Penalty u/s 271D - foundation of the penalty proceedings not in existence -whether no proceedings were initiated or pending in respect of the captioned assessment year, penalty proceedings u/s 271D or 271E can be initiated? - case of the assessee is that the original assessment order was passed by the Assessing Officer u/s 143(3) on 08/10/2009 and thereafter, learned CIT passed order u/s 263 of the Act as per which learned CIT set aside the said assessment order dated 08/10/2009 and directed the Assessing Officer to re do the assessment - Subsequently, the order of learned CIT u/s 263 of the Act was set aside by the Tribunal and therefore, now the surviving order is the original assessment order passed by the Assessing Officer u/s 143(3) on 08/10/2009
HELD THAT:- As per the penalty order passed u/s 271D on 27/11/2012, we find that the same is on the basis of fresh assessment order passed by the Assessing Officer u/s 144/263 on 28/12/2011, which does not survive because the order of learned CIT u/s 263 was set aside by the Tribunal and therefore, the consequential order of the Assessing Officer u/s 144/263 does not survive. It is also seen that the notice u/s 271D was issued on 11/05/2012 and 12/10/2012 and the order u/s 271D was passed on 27/11/2012.
As decided in Baldev Singh [2012 (2) TMI 650 - ITAT CHANDIGARH] there is no merit in initiation of penalty proceedings u/s 271D and 271E because no proceedings for the relevant year were pending at the relevant point of time. In the present case also, when proceedings were initiated u/s 271D on 01/05/2012, no proceedings were pending in respect of the present assessment year. In fact, the original assessment order was passed by the AO u/s 143(3) on 08/10/2009 and subsequent assessment year u/s 144/263 was also already passed on 28/12/2011 and this is admitted position that in course of original assessment proceedings completed on 08/10/2009, there was no whisper about initiation of proceedings u/s 271D of the Act.
In our considered opinion, under the facts of the present case, this Tribunal order rendered in the case of Baldev Singh (supra) and also in the case of Manohar Lal [2011 (1) TMI 538 - PUNJAB AND HARYANA HIGH COURT] are squarely applicable and hence, respectfully following these judgments, we hold that the penalty imposed by the AO in the present case is not valid because the initiation of penalty proceedings is not valid in the eyes of law. We, therefore, delete the penalty.Apeal of the assessee stands allowed.
Validity of reopenIng of assessment - Notice after a period of four years - reasons to believe - HELD THAT:- We are of the opinion that if the AO wants to invoke the provisions of section 147 after a period of four years, he has to compulsorily elaborate that there was failure on part of the assessee to disclose truly and fully the relevant facts to decide the taxability of that particular year. The courts are of the view that not only the fact of failure of the assessee has to be mentioned it has to be explained as to how assessee had failed and his failure ended in under assessment/escapement of income.
Where the provisions of section 147 are being invoked after the period of four years from the end of the relevant assessment year, in addition to the AO having reason to believe that any income chargeable to tax had escaped assessment, it must also be established as a fact that such escapement of assessment had been occasioned by either the assessee failing to make a return under section 139 either, etc. , or by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year.
Undisputed facts of the present cases are that the assessee original assessment was completed u/s. 143(3) of the Act, that the AO had not mentioned, in the reasons recorded for reopening of the assessments, that because of the failure of the assessee to disclose the material facts truly and fully income had escaped assessment. As the basic and first pre-requisite for issuing the notice is not fulfilled, so, the assessment orders passed in pursuance of such notices have to held to be invalid. Considering the facts and circumstances of both the cases, we are of the opinion that the orders of the FAA does not suffer from any legal or factual infirmity. So, upholding his orders for both the years i. e. 1997-98 and 1998-99, we decide the effective ground of appeal against the AO.
Reopening of assessment - whether assessee was entitled for deduction of the whole lease rent ? - HELD THAT:- No new material had come in possession of the AO to disturb the completed assessment. He had changed his opinion about the treatment to be given rental income. In our opinion, in absence of some cogent material AO cannot initiate proceedings u/s. 147 of the Act. We also find that if the order of the FAA was to be implemented there would not be any escapement of income for any of the years. In both the years the depreciation and interest would be more than the rental income, if the transaction with regard to leased assets was to be treated financial transaction.
With regard to the argument that the AO had not formed any opinion, as he had not discussed anything in the assessment order, we would like to mention that in the matter of Prima Paper and Engineering Industry [2015 (2) TMI 803 - BOMBAY HIGH COURT] as well settled that the power to reopen an assessment is not a power of review and mere change of opinion would not justify reopening of an assessment. This would apply even when assessment sought to be reopened is within four years from the end of the assessment year.
Revenue does not dispute the fact that the issue with regard to which the reopening is sought to be done was the subject matter of discussion and deliberation before the AO during the original proceedings leading to the order - Also it is an undisputed position that the Assessing Officer did have occasion to apply his mind to the deduction claimed by the respondent-Assessee before allowing the same. The objection of the revenue that there was no opinion formed during the original assessment proceeding as the order did not deal with the same is unsustainable. The mere fact that the assessment order does not discuss the issue of deduction would not lead to the conclusion that the Assessing officer had made no opinion with regard to the issue.
Thus we are of the opinion that the re-opening was not based on valid reasons and there was no escapement of income for both the years. Assessee appeal allowed.
Addition of low gross profit - survey conducted - as per revenue surrendered amount was nullified by claiming loss within the accounting period after the survey -correctness of gross profit disclosed by the assessee in the post survey accounting period - HELD THAT:- Even after the survey operation conducted u/s. 133A on 8.8.2007, no specific defect was referred by the AO pertaining to books of account of the assessee. There was no such allegation that there was suppression of sales or inflated purchases were accounted for in the books of account. Although there was an allegation of suppression of stock and excess cash were found but that was not made the basis of the impugned addition by the AO.
AO had proceeded to compare the trading results of pre survey and post survey period but contention before us is that the AO should have examined the profit of the entire financial year. That profit should have been compared with the profit disclosed and accepted in the immediately preceding year i.e. A.Y. 2007-08. This fact has also not been challenged by the Revenue side that addition in question was made without rejection of books of account.
On this issue, there are several decisions, wherein, it was consistently opined that there should be some defects to be pointed out by the revenue department so as to disturb the percentage of profit disclosed. In the absence of such discrepancy, the action of the AO remained un-substantiated. One more reason assigned by the ld CIT(A) before granting relief was that there was no uniform decrease in trading results of all the commodities. Rather in some of the commodities, the post survey profit rate was higher than the rate of profit already assessed in the past years. Therefore, we hereby confirm the findings of the ld CIT(A) and reject this ground of appeal taken by the revenue.
Disallowance of remuneration and interest paid to partners - As per the AO, the income surrendered was assessable u/s. 69C i.e. “income from other sources”, therefore, deduction claimed u/s.40(b) was not an admissible expenditure - CIT(A) deleted the addition - HELD THAT:- As we came to know that in a number of decisions, a consistent view has been taken that if the amount is surrendered pertaining to stock or business receipts, during the course of survey, then such surrender was nothing but income generated from the business activities of the assessee.
Seeking grant of interim bail - Interpretation of statute - whether the provisions and conditions of Section 37 of the NDPS Act would apply only to cases of "bail" or would also apply when the accused seeks "interim" bail? - HELD THAT:- In the light of Section 37 of the NDPS Act, right or discretion to grant regular bail is exactingly restricted, for the specified offences under the NDPS Act have serious repercussions on the society and are pernicious. The balance, therefore, mandates that regular bail should not be granted unless the negative stipulations of Section 37 of the NDPS Act are satisfied and mere satisfaction of conditions of Section 437 of the Code are not sufficient - Interpretation must elucidate the meaning which should be given to the statutory provisions, keeping in view the language used in the provision and if necessary adopt purposive interpretation when the language is capable of different interpretations. Legal interpretation is required in consonance with the statute and also the principles of bail jurisprudence.
The expression "interim" bail is not defined in the Code. It is an innovation by legal neologism which has gained acceptance and recognition. The terms, "interim" bail /"interim" suspension of sentence, have been used and accepted as part of legal vocabulary and are well known expressions. The said terms are used in contradistinction and to distinguish release on regular bail during pendency of trial or appeal till final adjudication - "Interim" bail entailing temporary release can be granted under compelling circumstances and grounds, even when regular bail would not be justified. Intolerable grief and suffering in the given facts, may justify temporary release, even when regular bail is not warranted. Such situations are not difficult to recount, though making a catalogue would be an unnecessary exercise.
The trial or the appellate Courts after conviction are entitled to grant "interim" bail to the accused/ convict when exceptional and extra-ordinary circumstances would justify this indulgence. The power is to be sparingly used, when intolerable grief and suffering in the given facts may justify temporary release - reference disposed off.
Legality/sustainability of the FIR registered against the petitioner - Bribery - mandate under Section 154(1) of Cr.P.C. - HELD THAT:- Divergent views are taken regarding recording of the voice of the accused prior to registration of the case. The Apex Court in the matter of Dr. Rajkumar Agarwal [2012 (8) TMI 1220 - SUPREME COURT], though noticed that the voice of the accused while demanding the bribe was recorded did not touch upon the legality or otherwise of such voice recording. In Criminal Petition No. 3750/2013 D.D. 11.2.2016 in the matter of LAKSHMIKANTHA S.G. VERSUS THE STATE AND ORS. [2016 (2) TMI 1366 - KARNATAKA HIGH COURT]], the transcription of the voice recording of the accused prior to registration of the case since was incorporated in the trap mahazar, was held as vitiating the further investigation. But here is a case where somebody on behalf of the complainant goes to the office of the Investigating Officer and is provided with a spy video camera on 15.11.2012. For the first time, the complainant meets the petitioner on the very same day and the said meeting is recorded in the camera. On 16.11.2012, FIR is registered by translating the prior events in chronological order. In the entrustment mahazar carried out subsequent to registration of the case on the very same day, the spy camera is seized after transferring its audio and video contents to a Laptop. The contents are incorporated in the entrustment mahazar. The investigation is proceeded by successfully trapping the second accused along with tainted currency notes.
It is not just on the material gathered from the spy camera the prosecution case rests, but also on the information brought in the written complaint by the complainant. When the information disclosed a cognizable offence, the S.H.O. had no other go except to register the FIR as per mandate of Section 154(1) of Cr.P.C.
The oral allegation and the supporting materials placed by the complainant have culminated in registration of the complaint. Thereafter, the Investigating Officer has investigated the matter and formed opinion to file his final report and the Court is also said to have taken cognizance of the offence - there are no illegality in registration of the case. Though a contention was taken by the petitioner that the Lokayuktha Police have no jurisdiction to register the case under the Prevention of Corruption Act, at the time of argument, such contention is not pressed. The irregularities pointed out during investigation cannot be counted upon in view of the fact that petitioner is restricting his claim only on illegality of registration of the FIR.
Now the matter since is before the Trial Court, the petitioner has to work out his remedy for discharge before the Trial Court only, if so advised. When an alternative remedy is provided under the Code of Criminal Procedure, this Court usually refrains from exercising jurisdiction under Section 482 of Cr.P.C.
Treatment of amounts deposited as Tax Deducted at Source (TDS) - HELD THAT:- The Income Tax authorities shall consider and appropriately grant the relief which the applicant may be eligible and entitled to claim, having regard to the provisions of Section 89 for spread-over of the income tax liability (calculated on lump sum basis while deducting TDS).
If an application is made in that regard within three weeks from today, the respondent bank shall extend full cooperation and furnish all necessary calculations in this regard. The Income Tax authorities shall grant the relief to the extent permissible in accordance with law.
Preliminary Investigation - Whether conversation of the accused recorded in support of the allegation for the offence under the Prevention of Corruption Act, prior to registration of FIR amounts to preliminary enquiry or investigation?
HELD THAT:- The registration of FIR is sine-quo-non for proceeding with the investigation of a case, otherwise investigation becomes illegal and is in violation of mandatory provision of Section 154 as held by Division Bench ruling of this Court in Sri Girishchandra and Another vs. State of Karnataka [2013 (2) TMI 928 - KARNATAKA HIGH COURT].
Coming to the case on hand, on the showing of the FIR itself, the Contractor approaches the IO on 26.03.2013 with the allegation that the accused is demanding bribe to get an indent for Transformer. Though the information divulged by the contractor discloses a cognizable offence without registering the case on the said information as mandated by Section 154 of Cr.P.C., IO hands over the voice recorder to him. It is only on 28.03.2013, when the contractor comes back with the recorded conversation of bribe demand, he receives a written complaint and registers the case and thereafter proceeds with entrustment mahazar and Trap.
By necessary implication in this case, the investigation commenced prior to registration of the case. Had if the IO immediately after receiving the information on 26.03.2013 had followed the procedure under Section 154(1) of Cr.P.C. thereby register the FIR and used his strategies for recording the conversation, by using the electric device, then the accused had no case to seek indulgence of this Court at the crime stage - The case of the petitioner shall succeed on two counts that (1) IO omitted to comply with the provisions of Section 154(1) of Cr.P.C., immediately after receiving information from the contractor on 26.03.2013, (2) The material collected before registration of the case now made to blend with the trap mahazar, subsequent to registration of the FIR vitiates entire investigation. The illegality noticed being abuse of process of law calls for interference in exercise of jurisdiction under Section 482 of Cr.P.C.
Inordinate delay of 1110 days in re-filing the appeal - HELD THAT:- The standard excuse that the department is putting forth in all such applications for condonation of delay in re-filing the appeal is the change of Standing Counsel for the Department and the failure by the earlier counsel to inform the Department about the appeal lying in defect.
This explanation does not impress the Court. It is not possible to accept that no one in the Department followed up on the filing of appeals and allowed a period of almost three years to elapse before the appeal could be re-filed. Department has a cell in the High Court which is under the supervision of a Deputy CIT. He ought to be keeping track of the filing of appeals and should be able to know if any appeal entrusted to the panel counsel for filing has not been listed even once before the Court for a long time.
The application for condonation of the delay of 1110 days in re-filing the appeal is dismissed.
Depreciation on net working equipments used for audio/video conference and video streaming - @15% OR 60% - HELD THAT:- As decided in assessee own case [2014 (12) TMI 890 - ITAT BANGALORE] AO, instead of classifying the entire equipment as plant and machinery and not computer, is required to examine each item in detail as regards its functional dependency on the computer and its independent existence. The items which are functionally dependent on computers are definitely part of computer and the items with independent existence may not be computers but wherever it is found that the device is not used independent of the computer system and the purpose of audio visual conferencing and video streaming, the same shall be treated as computers and wherever it is used independently for any other purpose it shall be treated as plant and machinery. The AO, shall, thus allow depreciation at the rate of 60% on the equipment which could be classified as computer and at the rate of 15% on the equipment which could be classified as plant and machinery - Ground no.1 & 2 of the assessee are treated as allowed for statistical purposes.
Set off of brought forward depreciation of loss - claim denied despite being made in the return of income - HELD THAT:- We find that the claim of brought forward loss was not considered by the AO. The AO is directed to verify such claim and to give a set off of brought forward loss as allowed under law. Ground no.3 is allowed for statistical purposes.
TP Adjustment - treatment given by the lower authorities to the international transactions pertaining to payments made by it for administrative support services received by it from its associated enterprises - Lower authorities have considered the value of the benefit if any received by the assessee from its AE as nil due to failure of the assessee to produce evidence in this regard - Similar failures were there in the earlier years also - HELD THAT:- As per the learned DR, assessee ought to have brought all the evidence in support of its claim that it had received benefits from its AE, due to the services rendered before the DRP, in view of the Tribunal’s order for assessment year 2008-09. However, it is also possible that the order dated 19-09-2014 would have been received by the assessee only much later. There is a distinct probability that the assessee after receipt of the order of the Tribunal for assessment year 2008-09 [2014 (12) TMI 890 - ITAT BANGALORE] did not have sufficient time to gather and produce such details before the learned DRP for substantiating its case due to short interval. Due to this reason, we are of the opinion, that the benefit of doubt can be given to the assessee for the impugned assessment year also. We therefore, give similar directions as given in the earlier years.
Classification of goods - rate of tax - Multi Functional Device - taxable @ 4% under Schedule IV of the VAT Act or @ 12.5%/14% in the Residuary Entry of Schedule V of the said Act? - device carry out the function of scanning, photocopier, fax machine and as computer printer, under the provisions of the Rajasthan Value Added Tax Act, 2003 - HELD THAT:- The Multi Function Device comprising of computer printer, fax machine, photocopier and scanner-all-in-one, with the fast technology development, is an office equipment, which combines the aforesaid three or four devices and functions in one unit, and is largely used while attached with computer, though it may be used in some respects, as stand alone equipment, or even with or without being attached to the computer, like fax machine, as a part of it. The scanner, which produces digital image of the documents canned can be used only with the aid of computers, if the scanned image has to be transmitted to any other destination, though such transmission can be made possible through mobile phone also, as contended by the learned counsels for the Revenue. With the technology fast developing, it is now possible to do so and use Multi Functional Device with remote sensors in the computer system or Wi-fi. Therefore, actual and physical connection with the computer may not be even necessary - The dissection or separation of the various parts of this machine to decide the taxability of rate thereof, is not called for, but if admittedly, this device can be used as computer printer also, there appears to be no justification to tax it in the Residuary Entry, ignoring the specific entry relating to computer printers and its peripherals. It is well settled legal position that the Residuary Entry can be resorted to only if the commodity in question cannot be brought under the specific entries, and this proposition, is not disputed by either side before this Court.
That as a matter of fact, the entry is wider, which includes not only computer printers, but computer peripherals also. This Court finds no justification in the contention raised by the learned counsels for the Revenue, that the word ‘peripherals’ has to be construed narrowly to limit and include only accessories like, mouse, webcam or keyboard, as computer peripherals, to be taxed @ 4% under the said entry, and not to include therein the Multi Functional Devices.
In para 13 of the judgment in the case of Xerox India Limited v. Commissioner Of Customs, Mumbai, Mumbai [2010 (11) TMI 20 - SUPREME COURT], the Hon'ble Supreme Court held that about 85% of the total parts and components alongwith manufacturing cost is allocated to printing and it is to be used principally in Automatic Data Processing Machine (ADPM) and it is also connectible to the Central Processing Unit (CPU), and therefore, it is classifiable in entry 84.71.60 and not in the Residuary Entry 84.79.89.
Similarly, in the case of Canon India (P) Ltd. v. State of Tamil Nadu [2015 (2) TMI 751 - MADRAS HIGH COURT], the Division Bench of the Madras High Court, in a case arising under the Tamil Nadu General Sales Tax Act, held that image runners (multifunction network printers) would fall under entry 18(i) of Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 and would be taxable at 4%. The contention of the Revenue that image runner sold by the dealer could act as copier machine and other functions, like printing, scanning and faxing were added features to this machine, and therefore, it was taxable at 12%, was rejected by the Division Bench of the Madras High Court.
Therefore, upon a detailed analysis and with reference to various technical literature and material, the cases laws in favour of the Assessees, this Court is satisfied that the commodity in question, namely, Multi Functional Device could not be taxed by the Assessing Authority under the Residuary Entry for the period from 01.04.2006 to 09.03.2010, and the said commodity would fall within the ambit and scope of entry relating to computer printers and computer peripherals, taxable @ 4% in Schedule IV of the VAT Act.
The levy of tax in the Residuary Entry @ 12.5%/14% therefore, cannot be held, and to that extent, the order impugned of the learned Tax Board and the authorities below deserve to be quashed and set aside. They are accordingly set aside. As far as the question of imposition of interest and penalty is concerned, this Court is also satisfied that the levy of interest would fall, since the levy of additional tax itself is quashed by this Court, and the question of imposition of penalty, therefore, would not simply arise.
The revision petitions filed by the Assessees are allowed and the revision petitions of the Revenue are dismissed.
Applicability of ESI Act - whether casual workers are covered under definition of employee as defined in Section 2(9) of the Employees State Insurance Act, 1948 (ESI Act) and pertaining to period for which Turf Club is liable to pay from 1978-79 or from 1987? - HELD THAT:- Reliance upon Regulations 26 to 31 of Regulations of 1950 is also of no avail as the Regulations make it clear that for the wage period, contribution has to be made by the employer as provided in Regulation 31 otherwise he is liable to make payment as provided in Regulation 31A and amount carry interest, which is recoverable as arrears of land revenue. It is also settled that interest cannot be waived. Regulation 36 also makes it clear that when an employee is employed by an employer for a part of the wage period, the contribution in respect of such wage period shall fall due on the last date of the employment in that wage period. The intendment of regulation is clear to cover work rendered in part of wage period.
This Court in Regional Director, Employees’ State Insurance Corporation, Madras v. South India Flour Mills (P) Ltd. [1986 (4) TMI 368 - SUPREME COURT] has overruled the decision of the Madras High Court in Employees’ State Insurance Corporation v. Gnanambikai Mills Ltd. [1973 (2) TMI 142 - MADRAS HIGH COURT] in which the High Court laid down that though casual employee may come within the definition of the term “employee” under section 2(9) of the Act, yet they may not be entitled to sickness benefits in case their employment is less than the benefit period or contribution period and that it does not appear from the Act that casual employee should be brought within its purview.
Coming to the submission that the ESI Corporation should be held bound by the consent terms, the submission is factually incorrect, misconceived, legally untenable and otherwise also devoid of the substance - the demand in the instant case is based upon the notification dated 18.9.1978 which left no room to entertain any doubt that the establishments of the aforesaid department in question were also covered under the ESI Act. Thus, no benefit can be derived by the consent terms which related to the earlier period when notification dated 18.9.1978 had not been issued. Notification has statutory force and agreement cannot supersede it. It is also clear that several departments of race club were covered under the notification issued in 1968. Thus, the submission raised on the basis of consent terms is hereby rejected.
The Turf Club is liable to make the contribution as per notification dated 18.9.1978 along with interest at such rate as provided in the Act and the Rules till the date of actual payment. Let the amount be contributed within a period of three months from today. Consequently, the appeals preferred by ESI Corporation are allowed.
TDS u/s 194A -reversal of TDS deducted on submission of relevant Forms - As per revenue Form 15H was not filed at the time of either payment of interest or credit of interest - According to the ld. DR, there is no provision in the Income-tax Act, 1961 to refund the tax deducted by the deductor - assessee claims that it received Form 15H from the respective depositors and accordingly, the tax deducted was credited to the respective accounts by making a reversal entry - HELD THAT:- Before the due date for depositing of the funds the assessee has received Form 15H, therefore, there was a statutory obligation on the part of the assessee to forward the Form 15H to the respective Commissioners. At the best, it can be said that there was a delay on the part of the respective depositors in filing Form 15H.
When the recipients of the interest are not liable for taxation under the Income- tax Act, 1961 or they have filed the return of income and paid the taxes on the interest income, naturally, the assessee is not liable to pay the tax deducted u/s 201 of the Act. When the recipients have no liability to pay tax, the question of payment of interest does not arise for consideration.
As observed by the CIT(A), it has to be verified whether the recipients had paid the taxes if at all they are liable for taxation. It is also to be verified whether the recipients have any taxable income in the light of Form 15H filed before the assessee.
Accordingly, the orders of the lower authorities are modified and the AO is directed to examine whether the recipients have any taxable income or not. If they have taxable income it also needs to be verified whether they have paid taxes on the interest paid by the assessee and thereafter, the Assessing Officer shall decide the matter in the light of the observation made by this Tribunal in this order. Appeal of the assessee is partly allowed.
Levy of Central Excise duty - Shortage of inputs on which cenvat credit has been availed (no manufacture of such inputs) - demand of duty on insurance charge, handling charge, storage, packing and forwarding charges - HELD THAT:- There are force in the arguments of the Ld. Counsel that no Central Excise duty can be levied on clearance of inputs on the ground that there is shortage. Central Excise duty is leviable on manufacture, and there is no manufacture of inputs in the instance case. Hence levy of Central Excise duty on the value on such inputs has no sanction of law and therefore cannot be sustained.
As regards the demand of duty on insurance charge, handling charge, storage, packing and forwarding charges, it is observed that these activities pertain to post manufacturing and post clearance of the goods. Such amounts are not includable in the assessable value for determining Central Excise duty. Therefore, the demand in such respects are also not sustainable.
The impugned orders of lower authorities are found to be non-sustainable and hence set aside - Appeal allowed.
Unexplained cash credit u/s 68 - Unexplained cash credit - HELD THAT:- It was a case of advances received by the assessee in cash from his dealers and the same having been adjusted against the sale subsequently made to the said dealers, there was no reason to apply the theory of preponderance of probabilities, especially when there was nothing brought on record to doubt the explanation offered by the assessee.
There was also no inquiry made by the AO with the concerned dealers to establish that what was stated by the assessee is not correct. On the other hand, at least two dealers were produced by the assessee for verification before the AO and they admitted of having been given the cash advances to the assessee.
Having regard to all these facts of this case, advances except the advance received by the assessee on 30.03.2009 having been already adjusted against the sales made by the assessee to the concerned Dealers and the sales so made having been duly accounted for by the assessee, the corresponding advances could not be added to the total income of the assessee u/s 68 treating the same as unexplained.
As regards the advance claimed to be received by the assessee we however, find that the assessee has failed to explain the same in terms of section 68 and the addition made by the AO and confirmed by the CIT(A) to this extent is liable to be sustained. Appeal of the assessee is partly allowed.
Recovery towards electricity dues - liability of the dues on Director of the Body Corporate - Scope of expression 'consumer' is defined in Section 2 (15) of the Electricity Act, 2003 - whether the recovery of electricity dues is authorized as against a person who is not the consumer but a Director of a body corporate which is the consumer?
HELD THAT:- The basis of the challenge is that the expression 'consumer' is defined in Section 2 (15) of the Electricity Act, 2003. The submission is that where a body corporate is a consumer, recovery cannot be enforced against its Directors. Hence, it has been submitted that the subordinate legislation is ultra vires.
The issue requires consideration.
The recovery citation shall not be enforced against the petitioner. However, this shall not restrain the enforcement of the amount due in accordance with law against the seventh respondent - List on 28 March 2016.
Selection to the post under O.B.C. category - whether a candidate who appears in an examination under the O.B.C. category and submits the certificate after the last date mentioned in the advertisement is eligible for selection to the post under the O.B.C. category or not?
HELD THAT:- The Division Bench of the High Court erred in not considering the decision rendered in the case of Pushpa [2009 (2) TMI 923 - DELHI HIGH COURT]. In that case, the learned single Judge of the High Court had rightly held that the Petitioners therein were entitled to submit the O.B.C. certificate before the provisional selection list was published to claim the benefit of the reservation of O.B.C. category. The learned single judge correctly examined the entire situation not in a pedantic manner but in the backdrop of the object of reservations made to the reserved categories, and keeping in view the law laid down by a Constitution Bench of this Court in the case of Indra Sawhney v. Union of India [1992 (11) TMI 277 - SUPREME COURT] as well as Valsamma Paul v. Cochin University and Ors. [1996 (1) TMI 484 - SUPREME COURT].
The decision rendered in the case of Pushpa is in conformity with the position of law laid down by this Court, which have been referred to supra. The Division Bench of the High Court erred in reversing the judgment and order passed by the learned single Judge, without noticing the binding precedent on the question laid down by the Constitution Benches of this Court in the cases of Indra Sawhney and Valsamma Paul wherein this Court after interpretation of Articles 14, 15, 16 and 39A of the Directive Principles of State Policy held that the object of providing reservation to the SC/ST and educationally and socially backward classes of the society is to remove inequality in public employment, as candidates belonging to these categories are unable to compete with the candidates belonging to the general category as a result of facing centuries of oppression and deprivation of opportunity.
The constitutional concept of reservation envisaged in the Preamble of the Constitution as well as Articles 14, 15, 16 and 39A of the Directive Principles of State Policy is to achieve the concept of giving equal opportunity to all sections of the society.
Disallowance being fees paid under Portfolio Management Scheme(PMS) as not deductible expenditure u/s 48(1) against Short Term Capital Gain (STCG) computed by the Appellant during the year under consideration - HELD THAT:- It is noticed that this is issue recurring from the earlier assessment years. It is further observed that the Tribunal while deciding the issue in assessee’s own case for the assessment year 2008–09 in the order referred to above, followed its earlier order in assessee’s own case for the assessment year 2006–07 and held that PMS expenditure is not allowable while computing income from short term capital gain. Respectfully following the consistent view of the Tribunal in assessee’s own case, we decide the issue against the assessee by dismissing ground raised.
Disallowance of depreciation and society charges - HELD THAT:- It is observed, while deciding similar issue in assessee’s own case [2015 (9) TMI 1104 - ITAT MUMBAI] claim of the assessee was denied by the authorities below in the absence of the particulars of the person having not been provided by the assessee. In all fairness we are of the view that the matter needs to be looked into by the AO, in order to verify claims of the assessee. Following the principles of natural justice we may it fit deem to the restore this issue back to the file of the AO to verify the names of the employees to whom the premises have been allotted and in whose hands the perk has been offered. Reasonable opportunity of hearing shall be afforded to the assessee. The ground of appeal no. 4 raised by the assessee is thus allowed for statistical purposes.
As there is no material difference in facts, respectfully following the aforesaid view of the Tribunal, we restore the matter back to the file of the Assessing Officer with similar direction. This ground is allowed for statistical purposes.
Ad–hoc disallowance being 5% of various expenses - HELD THAT:- On a perusal of the order of the Tribunal assessment year 2008–09 [2015 (9) TMI 1104 - ITAT MUMBAI] it is noticed that while deciding the issue of ad–hoc disallowance of 5% out of various expenses, the Tribunal did not interfere in the matter and upheld the disallowance. Following the order of the Tribunal, we uphold the disallowance by dismissing the ground raised by the assessee.
Fixation of upper age limit for admission to pre-school, pre-primary and class one - Section 16(1) of Delhi School Education Act & Rules, 1973 - violation of Articles 14, 19(1)(a), 21A and 45 of the Constitution of India - HELD THAT:- Since in the present case, a Sub-Committee of experts was constituted by a statutory body and action has been taken in pursuance to its report, this Court would, normally, be hesitant to interfere with the same.
But this Court is of the view that the State cannot take its citizens, especially the children by surprise. Both the parents as well as the children are entitled to fundamental right to education and to plan their future. As there were no upper age limit prior to 18th December, 2015, the parents of the children who are attaining the age of four prior to 31st March, 2016 could have well decided in the Academic Session 2015-16 they would get their children admitted in this Academic Year 2016-17 in the nursery class. Consequently, this Court is of the view that the impugned order issued on 18th December, 2015 virtually has a retrospective effect inasmuch as some of the petitioners have been deprived of their fundamental right to seek admission in nursery class without any forewarning inasmuch as the upper age limit has been fixed only on 18th December, 2016, i.e., on the eve of commencement of admission process for Academic Session 2016-17.
Consequently, till final disposal of the writ petitions, the impugned order dated 18th December, 2015 is stayed. All children above four years of age who are desirous of seeking admission in pre-school/nursery class in the Academic Session 2016-17 shall be entitled to apply for admission on or before 9th February, 2016 till 4.00 p.m. Respondents are directed to ensure that online applications qua EWS/disadvantageous/differently abled students are accepted - Application disposed off.
Doctrine of legitimate expectation - Seeking direction to the Appellant-Union of India to consider the Respondents for promotion to the rank of Colonel by creating supernumerary posts with effect from the date the said Respondents were eligible for such promotion - HELD THAT:- Coming to the case in hand, the plea of legitimate expectation does not appear to be of any assistance to the Respondents for two precise reasons. Firstly, there is no real basis for the Respondents to argue that the Government of India had either by representation or by any sustained course of conduct created an impression in the minds of the Respondents that any additional vacancies created to the lower age profile of commanding officers serving in Combat Arms or Combat Arms Support shall also benefit those serving in the Service Streams of the Army. There is no factual basis laid by the Respondents in the pleadings before the tribunal to suggest that any such impression was gathered by officers serving in the Service Streams. There is also no basis for the contention that a legitimate expectation arose in the minds of the Respondents that they shall be promoted to the next rank simultaneously with the officers serving in Combat Arms or Combat Arms Support.
As a matter of fact, the provisions of para (68) of the Regulations for the Army extracted earlier itself envisages the grant of promotion to officers from different streams at different points of time depending upon several factors which bring about the time lag for such considerations. Conscious of the fact that such officers serving in different streams may pick up the next rank at different points of time, the Regulations provide for grant of retrospectivity to the promotions so granted to restore inter se batch parity to such officers. There is no denying the fact that the said Regulation continues to be operative and regardless of the date when the officer is promoted, his promotion is so related back as to protect his seniority vis-a-vis his colleagues from the batch serving in other streams. Far from creating any impression or any expectation that promotions shall be simultaneous, the Regulations clearly provide for grant of retrospective effect to the promotions only with a view to restore seniority. This clearly implies that in the very nature of things the promotions could be granted to officers at different points of time and time lag could additionally be in the 0-1-2 scenario.
That apart, legitimate expectation as an argument cannot prevail over a policy introduced by the Government which does not suffer from any perversity, unfairness or unreasonableness or which does not violate any fundamental or other enforceable rights vested in the Respondents. In the case in hand, the Government has, as a matter of policy, decided to lower the age profile of officers serving in Combat Arms and Combat Arms Support pursuant to the recommendations made by the Expert Committees - In the absence of any perversity, unreasonableness or unfairness in the policy so introduced, we see no reason to allow the argument based on legitimate expectation to unsettle or undo the policy which is otherwise laudable and intended to render the Indian Army more efficient and better equipped for combat situations. It also is not a case where no reasonable person could have taken the decision which the Government have taken as regards the need for lowering the age profile of the Commanding Officers or their exit after 2-1/2 to 3 years to occupy positions which the Government have created for the officers to occupy till they are considered for promotion to the next higher rank.
It is directed that the Appellants shall create 141 additional posts of Colonel to be allocated to 'Combat Support' stream for being utilized by appointing officers who are eligible for promotions against the same as in the year 2009 over a period of 5 years till 2014 - appeal allowed in part.
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