGFT to give effect to the recommendations of the CDB and impose a ban on import of palm oil through Chennai, Mangalore, Tuticorin, and Beypore ports, in addition to Kochi Port. The court noted that neither the Central Government nor the State Government would be bound to act on the recommendation of the CDB. The cry of the farmers, as expressed in WP(C).35648/2007, is insufficient for the judiciary to compel the Central Government and the DGFT to accept the recommendations of the CDB in toto and impose a ban on import of palm oil through the other South Indian ports. The court emphasized that drawing up an economic policy may depend on various factors, including political policies, foreign policies, bilateral agreements, and covenants between India and her reciprocal countries. It would be beyond the bounds of judiciary to step in and issue directions as sought in WP(C).35648/2007.
  
  Conclusion:
  
  The court dismissed the writ petitions, upholding the legality of the notifications prohibiting the import of palm oil through the ports in Kerala and denying the request to extend the ban to other South Indian ports. The court emphasized the broad spectrum of power conferred by the Act and the F.T. Policy, and the necessity to allow discretion to the delegate in regulating foreign trade policies.

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• 2008 (2) TMI 946
  
  Issues Involved:
  1. Jurisdiction and Competency of Chief CIT
  2. Requirement of Approval for Financial Years with Receipts Below Rs. 1 Crore
  3. Legality of Consolidated Order for Multiple Financial Years
  
  Summary:
  
  1. Jurisdiction and Competency of Chief CIT:
  The petitioner, an educational institution, challenged the order dated 2-2-2007 by the Chief CIT, Orissa, Bhubaneswar, rejecting their application for approval u/s 10(23C)(vi) of the Income-tax Act, 1961. The petitioner argued that the Chief CIT lacked jurisdiction for the financial years 1998-99 to 2000-01, as the prescribed authority during this period was the CBDT. The court agreed, stating that only the statute could vest jurisdiction and the Chief CIT had no authority to deal with applications for these years. The applications for these years should have been transmitted to the CBDT.
  
  2. Requirement of Approval for Financial Years with Receipts Below Rs. 1 Crore:
  The petitioner contended that no approval was necessary for the financial years 2003-04, 2004-05, and 2005-06 since their aggregate receipts were below Rs. 1 crore, as prescribed under rule 2BC of the Income-tax Rules, 1962. The court upheld this argument, noting that the annual gross receipts for these years were indeed below the prescribed limit, and thus, no approval was required under section 10(23C) of the Income-tax Act.
  
  3. Legality of Consolidated Order for Multiple Financial Years:
  The petitioner argued that the Chief CIT's consolidated order for the financial years 1998-99 to 2005-06 was illegal, as each year's application should be evaluated individually. The court agreed, referencing the Supreme Court's decision in Aditanar Educational Institution v. Addl. CIT, which emphasized that the availability of exemption should be evaluated each year. The court concluded that the Chief CIT's consolidated order was without jurisdiction and authority of law.
  
  Conclusion:
  The writ petition was allowed, and the impugned order dated 2-2-2007 was quashed. The matter was remitted back to the Chief CIT with directions to send the applications for the financial years 1998-99 and 1999-2000 to the CBDT and to deal with the applications for 2001-02 and 2002-03 in accordance with law. No action was required for the financial years 2003-04, 2004-05, and 2005-06 as no approval was necessary. The court refrained from making any observations on the merits of the case, focusing solely on jurisdiction and maintainability.

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• 2008 (2) TMI 945
  
  Issues Involved:
  1. Addition of prior period expenses.
  2. Calculation of relief u/s 80HHC considering exchange rate fluctuation.
  3. Deduction u/s 80HHC regarding DEPB receipts.
  4. Inclusion of job charges and insurance claims in business income for u/s 80HHC.
  5. Reduction of gross vs. net interest for u/s 80HHC.
  6. Calculation of book profits u/s 115JB.
  7. Deletion of addition on account of commission.
  8. Deletion of addition on account of interest relatable to capital work in progress.
  9. Exclusion of excise duty from total turnover for u/s 80HHC.
  10. Exclusion of DEPB receipts from total turnover for u/s 80HHC.
  
  Summary:
  
  1. Addition of Prior Period Expenses:
  The assessee's appeal against the addition of Rs. 3,08,533 on account of prior period expenses was dismissed as the assessee failed to furnish any evidence to support the claim.
  
  2. Calculation of Relief u/s 80HHC Considering Exchange Rate Fluctuation:
  The assessee's appeal was allowed. The Assessing Officer was directed to exclude the negative effect of exchange rate fluctuation from both total turnover and export turnover while computing the deduction u/s 80HHC.
  
  3. Deduction u/s 80HHC Regarding DEPB Receipts:
  The issue was partly allowed. The matter regarding DEPB utilized by the assessee was remitted to the Assessing Officer for fresh consideration. However, the entire proceeds from the transfer of DEPB were considered profit as there was no cost to the assessee.
  
  4. Inclusion of Job Charges and Insurance Claims in Business Income for u/s 80HHC:
  The issue of job charges was remitted to the Assessing Officer for fresh consideration in light of the Supreme Court decision in CIT v. K. Ravindranathan Nair. The insurance claim of Rs. 7.59 lacs was excluded from business income, following the principle laid down by the Punjab & Haryana High Court in CIT v. Khemka Container (P.) Ltd.
  
  5. Reduction of Gross vs. Net Interest for u/s 80HHC:
  The assessee's appeal was dismissed. The exclusion of gross interest was upheld, following the jurisdictional High Court decisions in Rani Paliwal v. CIT and CIT v. Liberty Footwear Co.
  
  6. Calculation of Book Profits u/s 115JB:
  The assessee's appeal was allowed. The deduction u/s 80HHC was to be computed with reference to book profits, not actual deduction, following the Special Bench decision in Dy. CIT v. Syncome Formulations (P) Ltd.
  
  7. Deletion of Addition on Account of Commission:
  The revenue's appeal was dismissed. The Commissioner of Income-tax (A) was justified in deleting the addition of Rs. 38,00,000 as the Assessing Officer failed to bring any evidence against the genuineness of the commission paid.
  
  8. Deletion of Addition on Account of Interest Relatable to Capital Work in Progress:
  The revenue's appeal was dismissed. The Commissioner of Income-tax (A) rightly deleted the addition of Rs. 1,53,82,000 as the borrowed funds were not utilized for the work in progress and the interest was deductible u/s 36(1)(iii).
  
  9. Exclusion of Excise Duty from Total Turnover for u/s 80HHC:
  The revenue's appeal was dismissed. The exclusion of excise duty from total turnover was upheld, following the Supreme Court decision in CIT v. Lakshmi Machine Works.
  
  10. Exclusion of DEPB Receipts from Total Turnover for u/s 80HHC:
  The revenue's appeal was dismissed. The Commissioner of Income-tax (A) was justified in excluding DEPB receipts from total turnover as per the proviso to clause (ba) of Explanation to section 80HHC.
  
  Conclusion:
  The assessee's appeal was partly allowed, and the revenue's appeal was dismissed.

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• 2008 (2) TMI 944
  
  Issues Involved:
  1. Deletion of additions made under Section 68 of the Income-tax Act, 1961.
  2. Legitimacy of the initiation of proceedings under Section 147/148 of the Income-tax Act.
  3. Admission of additional documentary evidence by the Commissioner of Income-tax (Appeals) in violation of Rule 46A.
  
  Issue-Wise Detailed Analysis:
  
  1. Deletion of Additions Made Under Section 68 of the Income-tax Act, 1961:
  
  The Department challenged the deletion of Rs. 59,41,593 added by the Assessing Officer (AO) as unexplained income under Section 68. The AO had added this amount based on peak credits in various doubtful accounts where the identity of account holders was not verified. The Commissioner of Income-tax (Appeals) (CIT(A)) deleted the addition, observing that the bank was governed by the Banking Regulations Act and RBI guidelines, which required maintaining customer confidentiality and did not obligate the bank to verify the source of deposits. The CIT(A) noted that the accounts were introduced by bank staff or existing customers, and the credits were mainly transfers from other branches, thus not taxable in the current year. The Tribunal upheld the CIT(A)'s decision, stating that Section 68 was not applicable to banking companies for customer deposits, as these deposits were part of the bank's stock-in-trade and the bank had complied with RBI guidelines.
  
  2. Legitimacy of the Initiation of Proceedings Under Section 147/148 of the Income-tax Act:
  
  The assessee contended that the initiation of proceedings under Section 147/148 was invalid as the AO did not independently verify the reasons for reassessment and merely followed the directions of the Deputy Director of Income-tax (Investigation). The CIT(A) upheld the initiation, stating that the AO had sufficient cause to believe income had escaped assessment based on material from the Investigation Wing. The Tribunal agreed, referencing the Supreme Court's decision in Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd., which clarified that "reason to believe" did not require conclusive evidence at the notice stage but only a cause or justification. The Tribunal found no merit in the assessee's grievance and upheld the initiation of proceedings.
  
  3. Admission of Additional Documentary Evidence by the Commissioner of Income-tax (Appeals) in Violation of Rule 46A:
  
  The Department argued that the CIT(A) wrongly admitted additional evidence in violation of Rule 46A, as the assessee had previously refused to produce account holders, citing adverse effects on banking business. The CIT(A) admitted the evidence, noting that it related to the additions made and was not produced earlier due to lack of opportunity. The Tribunal found no error in the CIT(A)'s decision, as the documents were directly related to the additions and the assessee's belief in not being obliged to file such documents was bona fide. The Tribunal rejected the Department's grievance on this issue.
  
  Separate Judgment for Assessment Year 1998-99:
  
  For the assessment year 1998-99, the assessee argued that the CIT(A) erred in sustaining the AO's jurisdiction to issue notice under Section 148 without recording reasons or serving notice. The Tribunal noted that the CIT(A) had not addressed this specific assertion and remitted the matter to the CIT(A) for fresh decision on the preliminary issue of recording and communication of reasons for reassessment and issuance and service of notice under Section 148. The Tribunal directed the CIT(A) to provide adequate opportunity to the assessee and decide the merits of the case accordingly.
  
  Conclusion:
  
  The Tribunal dismissed the Department's appeal for the assessment year 1999-2000, upholding the CIT(A)'s deletion of additions and admission of additional evidence. For the assessment year 1998-99, the Tribunal allowed the appeal for statistical purposes, remitting the matter to the CIT(A) for fresh consideration on the preliminary issue of reassessment proceedings.

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• 2008 (2) TMI 943
  
  Issues Involved:
  1. Delay in passing the Detention Order.
  2. Delay in execution of the Detention Order.
  3. Non-supply of documents.
  
  Summary:
  
  1. Delay in Passing the Detention Order:
  The incident leading to the Detention Order occurred in May 2001, and the Order was passed on 11.4.2002, almost one year later. The Court scrutinized the Respondents' explanation, which detailed over fifty dates of actions and investigations, concluding that the delay did not result in the snapping of links between the commission of the offense and its likely recurrence. The Court emphasized that the nature of the investigation, involving commercial fraud and evasion of Customs Duty, required thorough and extensive investigation.
  
  2. Delay in Execution of the Detention Order:
  The Detention Order was passed on 11.4.2002 and served on the Petitioner on 10.6.2002. The Respondents explained that the Petitioner was not available despite surveillance, leading to an order u/s 7(1)(b) of the COFEPOSA Act on 21.5.2002. The Court accepted this explanation, noting that the Petitioner was absconding and that the publication of the Notice in the Official Gazette presumed the Petitioner's knowledge of the Detention Order. The Court found no inordinate or unexplained delay in the execution of the Order.
  
  3. Non-supply of Documents:
  The Petitioner argued that the non-supply of the Remand Order dated 4.10.2001, which was relied upon, prejudiced his defense. The Court referred to precedents like Powanammal v. State of Tamil Nadu and Kamarunnissa v. Union of India, emphasizing that non-supply of a relied-upon document is fatal. However, the Court found that the Remand Order was not relied upon by the Detaining Authority for passing the Detention Order, and relevant documents establishing the Petitioner's remand and bail were supplied. Therefore, the non-supply of the Remand Order did not prejudice the Petitioner's right of representation.
  
  Conclusion:
  The Writ Petition was dismissed as devoid of merit, with the Court finding no unjustified delay in passing or executing the Detention Order and no prejudice caused by the non-supply of the Remand Order.

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• 2008 (2) TMI 942
  
  Issues Involved:
  1. Whether the petitioner lost his right to seek a reference u/s 8 of the Arbitration and Conciliation Act, 1996.
  2. Whether the decision of the Company Law Board rejecting the application amounted to an omission to exercise jurisdiction lawfully vested in it.
  
  Summary:
  
  Issue 1: Right to Seek Reference u/s 8 of the Arbitration and Conciliation Act, 1996

  In these writ proceedings under Article 226 of the Constitution, the petitioner sought directions for quashing an order dated June 15, 1998, by the Company Law Board (CLB) in applications moved in Company Petition No. 55 of 1996. The petitioner alleged control over 40% of the shareholding in respondent No. 26 and claimed that disputes between two groups led to an arbitration agreement. The respondent disregarded the agreement and filed a suit before the Calcutta High Court, which was later stayed. The second respondent then filed a Company Petition before the CLB seeking orders u/s 397 and 398 of the Companies Act. The petitioner filed an application u/s 8 of the Arbitration and Conciliation Act, seeking to stay the CLB proceedings pending arbitration, which was rejected by the CLB on grounds of delay and disclosure of defense. The petitioner contended that the CLB's order was erroneous and that the arbitration agreement should prevail. The respondents argued that the petitioner had misappropriated company funds and that the arbitration clause could not be enforced as the nominated counsel was only a conciliator. The court held that the petitioner did not lose the right to seek reference u/s 8 as the preliminary objection to maintainability did not amount to entering into the substance of the dispute.

  Issue 2: Decision of the Company Law Board

  The court examined whether the CLB's rejection of the application was lawful. The factual narrative showed that the disputes were to be submitted to arbitration u/s 8. The arbitration agreement's existence was not seriously contested, and the petitioner had sought interim measures under Section 9 of the Arbitration Act. The court noted that Section 8 mandates judicial authorities to refer disputes to arbitration if the litigants were parties to the arbitration clause, provided the first statement on the substance of the dispute had not been filed. The court found that the petitioner's preliminary objection did not constitute a waiver of the right to seek reference. However, the court also noted that the arbitration agreement involved only a few parties, while the CLB proceedings included many others who were not parties to the arbitration agreement. The Supreme Court's decision in Sukanya Holdings was cited, which held that Section 8 applies only when the subject-matter of the suit is fully arbitrable and all parties to the litigation are parties to the arbitration agreement. The court concluded that the CLB's decision was not illegal or materially irregular, as not all parties in the CLB proceedings were parties to the arbitration agreement.

  Conclusion:

  The court dismissed the petition, upholding the CLB's decision and vacating all interim orders. The court emphasized that it would not interfere with the decisions of statutory tribunals unless there was manifest illegality or overreach of powers.

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• 2008 (2) TMI 941
  
  Issues involved:
  The issues involved in this legal judgment include the power of the executing court to grant interest even if not mentioned in the decree, the correctness of the Trial Court's order regarding interest on arrears, and the opportunity of being heard before passing the order.
  
  Power of Executing Court to Grant Interest:
  The legal judgment revolves around the question of whether the executing court has the authority to award interest even if it is not specified in the decree. The Trial Court relied on a decision to award 12% interest from the date of decree till realization, which was challenged in the High Court and subsequently in the Supreme Court. The Supreme Court cited a previous case to establish that an executing court cannot exceed its jurisdiction by granting interest not included in the decree. The Court emphasized that the executing court's role is limited to executing the order as per the procedure laid down.
  
  Correctness of Trial Court's Order:
  The Trial Court's decision to award interest on arrears was based on a High Court judgment that allowed interest even if not mentioned in the decree. However, the Supreme Court found that the High Court's interpretation was incorrect as it exceeded the legal boundaries. The Supreme Court clarified that the Trial Court's reliance on the High Court's judgment was misplaced, leading to an incorrect order. The Supreme Court set aside the Trial Court's order and the High Court's confirmation of the same.
  
  Opportunity of Being Heard:
  The applicant raised concerns about not being given a reasonable opportunity to present arguments before the order was passed. The applicant contended that there were other arguable points regarding interest on arrears that were not considered. Despite the applicant's absence during the previous hearing due to illness, the Supreme Court heard the applicant in detail before maintaining the previous order. The Supreme Court ultimately dismissed the Interlocutory Application filed by the applicant-respondent.
  

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• 2008 (2) TMI 940
  
  Issues Involved:
  The judgment involves an appeal against the setting aside of an arbitration award under Section 34 of the Arbitration and Conciliation Act-1996. The main issue revolves around the deduction of service tax by the appellants from the respondent's bills based on a contractual agreement and the applicability of relevant provisions of the Finance Act.
  
  Arbitration Award Setting Aside:
  The appeal was filed by the original respondents challenging the judgment that set aside the arbitration award dated 25th May, 2004. The sole arbitrator had dismissed the claim of the respondents, leading to the filing of Arbitration Petition No. 364 of 2004.
  
  Service Tax Deduction Dispute:
  The dispute arose from the appellants deducting 5% service tax from the respondent's bills under the assumption that the respondent was a clearing and forwarding agent, despite objections. The judgment focused on the contractual agreement between the parties and the obligations regarding tax liabilities.
  
  Interpretation of Contractual Clauses:
  The judgment analyzed Clause 9.3 of the agreement dated 17th June, 1993, which outlined the contractor's responsibility for taxes and duties. The court examined whether this clause allowed the appellants to deduct service tax from the respondent's payments.
  
  Legal Analysis and Decision:
  The court upheld the constitutional validity of extending service tax to recipients of services under relevant provisions of the Finance Act. It was determined that the agreement did not explicitly authorize the appellants to deduct service tax from the respondent's bills. The court found that the arbitrator's decision was erroneous and set aside the award, emphasizing the misinterpretation of the contractual clauses.
  
  Precedents and Conclusion:
  The judgment referred to legal precedents to support the decision to dismiss the appeal. The court concluded that the appellants were not entitled to deduct service tax from the respondent's bills based on the contractual agreement and the absence of specific clauses permitting such deductions. The appeal was ultimately dismissed without costs.

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• 2008 (2) TMI 939
  
  Issues Involved:
  1. Validity of the sale deed executed after the commencement of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978.
  2. Interpretation of the term "Transfer" u/s 3(e) of the Act.
  3. Applicability of Section 4 of the Act to the sale deed executed after the commencement of the Act.
  4. Authority of the Assistant Commissioner to resume the granted land u/s 5 of the Act.
  
  Summary:
  
  Issue 1: Validity of the Sale Deed Executed After the Commencement of the Act
  The Supreme Court examined whether the sale deed executed and registered on 13th October 1986, after the commencement of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978, was valid. The Court held that the sale deed was null and void as it was executed without the previous permission of the government, in violation of Section 4(2) of the Act. The Court emphasized that any transfer of granted land made after the commencement of the Act without prior government permission is prohibited and thus invalid.
  
  Issue 2: Interpretation of the Term "Transfer" u/s 3(e) of the Act
  The Court interpreted the term "Transfer" as defined u/s 3(e) of the Act, which includes an agreement for sale. The Court noted that although under the general law, an agreement for sale does not transfer the title of the property, the Act specifically includes such agreements within the definition of "Transfer" to protect the rights of Scheduled Castes and Scheduled Tribes. The Court highlighted that this inclusive definition aims to prevent exploitation of these communities by affluent and powerful sections of society.
  
  Issue 3: Applicability of Section 4 of the Act to the Sale Deed Executed After the Commencement of the Act
  The Court analyzed Section 4 of the Act, which prohibits the transfer of granted lands. It held that any transfer of granted land, either before or after the commencement of the Act, in contravention of the terms of the grant or without prior government permission, is null and void. The Court concluded that since the sale deed in question was executed after the commencement of the Act without government permission, it was invalid under Section 4.
  
  Issue 4: Authority of the Assistant Commissioner to Resume the Granted Land u/s 5 of the Act
  The Court affirmed the authority of the Assistant Commissioner u/s 5 of the Act to initiate proceedings for resumption of granted land if the transfer is found to be null and void under Section 4. The Court upheld the Assistant Commissioner's order to resume the land and restore it to the original grantee or his heirs, emphasizing the legislative intent to protect the rights of Scheduled Castes and Scheduled Tribes.
  
  Conclusion:
  The Supreme Court dismissed the appeal, upholding the orders of the Assistant Commissioner, the appellate authority, and the High Court. The Court reiterated that the sale deed executed after the commencement of the Act without prior government permission was null and void, and the land must be restored to the original grantee or his heirs. The appeal was dismissed with no order as to costs.

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• 2008 (2) TMI 938
  

  Application for grant of leave for Order of acquittal - failed to prove the demand and acceptance of bribe - High Court appears to have lost sight of the fact that in the statement recorded under Section 313 Cr. P.C. - HELD THAT:- The High Court has not given any reasons for refusing to grant leave to file appeal against acquittal, and seems to have been completely oblivious to the fact that by such refusal, a close scrutiny of the order of acquittal, by the appellate forum, has been lost once and for all. The manner in which appeal against acquittal has been dealt with by the High Court leaves much to be desired. Reasons introduce clarity in an order.

  Reason is the heartbeat of every conclusion, and without the same it becomes lifeless. (See Raj Kishore Jha v. State of Bihar and Ors. [2003 (10) TMI 640 - SUPREME COURT].

  The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate an application of mind to the matter before Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made; in other words, a speaking out. The "inscrutable face of a sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance.

  The above position was highlighted in State of Orissa v. Dhaniram Luhar [2004 (2) TMI 687 - SUPREME COURT].

  Therefore, the impugned order of the High Court cannot be sustained and is set aside, and matter is remitted to it. The High Court shall take up the matter afresh and dispose of the same in accordance with law. The appeal is allowed without any order as to costs.

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• 2008 (2) TMI 937
  
  The High Court of Calcutta dismissed the appeal as no substantial question of law was found. All parties are to act on a signed copy of the order. Certified copies will be provided upon request.

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